By Categories: Limelight

Introduction:-

The world needs to produce at least 50% more food to feed 9 billion people by 2050. But climate change could cut crop yields by more than 25%.

The land, biodiversity, oceans, forests, and other forms of natural capital are being depleted at unprecedented rates. Unless we change how we grow our food and manage our natural capital, food security—especially for the world’s poorest—will be at risk. (World Bank, 2016)


The status-quo:-

For two decades, leading up to the millennium, global demand for food increased steadily, along with growth in the world’s population, record harvests, improvements in incomes, and the diversification of diets.  As a result, food prices continued to decline through 2000. But beginning in 2004, prices for most grains began to rise.  Although there was an increase in production, the increase in demand was greater.

Food stocks became depleted.  And then, in 2005, food production was dramatically affected by extreme weather incidents in major food-producing countries.  By 2006, world cereal production had fallen by 2.1 percent.  In 2007, rapid increases in oil prices increased fertilizer and other food production costs.

As international food prices reached unprecedented levels, countries sought ways to insulate themselves from potential food shortages and price shocks.  Several food-exporting countries imposed export restrictions.  Certain key importers began purchasing grains at any price to maintain domestic supplies.


High Level Task Force on Global Food and Nutrition Security

The dramatic rise of global food prices and the crisis led the United Nations (UN) Chief Executives Board in April 2008 to establish a High-Level Task Force on the Global Food Security Crisis.  Composed of 23 key members of the UN system, it is chaired by Secretary-General Ban Ki-moon. The primary aim of the Task Force is to promote a comprehensive and unified response of the international community to the challenge of achieving global food and nutrition security.

Progress continues in the fight against hunger, yet an unacceptably large number of people still lack the food they need for an active and healthy life.


Hunger in numbers

The latest available estimates indicate that about 795 million people in the world – just over one in nine – were undernourished in 2014–16. That means one in nine people do not get enough food to be healthy and lead an active life. Hunger and malnutrition are in fact the number one risk to health worldwide — greater than AIDS, malaria and tuberculosis combined.


Measuring global progress against targets

The year 2015 marked the end of the monitoring period for the two internationally agreed targets for hunger reduction:

  • The first was the World Food Summit (WFS) goal. At the WFS, held in Rome in 1996, representatives of 182 governments pledged “… to eradicate hunger in all countries, with an immediate view to reducing the number of undernourished people to half their present level no later than 2015.
  • The second was the formulation of the First Millennium Development Goal (MDG 1), which includes among its targets “cutting by half the proportion of people who suffer from hunger by 2015”.

The Millennium Development Goals and food

In 2000, world leaders gathered at the UN to shape a broad vision to fight poverty, which was translated into eight Millennium Development Goals (MDGs) and remained, until 2015, the overarching development framework for the world. At the end of the MDG period in 2015, there was a final assessment of progress made during the MDG period.

The global mobilization behind the Millennium Development Goals has produced the most successful anti-poverty movement in history. The MDG target of reducing by half the proportion of people living in extreme poverty was achieved in 2010, well ahead of the 2015 deadline.

  • The proportion of undernourished people in the developing regions has fallen by almost half.

  • One in in seven children worldwide are underweight, down from one in four in 1990.

As can be seen from the above results of the MDGs, there was much progress in relation to food and hunger between 2000 and 2015.  However, a lot more work needs to be done. That work will now be the focus of the Sustainable Development Goals.


Zero Hunger challenge

The United Nations Secretary-General launched the Zero Hunger Challenge in 2012 during the Rio+20 World Conference on Sustainable Development. The Zero Hunger Challenge was launched to inspire a global movement towards a world free from hunger within a generation. It calls for:

  • Zero stunted children under the age of two

  • 100% access to adequate food all year round

  • All food systems are sustainable

  • 100% increase in smallholder productivity and income

  • Zero loss or waste of food


Food and the SDGs

Food is also at the core of the Sustainable Development Goals (SDGs), the UN’s development agenda for the 21st century. The second of the UN’s 17 SDGs is to “End hunger, achieve food security and improved nutrition and promote sustainable agriculture”.  Achieving this goal by the target date of 2030 will require a profound change of the global food and agriculture system. Some of the components of this goal are:

  • Ending hunger, and ensuring access by all people to safe, nutritious food;

  • Ending all forms of malnutrition;

  • Doubling the agricultural productivity and incomes of small-scale food producers;

  • Ensuring sustainable food production systems;

  • Increasing investment in agriculture;

  • Correcting and preventing trade restrictions and distortions in world agricultural markets;

  • Adopting measures to ensure the proper functioning of food commodity markets.


UN agencies working for food security

World Food Programme (WFP)

The World Food Programme (WFP), aims to bring food assistance to more than 80 million people in 80 countries and is continually responding to emergencies. But WFP also works to help prevent hunger in the future. They do this through programmes that use food as a means to build assets, spread knowledge and nurture stronger, more dynamic communities. This helps communities become more food secure.

