Saturday, August 7, 2010

India Wheat Spoils on Lack of Warehouses

Crop storage has been a problem in India for some time, and this year its hitting hard, as wheat that could have fed up to 210 million people annually is beginning to rot because of lack of warehouses to put it in.

According to estimates by the Indian government, about 17.8 million metric tons of wheat is at risk, where it is stored outdoors under tarps, while the monsoon season begins to hit.

Unfortunately, the price of food and inflation has risen in the double digits for months, and to export the wheat to generate income which could be used in helpful ways, could result in large protests, and possibly riots.

So the grain continues to mount up rather than be used for some good. The only ones being helped by it at this time is the dogs ... literally.

The other hard place the government finds itself in is it is unable to buy wheat because it would increase the growing deficit in the country, as it would have to do it at subsidized prices.

But Biraj Patnaik, a key adviser to the Supreme Court of India, said, "The government is acting like the biggest hoarder. It's unconscionable and unacceptable."

"You're going to end up losing as much money on food grains that go bad than the subsidies would incur if they distributed it to the poor," he added. "It's completely irrational and illogical not to distribute it right away.

A growing number of people are pushing for the privatization of the market in order to increase investment in the sector and drive down prices, and create a better storage and supply channel.

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