Modi's Gujarat gets partial success in controlling food prices

The BJP's prime ministerial candidate has a mixed record of keeping food prices in check over the past five years as CM of Gujarat

The Bharatiya Janata Party's prime ministerial candidate Narendra Modi has a mixed record of keeping food prices in check over the past five years as chief minister of Gujarat.

Modi, who has promised to tame food inflation if the National Democratic Alliance comes to power at the Centre, was able to rein in prices of most essential commodities, except milk and sugar.

The department of consumer affairs data show Gujarat’s monthly average retail prices of milk and sugar have been above the national average since 2009, but other major food items were cheaper in the state.

The department monitors Rajkot and Ahmedabad in Gujarat for food price movements.

In cities like Delhi, the prices of key essential commodities have been uniformly above the national average for most of this period, the data show.

“The farmer price for milk has been higher in Gujarat than in other parts of the country," R S Sodhi, managing director of the Gujarat Cooperative Milk Marketing Federation which owns the Amul brand, told Business Standard.

"Income growth has been higher in Gujarat, resulting in more demand for these commodities," said Vasant Gandhi, chairperson of the Centre for Management in Agriculture at the Indian Institute of Management, Ahmedabad.

The state has, however, sold rice, atta (wheat flour), mustard oil, gram dal, onion and tomato at below the national average price since 2009.

Y K Alagh, economist and former Union minister for planning, programme implementation, statistics and power, pointed out the spread of farm product prices in Gujarat was lower than in other states.

“Gujarat is a highly urbanised state. It does not have a single taluka where industrial employment is less than 10,000 and there are towns where almost 75 per cent of the population is engaged in non-agriculture activities, which enables value chains to work efficiently,” Alagh said.

Ashok Gulati, Chair Professor-Agriculture at ICRIER, a thinktank, added food cost less in some cities of Gujarat because of low mandi charges — under 3 per cent against almost 14.5 per cent in Punjab. “In milk, Gujarat has a huge surplus and the industry is more-market oriented so the value chains are developed in the state,” he added.

Another economist who did not wish to be named said milk and sugar cost more in Gujarat because the state consumed more of both than other states.