Tuesday, February 16, 2010

India's food exports boom, as 200 million people go hungry


India has more starving people than sub-Saharan Africa, with more than 200 million classified by IFPRI (International Food Policy research Institute) as hungry, even though the country is the world’s biggest rice grower with surplus grain in government warehouses. A bold policy proposal ensuring the right to food, the National Food Security Act would entitle every rural and urban family to 25 kilos of rice or wheat per month at a price of three rupees. This proposal has been widely welcomed, but previous government initiatives to reduce hunger have not met the stated targets.

In contrast, government supported programmes to increase India’s food exports are evidently a higher priority than feeding hungry people, as many of the export targets have been met. Whilst India’s other key export sectors, including textiles and jewellery, declined in 2008, plummeting 9.9 per cent in November alone, agricultural and processed food exports are booming. APEDA (Agricultural and Processed Foods Export Development Authority) reported that agricultural and processed foods exports totaled 17.5 million tones valued at Crore 31,820 in 2008. This is a growth of 46 per cent by value compared to 2007. It is worth pointing out, however, that the export volume growth of 70 per cent, from 10.9 million tones to 17.5 million tones, was much higher than the revenue growth, so the revenues are actually declining per tonne of food that is exported. APEDA is anticipating 20 per cent growth in exports for 2009, and has set a target to double India’s agricultural exports from $9 billion to $18 billion within five years.

Many countries including the US are investing heavily in India’s food processing industry. It is claimed that India will soon host the world’s biggest food park, the Himalya 13 hectare food plant near Delhi Airport will produce supposedly healthy functional foods, meal replacements, and processed bars made from nuts and berries and grains. Contract farming will source oats from Rajasthan and Gujarat, but other opportunities for Indian suppliers will be limited as US interests in the plant will be supported with nuts, almonds, and berries to be sourced from California. The US EXIM Bank has supported the plant with concessionary rates for the import of the plant and equipment. This is extending the supply chain, and increasing the environmental damage of transportation, for the construction and operation of the fancy food plant itself, as well as the actual products.