PM concerned over price rise, criticizes bio-fuel factor

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New Delhi, April 10:: The Prime Minister Manmohan Singh expressed deep concern over the rising commodity and food prices both at the global level and in the country.

He held the bio-fuel programme also responsible for the same. He also expressed concerns over the impact of climate change.

Addressing the Global Agro-Industries Forum here on Thursday, the Prime Minister said, "The world as a whole is faced with a situation where rising demand for food is not being met with a similar supply side response. Further, the situation is becoming more complex due to the alternative uses being developed for food crops - I refer here to the growing demand for bio-fuels.”

“Owing to galloping oil prices, bio-fuels are being seen in many quarters as attractive substitutes for imported hydrocarbon fuels. Some see them as a greener alternative, although there may be more than one view on that. Many countries are actively promoting the development of bio-fuels. It is particularly worrisome that the new economics of bio-fuels is encouraging a shift of land away from food crops. What this has done is that for the first time, there is a direct linkage between oil prices and food prices. Food markets have got interlinked to oil markets, making food policy - making extremely complex as well as uncertain," he said.

The Prime Minister was awarded with the Agricola Award by the FAO Director-General, Jacques Diouf Singh said that in India too was deeply concerned about rising commodity and food prices. Sharply rising food prices can slow down poverty alleviation, impede economic growth and retard employment generation. The global economy can also be hurt by this process.

"We in the developing world will of course be seriously hurt by it. Efforts to promote reforms and more open economies would be derailed in the face of persistent food shortages and rising food prices. In most developing countries, food prices are the kingpin of the price structure. A steep rise in food prices will make inflation control more difficult and can thereby hurt the cause of macro-economic stability. The constituency for economic reforms, so necessary to stimulate economic growth, would also diminish. Pressures would mount for restrictive trade practices," he said.

The Prime Minister said that though modern technology had certainly widened the options available to our farmers and planners, yet, the world seemed to be facing the prospect of food shortages and rising food prices.