World Bank

Investment in agriculture and rural development to boost food production and nutrition is a priority for the World Bank Group. The Bank Group works with partners to improve food security and build a food system that can feed everyone, everywhere, every day. Activities include encouraging climate-smart farming techniques and restoring degraded farmland, breeding more resilient and nutritious crops and improving storage and supply chains for reducing food losses

The Food and Agriculture Organization of the United Nations (FAO)

Achieving food security for all is at the heart of the efforts of the UN Food and Agriculture Organization (FAO) – to make sure people have regular access to enough high-quality food to lead active, healthy lives. Its three main goals: the eradication of hunger, food insecurity and malnutrition; the elimination of poverty and the driving forward of economic and social progress for all; and, the sustainable management and utilization of natural resources, including land, water, air, climate and genetic resources for the benefit of present and future generations.  FAO also  issues the food price index, which is a measure of the monthly change in international prices of a basket of food commodities

International Fund for Agricultural Development (IFAD)

The International  Fund for Agricultural Development (IFAD)  has focused exclusively on rural poverty reduction, working with poor rural populations in developing countries to eliminate poverty, hunger and malnutrition; raise their productivity and incomes; and improve the quality of their lives.

The International  Fund for Agricultural Development (IFAD)  has focused exclusively on rural poverty reduction, working with poor rural populations in developing countries to eliminate poverty, hunger and malnutrition; raise their productivity and incomes; and improve the quality of their lives. All IFAD-funded programmes and projects address food and nutrition security in some way. IFAD has supported about 400 million poor rural women and men over the past three decades.


 

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    Rising fuel prices in India have led to considerable debate on which government, state or central, should be lowering their taxes to keep prices under control.

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    In the report, the Philippines has a comparable petrol price but has a per capita income higher than India by over 50 per cent.

    Countries which have a lower per capita income like Kenya, Bangladesh, Nepal, Pakistan, and Venezuela have much lower prices of petrol and hence are impacted less than India.

    “Therefore there is still a strong case for the government to consider lowering the taxes on fuel to protect the interest of the people,” the report argued.

    India is the world’s third-biggest oil consuming and importing nation. It imports 85 per cent of its oil needs and so prices retail fuel at import parity rates.

    With the global surge in energy prices, the cost of producing petrol, diesel and other petroleum products also went up for oil companies in India.

    They raised petrol and diesel prices by Rs 10 a litre in just over a fortnight beginning March 22 but hit a pause button soon after as the move faced criticism and the opposition parties asked the government to cut taxes instead.

    India imports most of its oil from a group of countries called the ‘OPEC +’ (i.e, Iran, Iraq, Saudi Arabia, Venezuela, Kuwait, United Arab Emirates, Russia, etc), which produces 40% of the world’s crude oil.

    As they have the power to dictate fuel supply and prices, their decision of limiting the global supply reduces supply in India, thus raising prices

    The government charges about 167% tax (excise) on petrol and 129% on diesel as compared to US (20%), UK (62%), Italy and Germany (65%).

    The abominable excise duty is 2/3rd of the cost, and the base price, dealer commission and freight form the rest.

    Here is an approximate break-up (in Rs):

    a)Base Price

    39

    b)Freight

    0.34

    c) Price Charged to Dealers = (a+b)

    39.34

    d) Excise Duty

    40.17

    e) Dealer Commission

    4.68

    f) VAT

    25.35

    g) Retail Selling Price

    109.54

     

    Looked closely, much of the cost of petrol and diesel is due to higher tax rate by govt, specifically excise duty.

    So the question is why government is not reducing the prices ?

    India, being a developing country, it does require gigantic amount of funding for its infrastructure projects as well as welfare schemes.

    However, we as a society is yet to be tax-compliant. Many people evade the direct tax and that’s the reason why govt’s hands are tied. Govt. needs the money to fund various programs and at the same time it is not generating enough revenue from direct taxes.

    That’s the reason why, govt is bumping up its revenue through higher indirect taxes such as GST or excise duty as in the case of petrol and diesel.

    Direct taxes are progressive as it taxes according to an individuals’ income however indirect tax such as excise duty or GST are regressive in the sense that the poorest of the poor and richest of the rich have to pay the same amount.

    Does not matter, if you are an auto-driver or owner of a Mercedes, end of the day both pay the same price for petrol/diesel-that’s why it is regressive in nature.

    But unlike direct tax where tax evasion is rampant, indirect tax can not be evaded due to their very nature and as long as huge no of Indians keep evading direct taxes, indirect tax such as excise duty will be difficult for the govt to reduce, because it may reduce the revenue and hamper may programs of the govt.