INDIAN FOOD CRISIS-AN ANALYSIS

Presented by:

SPIDERS
 FACTORS AFFECTING FOOD
PRICES

SUPPLY
DEMAND
Factors Affecting Demand

 Rise in income level

Increase in Population

Inelastic Demand for food items

World economic boom starting

2004
 Factors Affecting Supply

 Threats to Sustainable Agriculture

Climatic Change Pollution Land Degradation

due to global due to over
warming cultivation

 Reduction in Cultivable land due to growth

in industries and mining activities
 Supply Chain Mismanagement

 Development of Bio-fuels

 Fragmented Land Holdings

 Not enough access to Institutional Credit

 Rise in oil prices

 Increased demand for meat and dairy

products from richer Asian countries
 Lack
of sustained capital formation in the
country.
 Just 5.8% share of agriculture in gross capital
formation where 70% of the people are employed
and has a share of 20% of GDP.
Impact of Rising Food Prices on:

 Consumers

Producers

Industry Trade and Business

 Impact of Rising Food Prices on Consumers

 Rising Inflation causing wider gap between rich and

poor
 Consumption Pattern Changes
 Malnutrition
 Purchasing Power Reduces
 Standard of living goes down
 Political Ramifications
 Impact of Rising Food Prices on Producers

 Farmers in developing nations not gaining from the

price rise
 Genetically Modified Crops are developed in larger
numbers
 Impact of Rising Food Prices on Industry Trade
and Commerce

 Increased Speculation and Trading in the global

market
 Greater volatility
 Increase in imports to meet demand
 Cascading effect on other sectors
 Slowdown in economy
 Decision Making at a Firm’s Level

Cost Cutting Measures Implemented to sustain Profits

Questions??