IGNOU BECE 214 2017 2018 - What policy options exist for combating the issue of ‘food infla

Question

What policy options exist for combating the issue of ‘food inflation’?

06 Mar 2018

Answer :

Word Count : 671

Policy options exist for combating the issue of food inflation are -

Increase farm productivity: Given limitations in expansion of agriculture acreage, improvement in yields assumes great significance. As compared to developed countries, India's crop yields are low and in some cases, less than the world average. Yield growth rates in 2001-2010 have stagnated to <1.5 per cent for rice and wheat as compared to over three per cent in the 1980s.

Lower costs of inputs: India is a significant net importer of phosphatic and complex fertilisers and large subsidies would be unsustainable in the long run leading to ballooning fiscal deficits which lead to inflation. Impact of fuel costs, which is a key input for transportation of agri-commodities to processing or consumption centres is significant and India is a net importer of crude to the extent of 70 per cent of its requirements.

Increase in share of

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