“India has been able to partially insulate consumers from the full onslaught of global food price inflation,” a recent World Bank report has said.

“Whereas traditionally India has kept domestic wheat and rice prices (retail) above international prices, they now are about 30-35 per cent below world market prices,” it said.

Citing crop forecasts the report also suggested that India would benefit from good rice and wheat harvests.

International wheat prices have already decreased substantially (40 per cent) compared to their peaks of February 2008 after expectations of a good harvest season in major growing areas, such as Australia, Eastern Europe and Argentina.

India and Pakistan have also confirmed good wheat harvests this year.

However, the long term solution for the spiralling food prices, according to the world body, would be increased agricultural productivity and growth.

While the region made enormous strides in improving agricultural productivity both during and after the green revolution, in recent years, agricultural growth in South Asia has been less than 3 percent, far below the growth rates of other sectors, the report said.

“In a number of countries, the environment around agriculture is dramatically changed, but many of the policies have not kept up with these changes,” says Adolfo Brizzi, World Bank Sector Manager for Agriculture & Rural Development in the South Asia Region.

Techonolgy uses

While Brizzi believes technology will bring about an important improvement he said “how that technology is driven by market demands will be the key for South Asia”.

Arguing for productive investments in agriculture he added: “India invests a substantial amount of money in the agricultural sector, but a large share goes to subsidies for fertiliser, electricity, water, and the Minimum Support Price (MSP) for cereals.

The spending on subsidies is about four times greater than the spending on investments.”