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All this is thanks to the mindless industrial drive in China, which has caused pollution and acid rain that is wiping out arable land. Plain, simple mismanagement of agricultural productivity and the vagaries of the monsoons in India are contributing to the problem. By 2035, the populations in both countries will have reached 3 billion.
In 2005-06, China imported roughly 5 million tons of wheat and about 7 million tons of corn and rice. China does export some specialty rice, but it is not much. It was a remarkable achievement for China to boost food grain production from 90 million tons in 1949 to 398 million tons in 1997-98. But in the next five years, from 1999 to 2004, this production dropped by 70 million tons.
Published data indicates that only 322 million tons of food grains were grown in 2004. This is attributed to bad weather in consecutive years and a drop in farmland usage. Reading between the lines, it means polluted land and acid rain. In the past three years, production has recovered a bit but the danger of food shortages still exists.
How does China restrain its restive population from reeling under the impact of food shortages? An estimated 80 million tons of reserve food stock keeps the population supplied. Imports are ordered as soon as bad weather is detected. One thing good about Chinese food management is that they do not dither around when they see looming food shortages. Imports are ordered quickly. They have the money to pay for these. Hence central reserves are kept in a steady state.
India's food production has kept pace with China's. It has increased from 50 million tons to about 215 million tons in the current year. The tonnage in India appears to be lower, but it is not really so. The Chinese include tuber crops like potatoes, taro, cassava and many other field-grown items in their food grain statistics. Also quite a bit of Chinese production is feed grains as opposed to food grains. Hence Chinese statistics are higher.
Indian statistics are basically staple cereals. Indian food grain is produced in two seasons. The Rabi crop, or winter wheat season, spans from November to April. This year's Rabi yield was about 108 million tons -- a record since 1999-2000. The rainy season crop, Kharif, is expected to be 107 million tons, giving India a total of 215 million tons for the current year. Other crops like edible oil and other essentials are woefully under grown for the demand.
India's grain production barely meets the demand. To keep prices stable and prevent farmers holding back crops to get better prices later, India imports wheat in large quantities -- about 5 million tons in 2007. Imports help to maintain the reserves, which are about 40 million tons. Corn and rice are selectively imported.
The greatest shortfall in the last decade or so has been in the oilseed harvest. Oil is the basic ingredient of Indian cooking. In the current year, about 5 million tons of oil has been imported, to supplement a shortfall in local oilseed production. This year's oilseed harvest, at 22.6 million tons, is 7 percent lower than last year. Overall, India has been importing cooking oil for decades. Oilseed production has never kept pace with demand.
The picture is not pretty for either China or India. China is slowly destroying its arable land and India is unable to undertake the needed land reforms to free farming from its shackles and controls. A recent observation of retired U.S. Federal Reserve Chainman Allan Greenspan is worth repeating. He stated that Prime Minister Manmohan Singh does not have the political clout that Chinese leader Deng Xiaoping had in the 1980s to implement changes in agriculture. His view is that Indian food grain production is lagging behind because of controls and shackles.
One can argue with Greenspan's optimistic view of China, however, since Chinese food production has nose-dived in the last five years. The fact remains that India has to take much bolder steps. The alternative is to starve in 30 years.
What is causing China's catastrophe? And why is it happening in spite of highly unpopular population controls?
The answers lie in the Chinese leaders' vision of being a great industrial power at the expense of a natural agrarian society. This massive industrialization, on the back of foreign direct investment and the bulk of the West's smokestack industries relocating to China, has actually begun to kill the agricultural land and pollute the water with acid rain.
Consider this: China has 20 percent of the world's population and only 7 percent of the world's fresh water supply. Per capita water availability is low, and available water is getting increasingly polluted. This will ultimately lower food grain output. The last five years are a good example.
Arable land is being encroached upon by urbanization. Add to this the fragmentation of land into tiny plots on which 250 million households live. This is negatively affecting productivity and is not good news in the long run. But there is good news in all this gloom. The Chinese have upgraded their transport, storage and distribution network. This prevents shortages from becoming a catastrophe. Also they are embracing technology to boost food production much better than others.
Still, the picture is by no means optimistic for China. On the other hand, India is worse off.
India's food grain output has increased only 5 percent in the last five years, while the population has increased by 8 percent in the same period. The much-heralded green revolution has stumbled. The second green revolution, although on the cards for the last five years, does not seem to be taking off. One reason is that India's focus, like China's, is on industrialization. Another is that all reforms require money, which is not there.
Lack of money is stalling the link canal system, which will transfer surplus water in the Gangetic valley during the rainy season to arid lands. Also India is a bit slow to embrace technology to boost production. Genetically modified foods are having a tough time finding favor with consumers and farmers. Poor distribution, marketing and storage systems have resulted in 10 to 12 percent of the grains becoming unfit for human consumption. All of this is the government's doing.
The other negative role the government plays today is its agricultural controls and regulations. Indian farmers are not better off with subsidies, which they get in the form of subsidized fertilizers, electricity, pesticides and irrigation. These were instituted in the 1970s and 80s, at which time they had the desired impact. Food grain production rose to its present heights.
Now the farmers have matured and are getting weary of controls and subsidies. They wish that the government would concentrate on rural infrastructure like roads, irrigation, education, technology and training. Larger projects like the link canal, surplus water storage dams and a water distribution system should also be part of the government's plan. On the other hand, the government should stay out of pricing, crop rotation, distribution and grain storage. The private sector is a better vehicle to undertake these things.
Food shortages are coming sooner rather than later to India and China. This is inevitable, with China on a self-destructive path and India on a mismanaged path. Sooner rather than later China will have to quit its excessive industrialization drive and India will have to learn to better manage its resources.
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(Hari Sud is a retired vice president of C-I-L Inc., a former investment strategies analyst and international relations manager. A graduate of Punjab University and the University of Missouri, he has lived in Canada for the past 34 years. ©Copyright Hari Sud.)
