Is India a Nutritional Weakling?

While researching the causes of the sugar crisis in Pakistan earlier this month, I found that, on a per capita basis, Pakistanis consume significantly more of almost everything they eat than their neighbors, including wheat, dairy, meat, poultry and sugar. The only comparable category between Indians and Pakistanis are fruits and vegetables, of which both use less than 100 grams a day.

This was before the shameful deaths of several destitute Karachi women scrambling to grab free wheat bags stole the headlines.

In spite of the fact that there is about 22% malnutrition in Pakistan and the child malnutrition being much higher at 40% (versus India's 46%), the average per capita calorie intake of about 2500 calories is within normal range. But the nutritional balance necessary for good health appears to be lacking in Pakistanis' dietary habits. One way to alleviate the sugar crisis in Pakistan is to reduce sugar consumption and substitute it with greater intake of fruits and vegetables. There is an urgent need for better health and nutritional education through strong public-private partnership to promote healthier eating in Pakistan.

Among other basic food commodities, per million population wheat consumption in Pakistan is 115,000 metric tons versus 63,000 metric tons in India, according to published data.

Pakistanis consume over 25 Kg of sugar per person versus India's 20Kg.

According to the FAO, the average dairy consumption of the developing countries is still very low (45 kg of all dairy products in liquid milk equivalent), compared with the average of 220 kg in the industrial countries. Few developing countries have per capita consumption exceeding 150 kg (Argentina, Uruguay and some pastoral countries in the Sudano-Sahelian zone of Africa). Among the most populous countries, only Pakistan, at 153 kg per capita, has such a level. In South Asia, where milk and dairy products are preferred foods, India has only 64 kg and Bangladesh 14 kg. East Asia has only 10 kg.

While it remains very low by world standards, meat and poultry consumption has also increased significantly in Pakistan over the last decade. Per capita availability of eggs went from 23 in 1991 to 43 in 2005, according to research by N. Daghir. Per capita meat consumption in Pakistan now stands at 12.4 Kg versus India's 4.6 Kg.

In addition to relatively large per capita wheat and sugar consumption, Pakistanis also consume significantly higher amounts of meat, poultry and milk products than other South Asian nations, getting more protein and almost half their daily, per capita calorie intake from non-food-grain sources.

About two weeks after the widely reported wheat deaths in Karachi, there is a new damning British report about the serious malnutrition affecting Indian children.

The new British government report on child hunger and malnutrition in India says the nation is an "economic powerhouse" but a "nutritional weakling". Here is an excerpt from Times online story:

India is condemning another generation to brain damage, poor education and early death by failing to meet its targets for tackling the malnutrition that affects almost half of its children, a study backed by the British Government concluded yesterday.

The country is an “economic powerhouse but a nutritional weakling”, said the report by the British-based Institute of Development Studies (IDS), which incorporated papers by more than 20 India analysts. It said that despite India’s recent economic boom, at least 46 per cent of children up to the age of 3 still suffer from malnutrition, making the country home to a third of the world’s malnourished children. The UN defines malnutrition as a state in which an individual can no longer maintain natural bodily capacities such as growth, pregnancy, lactation, learning abilities, physical work and resisting and recovering from disease.

In 2001, India committed to the UN Millennium Development Goal of halving its number of hungry by 2015. China has already met its target. India, though, will not meet its goal until 2043, based on its current rate of progress, the IDS report concluded.

“It’s the contrast between India’s fantastic economic growth and its persistent malnutrition which is so shocking,” Lawrence Haddad, director of the IDS, told The Times. He said that an average of 6,000 children died every day in India; 2,000-3,000 of them from malnutrition.

Related Links:

FAO Statistics

Grinding Poverty in Resurgent India

Pakistan's Sugar Crisis

Agricultural Diversification in South Asia

Nutrition in Pakistan

FAO Report on Food Consumption Patterns

Global Hunger Index Report 2009

Wheat Consumption in India and Pakistan

World of Sugar

Pakistan's Livestock Farming

Why are the Food and Fuel Prices Soaring?

As South Asians, Americans and the rest of the world suffer the impact of doubling of the food and fuel prices in about a year, there is a strong desire around the world to understand and address the underlying causes driving this phenomenon. While conspiracy theories abound, the more serious reasons being explored include imbalances between supply and demand and market speculation by large financial players. Meanwhile, the people continue to suffer in countries such as Pakistan and India where the poor spend as much as 66% of their income on food and fuel.

