Scarcity is a situation in which resources are finite and limited, while human resoucres are infinite and unlimited. Humans want many things, but because resources are scarce, not all of our wants and needs will be able to be met.
Lately, India has experienced a fall in the country's sugar production. It is known to be one of the countries in the world that produces a high amount of sugar, and is said to be importing sugar from other countries for the first time in three years. Once producing a lot of sugar, India now has to rely on importing sugar from other countries instead of producing the sugar itself in this season of a fall in its sugar production. I quote from the below:
Kanhaiyalal Gidwani said that “sugar production in the country is going to be 40 per cent less compared to last year. Many sugar mills have stopped operations due to shortage of sugarcane”, and that "The annual sugar production for the year is likely to be 200 lakh tonnes while the consumption is 230 lakh tonnes and most of the buffer stock is already in the market".
Here, the concept of scarcity has been illustrated because there is a shortage of sugarcane. This means that sugarcane is scarce and there will not be enough of it to produce enough sugar to meet consumers' wants and needs.
But why then has there been a shortage of sugarcane?
There are some possibly reasons that could lead to a shortage of sugarcane.
Firstly, it is because of the weather. I quote from Anis Majeed, President of Wholesaler Grocery group below:
"The main reason behind this shortfall is a smaller sugarcane crop due to untimely rains".
Since there was "untimely rains", this could possibly make it too wet to grow sugar canes. Thus farmers could have been unable to grow sugarcane even if they want too. With less sugarcane planted and grown, there would be less sugarcanes to produce sugar, and thus India would experience a fall in the production of sugar.
Here, i would like to bring in the concept of supply. Supply is the willingness and ability of producers to produce a quantity of a good or service at a given price in a given time period. Assuming that it is ceteris paribus, whic means all other things being equal, supply can be influenced by various factors, such as weather, cost of production and the influence of modern technology.
In this case, the supply of the sugarcane has been affected by the weather. Because there have been untimely rains, conditions are not as suitable as before to grow sugarcanes. This is a fall in the supply of the sugarcanes, which will cause the supply of sugar, or the production of sugar to fall.
IFDC, the international centre for soil fertility and agricultural development reports that urea, the most common nitrogen fertilizer, has risen in price from an average of US $281 per ton in January 2007 to $402 in January 2008, and to $815 in August.
Also, fertilizers are a basic ingredient in producing healthy crops! If farmers do not buy the fertilizers they will not be able to produce good, strong and healthy crops. As the prices of fertilizers increased from January 2007 to August 2008 as mentioned above, this will discourage farmers to buy fertilizers as they want to avoid high prices. When farmers do not buy fertilizers they cannot grow crops properly, and this will lead to less crops grown.
This could be another possible reason as to why there is a shortage of sugarcanes.
So in conclusion, resources could be scarce because of certain reasons. My post has talked about the weather conditions, and the prices of goods used to produce the good, for instance, how the rainy season was less suitable to grow the sugarcane crops, and how the increase in the prices of fertilizers could possibly cause a shortage of sugarcanes.
Resources are scarce and limited and this can have quite some influence on the supply of the product, in this case, how the shortage of sugarcane has quite some influence on the production of sugar.
Here, i would like to conclude by bringing in the concept of opportunity cost. Opportunity cost is defined as the next best alternative foregone when an economic decision is made. For example, in this case of the fall in sugar production in India, if farmers buy less fertilizers because of the increase in the price of fertilizers, they can use the money for some other purpose. However, this also means that less sugarcane crops can be grown and produced, which would also cause a shortage of sugarcane crops. The opportunity cost would then be buying the fertilizers, growing healthy sugarcane crops, producing and selling sugar and earning money through producing and selling sugar.
sources:
1. http://www.bloomberg.com/apps/news?pid=20601091&sid=aEm2g82hUqzw&refer=india
2. http://www.expressindia.com/latest-news/rising-sugar-price-leader-urges-centre-to-step-in/405518/
3. http://www.moneycontrol.com/commodity/comm_news.php?autono=3347&type=SPR
4. http://www.ifdc.org/focusonfertlizer7.html
Alisa
5y
Interesting. It is hard to imagine life without sugar or salt or other basic commodities. Of course, as such, we are often unaware of the scarcity of such basic commodities.
ReplyDeleteIt also points out a very good point that, admist the economic crisis, even primary industries are affected and that they should also be offered help as well.
- Jeff
I feel that the concept is very interesting and makes readers want to read on.Scarcity is very well-defined.Reasons for shortage of sugarcane are also very clearly explained.I feel that there should have been some elaboration on how we can solve the shortage of sugarcane.
ReplyDeleteThe sources written at the bottem are a good reference to where we can obtain articles on sugarcane.Good Job!
Alisa to Jeff&Munisha: thanks!! (:
ReplyDeleteWhat a "sweet" read! Your post gives a very good introduction to concepts we have just covered in class, and your ability to distill the economic concepts running through the market for sugar is highly commendable!
ReplyDelete