Dinesh Kamath's Editorial 'Find out new methods to fight food inflation' that was published in Newsband

Find out new methods to fight food inflation

This time the monsoon seems to be playing truant. A poor monsoon can result in bad harvests and this can lead middlemen to hoard food staples such as onion and potato. It is high time onion and potato came under the Essential Commodities Act

Poor monsoon can lead to food inflation. Both Central and State governments have been fighting against food inflation. Setting of actual stock limits and cracking down on hoarders are the strategies adopted by the government to control food inflation. Attempt is being made by the government to reform procurement practices or minimise the role of middlemen or amend the Agricultural Produce Marketing Committee Act to bring food inflation under control.

The thing is if the monsoon fails to revive in the next couple of weeks, the government will have to put up a real fight.  The fight against food inflation is critical for the government as it will have an impact on the monetary policy of the Reserve Bank of India.

Hoarders are speculators, who take a calculated risk in hoarding commodities hoping to make a "killing" when the right time comes. For example, like the hoarders of onions/vegetables in India, speculators all over the world hoard oil/gas thinking there will be a supply problem because of chaos in Iraq. Central Government must think of ways to bring to book these Speculators/Hoarders. At this juncture, the Center/States must also ponder whether the farmers get "FAIR" price for their produce when the labor costs increase sharply.

The only way to bring out some sort of control in the food inflation is by the government working in tandem with the state governments. They must set aside all of their differences and work together. A victory in the war against food inflation can lead to Modi government winning all the state elections that are coming up.

In India, the farmers depend heavily on monsoon for their production of crops. It is high time our newly elected government changed the complete course of the Agricultural sector especially in irrigation in the sense that India should not remain only dependent on the Monsoon for irrigation. The government should try methods like "connecting rivers", making canals for the irrigation etc. When the dependence from the monsoon will shift then automatically lots of problem such as inflation, drought like situation, lesser productivity etc will automatically reduce. Lots of problems in the past have been solved by the use of technology but the government should think on this primary and perennial issue.

The government must set up a policy for import of commodities from near by countries like Pakistan and Nepal to keep the price of essential commodities under check. As mentioned by Modi, the government must take severe action against hoarders and must start a wave for creation of storage space for perishable commodity. It is high time some new methods are invented to win the war against food inflation.