Climate woes throwing food security into tizzy
The government has pressed the panic button on inflation. After retail inflation in July soared to a 15-month high of 7.44%, the government is trying to ease the inflation pressure through various measures, the latest being disincentivising onion exports by levying a duty of 40%. In July, the government banned exports of non-basmati rice, while the ban on wheat exports continues for over a year now. The consumer food inflation soared to 11.5% year-on-year in July, driven mainly by vegetables (37% y-o-y), cereals (13%) and spices (21%). While the government would like us to believe that the latest round of food inflation is largely seasonal—and prices would ease in a month or two—the truth is that climate change concerns are now materialising.
High food inflation across the world is due to change in weather patterns, untimely rains, incessant floods and droughts. India is no exception to this as we are witnessing the driest August since 1901, thanks partly to the El Nino effect, where higher-than-normal temperatures in the Pacific Ocean disrupt the movement of monsoon winds over the Indian Ocean, resulting in lesser monsoon rains for India. We are already in the midst of an ongoing El Nino effect, and agriculture experts predict a drop in the production of Kharif crops (rice, soyabean, maize, etc) this year. India is the largest exporter of rice—it exported $11 billion worth of rice to over 150 countries in 2022–23). Its decision earlier to ban the non-basmati rice exports has not gone down well as this move has created a food security crisis in the world, which was already suffering due to the disruption in wheat exports thanks to the Ukraine war.
With the disruption in weather patterns so evident, food security will be a big challenge facing the world. According to a World Bank estimate, 345 million people in 82 countries faced acute food insecurity in June 2022, a 155% rise since 2019. As one of the major players in the trade of agricultural products, India might hold a few important cards in the fast-changing geopolitical space. But it has to play its cards right, balancing internal and external priorities. India has, in the past, banned exports of wheat, rice, sugar and even onions to control domestic prices. But with the impacts of climate change becoming severe and food security issues becoming acute, India might find it difficult to effect one-sided export bans without attracting reprisals.