India's Food-Security Problem Is Also the World's

Climate change is already beginning to reshape global agriculture. India, the world's most populous country, looks particularly vulnerable: not just because of extreme weather, but because of government price controls. Fixing the problem is becoming more urgent, both for India and the world -- because India is a big food exporter, too. But politics makes that very difficult. From a report: In early December, India banned overseas shipments of onions until March in an effort to tame domestic prices. That is on top of export restrictions on rice, wheat and sugar already imposed over the past 18 months. And since India is the world's largest rice exporter, second-largest sugar and onion exporter, and a significant wheat producer, the bans are wreaking havoc globally. Thai rice prices had risen 14% and Vietnam rice prices had risen 22% from July levels by October, according to the International Food Policy Research Institute. Malaysia and the Philippines introduced their own measures to damp rising prices after India's curbs on rice exports in July.

Climate change will almost certainly pose a major problem for India's food supply. India's Ministry of Agriculture and Farmers Welfare recently estimated that, in the absence of adaptation measures, rain-fed rice yields could fall 20% by 2050. But domestic agricultural policies are almost as big a problem. At present, the government sets price floors for two dozen crops, guarantees purchases of certain agricultural products, and provides subsidies to farmers for fertilizers, electricity and transportation. All that might seem positive for food security, but on net it probably hampers investment and food supply growth. Price floors mean that supply might sometimes exceed final buyers' willingness to pay during slow times, leading to wastage. And restrictions on exports artificially depress domestic prices when global demand is hot. The government's own investigations have found that Agriculture Produce Marketing Committee laws, which regulate the trade of farmers' produce by providing licenses to buyers, commission agents and private markets, lead to cartelization and reduced competition.

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