As of August 2023, the food inflation rate in India is recorded at 9.9%, a decline from its recent peak of 11.5% observed in July. This fluctuation raises important questions about the factors contributing to food inflation and its broader implications for society.
The rise in food inflation can be attributed to several key factors:
High food inflation poses significant challenges to the economy, particularly affecting food and nutritional security among the economically weaker sections of the population. This can lead to greater economic instability and social unrest.
Among the food items, pulses, cereals, and edible oils have seen striking inflation rates, with prices of certain pulses skyrocketing.
To effectively address food inflation, several measures can be implemented:
To achieve self-sufficiency, enhancing funding for agricultural R&D and the National Adaptation Fund for Climate Change (NAFCC) is essential. This will help mitigate climate-related risks and secure food and nutritional stability.
In the short term, incentivizing pulses production and adopting yield-enhancing technologies can address the escalating prices of essential food items.
Implementing climate-resilient practices, which include developing high-yielding and climate-adaptive crop varieties, is critical to meeting the increasing demand for food and ensuring long-term food security.
Despite a rise in oilseeds production, India remains heavily reliant on imports for edible oils. This dependence can lead to increased vulnerability when global prices surge.
Currently, funding for agricultural R&D represents less than 1% of agricultural GDP. Moreover, funding for NAFCC has drastically decreased from Rs. 118 crore in 2015-16 to Rs. 34 crore in 2022-23.
Food inflation is a complex issue that requires a multi-dimensional approach to effectively tackle the various factors influencing it.
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