Morgan Stanley
India | Friday, 25 July 2008
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Let's have a hearty laugh over Bush's gaffe

By Surojit Chatterjee
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Posted 07 May 2008 @ 04:46 pm GMT

US President George W. Bush pulls a funny face as he tries to open a locked door
US President George W. Bush pulls a funny face as he tries to open a locked door. Indian politicians, in a fit of nationalist pique, lambasted U.S. President George W. Bush for saying the South Asian country`s increasing prosperity is partly to blame...

Together that makes a "consuming class" almost as large as the population of the United States.

Perhaps, Bush meant that. And, perhaps the Indian leaders kept quiet in this regard, because, like Shyam Saran, former Foreign Secretary and Indian Prime Minister's Special Envoy on Nuclear Issue, they must have felt that Bush's remark had a positive aspect to it as well. "It (the remark) is a recognition of the distance India has traveled as a result of its successful economic development," Saran said, adding that Bush had spoken about the growing prosperity of India when he talked about the country's middle class that was now bigger than the entire population of the US.

But one thing is true: Bush still forgot that these Indians consume far, far less food and fuel than middle-class Americans.

Data collected by the Food and Agricultural Organization (FAO) of the United Nation show that the consumption of cereals (wheat, rice, maize, corn and so on) is growing far more rapidly in the US than in India or China.

According to a global food market report put out by the FAO, the consumption of cereals by India is projected to have grown 2.17 percent from 193.1 million tonnes in 2006-07 to 197.3 million tonnes in 2007-08, while that in China has risen 1.8 percent from 382.2 million tonnes to 389.1 million tonnes.

In the same period the consumption of cereals in the US, the world's largest economy, has been projected to have grown 11.81 percent from 277.6 million tonnes to 310.4 million tonnes. However, a large part of this spike is learnt to have been caused by the country's new-found appetite for bio-fuel made from corn.

With crude oil prices rising to over $115 a barrel, the US is learnt to have utilized 30 million tonnes of corn to make bio-fuel. The FAO data show that the usage of corn in the US to make bio-fuel increased two-and-a-half times between 2000 and 2006.

FAO also noted that though India accounts for a sixth of the world population, the country is estimated to have consumed 9.37 percent of world cereals in 2007-08, almost the same as 9.36 percent in the previous year.

The share of the US, the FAO report said, has gone up from 13.46 percent in 2006-07 to 14.74 percent. China's share, it is worth noting, is projected to have come down from 18.53 percent to 18.48 percent.

Yes, one cannot deny that globally, food prices are spiraling. One cannot also deny that globally, food consumption is increasing, be it in India or in the US.

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