Increasing demand from the fast growing economies of the BRIC countries is usually acknowledged as a factor. Simultaneously, supply jitters have been caused by "peak" oil theories bandied about Saudi Arabia and crop failures in traditional breadbaskets of the world. In addition, the US and Japan have become the largest hoarders of oil. The Strategic US Petroleum Reserve (SPR) is an emergency petroleum store maintained by the United States Department of Energy. The US SPR is the largest emergency supply in the world with the current capacity to hold up to 727 million barrels (115,600,000 m³) of crude oil. The second largest emergency supply of petroleum is Japan's with a 2003 reported capacity of 579 million barrels (92,100,000 m³). The current US inventory is displayed on the SPR's website. As of June 11, 2008, the current inventory was 704.9 million barrels (112,070,000 m³). At current market prices ($138 a barrel) the SPR holds over $38.7 billion in sweet crude and approximately $50.9 billion in sour crude (assuming a $15/barrel discount for sulfur content). The total value of the crude in the SPR is approximately $89.6 billion USD.

However, it appears that the increased demand, greater national hoarding and limited supply do not completely explain such a steep price rise over less than a year.

It seems the line between financial assets such as stocks and bonds, and essential commodities such as food and oil, is rapidly fading with huge institutional investors including pension and hedge funds looking to increase their returns substantially. Some of them may be buying oil, food and other physical commodities as well as futures contracts to hedge against inflation and the falling US dollar.

Recently, George Soros, the legendary investor and speculator, told a US senate committee that speculation, while not the only contributor to the recent runup in crude oil prices, "reinforces the upward pressure on prices." He said speculation is "distinctly harmful" to the economy.

"We're paying, some believe, as high as a 50% premium to the pockets of speculators that are operating in markets that are completely unpoliced," said Michael Greenburger, a University of Maryland professor and former CFTC official. "At least 70% of the US crude oil market is driven by speculators and not people with commercial interests."

"Americans may be surprised to learn that the oil futures markets were substantially deregulated by the CFTC staff decisions that were made behind closed doors," said Sen. Maria Cantwell, D-Wash. "Now this London and Dubai loophole is keeping important U.S. energy trading in the dark and without proper light ... it can give manipulators free rein in energy markets."

Investigating food prices in India, a government appointed commission concluded that futures trading has nothing to do with the increase in the prices of food products such as wheat and rice. That was the unanimous finding of the four-member committee headed by Abhijit Sen asked to look into the connection between the two.

While the futures trading may not have caused the price rises, there is a strong belief that investors are playing their part in the food chain and may contribute to further price volatility.

Soaring agricultural prices, growing demand for biofuels and the growth of the Chinese and Indian economies are leading top global investment banks to buy farmland in a bid to embrace the physical commodities market, according to Reuters.

Investment banks and hedge funds are buying up vast tracts of agricultural land around the world, hoping to ride the so-called "commodities supercycle" that has lifted prices of everyday agricultural commodities such as wheat, rice, soybeans and corn to record highs, says a Reuters report.

One of the Middle East's largest private equity firms has been quietly buying up farmland in Pakistan as part of plans by the United Arab Emirates to increase food security and to control inflation, according to a gulf website arabbuild.net. Please read prior blog posts on this subject.

US investment bank Morgan Stanley has bought several thousand hectares of land in Ukraine, Europe's grain basin. Reuters says Morgan Stanley declined to comment, but industry executives say many other big banks are looking at land.

A recent NY Times report raises concerns about the commodity speculators jumping into the fray. By owning land and other parts of the agricultural business, the investors, including sovereign funds, are freed from rules aimed at curbing the number of speculative bets that they and other financial investors can make in commodity markets. “I just wonder if they need some sheep’s clothing to put on,” said Jeffrey Hainline, president of Advance Trading, a 28-year-old commodity brokerage firm and consulting service in Bloomington, Illinois in the United States.

If the governments do decide that the futures trading is driving significant price increases rather the fundamental supply-demand equation, then the possible fixes include a range of options. The regulators can just ban futures trading outright (as they have in India) in one or more commodities or, at a minimum, significantly increase margin requirements (from 5-10% to 50%)for futures contracts to dampen speculation. The latter option is better because it does preserve the ability of genuine producers and consumers to hedge against future price volatility. Given the potential for artificially high food and fuel prices causing major disruptions in the global economy, it would be wise for major governments to act now, rather than wait for conclusive evidence.

On the oil speculation front, the US Congress appears ready to act to restrict oil futures trading, under mounting pressure from the airline industry, American consumer groups, the International Monetary Fund and Billionaire investor George Soros. A similar effort will probably be needed to curb food price increases based on speculation.

