PM concerned over price rise, criticizes bio-fuel factor

Font Size

Print

Feedback

Email

Discuss

Related Articles

IMF to expand crisis lending fundInflation challenging economy: GokarnRupee down 10 paise at 46.57 a dollar

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.

"Believe that in the near future, this is going to be one of the most urgent challenges of our times. Therefore, it is important that the world community tackles this problem head-on. We need a Second Green Revolution. We need new technologies, new organisational structures, new institutional responses and, above all, a new compact between farmers, technologists, scientists, administrators, businessmen, bankers and consumers. The global community and global agencies must fashion a collective response that leads to a quantum leap in agricultural productivity and output so that the spectre of food shortages is banished from the horizon once again" he said

Singh said that institution building, capacity building, empowering farmers through investment in their capabilities were the kind of interventions needed. Even in promoting agri-business and agro-industries the model should combine the economics of small farms with the economics of mass production and modern marketing, he said and added, "I sincerely believe that some of the solutions to the problems of Indian agriculture are to be found outside agriculture."