An Urban's Rural View

When Hundreds of Millions Acquire a "Right to Food"

Urban C Lehner
By  Urban C Lehner , Editor Emeritus
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With elections looming, India's ruling party is pushing ahead with legislation to declare food a legal right and create what the New York Times says would be "the world's largest food subsidy system for the poor (http://tiny.cc/…)." Could that affect international trade in agricultural products?

Maybe. India has 1.2 billion people. In 20 years, demographers say, its population will surpass China's. Between 200 million and 300 million Indians are "chronically hungry." It's tempting to conclude a big new food-welfare program in a country like that will create demand for agricultural products that domestic farmers could not entirely meet.

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But then again, maybe not. The program may serve more people than any other country's but measured by cost it's far from "the world's largest." The Times says the legislation would expand India's expenditures on food welfare to $21 billion a year from $15 billion. America's food-stamp programs runs Uncle Sam $743 billion over 10 years, which would suggest it's three times costlier than what India is proposing.

Consider, too, that the proposal smacks of political pandering ahead of the national elections. Critics see the proposal as a step backward; some of them would prefer to put the money into agricultural research. Economists say India's inefficient, corrupt subsidy system for food, electricity and other basics impedes its development. The legislation is likely to pass despite the criticism -- it will be hard to vote against it without seeming heartless -- but the criticism may shape how bureaucrats implement the program.

Even if India needs more food, its natural inclination will be to expand domestic production. Recall that one of the reasons the U.S. refused to give further ground in the Doha round of World Trade Organization negotiations was India's insistence on being able to continue to protect its farmers.

Still, the proposal could end up having long-term international consequences. India's agricultural imports have risen from the low hundreds of millions of dollars a year in the early 1990s to more than $10 billion a year in 2010 (http://tiny.cc/…). U.S. ag exports to India rose 10% a year during that period, with tree nuts, cotton and fruits and vegetables leading the way. You wouldn't expect hamburger to be next but there's always hope for chicken.

Moreover, India is a beacon for other developing countries. Olivier de Scheutter, the United Nations Special Rapporteur on the Right to Food, says that by making food a legal right, India "can inspire many countries to do the same thing (http://tiny.cc/…)." If that happens, developing-world demand for food could rise faster, sooner, than experts are currently expecting.

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