No need to worry about food inflation for six months, says expert

The buffer stock has been procured by the government at Rs 37 per kg and Rs 27 per kg for wheat, and this is sold through PDS at Rs 2-3 per kg, which involves a huge subsidy, he said.

Food inflation is not a concern for the country, at least for the next six months, as the government has doubled its stock of foodgrains, an agri sector expert has said.

There is no need to worry about food inflation in the next six months since India’s stock of wheat and rice as on June 1, 2020 would be to the tune of 95 million tonne to 100 million tonne, nearly 100% more than the buffer stock norms of 41-42 million tonne this season, said Ashok Gulati, Infosys chair professor of agriculture at ICRIER, on Wednesday.

Around 35 million tonne of wheat has already been procured in addition to 5.5 to 5.6 million tonne of rice, and this is a problem of plenty, Gulati said, addressing a webinar on ‘The Impact of Covid-19 on the agricultural economy of India and the way ahead’ organised by NSE.

Moreover, fertiliser sales are 40-45% higher than the previous season, which means that farmers are excited about the coming kharif sowing, he pointed out.

During the nationwide lockdown imposed to curb the spread of coronavirus, it was the farmers of perishable crops (flowers, grapes) who suffered the most, because the lockdown was abrupt and prices collapsed by 30-40%, he said.

Although the country was expecting a larger crisis as far as labour is concerned in Mandis during the lockdown, Punjab set an example by procuring 12.5 million tonne of wheat outside Mandis through 1,800 rice mills, taking the social distancing into account and preventing crowds at Mandis, Gulati said. Nearly 35 million tonne of wheat was procured in 35-40 days, which was a remarkable feat, he added.

Gulati also said that the Rs 20.9-lakh crore package lacked cash stimulus and was more on the liquidity side.

The buffer stock has been procured by the government at Rs 37 per kg and Rs 27 per kg for wheat, and this is sold through PDS at Rs 2-3 per kg, which involves a huge subsidy, he said.

He suggested that instead of offering rice and wheat through PDS, the government should put money in Jan Dhan accounts, which would let people choose what they wished to buy — which could be eggs or vegetables. This would reduce the PDS burden, he added.

About the reforms regarding the Essential Commodities Act, APMC framework and contract farming, Gulati said tat if the government has to bring a legislation, it would be good for the farmer and the country.