Consumers bewildered at rise in prices

Anil Kumar Sastry

Rice and sugar likely to become costly because of short supply

Futures trading in commodities market has led to hoarding of foodgrains

Area under foodgrain cultivation has decreased

BANGALORE: As you dig deeper into your pocket to pay your grocery bill, how often have you wondered why you are paying so much for your staples such as rice and pulses?

Nose around a bit and you will discover that there are reasons beyond the simplest one of demand and supply. The area under foodgrain cultivation has either remained constant or decreased, commodities are being traded in the futures market and these in combination with failure of rainfall and increase in population have propelled prices way up, out of reach of the common man. As if these were not enough, traders hoping to make a killing in an unstable market have resorted to hoarding of foodgrains.

Take the first instance, that of near-stagnation in cultivation of foodgrains. Farmers say there are no labourers available to work in the fields. Most of them have migrated to towns and cities. The only way to increase the area of cultivation is to encourage reverse migration, they say. The Government would do well to work out a comprehensive strategy to entice labour back to the villages.

The area under rice cultivation in Karnataka was 14.84 lakh hectares and the production was 38.47 lakh tonnes in the year 2000-01. It came down to 14.7 lakh hectares in 2008-09 and the production to 36 lakh tonnes.

Similarly, the area under cultivation of pulses was 20.47 lakh hectares in 2000-01 and the production was 9.56 lakh tonnes. In 2008-09, the total area stood at 20.73 lakh hectares and production at 9.45 lakh tonnes.

Total cereal production in 2008-09 stood at 99.32 lakh tonnes as against 100 lakh tonnes in the year 2000-01. Production peaked in 2007-08 with production at 121.86 lakh tonnes. Thus, the agriculture production did not match with the increasing population thereby creating more demand.

Toor dal, which used to cost around Rs. 45 a kg last year, now costs Rs. 90 a kg; rice is up from Rs. 23 to Rs. 40 a kg; sugar from Rs. 16 to Rs. 26 a kg; urad dal from Rs. 35 to Rs. 60 a kg; green gram dal from Rs. 30 to Rs. 55. The list goes on.

Futures trading in the commodities market has led to hoarding of foodgrains jacking up prices in the process, market watchers say.

Toor dal

In the specific case of toor dal, considered the common man’s protein, the abnormal increase in price is attributed to crop failure in many parts of the country as well as in Myanmar, a key exporter to India. Demand for toor dal has gone up in recent times after the Centre made it mandatory in the midday meal scheme in schools. Andhra Pradesh and Tamil Nadu distribute toor dal under the public distribution system. The situation is not expected to improve at least until December when the next crop is harvested.

Officials, meanwhile, say prices of rice and sugar may go up because of short supply.

Market watchers are of the view that it is time the Union Government promulgated the food control order to eliminate hoarding and ensure supply of commodities.

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