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Background
Recent
upswing in the global food prices had a multitude of impacts across
the globe including India. This increase have come in the context of
the latest study on poverty by the World Bank showing modest decline
in poverty in 2005 since early 1980s. This increasing trend in prices
has the potential to reverse the development trend that is being
witnessed in the country.
According
to India’s Economic Survey 2006-071,
primary articles recorded an inflation rate of 9.76 percent as
compared to 5.87 percent a year ago, and contributed 34.87 percent to
overall inflationary impact. Commodity-wise analysis of inflation in
primary products reveals that in cereals and pulses subgroups, eight
commodities – urad,
moong, gram, wheat, maize, ragi, jowar and arhar
– had inflation in excess of 5 percent. The WPI (Wholesale Price
Index) computed by the Government of India showed an increase of over
14 percent from 2005 in all commodities, primarily food articles
having 15 percent of weight in the total indices in which cereals and
pulses witnessed sharp rise over 30 percent.
However,
for the country, price movements at the whole sale level may not be
true indication of the real food price inflation due to huge
differences in the price structure across the states, different crops
and varieties grown and preference by the local consumers. Price
spread up to the retail level varies to the extent of 70-80 percent
of the farm harvest price. These differences make domestic trading
viable. Price analysis of the two important cereals -- Rice and Wheat
-- indicates that wholesale prices have increased higher than the
farm harvest prices while sharper price increases at retail levels
have been reported in regions which are deficit (especially metros
and cities). This brings out the policy dilemma to maintain high
prices at the producers’ end and at the same time keep the prices
at the consumer level affordable.
Food
item constitutes a substantial share in average consumer budget in
India their implication on consumption and poverty linkage is clearly
manifest. Even though poverty has been declining in the country, the
extent of malnutrition among children is high close to 44 percentage
and has not changed since 2000. Even the extent of undernourished
population has only marginally dropped from 25 in 2000 to 20 in
2006.2
As a second most populous country, India often faces more concerns to
balance the two diverging needs of becoming an efficient producer and
exporter of food while securing livelihoods of more than two-thirds
of its population that is economically under-privileged, living under
US $2 a day and spending about 30 – 50 percent of their income on
food. This aspect becomes even more alarming if the foreign exchange
depreciates and imports become expensive as exports turn highly
uncompetitive (on account of higher prices) or if the income growth
is being outpaced by inflationary factors of food prices. The current
rise in food prices seriously threaten the Millennium Development
Goals.
Given
this backdrop, Oxfam India in collaboration with Centad and NACDOR
(National
Conference of Dalit Organisations)
is
planning to dedicate the World Food Day i.e. October
16, 2008,
to the millions of Indians who are exposed to the vulnerabilities of
high food prices. This would be realised through an interactive
seminar entitled ‘High
Food Prices and the Development Challenges in India’.
The seminar will officially launch the Oxfam’s Global Study --
“Double-Edged
Prices”
and Indian Case Study “High
Food Prices in India: Factors, Consequences and Mitigation”
which will be followed by Panel discussion by eminent economists,
government officials, grassroots workers, legal practitioners and
civil society organisations from across the country.
Venue:
Maple
Hall, India Habitat Centre, New Delhi
Click
here for Agenda.
1
http://indiabudget.nic.in/es2006-07/chapt2007/chapter.zip
2
http://ddp-ext.worldbank.org/ext/ddpreports/ViewSharedReport?&CF=&REPORT_ID=1336&REQUEST_TYPE=VIEWADVANCED
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