Bush blames India for rise in food prices, receives flak

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"There are 350 million people in India who are classified as middle class. That's bigger than America. Their middle class is larger than our entire population," said Bush last week. "And when you start getting wealth, you start demanding better nutrition and better food. And so demand is high, and that causes the price to go up."

The US President was endorsing US Secretary of State Condoleezza Rice's earlier comments that the world food crisis was a result of "improvement in the diets of people in India and China."

Rice had observed that this was forcing the two countries to keep the food supply within the limits of their geographical boundaries leading to a food grain shortage worldwide.

Stung, the Congress-led Indian government, did not lose time to point out to the US president that his analysis was "completely erroneous" as India is not a food importer but a food exporter.

"George Bush has never been known for his knowledge of economics. And he has just proved once again how comprehensively wrong he is," Jairam Ramesh, Minister of State for Commerce, said, wondering whether President Bush wanted Indians to remain malnourished.

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.

FAO 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.

The FAO data also show that the usage of corn in the US to make biofuel increased two-and-a-half times between 2000 and 2006.

According to Ashok Gulati, the Asia director of the International Food Policy Research Institute, "Factors like the drought in Australia, diversion of corn to biofuel by the US and speculative investments in futures market globally have caused prices to flare."

Agrees India's Defence Minister A.K. Antony. "We cannot deny the fact the food prices are soaring and it is a fact that the world food prices are rising. But we should look into the matter and find out what is the real reason. Many countries including America are responsible for this trend and they have converted millions of hectares of agricultural land for biofuel production. And instead of correcting their mistake, they are blaming India. The need of the hour is to correct the situation, else we would be faced with food crisis and people will die of starvation," he said.

"The President of America and other leaders of that country should think before they advise other countries. If they look within, they would realize that the per capita consumption per person in their own country is almost 10 percent more than that of the Indians," Congress party spokesman, Abhishek Manu Singhvi said.

"India is a not a net food importer. It is a food exporter. The assumption that local prices are increasing because of a changed India is completely erroneous," Congress leader Manish Tewari said.

"The crisis is actually because of diversion of arable land in the developed world for ethanol production and because of changes in the climate pattern," he said.

And, if the food consumption in India has increased, it has also been matched by increase in production, Tewari said, adding that efforts were also being made to enhance the rate of growth of agricultural production to four percent in the next four years.

"Whether it is the global food crisis or energy crisis or climate change, in all these issues there is a global dimension. These issues cannot be resolved by blaming each other," Shyam Saran, Prime Minister's Special Envoy on Nuclear issue, said.

"We have to learn to work together even on the issue of dealing with the food crisis," the former Foreign Secretary said.

However, Saran said Bush's statement had a positive aspect to it as well. "It is a recognition of the distance India has traveled as a result of its successful economic development," Saran said.

He said 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.

The Communist Party leaders were less charitable in their views. Communist Party of India (Marxist) or CPI(M) general secretary Prakash Karat said Bush's "insensible remarks about India's prosperity affecting global food prices are adding insult to injury." He said the US policy of subsidizing and promoting biofuel out of crops was the major reason for the shortages and spurt in food prices. "This is what President Bush has sought to cover up."

"It is preposterous for anyone to say that global food crisis, including the crisis in America, is because Indians are eating more. It is needless to say what the Indians get to eat or what they (Americans) eat. This only shows how he has lost his senses," said West Bengal's Chief Minister Buddhadeb Bhattacharya, adding that Bush's remark was nothing more than a "cruel joke."

The CPI(M) leader said that Bush has lost his mind since his downfall is round the corner. "It is rather the policies of the USA which are primarily responsible for the food scarcity across the world," he added.

Wondering whether Bush wanted Indians to suffer hunger, CPI National Secretary D. Raja blamed US policies for all major crises facing the world, particularly in energy and food sectors.

"The Bush Administration is trying to cover up its own fault by shifting the blame to developing countries. It is the US which has shifted agricultural production from foodgrains to bio-fuel, thereby creating food crisis and pushing up the prices," he said.

Raja described Bush's comment as "a kind of racial statement" which blames India and China for heightened demand.

The CPI leader said India grew its own food and did not "exploit other nations like US imperialism."

Opposition Bharatiya Janata Party or BJP also did not lose opportunity to criticize Bush or the Indian government.

