Food Rising Prices Prepared By -: ParminderJIt Kaur BS13MAEC003 1St Sem.

PARMINDERJEET KAUR BS13MAEC003

M.A. Economics – 1st Sem.

Food inflation -:Methods to measure , Trends Reasons and Impacts Methods to control Food Inflation Food security - : Need and India ‘ s food securityGovt. SchemesPDS - : Benefits and Problems

Food inflation

Consistent rise in price level .

Rise is neither seasonal nor

sudden.

Methods of Measurement

A . Change in Price Index- :

1. Consumer Price Index (CPI)=

2. Wholesale Price Index (WPI)

B . Gross National Product (GNP Deflator)

𝑛𝑜𝑚𝑖𝑛𝑎𝑙𝐺𝑁𝑃 ÷𝑅𝑒𝑎𝑙𝐺𝑁𝑃×100

Food inflation ( Skyrocketing Prices )

Item 2004 2008 2010

Wheat 9 20 29

Rice 10 22 48

Sugar 14 20 50

Edible oil 40 95 100

Dalda 40 72 85

Channa dal 25 40 56

Mung dal 24 48 100

Besan 20 48 60

Milk 14 20 30

Caro sine oil 18 35 35

Increase in Wheat price is not good.

Current prices in Delhi commodity Price (rs. ) Range Milk 35.00 30-40

Loaf of fresh bread (500g)

22.00 20-27

Rice (1 kg) 44.00 37-50

Local cheese(1kg) 220 180-300

Chicken 180 150-220

Apples 120 100-150

Oranges 70 50-100

Tomato 30 20-40

Potato 20 15.81-30

Lettuce(1 head) 20 20-40

Recommended minimum amount (2000kalories )

commodity Quantity Price (rs. )

Milk 0.25 liter 8.75

Loaf of fresh bread 130 gm. 5.72

Rice 0.13kg 5.72

Local cheese 0.15kg 35.00

Chicken 0.25kg 45.00

Apples 0.34kg 40.80

Oranges 0.34kg 23.80

Tomato 0.21kg 6.30

Potato 0.25kg 5.00

Lettuce 0.15head 3.75

Eggs 3.60 14.40

Daily expense = 192.24 rs. Monthly expense = 5,959.44 rs.

Retail prices of commodities in Delhi (2009-2012)Item 2012 2011 2010 2009

Rice 23 23 22 17

Wheat 15.5 16 13 13

Atta 17 18 14 14

Channa dal 35 38 35 35

Arhar dal 69 84 50 42

Moong dal 68 81 45 36

Masoor dal 54 62 62 39

Sugar 34 42.5 23 17

Milk 25 22 21 20

Groundnut oil 135 113 109 121

Mustard oil 79 71 77 69

Vanaspati 77 57 54 67

Cont.

Increase in basic necessities of life make survival difficult.

Tea loose 149 156 144 107

Salt pack 13 12 11 10

Potato 10 9 8 8

Onion 33 23 21 9

Food Inflation Year Inflation rate 2005-06 4.83

2006-07 7.78

2007-08 5.46

2008-09 8.01

2009-10 14.72

2010-11 15.78

2011-12 7.27

2012-13 14.3

10 % increase is unpleasant for any economy

Factors for rising prices

1) Decrease in Production 2) Minimum Support Price3) Government policies4) Substitute product5) Demand/consumption6) Seasonal Cycles7) International prices8) Hoarding

Impacts of Food Inflation Low purchasing power of common man .

Corruption in PDS shops.

Low income growth .

Measures to Control Food Inflation

Increase in Production

provision of Subsidies .

Proper commercial

policies

Encouragement to savings. Ban on Exports.

Food security

Conclusion

Need of Immediate

action

Passing of Food Security Bill can help .

Corruption in PDS system

due to Political

Intervention .

• Food security • No hoarding • Increase in production