Discover more from Learning by Proxy with Vivek Srinivasan
2022 will be a year when more people go hungry than ever before in Human history. We have the means to ensure it is not.
At the beginning of the 20th century, there were a little less than 2 Billion people in the world. That number has gone up 4 folds in the last 120 years.
This also implies that we have been able to scale food production to not only feed everyone but also waste an incredible amount. This post is NOT about food waste.
The scale of production is especially true of staples such as wheat and rice.
Many scientists were working on increasing crop yields in the 1960s. Norman Borlaug was working on a strain of wheat in Mexico with money from the Rockefeller Foundation. He found success and wanted to have the same planted in India and Pakistan which had large wheat-growing belts.
The consignment that Borlaug shipped to India was to come to India through the port of Karachi. The consignment reached Karachi on 4th December 1971. It almost did not make it to India because a war started between India and Pakistan on the day before its arrival. Rockefeller got clout!
He had also discovered that the greater the Nitrogen in the soil, the larger the kernels of wheat grew. The question; How do we get more Nitrogen into the soil?
This was enabled by something that two German scientists had discovered. The Haber-Bosch process is an artificial Nitrogen fixation process that, amongst other things, is used to produce Ammonia. This was used to produce fertilisers which ushered in the green revolution when combined with the artificially produced strain of Wheat which was named Sonora after the Mexican Valley in which it was first created and cultivated.
While this has kept us all well fed. Often the overuse of fertilisers results in the Nitrogen being washed downstream and being deposited in waterways. This process is known as Eutrophication. It results in algae blooms and dense plant growth which consume all of the oxygen in the water and kill all marine life in that region creating dead zones.
In 2019, the Sri Lankan government decided to do something about it and announced that the country will stop the use of all fertilisers and move to organic farming on the 6th May 2021.
Organic farming practices while great for the environment produce a yield that is 20% to 25% lower than fertiliser based farming techniques. Imagine, a quarter of a country having no food! Sri Lanka has a population of 20 million people; now think 5 million have nothing to eat. Half of Bangalore being starved.
To add to that…
Covid-19 lockdowns devastated Sri Lanka’s tourist industry, which generates one-tenth of the country’s economic output and provides a major source of foreign currency. The domestic currency, the rupee, has lost about one-fifth of its value, limiting Sri Lanka’s ability to purchase food and supplies abroad just as prices were rising. That added to lingering problems like its huge debt load, including on high-interest loans from Chinese state banks that required it to take out still more loans.
“Our annual earnings from tourism amounting to almost $5 billion did not materialize during the last two years,” Basil Rajapaksa, the finance minister and the president’s brother, told Parliament last month. “As a government, we acknowledge that our foreign reserves are being challenged.”
Source: New York Times
The broken supply chains thanks to COVID meant that there were no reliable suppliers who could be sourced to overcome this shortfall. The absence of tourism also meant that the government did not have adequate foreign exchange to import crops from other countries. Not to mention the crushing Chinese debt that has already been squeezing the country.
And like that begins illegal immigration.
People get on small boats trying to make their way to India rather than dying in Sri Lanka.
In 2015, people saw the image of a dead Syrian baby, Alan Kurdi and wondered why parents would take such a perilous trip to Europe - because the alternative is starving.
While the troubles in Sri Lanka seem self-inflicted, the troubles in Syria are a result of climate change. When there is limited food and many more to feed, what do you think happens? Civil War. That is how Syria plunged into crisis.
This story is going to repeat itself for an entirely different reason in Ukraine and by extension in other countries.
Russia and Ukraine export enough Wheat to feed 30% of the world. Egypt for instance imports 80% of its wheat from these two countries. Russia is not allowed to export because the USA is waging some kind of financial war and Ukraine is no longer in a position to export. As the hunger rises, what do you suppose will happen?
Enter India, the world’s second-largest producer of wheat! We’ve had bumper harvests for 5 consecutive years and the government godowns are filled to the brim.
So how does the Indian government plan to step up?
Well for starters, they are being proactive. India is trying to reach out to countries like Egypt, Turkey, Sudan, Nigeria, Lebanon and Iran, offering to meet any potential shortfalls. They are also trying to make sure the wheat can actually reach the intended destination in a timely manner.
Elsewhere, the government is mandating lab tests to check for quality issues. And they are doing everything in their power to prevent a diplomatic row — something that could happen if the wheat were found to be of poor quality. Also, they are asking the railways to put together extra wagons to transport all the excess wheat from farms to ports. And they’re asking Indian ports to allocate special terminals in a bid to expedite access.
India has been contributing a measly 1% of global exports because India has the Minimum Support Price (MSP) regime under which the government guarantees to buy Wheat at a price that is higher than that of the market. So Indian farmers have never looked beyond India to sell their produce. They have often been satisfied with the price that the government provides.
Now, the international prices have gone way beyond the MSP set by the government. Indian farmers are starting to consider exports. So all good… Now we can start exporting Wheat.
Not so fast!
Since India offers a price guarantee to its farmers, many countries view this as an incentivisation of production.
India has lost the dispute over subsidies of sugar exports at the World Trade Organization (WTO) with the dispute settlement panel ruling against the country on a complaint that Brazil, Australia, and Guatemala had filed.
However, the ruling is unlikely to come into effect immediately because India is set to file an appeal against the report and lack of a functional appellate body at the WTO means a final decision on the matter is unlikely anytime soon.
Source: Business Standard
The grains that India has, are produced under incentive and therefore cannot be exported according to the WTO.
Maybe Brazil, Australia et al can prepare to welcome Egyptian refugees later this year.