Sunday, February 19, 2012


Being born in a rich country like the US or in Europe is considered a blessing because of high per capita income enjoyed by the population there. It is true that on PPP basis the citizens might not be as rich as thought to be because of high cost of living experienced there. A note worthy phenomenon which cannot escape notice of a discerning observer is the relatively low cost of the food as part of the family income. While in a country like India an average family in the lower middle class category may be spending almost 50% of the income on purchasing food and groceries, the same works out to less than 10% for a US family. In spite of constant inflation eating away part of the purchasing power of the citizen, still the food is considered affordable because of huge subsidies being showered on the farmer community by the government. In spite of the above recent reports suggest that there are significant pockets of poverty across that country with many families unable to muster even the minimum money required to buy essential foods for meeting the daily nutritional needs. A human tragedy of herculean dimension. Here is a take on this queer phenomenon.

"Food prices have risen in recent years due to growing demand in developing nations and speculative shenanigans in the commodities markets, but food in America is still cheap. As Michael Pollan noted in The New York Review of Books, President Richard Nixon reacted to a spike in food prices in the early 1970s by shifting policy from supporting price stability for farmers to increasing output of a few crops such as corn and soy (this explains why there's corn and soy in everything). As a result of this policy shift and technological gains that have increased productivity per acre, Americans spend less on food as a percentage of their income — slightly less than 10 percent — than at any time in modern history. Hunger persisted, however, because at the same time the cost of housing increased markedly, which left people with less money for food. Thankfully, the cost of housing in Las Vegas decreased with the housing bust. Still, hunger persists, though now it's because people can't find work or their income is swallowed up by medical costs."

The food inflation in many developing countries has witnessed alarming spurts and the condition in these places is not congenial for supporting a decent life style. It is not long ago the Prime Minister of India "lamented" about the sorry conditions in the country where majority of children are suffering from gross malnutrition and under nutrition with insufficient access to foods due to economic factors. It is not a solace that the government economists declaring that inflation for the last 4 weeks is less than zero though the food markets tell a different story. The fact is that there is no price stability practically for any food, especially the protective foods like fruits and vegetables and government does not seem to have any clue as to what needs to be done to make them available in plenty at affordable cost.


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