By Arun Kumar, IANS,
Washington : Calling the global food crisis man made, India has demanded a rationalisation of the biofuels policy and a quick agreement on removing agricultural subsidies to make food trade more efficient and fair.
“The global food crisis is not a natural catastrophe. It is man made,” Indian Finance Minister P. Chidambaram Monday told an annual meeting of world financial leaders here while seeking concerted action to deal with the unfolding financial crisis.
Fearing that more than 100 million people may have slipped back into poverty, pushing back efforts to eliminate poverty by about seven years, he stated: “Nevertheless, crises do give us an opportunity to quickly take stock of what went wrong and to act in a concerted fashion.”
In the absence of Chidambaram, who has stayed back home to deal with the impact of the global meltdown on the Indian economy, his statement at the plenary session of the International Monetary Fund and the Word Bank meeting was read out by Economic Affairs Secretary Ashok Chawla.
“The financial sector turmoil that originated in the US is now unfolding into a full-blown crisis across many developed economies and possible spill-overs to rest of the world,” he said seeking action “not just to alleviate the immediate effects of the crisis, but to create a better world especially for its poor.”
With inflationary pressures arising out of elevated food and fuel prices not yet fully subsiding and the recessionary trend slowly becoming a reality, the world economy is now on a sharply decelerating trend after five years of high growth, the Indian delegate said.
Describing the global food crisis as not a natural catastrophe, but man made, Chidambaram said: “The fall in world cereal production, low food stock levels, and crop diversion for the bio-fuel sector have played a major role.”
“Add to these, the role of speculation and financialisation of commodities, and we have an unprecedented crisis,” he said stressing the need for “urgent action on rationalising the biofuels policy.
“We should also quickly reach agreement on removal of agricultural subsidies; arrive at a successful conclusion of the Doha Development Round; and create the conditions for a more efficient and fair global food trade,” Chidambaram said.
Turning to the role of IMF, the Indian delegate said the current crisis and the attempts at its resolution have raised a number of concerns.
With risk management and supervisory practices in developed countries lagging behind the pace of financial market innovations and new business models, Chidambaram said “I am afraid, there will be substantial fiscal costs with attendant implications.”
The Fund’s principal mandate is to provide the global public good of financial stability through two key tasks – surveillance and providing the comfort of readily available financing to members, he said.
While separate efforts are already underway in several fora, Chidambaram said: “It would be more appropriate to organize the fragmented efforts on a global scale under the inclusive umbrella of the IMF.”