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Home > India > Business > Business Headline > Report

US responsible for global food crisis: FAO data

Ajay Modi | May 05, 2008 09:17 IST

US President George W Bush and his Secretary of State Condoleezza Rice may have their numbers wrong when they accuse China and India of contributing to the global food crisis as a result of growing prosperity-led consumption.

Data collected by the Food and Agricultural Organisation of the United Nation show that the consumption of cereals (wheat, rice, maize, corn and so on) is growing far more rapidly in the US than in India or China.

According to a global food market report put out by the FAO, the consumption of cereals by India is projected to have grown 2.17 per cent from 193.1 million tonnes in 2006-07 to 197.3 million tonnes in 2007-08, while that in China has risen 1.8 per cent from 382.2 million tonnes to 389.1 million tonnes.

In the same period the consumption of cereals in the US, the world's largest economy, has been projected to have grown 11.81 per cent from 277.6 million tonnes to 310.4 million tonnes. However, a large part of this spike is learnt to have been caused by the country's new-found appetite for bio-fuel made from corn.

With crude oil prices rising to over $115 a barrel, the US is learnt to have utilised 30 million tonnes of corn to make bio-fuel. The FAO data show that the usage of corn in the US to make bio-fuel increased two-and-a-half times between 2000 and 2006.

"About 30 million tonnes of corn was used in US to produce bio-fuels last year," said Ashok Gulati, the Asia director of the International Food Policy Research Institute.

There are more statistics to prove that the blame for the current global food shortage cannot be put at India's doorstep. Though the country accounts for a sixth of the world population, India is estimated to have consumed 9.37 per cent of world cereals in 2007-08, almost the same as 9.36 per cent in the previous year.

The share of the US, the FAO report said, has gone up from 13.46 per cent in 2006-07 to 14.74 per cent. China's share, it is worth noting, is projected to have come down from 18.53 per cent to 18.48 per cent.

According to Gulati, though there is a rising demand for foodgrain from India, the situation has been made worse by severe supply constraints, for which the developed world will have to share the blame.

"Factors like the drought in Australia, diversion of corn to bio-fuel by the US and speculative investments in futures market globally have caused prices to flare," he said.

Various reports have now come round the view that it is not just the rising demand for food in China and India that has caused prices to spiral - it has been caused also by the rising demand for bio-fuels all across the world and speculative investments in commodity markets.

As a response to rising crude oil prices, huge quantities of corn and oilseeds have been used to produce bio-fuels.

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