Posted on: 15 Oct, 2013
In near future the impact of high food price will show in terms of more malnourished
Photo: Meeta Ahlawat
Food inflation is back on the national political agenda. In August,
food inflation rose to 18 per cent, the highest in nearly three years.
It is no more a unilateral onslaught of onion price rise on the
political class. All food items now compete with onion in being
unaffordable. By August this year, onion price went up by 245 per cent
and that of other vegetables by 77 per cent. Politicians now use the
broader term, food inflation, as a political weapon instead of evoking
the name of just onion to strike fear in the hearts of opponents. Food
prices have been rising since 2006. In the past five years food
inflation contributed to over 41 per cent to the overall inflation in
the country.
More than two years ago, this column had argued that the era of cheap
food is over. At that time the point was to use this for the benefit of
farmers. Increasing food demand and price could be the best opportunity
to lure farmers back to farms. But today there is a pressing concern,
particularly for a country like India, which has the world’s largest
number of poor. How is the rise in food price affecting the poor? Going
by recent studies and anecdotal field reports, food inflation has
impacted the health of the poor the most. It is an irony that while
globally the fight against malnutrition is intensifying, food inflation
may be impeding it within the country.
The Asian Development Bank has recently made public its extensive
survey of the impacts of food price rise on health. The survey covered
63 developing countries. It measured the impacts of food inflation on
infant mortality, child mortality and undernourishment during 2001-2010.
It found that a one per cent increase in food inflation leads to an
increase of 0.3 per cent in both infant and child mortalities, and 0.5
per cent in undernourishment. Among the developing countries, the
impacts are more severe in poorer countries. Interestingly, the impacts
are lesser in countries that have a higher contribution of agriculture
to GDP. Impacts of food inflation of earlier years was visible in
increased infant and child mortality, and that of recent years in
increasing undernourishment.
Given that an average household in India spends nearly 50 per cent of
its earning on food—the poor spend more than 60 per cent—price rise
will precipitate a crisis. Going by the survey findings, the impacts
will be severe in India. The poor will face double whammy: one, they
will be forced to spend much more on food by diverting funds for other
purposes and two, their health will further deteriorate. India’s poverty
level may increase sharply and the country may not achieve results in
its fight against infant and child mortality and malnutrition.
In 2007, when the Planning Commission released the poverty estimate,
decline in poverty was credited to low food inflation in the previous
year. During 2008-2012 food inflation has averaged 10 per cent per year.
One can infer the impacts on the poor. (Interestingly, a recent poverty
estimate shows a sharp decline in the poverty level in the country.)
This warrants a political and policy response. The political response
must be a search for the reasons behind price rise, while the policy
response must be to fix these reasons. Since 1996-97 when India opened
up its agriculture sector to international market, it has been subjected
to global changes. Practically, Indian agriculture cannot be delinked
from global developments. But it can definitely be protected at the
local level through political and policy interventions. A policy
intervention can be as simple as distributing subsidised food more
efficiently. Or a political intervention can be as simple as bringing
food self-sufficiency back on the national agenda. These articulations
sound clichéd but they need to be emphasised.
