The price of wheat is watched in India like the price of gasoline is in the United States. And the gyrations are just as crazy.
Until the 1960’s drought and famine used to produce widespread starvation. Mechanized farming, the introduction of productive dwarf wheat (and American contribution to India’s green revolution, via Norman Borlaug) and better irrigation have mitigated the cycles somewhat, but India is still dependent on the monsoons rains and their vagaries.
This year’s rainfall has come in above the long-term average, a stark contrast to last year’s severe drought.
The Manmohan Singh government supports farmer incomes by paying a guaranteed minimum price for crops, and encouraging farmers to sell only to the government. An export ban in place since 2007, meanwhile, means the excess can’t be dealt with sensibly. Here is how the Wall Street Journal reported it.
While the problem is clear, the solutions involves economics, politics and logistics in apparent tension with one another. Don’t assume any quick solution.
