‘Indo-China cooperation needed to tackle soaring food price’

April 11th, 2008 - 9:59 pm ICT by admin  

Boao (China), April 11 (Xinhua) Cooperation between India and China in the farm sector is needed to fight soaring food prices, an Indian business leader said Friday. “It is the right time for India and China to collaborate in agricultural research, agricultural extension and agricultural technologies when food prices are going up,” said Amit Mitra, secretary general of the Federation of Indian Chambers of Commerce and Industry (FICCI).

Mitra is in the southernmost Chinese resort city to attend this year’s Boao Forum for Asia (BFA).

The BFA, which was established in 2001, is a pan-Asian platform for discussing key issues affecting Asia and the world. The theme of this year’s annual conference slated for April 11-13 is “Green Asia: Moving towards win-win through change”.

“The cooperation will not change inflation quickly, as inflation is due to short supply and short supply does not change overnight. But let us make the beginning of cooperation,” Mitra told Xinhua in an exclusive interview.

Mitra also said that collaboration with China to negotiate affordable rates for food grain imports in order to build domestic stockpiles was crucial for the country’s food security.

“The potential for China-India cooperation lies in the fact that China’s food productivity is two to three times more than that of India in terms of grains, rice, wheat and potatoes thanks to irrigation,” Mitra noted.

He said about 16 percent of India’s land has to depend on rainfall.

“This year is going to be a difficult year for both India and China in terms of food. But if we can do something this year toward a long-term view, next year will be better,” he said.

India is currently experiencing an inflation rate of 7.41 percent, worst in last 41 months, while China registered an even more challenging 8.7 percent inflation rate in February.

The Indian government has recently banned export of common rice and edible oil to constrain soaring food prices, he said.

Mitra said wheat prices are mainly affected by Australia, where the major wheat producer has suffered five consecutive years of droughts.

The FICCI official blamed productivity not going up in the world in line with growing demand, and said the development of bio-energy in the US had caused a short supply of corn in the world market.

Rising incomes in China and India leading to a higher demand for meat also helped to drive up food prices, he said.

“In wheat and rice, the world is facing a very serious situation of short supply,” he said and added: “The key to handle the issue is to significantly improve per-hectare productivity.”

Mitra also suggested that India and China form a cartel on energy needs to deal with rising fuel prices. “By 2030, India’s dependence on oil imports will rise to 87 percent and China’s to 77 percent.”

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