Fracking in the US and guar seed farmer impact in India

An article in the New York Times (July 16,2012) describes how growth in fracking for oil has resulted in increased demand for guar, a water absorbing seed grown primarily in India. With prices rising dramatically amidst growing oil company demand, sales of tractors, house building etc have all increased as Indian farmers spend their new wealth. But the high prices caused seeds to be sold, thus creating stress on future yields. Will the higher prices cause guar to be grown in other countries, thus depressing prices ? Will substitute seeds replace guar demand ? Can guaranteed price commitments to farmers enable risk to be transferred from the farmer and ensure supply ?

About aviyer2010

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