Growing Food Insecurity offers Investment Opportunities

Growing Food Insecurity offers Big Investment Opportunities in Agribusiness Space

In recent months and years India’s economic progress is suffering because of growing food insecurity. Food Inflation is beyond manageable level due to falling productivity and growing demand by growing population of humans as well as animals.

Human population is growing at the rate of 1.5 % where as animal population is growing at around the same rate. There is growing competition for food between animal and humans. For the first time in Indian history, soybean is selling at higher price than mustard. Reason is simple, soybean is consumed by both human as well as but mustard is consumed by mainly humans. This is just an example to highlight what will happen in coming days.

High yielding animals will not eat just grass; they also need high calorie and high protein diet to perform.  Poor yielding animals and poor yielding farms will add to environmental stress and global warming, because more inputs will be required to produce desired quantity.

Food Inflation and its impact on national economic development – some facts:

·         Current food inflation is around 9%. It is higher than even the PPF and PF interest rate i.e. 8.25%. It means people have to reduce the food intake to ensure survival in their limited means.

·         In order to control inflation, RBI has increased the interest rate. This will create more problems because investment in supply side will go down and inflation will remain unmanageable and may increase with time.

·         High interest rate is creating problem for other sectors of economy and also impacting employment growth. More unemployment and high food inflation will lead to lawlessness and crime rates will go up.

·         Growing food prices will also increase subsidy burden for Government of India.

·         In order to meet domestic food demand today India is dependent on imports and ban of exports. We are the largest importer of pulses and edible oils in the world.  Our earnings from food exports will also go down. This will also create serious current account deficit for Indian economy.

·    In order to secure large scale food imports at affordable price, India may have to sacrifice her foreign policy and independent voice in global forums.

·      India is deficient in protein and fat, only item which political system is focusing on is carbohydrate i.e. wheat, Rice and sugar.

·    Is this coincidence that India is having highest number of diabetic patient in the world?

·       Is this another coincidence that protein deficiency in India is making Indian labour productivity among the lowest in the world?

In last 10 years many assurances were given to the nation by policy makers that food prices will come down. The fact is in front of us. Food prices are increasing every year.

What is the ground reality?

·         Agriculture land is shrinking in its productive capability.

·         Water resources are shrinking for agriculture purpose.

·         Ground water level is going down at faster level and increasing demand for power to run tube-wells.

·       Productivity per hectare across the crops is one of the lowest in the world due to very poor quality seeds with farmers and seeds with high vigor replacement rate are very poor.

·  Soil health is going down due to lack of understand of inputs use and  replenishment needs of the soil.

·       Pre-harvest and post harvest knowledge is missing leading to improper use of agri-input and leading to poor yield and high cost of production.

·  Agriculture extension system does not exist on ground it means appropriate knowledge and technology transfer to farmers have virtually stopped. This gap is now filled by many shopkeepers, traders and local interest groups. They have limited knowledge and understanding of complex science involved in the process of crop production. Very often their arguments have no scientific basis and hurt the farmers more.

·         Majority of population in India thinks that agriculture is a sector where no scientific knowledge and technical inputs are required. This ignorance among the common man is hurting the adoption of better technologies and products.

·         Many countries don’t want India to become self-sufficient in food because it suits their economic as well as political interests.

·         In order to distract our food security planning, many issues were planted through NGOs, managed by well to do people those who never faced scarcity and hunger in life, in the name of environment, technology, sustainability, etc. in distorted manner in the planning process to delay the food security policy process and to impact food security of India. Incidentally many such voices are coming from the places where they themselves are adopting every option available to ensure food security of their country.

What is the way out?

·        Create the world what you want to see.  No one else will do for India.

·         Is there any surplus food in the world to feed India? Answer is No.

·     We can’t replace the system; but definitely can act as the catalyst to speed up the process by injecting correct technical inputs.

·      All like minded private and public organizations should come forward for the cause. Helping in achieving food security will speed up the reform process, fiscal policy and economic policies of India.

Our political system and many of you may not agree with my assessment. I also want everyone should prove me wrong. I will be happy, if facts can be shared with all.

If you have any other opinion on the subject, please feel free to share…