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Resource centre on India's rural distress
 
 

Poor families struggle with higher food prices in India by Laurinda Luffman
After announcing food prices had reached record levels last week, the United Nation’s (UN) Food and Agriculture Organisation (FAO) is now trying to play down concerns about shortages.

The FAO’s representative for Asia and the Pacific region, Hiroyuki Konuma, admitted that food supply and demand were tight but said there were sufficient grain stocks to feed populations. Though certain foods such as sugar, meat, corn and soybeans are selling at a two-and-a-half-year high, wheat prices have yet to rise above the peak in 2008 and the cost of rice, the staple food in Asia, has actually fallen. Nevertheless, China, South Korea and India have all introduced various measures amid growing consumer concern.

In India, food inflation has just risen for the fifth successive week to over 18 per cent, the highest rise in over a year. One leading economist blames the inefficiencies in India’s food system. Hampered by land restrictions and an archaic retail chain, where poor roads and few refrigerated vehicles make transporting food difficult and expensive, India’s farmers are unable to satisfy the growing demand. India’s population of 1.1 billion is increasing by over 1.3 per cent a year and with certain sections of society enjoying greater wealth, more meat and dairy products are being consumed. However economists note that “agricultural produce has not kept up with the demand.”

Pushpa Main lives in Mumbai and has a family of five to feed. Over the past two years, she has seen rising prices for many of the ingredients used in her daily meals – pulses, wheat bread, rice, vegetables and curd. However, with no similar increase in salaries, food inflation is beginning to take its toll. “My boys are young....[and] need lots of rice and flour,” she explained. But affording these staples and the vegetables eaten by the family is proving ever harder on a monthly income of around 133 dollars.

The final straw for Pushpa and many other families has been the soaring price of onions. Heavy rains in November ruined onion harvests and some farmers reported losses of up to 80 per cent of their produce. Onions are a staple vegetable in Indian cooking, usually costing around 20 rupees a kilogram (0.44 dollars). Currently though, they are costing three times as much at 60 rupees (1.32 dollars). This means that many customers are buying only a small handful and Pushpa rues that she can only afford to use them only “for grinding spices”.

To ease the pressure on prices and lessen consumer discontent, the Indian government has banned exports of onions and slashed duties on imports. It even tried shipping in cheaper onions from Pakistan, though domestic shortages there, as well as political sensitivities, meant no supplies reached the Indian market. The Prime Minister of India, Manmohan Singh, is meeting with his cabinet colleagues to discuss how rising food inflation can be tackled. In the meantime, Pushpa speaks for many Indian families when she says ‘times are so hard!’