Comment

Sometimes, I wonder if it is necessary for our politicians to react to every passing statement of global leaders about the food crisis.

After Condoleeza Rice, George Bush also remarked on India’s growing demand for food as a reason for rising prices. I don’t think Bush said Indians should eat less; just that when more people earn better, they eat better.

And in the short term, that will push prices up. Our own finance minister made equally populist statements on the diversion of corn for biofuels, calling this a “crime against humanity” when “millions of people are going hungry.”

Chidambaram should know that people go hungry not because the US is converting corn to biofuel, but because they don’t have the wherewithal to buy food. By putting money in the hands of the poor through the national rural employment guarantee
scheme, Chidambaram has not only helped them buy food, but borne out what Bush said. It is time to put a stop to all the moralising about someone else’s economic priorities.

If the US feels that fuel is more important than food grain, it has a right to follow that policy. Different countries at different points of time will have different priorities. Some may make the wrong choices, but that can only be said with hindsight.

But every country, like every individual, has the right to decide what it wants to do with its resources. When we are doing the same, why shouldn’t the US be guided by its own interests? It’s not as if we are pursuing sensible policies ourselves.

The government has banned some food exports and made others prohibitively expensive through the levy of export duties. It has thus helped lower prices at home. But is that good? When farmers get less than what they expect, will they plant more grain or less?

What if they decide that growing wheat is not as remunerative as growing oranges and we get into an even bigger food crisis next year? Will Chidambaram carry the can for his wrong decision to keep prices down this year? One must also be wary of guns-or-butter arguments which pit one seemingly heartless option against another as though there is no trade-off between the two.

Economists are fond of saying that if the world merely transfers a fraction of its military budget to feeding the poor, hunger will be banished. This argument always seems so valid till we ask whose guns are to be traded for whose butter?

When India finds itself in a hostile neighbourhood and believes it is spending as little as it can on defence, why should we adopt a moral posture on what the US or Russia should be spending on their defence?

One often hears the argument that some kinds of spending are a waste compared to some other (imagined) noble causes. For example, many people find the crores being spent on cricket a waste, when so many other games are languishing for want of funds. It is indeed a shame, but crores get spent on cricket because that is what attracts advertising and audiences.

To attract fans to other games, you would have to spend even bigger bucks to develop those games into winners. Nobody will invest when the returns are iffy. In life, there is no either/or option. We need both guns and butter.

We need both nuclear energy and solar power. In the long term we can move towards the optimum solution, but in the short term we are condemned to make choices that are messy. Often, choosing one option over another can boomerang.

Chidambaram himself chose growth over fiscal prudence for the last few years when he should have struck a better balance. Now that the chickens are coming home to roost,
he cannot say it was all external factors that did him in. The oil price spike
was there for all to see for the last five years; he sat on his hands when he could have done something about it. Now he is paying the price.
Email: r_jagannathan@dnaindia.net