The high prices of essential commodities are expected to decline by the end of the rabi season in the next two months, Vijay Shankar Vyas, member of the Prime Minister’s Economic Advisory Council, said here on Tuesday.
“Food inflation would come down by March-April as we are expecting a good rabi production this year,” Dr. Vyas told journalists on the sidelines of the launch of a publication on agriculture, Millions Fed, produced by the International Food Policy Research Institute.
At the same meeting, the former head of the Indian Council of Agriculture Research, R.S. Paroda, said that high food prices were due to lack of control over middlemen and the failure to link farmers with markets through self-help groups and cooperatives.
Dr. Paroda said India had to go in for large-scale import of essential commodities because of “complacency, inability to take innovations to end-users, and a total lack of accountability of researchers and scientists.”
Dr. Vyas, however, maintained that a good wheat crop along with the boro rice harvest would help contain food prices in the coming days.
He said that the price surge was a consequence of supply side shortages and there was a need to improve the supply position to augment availability, failing which there was the danger of the high food inflation spreading to general inflation.
“My personal view is that at the moment, it is basically a sector-specific policy which is needed, but if the trend continues, then we will have to think in terms of monetary interventions,” he said.
The overall inflation in December rose to 7.31 per cent with food inflation at 17.28 per cent for the week ending January 2.
The government recently announced a slew of measures, mostly based on imports, to contain the prices of sugar, pulses and edible oils.
Pointing out that in the current fiscal year, farm growth would be negative due to drought in kharif, Dr. Vyas said that to reduce dependence on the import of food grains, agriculture should grow at the rate of four per cent.
“For this there should be more investment in the sector. We expect higher growth rate in fishery and horticulture sectors.”