Green Shoots In Farming, But Centre Is Nipping It In The Bud

Food prices are rising. Agri GDP is recovering, too. But if the government continues to push prices down with an iron hand, like in the case of onions, the recovery process will be derailed

- Rajalakshmi Nirmal

In November, the consumer food price inflation touched 10.01 percent year on-year, the highest since December 2013.

While this is good news for farmers, consumers are unhappy and so is the Centre. With sleeves rolled up, the government machinery is working to control the price rise.

Take the case of onions. An average family comprising five members consumes 2 kg of onions in a month. Even when the price rises to ₹100/kg, it results in an additional expenditure of only ₹200 a month.

By checking the price increase through various measures, the Centre, however, has killed the joy for farmers who saw a good season after four long years.

Some relief, finally

Across farm commodities, there has been an uptick in prices in the past six months. But this recovery in farm gate prices is at the risk of being derailed by government measures.

The CPI inflation for November is 5.54 percent. This is sharply higher than the 2.33 percent in the same month last year, thanks to an increase in food prices. The consumer food price inflation was 10.01 percent in November. This is up from barely 0.3 percent in March.

Higher food inflation is contributed by vegetables — onion, tomatoes — besides pulses, oil seeds and milk. Inflation in onions has spiked from 6.4 percent in August to 144.6 percent in November.

Similarly, inflation in tomatoes has been on the rise for the past six months — from 2.13 percent in May to 13.94 per cent in November. Prices of potatoes, carrots, drumsticks and other vegetables have also gone higher, show ground reports from mandis.