As food inflation soars, the Planning Commission has suggested that output of fruits, vegetables and protein-based items should grow at a faster pace than that of cereals to meet the rising demand in these items.
The output growth of pulses is required to be stepped up to around four per cent, said the paper, finalised by the full Planning Commission meeting last week. It pegged overall foodgrain production to expand by around two per cent or slightly higher a year on an average in the next five years.
| PLAN PLATTER |
| OFFICIALS said the approach paper to the 12th Plan, which begins from the next fiscal, targeted average annual output growth rate of about 1.8 per cent to 2 per cent in cereals, with rice production likely to expand by around 2 per cent |
| THE output growth of pulses is required to be stepped up to around 4 per cent, said the paper. It pegged overall foodgrain production to expand by around 2 per cent or slightly higher a year on average in the next five years |
| NIKKEI However, for horticulture and animal husbandry products, the paper had set a higher target of 4.5 to 5 per cent growth. Oilseeds are expected to exceed 2.5 per cent growth |
However, for horticulture and animal husbandry products, the paper had set a higher target of 4.5 to 5 per cent growth. Oilseeds are expected to exceed 2.5 per cent growth. Overall, this would deliver a 4-4.5 per cent growth rate in food products.
The approach paper’s perspective assumes importance since food inflation is not showing signs of deceleration despite the Reserve Bank of India raising policy rates for eleven times. Experts said food inflation would not fall substantially in the long run unless supply matches demand, particularly in protein-based items as well as vegetables and fruits.
For the week ended August 13, food inflation rose to 9.80 per cent as certain vegetables, particularly onions, turned expensive. The break-up of the data showed that cereal inflation has been coming down over the weeks. In fact, inflation in wheat was in the negative at 2.80 per cent. This means that wheat prices have in fact fallen during the week compared to the corresponding period last year.
The inflation of pulses has also been negative for weeks now. But, the Planning Commission wanted to step up its output growth because of exorbitant rise in their prices a few years back and lack of availability of imports in international markets.
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Besides vegetables, inflation in fruits, meat, fish and eggs has been moving northwards. While inflation in fruits was up at 27.01 per cent from 26.46 per cent a week before, the rate of price rise in egg, fish and meat went up 13.37 per cent from 9.93 per cent.
The approach paper has targeted overall inflation rate (of which food inflation is just a minor part) to come down to 4.5-5 per cent for achieving nine per cent growth a year on an average in the 12th Plan, against an estimated six per cent rise in the rate of price rise in the ongoing plan.
The approach paper wanted self-sufficiency in basic food items in the backdrop of price trends in the international food markets. It is clear that we would be prudent to plan for not only self-sufficiency in basic food production, but also to maintain a surplus, the paper said. The surplus can also be used to meeting critical food shortfalls in the neighbouring countries to strengthen a peaceful climate in the region, it added.