Thursday, February 24, 2011

The Food Crisis in India: The Price is the Crisis

Food: The Price is the Crisis

At the risk of sounding trite, the law of supply and demand still functions. To solve the price crisis in India, supply must be increased. This is a matter of "time place utility"; "form utility"; "economies to scale"; and direct foreign investment. I mention the last consideration because the advice to some can also be considered advice to another. In short, if you know where and how people are being advised to invest, you can position yourself to be the where and the how.

I've included "Having Problems with Foreign Direct Investment?" to give insight into what investors can look for. This can also give insight into those who want to benefit from the investors. I've included The Marketing of India. I've included a metaphor: Starving Nations and Food Equations: A metaphor. This is not to be interpreted as reference to people actually dying. It is to discuss the economics of agriculture.

Having Problems with Foreign Direct Investment?

What are some of the barriers?



It is easy to see that start up costs in some countries are much lower than start up costs in another. If the other country does not have the physical plant for example, it will be cheaper to build that plant in the other country.

Currency considerations are another factor

Incentives from a country with little industry are greater than they are from a country where you will compete with the locals.

Market penetration. Would people in countries in the region be more inclined to buy from countries in the region or from western nations.

Partnering. It is easier to partner with business in some countries where western technology is not readily available by making that technology available.

Just a few thoughts.




Copyright (c) 2011 Slim Fairview

The Marketing of India

Find a need and fill it.

Who has a need for what you can produce?
Partner with that (nation's) companies.

In addition to the profits, offer a minority interest in the company. (This will give investors an incentive to succeed.)

Offer a profit share to the suppliers. (This will give the farmers(?) an incentive to join in the venture.

In addition to money, offer other incentives. [Prestige]. For example: Build schools in the areas where the people are most enthusiastic.

If one or two small companies cannot find the funding (through govt. funding--a bad idea) go to the marketplace.

Economies to scale.

Create a marketing group for the several smaller companies, so they can pool their resources.

In Vermont there is a joke:

Q: "Do you think the rain will hurt the rhubarb?"
A: "Not if they're in cans."

If produce spoils before it hits the market, set up a joint effort to can the produce at the source.

Roads are a government responsibility.

Just a few ideas. (Call me old-fashioned)

Anyone care to amplify, amend, or correct?

Sincerest regards,


PS. Read The Caste Busters article in the NY Times:


Copyright (c) 2011 Slim Fairview

Starving Nations and Food Equations: A Metaphor

[This metaphor does not refer to people actually dying. This refers to the discordance in the economy of agriculture specifically and in the economy as a whole.]

If one person in the group does not have enough food to eat, he may die.

For a while, that means more food for the rest of the group. However, that also means one less person to work the farm. That means less food to eat. Less food to eat means someone will die.

For a while, that means more food for the rest of the group. However, that also means one less person to work the farm. That means less food to eat. Less food to eat means someone will die.

Soon, there won't be enough people to work the farm. That means there won't be enough food to eat.

Get the idea?



Copyright (c) 2011 Slim Fairview


JAL said...

You are right that supply need to be increased but also the administration needs to be improved so that food does not go rotting in storage as was recently reported.

slimfairview said...

Thank you, Jal.

Indeed. Later I will be posting something more specific on the handling of food, and investment in India.