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India becoming a food deficit country?

A UNDP report warns that global trade expansion can hurt farmers' interest by lowering prices, reports Saikat Neogi.

india Updated: Jun 30, 2006 03:33 IST

Is India becoming a food deficit country? Declining foodgrain production, low public investment in agriculture and cheap imports kept India’s food surplus constant at $3 billion from 1990 to 2000, says Trade on Human Terms, the UNDP Asia Pacific Human Development Report 2006, released on Thursday.

It says though two-thirds of India’s population depends on agriculture, little has been done to promote productivity and employment in this sector. Public expenditure on agriculture has fallen by 29 per cent between 1980s and 1990s and most farmers cannot even access government loans and have to rely on moneylenders who charge interest rates of several hundred per cent. And the promise of quick profits is encouraging rich Indian farmers to move out of foodgrain cultivation to more profitable commercial crops.

Global trade expansion, the report cautions, can damage poor farmers’ interest by bringing down prices, increasing input cost such as fertilizers and withdrawal of state services for irrigation. “If as a result of trade expansion, small farmers are out-competed by imports…human development will suffer,” says Hafiz A. Pasha, UN assistant secretary-general and regional director of UNDP.

The report suggest that if the government wants equitable development, it will need to invest more in agriculture, particularly capital formation, and provide price support, affordable loan, assistance with irrigation and marketing and help with storage, processing and distribution facilities.

Stressing the need that national security must be built on domestic food production, the report observed that developing countries have opened up their agriculture trade far more than developed countries and have become dependent on the global market for basic food supply.

The report outlines an eight-point agenda for national governments to make trade work for the poor. These include prioritising investments, adoption of strategic trade policies, renewed focus on agriculture and rural development, and strategies to combat jobless growth.