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Can wheat be a new area of US-India cooperation to safeguard global food security?

Exports from the world’s largest wheat exporter Russia and the fifth-largest exporter Ukraine have been disrupted by the invasion. The two countries account for about 30 per cent of the world’s export of wheat

Arul Louis Apr 11, 2022
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Cooperation on the global food crisis sparked by the Russian invasion of Ukraine could open a new area of cooperation between the US and India, softening the fallout from the rift over dealing with the invasion. A senior US official has spoken of  “extensive discussions about ways to further our cooperation on global food security”. 

A joint programme utilising India’s wheat surplus to avert a global crisis of hunger could change the focus from the diplomatic differences over New Delhi’s continuing ties to Moscow to cooperation between the US and India to protect vulnerable countries from the fallout of the invasion.

Such an effort would also demonstrate the impressive progress achieved by India in the food sector.

Hints of the possibility of such a joint effort have come from Washington.  President Joe Biden’s Spokesperson Jen Psaki has said that during the virtual summit with Prime Minister Narendra Mod on Monday they will consult on “mitigating its destabilising impact on global food supply and commodity markets”.

If it happens, it would build on India’s role as a source of global humanitarian aid that came to the fore during the Covid-19 pandemic when it provided vaccines to countries around the world.

Historically it would be a turnaround for India.

In the 1960s, the US rushed shiploads of wheat to India to avert famine and allowed India to pay for them in rupees that were spent on projects in India. But now India is an exporter because of the phenomenal increase in agricultural production achieved through the Green Revolution launched with US help.

The United Nations has warned of a food crisis arising from the Ukraine invasion hitting developing countries hard.

Exports from the world’s largest wheat exporter Russia and the fifth-largest exporter Ukraine have been disrupted by the invasion. The two countries account for about 30 per cent of the world’s export of wheat, and according to the UN Conference on Trade and Development, about 15 African countries rely on them for more than half of their wheat imports.

The problem is compounded by the zooming prices, with the UN Food and Agriculture Organisation (FAO) reporting that its index of food prices is at an all-time high.

FAO Director-General Qu Dongyu warned recently, "Prices for staple foodstuffs such as wheat and vegetable oils have been soaring lately, imposing extraordinary costs on global consumers, particularly the poorest”.

Meanwhile, India is sitting on a stockpile of wheat estimated at about 100 million tonnes, which is beyond the need of a safety net.  A model already exists for cooperation between the US and India for humanitarian relief.

The Quad, which is made up of India, the US, Japan and Australia, has launched an ambitious programme to provide vaccines to developing countries. Under the programme, India is making 1 billion doses of the Covid-19 vaccines, the US and Japan are helping with the financing and Australia is to handle the logistics of distribution.

Washington and New Delhi, possibly along with other countries, could launch a similar programme to provide the stockpile’s surplus wheat to countries facing a food crisis.

India is the world’s second-largest producer of wheat after China, but because of the high domestic needs and the stockpiling, it has been only a marginal player in the international market exporting only about 6 million tonnes last year.

India is also working to increase commercial wheat exports, helped by the higher prices of wheat and the weaker Indian rupee, and overcoming one of the factors holding back wheat exports, the relatively higher cost of wheat in India in relation to the international market.

A way of reducing the stockpile through internationally beneficial actions could also help India in other ways.

India has also problems with storage and handling of the huge wheat output – and according to the Trade Promotion Council of India, about 10 per cent of it is lost due to poor storage conditions.

The Indian government is forced to directly acquire wheat at guaranteed prices from farmers and its attempts to move to a market structure was thwarted by the farmers’ protests resulting in a further build-up of the stockpile. 

On the humanitarian front, India recently began sending that country 50,000 tonnes of wheat through the World Food Programme to stave off an imminent famine.

When it comes to diplomacy, the Biden administration has taken a more understanding view of India’s ties to Russia, which led to eight abstentions on Ukraine-related matters at the UN and continued trade with Moscow.

Amid criticism of India and media disinformation, Psaki has pointed out that oil imports from Russia “is only 1 to 2 per cent of their imports.  About 10 per cent of their imports is from the United States” and clarified that energy imports are not under US sanctions.

The Biden administration also understands that India’s dependence on Russia for its defence needs has to continue if India is to defend itself against China, given that India has a key role in its Indo-Pacific strategy of meeting Beijing’s challenge.

In return for cooperation on wheat, India may receive help with its energy needs – for which, Psaki has said, Washington was ready.

(SAM)

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