Here's a video clip of world leaders, including Shaukat Aziz, at the World Economic Forum in Kuala Lumpur talking about Global Food and Energy Crises:

Entrepreneurs See Opportunity In Food Crisis

Richard Spinks, a 41-year-old British entrepreneur, is going door-to-door, leasing small plots of land from hundreds of thousands of poor farmers in western Ukraine. His company, Landkom International PLC, has planted wheat, barley and rapeseed (aka Canola) on a combined 25,000 acres. Landkom expects to reap its first big harvest this fall, according to the Wall Street Journal.

As the world food crisis becomes acute, entrepreneurs see opportunities to tackle it and make big money. Such efforts could give a much-needed boost to feed the growing population of the world. For years, big agribusiness companies have used new seed and fertilizer varieties to push yields higher. But as technology gains have slowed, the search for additional arable land has intensified. That's created an opening for entrepreneurs with visions of re-collectivizing the land in former communist countries and boosting production.

The total combined arable land in Russia, Ukraine and Kazakhstan that fed the former Soviet Union adds up to about 437m acres, almost the same as the total arable land in the United States. Among other nations with large arable acreage, India has 400m acres, China has about 350m acres and Brazil 146m acres. Of these countries, only China and Brazil have increased total arable land by about 10% over the last decade while others have shrunk. Compared to these nation, Pakistan has about 50m acres of arable land. And, given appropriate investments, Pakistan can increase its arable land by 10-20% over the next decade.

The current food crisis presents an opportunity for entrepreneurs and investors to invest in Pakistan's farm sector and reap big benefits. The new government in Pakistan should seize this opportunity by formulating a new policy of investment in the agriculture sector to bring prosperity to rural areas in Pakistan and help feed the nation and the world.

Can Pakistan Enhance World's Food Security?

While the term "energy security" has been in vogue for many years, the term "food security" seems to be competing with it for an equal or higher ranking on the world agenda. Food Security is particularly high on the list for countries such as China with the world's largest population to feed and the Middle East nations such as Saudi Arabia and Libya who depend on imported food.

So what are these countries doing? They are acquiring farmland in the nations considered world's breadbaskets. Countries in Africa, Latin America, and Eastern Europe who have plenty of farmland but not a lot of money. While these efforts will help increase food production, a downside of an aggressive policy for more farmland is that it will accelerate deforestation and hurt the environment.

The Chinese agriculture ministry has drafted a proposal to support the acquisition of farmland, especially in Africa and South America, to help guarantee China's food security, the Financial Times reports. Beijing already promotes aggressive foreign acquisition by Chinese oil, banking and manufacturing firms -- to mixed receptions abroad at a time of heightened suspicion surrounding sovereign-wealth investments. A Chinese official tells the FT that there shouldn't be any problem getting the policy approved, but that Beijing worries that foreign governments may be "unwilling to give up large areas of land."

And at a time of relative food shortages and soaring prices for cereals and other nutritive commodities, China will already have some competition, says the Wall Street Journal. In the Middle East, the region most dependent on imported food, Saudi Arabia has said it plans to invest in farm and livestock projects overseas to get a handle on its commodity prices and ensure supply, while Libya has been talking to Ukraine about the possibility of growing its own wheat there. Any shift of economic power from the Middle East to the likes of poorer Ukraine, one of the world's biggest wheat producers, could revive the Heartland Theory of 19th-century and 20th-century geographer Sir Halford John Mackinder, who argued control of the natural resources of the East European breadbasket region was key to controlling the "World Island" of Europe and Asia, and thus the world.

This developing new dynamic creates an opportunity for Pakistan to form partnerships with the Chinese and the Saudis aimed at dramatic improvement in the productivity of its farmland in Sind and Punjab without actually selling the land to foreigners. Farm modernization to realize the full potential of its farmland is a goal Pakistan must set for itself for this decade. If pursued with a clear plan and strategy, Pakistan can not only feed its own population well but it could also become the breadbasket for the world and improve the living standards of Pakistan's rural population.

Prior efforts beginning in 2000 toward corporate farming have met significant opposition. For example, an official of Pakistan's Ministry of Food and Agriculture said in July 2000, "We are working to finalize a policy for introducing corporate agriculture in the country where large farm holdings will be allowed to companies which would seek listing in the stock exchange."

Under the proposal, foreign companies were to be granted a 30-year lease on government-owned land that could be extended for another 20 years. However, food rights campaigners expressed the fear that profit-driven agribusiness transnational companies (TNCs) would use Pakistan as a base for exporting cash crops which would replace staple cereals on the country's farms.

