• There was an increase in retail food prices in the monsoon season of 2023 in India for essential vegetables like tomatoes, onions and potatoes (TOP) to cereals like rice, wheat and tur dal.
• Urban India has a Consumer Food Price Index (CFPI) of 10.42%, compared to rural CFPI of 9.67%.
• The pulse prices rose faster in urban than in rural India, and rural inflation in spices and cereals exceeded the urban scenario.
• When inflation rises, consumers buy lesser due to decrease in purchasing power, that affects nutrition and food availability.
• Several crops like rice, maize, tur and urad are affected due to El Nino effect and alterations in monsoon pattern.
• It can lead to disruptions in Global supply chains and alter trade export- import balance.

Food Inflation

• Food inflation is the rise in price of food commodities that endangers food security, especially for developing countries.
• Causes: increase in production, labor and transportation costs, climate change, population, hoarding of food items, land exploitation etc.
• It is a significant component of poorer households’ monthly expenses that has a direct bearing on political fortunes.
• It is measured as the average price rise in 12 sub-groups within the Consumer Price Index (CPI) basket.
• CPI is a macroeconomic indicator that measures the change in price level of goods consumed by retail consumers over a particular period of time.

Trends of food inflation in India:

• Price trends of major food items suggest that food inflation is widespread, and may not be as transitory as tomato prices.
• Food grains witnessed high inflation in recent months despite record output of 330 million tonnes in 2022-23 (Third Advanced Estimates by the Ministry of Agriculture).
• Factors: uneven distribution of monsoon, prevailing weak El Nino conditions are potential risks to crop production, which put pressure on food prices.
• When two of the sub-groups of non-alcoholic beverages and prepared meals, snacks, and sweets are excluded, Consumer Food Price Index (CFPI) is at 9.94%.
• Inflation rate of vegetables is highest at 26.14%, followed by spices (23.19%), pulses (13.04%), and Cereal (11.85%).
• The steady rise in the prices of pulses to about 13% by mid-2023 is the highest since 2021.
• Although total pulses production was higher (275 lakh tonnes in 2022-23), the output of tur declined by 18.7% and urad by 6%.
• Cereals and products registered double-digit inflation for a year, despite record production of rice (135.5 million tonnes) and wheat (112 million tonnes) in 2022-23.
• Sowing in kharif season indicated a fall in acreage under urad (13.8%), moong (8%) and tur (8%), indicating that inflation in pulses may gain momentum in future.
• Oils and fats showed a deflationary trend for the past 11 months, but it may reverse onset of festival season.
• Oilseeds’ production increased, but 50% of domestic demand for edible oils is met through imports.

Steps to be taken:

• Augmenting Domestic supply: Supply of pulses through imports is limited so expansion of pulses production through adoption of yield-enhancing technology is needed.
• The dependence on imports may rise further, unless domestic production expands.
• Sustainable Agriculture: Pulses cultivation can lead to positive externalities including enriching soil fertility, ‘more crop per drop’, and short crop duration.
• It can be adequately incentivized in the short-term, while developing high yielding climate adaptive varieties in the long-term.
• Policy measures: As high food inflation affects food and nutritional security, especially for economically weaker sections, decisive policy measures lead to self-sufficiency in food production.
• Seed enhancement: With stagnant yields, increased weather aberrations and limited scope for expanding acreage, it is imperative to develop high-yield and climate-resilient varieties and practices to meet rising demand and ensuring food security.
• Financial management: There must be enhanced funding for agricultural research and Development (R&D) to about 3% of agricultural GDP from the existing (less than 1%) to tackle falling crop yields, deteriorating soil fertility, loss of groundwater, etc.
• The National Adaptation Fund for Climate Change (NAFCC) decreased from ₹118 crore in 2015-16 to ₹34 crore in 2022-23.

There is an urgent need to enhance agricultural R&D for climate-resilient practices, technologies, crop varieties and ensure self-sufficiency in food and nutritional security.