More investment in infrastructure, rather than export bans, should be the solution to looming food crises in emerging markets, say analysts.
'If one really wants to balance demand and supply of food, one should not only invest in seeds and fertilisers and bet on consumption patterns, but also invest in infrastructure such as food processing and storage facilities,' said Ralf Oberbannscheidt, managing director and head of agribusiness at fund manager Deutsche Asset Management. 'This is especially true in emerging markets.'
He cited the export ban on wheat imposed by the Indian government in 2007, which pushed up global prices because the country was the second-biggest producer of the grain.
That ban has resulted in a stockpile of over 65 million tonnes as of this month - more than twice India's reserve needs - with the government admitting crops and fresh produce are going to waste because there is nowhere to store them.
Some 40 per cent of fruit and vegetable harvests have gone bad because the country lacks the necessary storage and transport infrastructure, official figures show.
The government is drafting new legislation on food security and revising the export ban on wheat and rice.
'India needs more infrastructure,' Oberbannscheidt said. 'It is not technologically difficult to build storehouses, to pave roads, and to build processing plants.