Macroeconomics - The Great Food Crises - Essay Example

The demand side includes the overall increase in population and the usage of grain in vehicles operated with fuel. Yearly demand has almost doubled due to the increase in population. The increase in demand for the crops used to produce oil has reduced the amount of land which could instead be used to produce wheat. Whereas, on the supply side it is the weather-related issues, high land prices, and the limited availability of water that are leading to less production of wheat.

Analysis

Moreover, hoarding of wheat is also one of the major threats (issue) that government has to face every year. It is done by flour millers, the private sector, government agencies, distributors, traders, and retailers, thus almost all the intermediaries involved through procurement of wheat from farmers to it selling by retailers, everyone to their extent is involved in stockpiling.

Considering the above-mentioned demand and supply situation, the government should try to balance the competing interests of the two sides. The supply side should aim at increasing wheat productivity and output and also supporting the farmer incomes whereas the demand side should aim at increasing household food security by ensuring abundant wheat availability at affordable prices.

In order to increase wheat supply, the bottom line or crux of any policy pertinent to wheat should revolve around one principle that is in case there is a wheat shortage in the country; the deficit could be met by the international markets where the prices of imported wheat are comparatively low.