Friday, June 13, 2008

The Threads of thought - Global Inflation and Agricultural productivity

Few of the reasons, which are responsible for Inflation both in global and national scale, is agricultural productivity. We had couple of debates and posting in this blog ,regarding the issues of agricultural productivity. Some of things predicted at that time, is a reality now. This is indeed a test of the how the blog is performing to deliver right insights and knowledge to people.

The first post regarding agriculture productivity was in 27th February

Entitled as 'Outlay and outcome' it was a pre-Budget post which was trying to see the real condition of agricultural market

The real issue of not focusing in agricultural productivity came in the post of March 3rd 2007.This post was very well discussed , and there are three elaborated comment on this posting .

Issues related to the topic is further discussed when Global food crisis broke down in April 11 and April 14 this year, which has been predicted earlier while responding to the comment of Anthony Mitchell on the earlier post.

Policies of neo-liberalism and globalization have to be put in a deeper scrutiny, which are the voices of the earlier post. The present inflation is an effect of the Global process as remarked by our leaders. I accept that as true. However, that cannot be the end of the discussion. If something is wrong in the global process, we have to figure out a answer. We cannot blindly accept it. We have to think creatively. Might be we should do a online brainstorming session. So, I welcome ideas from all of you.

Thursday, June 12, 2008

Global Inflation – Failure of neoliberal policies and globalisation ?

Global inflation, particularly the increase in food prices, is said to be an outcome of the neoliberal policies underlying globalisation. The surge in global inflation is an outcome of various factors:

1. Rising oil prices . This is affecting the commodity pricing too.

2. Shifting away from food crops and using cereals and vegetable oils to produce bio-fuels in several countries like the US, EU and Brazil, leading to declining food production.

3.Policy neglect by national governments leading to decline in public investment in agriculture, especially in areas like irrigation, productivity enhancing technology and extension services.

4.Withdrawal of the State from procurement and distribution of agricultural commodities, dwindling food stocks held by public agencies and increasing dominance and control exercised by private players in food production and trade

5.Enhanced speculation in the commodity markets through instruments like futures and derivatives with the involvement of financial entities .

A number of Government which includes Indian Government continues to repose faith in the neoliberal policies and globalisation, which seems to be the root cause behind the global food crisis. It is true, that there has to be, a lot of creative thinking into this policies . We can’t go back from globalisation to protectionism era, where again there are more ammount of export and import barriers, promting national interest, which has recently started by certain goverments. Further,we are moving on the maturity stages of Globalisation phenomenon, and the world is more and more becoming flat . So , we have to think on creating a right balance between the protecting the primary markets like agriculture and food production and yet enabling the global trade.