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I have NDTV news, which is the major news channel in India and when President Bush was on television speaking about how the 350 million middle class Indians were causing the hike in food prices: ‘‘Their middle class is larger than our entire population. 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.”
Alright, economics 101 – when demand is high, supply goes down and therefore prices go up. But is that relevant to India and is the Indian middle class causing the price hikes in food?
The fact is that India is a net EXPORTER of food, not a food importer. Hence, local consumption of food by Indians has no bearing on global food prices. The developed world needs to stop pointing fingers at India and China and rein in its OVER-consumption patterns: The United States, with less than 5% of the world’s population, consumes 24% of the world’s energy, 27% of the world’s aluminum, and 21% of the world’s beef. U.S. residents own 32% of the world’s motor vehicles.
Moreover, food prices are going up especially for commodities like wheat and soybean since these are being re-directed into producing bio-mass fuel. Again, which country uses the most fuel? It doesn’t need to be spelled out for everyone.
The developed world needs to stop preaching to developing countries like India, Brazil and China and lead by example.