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Foodgrains Agri-Biz & Commodities - Commodity Markets Web Extras - Outlook Food security demands ban on futures trade in all essential items: Jayati Ghosh Our Bureau Chennai, Oct. 24 The Union Government must ensure that there is no instability in domestic prices of food grain and must curb speculative tendencies. It must also ban futures trade in all essential commodities, to make any programme of food security a success, said noted economist Prof Jayati Ghosh, who is a Professor of Economics and Chairperson at the Centre for Economic Studies and Planning, School of Social Sciences, at the Jawaharlal Nehru University, in New Delhi. The global food crisis is not something that can be treated as independent of global financial crisis. On the contrary, it has been intimately connected with it, particularly through the impact of financial speculation on world trade prices of food, she said. Market imbalancesDelivering the V.P. Chinthan Memorial Lecture on ‘The global food crisis and food security in India’, she said demand-supply imbalances have been touted as reasons, but unjustly so because there has been hardly any change in the world demand for food in the past three years. She attributed the crisis to issues such as diversion of food crop for bio-fuel production and falling food crop production due various other reasons. Elaborating on these points, she said the impact of both oil prices and government policies in the US, Europe, Brazil and elsewhere that have promoted bio-fuels as an alternative to petroleum. This has led to significant shifts in acreage to the cultivation of crops that can produce bio-fuels, and diversion of such output to fuel production. For example, in 2007 the US diverted more than 30 per cent of its maize production, Brazil used half of its sugar cane production and the European Union used the greater part of its vegetable oil seeds production as well as imported vegetable oils, to make bio-fuels, she pointed out. In addition to diverting corn output into non-food use, this has also reduced acreage for other crops and has naturally reduced the available land for producing food. Moreover, she said that ethanol production is extremely energy-intensive too, and also leads to large-scale deforestation of the Amazon, thereby further intensifying the problems of global warming. In India, nutrition indicators have stagnated and per capita calorie consumption has declined, suggesting that the problem of hunger may have got worse rather than better. The recent rise in food prices in the country is likely to have made matters worse, and the effects of the global crisis on employment and livelihoods within the country are likely to cause further deterioration in people’s access to food. “Clearly, therefore, food security is currently one of the most important policy areas, and demands stressing a rights-based approach to public food strategy have gained ground,” she said.
The first priority of a national food policy must be to increase domestic food production through improved agricultural productivity, so that the country is not dependent upon imports. This requires making cultivation financially viable as well as more productive, through a range of measures. A policy of providing minimum support prices that reach all farmers is an essential part of this, and should be part of a voluntary rather than forced system of public procurement. Any programme of national food security must be combined with a concentrated focus on improving food grain production in the country, so that we are not dependent upon imports in a volatile global market. This requires much more attention to the requirements of farmers, and speedy implementation of the many reforms that have already been suggested by the Farmers’ Commission to improve the productivity and financial viability of farming, particularly of food crops. No justification in ban on futures trading: Assocham Ban on futures trading in 4 commodities extended Centre bans futures trading in tur, urad More Stories on : Foodgrains | Commodity Markets | Outlook
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