Since the failure of the effort in 2000, Pakistan has again initiated efforts in 2007 to build serious agribusiness using modern techniques as part of a mega project sponsored by the Ministry of Food, Agriculture and Livestock, with the technical and financial assistance of Asian Development Bank. The executing agencies include Ministry of Food, Agriculture and Livestock (MINFAL), Department of Agricultural & Livestock Products Marketing & Grading, State Bank of Pakistan, Provincial Agriculture, Livestock and marketing Departments, and the Agriculture and Livestock Departments of FATA, FANA and AJK. The Project has its headquarters in Islamabad and implementation offices in Punjab, Sindh, NWFP, Balochistan, Federally Administered Tribal & Northern Areas and Azad Jammu and Kashmir.

To the dismay of biodiversity advocates and environmentalists, Brazil has become a dramatic success in food production by making use of the Cerrado (literally meaning Closed), a region of grassland near the equator that was considered not cultivable. The large scale American agribusiness investments have transformed the region into a major producer of soybean and made Brazil a food exporter rivaling the United States. Soybean is a major source of protein for livestock. Livestock farming is in big demand as the world consumes more meat and dairy products. Brazil is also the largest producer and consumer of biofuels and self-sufficient in energy.


The world food and energy crises clearly present opportunities for investors to invest in countries such as Pakistan with plenty of fertile farmland but very low farm productivity. By bringing the farm expertise and enhancing crop yields, agribusiness companies such as Archer-Daniel, Cargill, Bunge, Dow and Monsanto and their international competitors have tremendous opportunities in South Asia. So do companies like Caterpillar, John Deere, Kubota, Hyundai, Mahindra and others in the farm machinery and construction business. While many South Asians may be concerned about the negative impact of big agribusiness on the society and the environment, the over-riding need for efficiency to feed the growing population and international export opportunities will likely trump these concerns.

World Food Crisis Alarm Bells Ring Louder

"I am pleased to announce that ADB will provide $500 million as immediate budgetary support to the hardest-hit countries so that they can bring food to the tables of the vulnerable, poor and needy," the Asian Development Bank Chief Haruhiko Kuroda told a news conference, adding that he expected to make the first loans within weeks. But Mr. Kuroda said the best long-term solution to painful price spikes was through boosting agricultural output, adding that the bank would double lending to agricultural, natural resource and infrastructure projects to $2 billion in 2009.

As the alarm bells sound louder in the major world capitals, the rich nations and the multi-lateral institutions such as the World Bank, the Asian Development Bank, UN Food Program and others are showing a great sense of urgency in responding to the growing international crisis.

In the absence of any coordinated international effort to assure food supplies, nations are acting unilaterally to avert the crisis within their national borders. Export bans and prices floors established by main rice exporters China, Pakistan, Vietnam and India have increased price volatility and raised uncertainties about future supplies, according to the ADB. Indian sugar and soy-oil futures are dropping amid market talk that the government may halt trading to guarantee food supplies and rein in the inflation that is at its highest level in 3½ years. There is some evidence that, at least partially, the dramatic food price increases are being fueled by hedge funds and speculators. Investors fleeing Wall Street's mortgage-related strife have plowed hundreds of millions of dollars into grain futures, driving prices up even more. The US Federal Reserve efforts to pump liquidity into the markets have exacerbated the crisis.

"Trade measures or price controls are not efficient ways to combat the food crisis or food-price inflation. It distorts the market and could exacerbate the situation in the international grain market," Mr. Kuroda said in an interview carried by Reuters.

The World Bank, with its focus on poverty reduction, is concerned about reversals of the gains made in war against poverty if the food crisis is not dealt with effectively. “Based on a very rough analysis, we estimate that a doubling of food prices over the last three years could potentially push 100 million people in low-income countries deeper into poverty,” World Bank President Robert Zoellick said. “This is not just a question of short-term needs, as important as those are; this is ensuring that future generations don’t pay a price too.” He reiterated his call for a “New Deal for Global Food Policy” to meet the food price crisis, which includes a call for US$500 million from donor governments to close an immediate gap identified by the UN’s World Food Program. To date, about half of the half-billion-dollar target has been met, Zoellick said.

US President Bush and Secretary of State Condeleeza Rice have also expressed serious concerns about potential instability in the low-income countries. The US is pledging to more than double its food aid in 2008-2009 to avert a major humanitarian and security crisis. Mr. Bush is also attempting to at least partially untie the US food assistance to purchases from US farmers. The European governments have already done so.

As the nations of the world and multi-lateral institutions wake up to the fact that there is a serious food crisis gripping the world, it is important that they work on a comprehensive strategy beyond just the emergency food aid. The strategy needs to focus on helping the farmers in poor nations with education, infrastructure and facilities to enable them to feed themselves and their nations. The small farmers in poor countries have very low productivity and crop yield due to lack of water management, good quality seeds, fertilizer, equipment, storage and transportation facilities, etc. Such investments are the best way to prevent backlash against globalization, reduce conflict and poverty and assure peace and security in the world.