Roses vs. Rice

The other day, happened to stop by at a florist to pick up some flowers. What stuck me was the price of flowers - an astonishing Rs. 10/rose. And this guy was doing brisk business - as are the other florists dotting the city. Go to the local specialty grocery (e.g. Namdharis) and you see all sorts of exotic fruits/vegetables flying off the shelves. And then you step out of this bubble - only to realize that the country, as is rest of the world, is going through a food crisis of sorts. A combination of events, ranging from the global economic downturn to global warming to rising prosperity have put the world on a slow trajectory of demand outstripping supply (much like oil and in time to come, water).Of course, not many of us actually notice the price of food anymore - when was the last time you tracked the price of onions or rice/wheat etc? In that sense, we are truly on the indifference curve, which in itself may not be an issue - so what if a small sliver of the population doesn't let the price of essentials drive consumption any more? However, what may be a problem is the fact that the demand for 'luxury' products like roses, exotic vegetables could be taking precious land and resources away from essential food products. Add to this the fact that these products show an overwhelmingly urban bias - which is probably leading to the agricultural land around the urban settlements increasingly moving towards these cash crops. That would drive up the prices of the essential produce even further - handing out a double whammy to the urban poor, who were driven to the cities in the first place to escape the lack of opportunities in the countryside.

And so this leads to the inevitable economics question - if this is what the market demands, who is anybody to blame? Indeed, you could even argue that this is the efficient markets hypothesis at work. After all, this line of argument goes - commodity exchanges are closest to efficient markets. Try telling that to the person who is struggling to make her ends meet in your urban neighbourhood (she is much closer than you think - look around and see the vast army of direct and indirect help that goes to make your uber-cool lifestyle uber-comfortable). And as the wedge between the haves and the have-nots keeps growing, we will see more of these phenomena around us. Over the course of history, first it was the ruling classes, then it was the landlords, who were then followed by the colonials, and now it is the sons and daughters of the great economic liberalization. In all this, I continue to marvel at the general ease with we continue to live with all these contradictions - we may have some of the worst records of child malnutrition records in the world and we have long been used to farmer suicides as a regular fixture of the economic and political landscape - do not forget that we are also one of the fastest growing wine producing countries in the world. Not to forget the Washington apples which are so conveniently available at our doorsteps throughout the year, all the way from across the world so that we can get our daily fruit fix. That we can import it from the USA, also frees up some more land around our cities so that the supply of roses and carnations can continue without interruption.