Credit has seen inflation in average consumer prices an average of 8.8% from 2007 to the present, Crisil has noted in his latest report.
“For the majority of Indian households, pulses are the main source of protein.
In line with WPI inflation, the CPI for pulses also settled around a long-term 8.8%.
It implies that pulses continue to be food contributors to food inflation for households, “Crisil said in the report.
Not only that, the price of pulses could not go down substantially in the near future from a household perspective, Dharmakirti Joshi, the chief economist at Crisil told Toy.
“That’s because unless there is price incentives for farmers they will not increase production,” Joshi said.
One of the important things that the report stated is that the volatility of credit inflation is substantially reduced.
This in turn works well for farmers because the cycle of price shocks negatively affects sowing decisions.
According to Crisil, volatility has fallen due to four reasons; Farmers have increased production, higher government procurement, active intervention by the government in front of imports, and the weather affects supply.
However, while volatility has been reduced, the overall wholesale price of pulse inflation remains stubborn at more than 9%, said Crisil.
It’s higher than cereal and vegetables.
Also, the report citizes commissions for agricultural costs and price observations while wholesale prices above MSP, market prices are realized by farmers still remain below for the main pulse.
This is one reason why the price of pulses for households is also impossible to come in the near future.
Explain Crisil’s Joshi, “The full benefit of almost 9% WPI pulses does not reach farmers.
The government needs to strengthen the procurement and reduce market inefficiencies so that farmers prefer to sow credit on cereal.” Increasing sustainable pulse production remains important to drop its share in food inflation for the long term.
“Price incentives can be in the form of subsidies instead of only MSKS so that the full load of higher prices does not fall on consumers.
In the long run if the price is high, farmers will get incentives to increase production which will ultimately in the end.
Lead at the overall price Credit is lower for consumers, “he told Toi.
Joshi believes that when the individual income level rises, the demand for a protein-rich diet will rise, therefore increase the demand for pulses.
“So the government needs to find a good balance between reasonable prices for households and farmers getting full benefits of these prices,” recipes.
Why pulses continue to be the main contributor to food inflation
