Question

Though India is an agricultural country, the cost of food is rising sharply. Give reasons to explain the causes of this rise in prices of food.

Answer 1

The sharp rise in food prices in India, despite it being an agricultural country, can be attributed to the following reasons:

1. Reduction in Net Sown Area: There has been a shift from cultivating food crops like cereals and pulses to commercial crops such as fruits, vegetables and oil-seeds. Also, competition for land for non-agricultural uses like housing has reduced the land available for food crop cultivation, leading to a decline in food production.
2. Small and Fragmented Landholdings: Most farmers have very small and fragmented land, limiting their ability to adopt modern farming techniques and investments needed for increased productivity.
3. Exploitation of Farmers: Many farmers are tenants or laborers who receive low wages and lack incentives or capital to improve farming practices.
4. Subsistence Farming: Indian agriculture is mostly subsistence-based, producing just enough for farmer’s survival, with little surplus for the market.
5. Economic Constraints: Farmers are largely poor, indebted, and uneducated, limiting their access to modern technology, high-quality seeds, and financial resources. Lack of adequate irrigation and marketing infrastructure adds to their problems.
6. Impact of Globalization: Reduction in government subsidies (like on fertilizers) and lowered import duties have increased production costs and introduced competition from cheaper international agricultural products subsidized abroad.
7. Soil Fertility Issues: Repeated cultivation of crops like rice and wheat depletes soil fertility, affecting productivity and increasing costs for fertilisers.

These factors combined lead to lower production, higher cost of production, and supply constraints, causing the sharp rise in food prices in India.