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  • Category: Miscellaneous

    What is the main cause of rise in food prices?

    As we all know, in the last 20 years food prices have increased drastically in India. We can't even imagine that this much change in price occurred in the last decade. What may be the reason for such price rise? Whom do you think is the main cause of inflation from the following options?

    1. Politicians
    2. Black Marketing
    3. Corruption
    4. Weather
    5. Population

    Inflation is surely dependent on the above factors. Rise is prices can be detrimental to poor families, as they don't have enough money to support a good living. In your opinion what is the most important factor that contributes to poverty?
  • #578423
    Let us try to understand the issue as a layman. The cost or prices are based and demand and supply ratio. The population is ever increasing at an exponential rate. The growth in the agricultural produce is not commensurate with the population growth rate and therefore resulting in shortages of supplies and hence escalation in the prices. The typical example is the necessity to go far import of pulses.

    The prices of food items rise due to several factors, some of which are as follows -

    1. Increase in the cost of production due to price rise in fertilizers, wages of labor, fuel etc.
    2. Shrinking agricultural fields due to urbanization and industrialization etc.
    3. Whether outcome.
    4.An increase in the cost of transportation, supply chain mismanagement, many mediators, hoarding etc.

    There is no direct marketing by the farmers to the consumers and profit margin of each mediator increases the cost further . Apart from above factors the usual business tactics of the merchants e.g. creating an artificial shortage by hoarding etc., results in the increase in the net price.

    Let us encourage each other in sharing knowledge.

  • #578427
    There are many reasons for increase in the prices of food prices. For example if you take agricultural produce, there are three main reasons. As per the law of diminishing returns, when a land is put to repeated use, the yield will be with diminishing return mode. That means the out put at the end of each season would be decreasing and in that case the farmer wont be interested to produce and thus would sell the land for other purpose. The second reason being heavy demand for housing. As the population is increasing and the places in cities have exhausted, most of the cities have now extended to suburbs. Normally we find agriculture fields in the outskirts of town and cities and the pressure on housing forced the farmer to sell the land for obvious reasons. And the last main reason is that the government in every state is pooling the land for Industrial purpose and various use and thus farmers are forced to sell even the fertile land to the government at throw away prices and thus agriculture produce went short of expectations and prices rising continuously.
    K Mohan
    I consider myself as the learner everyday

  • #578430
    There are many reasons for increase in the prices of food prices in India.Black Marketing,Population increase, increased cost of transportation,Whether conditions,urbanization, increase in the cost of living,increase in purchasing power of customers.hoardings, entry of so many middle men.
    'Education is a lifelong process, keep on learning new things'

  • #578442
    The main reason of inflation in our country is CORRUPTION. Everything from the beginning to end never ends without corruption. When farmers are purchasing seeds they're facing corruption by the dealers (also by government officials), then while selling the grains, fruits, vegetables etc to vendor they're getting less price comparing to their effort. Similarly in every sector without corruption nothing happens in our country. Due to this only the price/rate of each and every product rises and we're bound to go accordingly.
    Regards,
    Naresh Kumar
    'Every bad situation will have something positive. Even a dead clock shows correct time twice a day.'

  • #578447
    All the factors mentioned by Mr. Babu, author of this thread, are responsible for food inflation. Food inflation is indeed a matter of real concern for the country because a large chunk of the population is still below the poverty line. As a nation-state, we can check corruption, hoarding and control the role of middle-men to manage the food inflation. the other factors can also be controlled with the long-term planning and effective implementation.
    “Whenever I feel the need to exercise, I lie down until it goes away.” - Paul Terry


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