While BJP leader V.K. Malhotra questioned whether Bush wanted Indians to "die of hunger," senior party leader Murli Manohar Joshi said Bush is speaking out of ignorance and that he is not aware of the current agricultural situation in India and the fact that there are many people who still cannot manage two square meals a day.

"BJP feels that his (Bush's) statement is not acceptable and that he is speaking out of ignorance. But if he is speaking knowingly, then it is totally condemnable," Joshi said.

Dismissing Bush's remarks as "totally absurd," BJP party president Rajnath Singh has seized the opportunity to launch an attack on the Congress-led government. It is the responsibility of the planners and the government to ensure supply of food and to control prices at the same time, Singh said, adding that the government has failed to do both.

"It has been proved time and again that the moment the Congress party comes to power, the prices of all essential commodities start moving upwards. Therefore, it is pertinent to ask the Congress party a question that why it has become synonymous with high rate of inflation and spiraling prices," Singh said.

"Almost all sections of society, be it women, poor, laborers, farmers, SCs and STs, have felt betrayed or disappointed in the past four years of UPA rule. The UPA government's biggest failure, in fact, has been on the inflation front," he maintained.

Meanwhile, the US is trying to play down Bush's remark.

Dismissing suggestions that the US President had made any critical comments, the US Ambassador to India, David Mulford said "hostile political commentary is not productive."

Mulford said Bush is a "great friend and admirer" of India and in his remarks on the global food assistance, he had expressed his support for the progress developing nations were making in both food production and nutrition.

The US President, he said, expressed concern about the global food price increase and called on all nations to help in the fight against hunger.

"I believe that this is a time for increased cooperation among nations to solve this problem and that hostile political commentary is not productive," Mulford said.

According to White House spokesman Scott Stanzel, the point Bush was trying to make was that "as you increase your standard of living, the food that you eat - it can venture more into meats that require more commodities to feed the livestock, which uses more of those commodities, whether it's corn or wheat or other commodities, and it drives up the price. So that is just a function of how those food prices that we've seen spike in the - around the world."

Mariann Fischer Boel, the European Union's commissioner for agriculture has also come to the defence of Bush, saying biofuel crops are being unfairly blamed for soaring food prices around the world.

According to Boel, other, larger factors were behind the price increases, which have triggered public unrest, especially in Asia and Africa.

These "other factors" are increased demand for meat and dairy products, particularly in China and India, which has reduced farmland for growing food crops. She also noted that bad weather in 2006 in North America, Russia, the 27-nation EU and in Australia last year led to less production, Boel said.

Also - but harder to quantify - grain and other food commodity speculators have pushed up prices, she said.

"Biofuels won't solve all our problems, but nor will they swallow the world's food supply," the commissioner said in a speech in Brussels on Tuesday, a copy of which was distributed to journalists. "Used correctly, they can be a weapon in the fight against climate change and an insurance policy against fuel supply problems."

"Those who see biofuels as the driving force behind recent food price increases have overlooked not just one elephant standing right in front of them, but two," Boel said in a speech at the European Policy Center, a think-tank in Brussels.

"The first elephant is the huge increase in demand from emerging countries like China and India. These countries are eating more meat. It takes about 4 kg of cereals to produce one kg of pork, and about two kg of cereals to make one kg of poultry meat. So a dietary shift towards meat in countries with populations of over 1 billion people each has an enormous impact on commodity markets," she said.

The second elephant is the weather, and its effect on production, said Boel. In 2006, bad weather hit cereal production in the US, the European Union, Canada, Russia, Ukraine and Australia. In 2007, the same thing happened again, except in the US. "This is not a recipe for low prices," she said.

However, her views clash with those of Jeffrey Sachs, head of the Earth Institute at New York's Columbia University and a special UN adviser.

Speaking on Monday at the European Parliament, Sachs said the fact that a third of the US maize crop is used for fuel "is a huge blow to the world food supply." He acknowledged the US biofuel program has had more impact on food shortages and that Europe's plans for more biofuel output will also start to bite.

He noted that a third of the US maize crop in 2008 would be used to fill petrol tanks.

Sachs also criticized the World Bank for encouraging developing countries to focus on export goods, thus neglecting agriculture and starting to import most of their food.

Sachs has a supporter in British Prime Minister Gordon Brown who is among those who have called for a re-examination of the push for biofuels, which have been promoted as a way to reduce pollution and fight global warming.

Last month, top international food scientists also recommended a halt in the use of food-based biofuels, such as ethanol, because they say it would cut corn prices by 20 percent during a global food crisis.