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Lack of Governance leads to Massive Food Inflation in India even as Grain Stocks get eaten by Rats

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India is suffering from a massive increase in Food Prices even as Millions of Tons of Grains are getting eaten by rats and termites.India’s Agriculture which is still heavily controlled by the government suffers from total misgovernnce and endemic corruption.The Food Corporation of India (FCI) which is the government body in charge of Procurement and Stocking of Foodgrains is known for being totally corrupt.In collusion with private traders,FCI officials openly sell subdized rice and wheat at much higher prices.Most of the Below the Poverty (BPL) families never get the subsides targeting them with the much heralded Food Programs leaking like a sieve.The Supreme Court in India recently reprimanded India’s Agricultural Minister for not distributing rotting food to the starving poor for free.Instead of improving the Distribution Mechanism,India’s PM told the Court not to interfere with the Executive Authority of the Indian Government.The whole supply chain for Agriculture is totally inefficient and fragmented.The entry of Retail MNCs had promised improvement in Agricultural Efficiency but the middlemen scuttled this move.So India’s Poor Consumers face Rising  Food Prices even as India’s Farmer continue their suicides due to unremunerative income as middlemen siphon of the profits.

Inflation dip not to bring respite to consumers – BS

A drastic dip in food inflation is unlikely. There are indications that fundamentals will support food prices for the next few months.

Planning Commission Deputy Chairman Montek Singh Ahluwalia recently forecast that food price inflation would decline to six-seven per cent by December. On Thursday, he said this might not happen so soon. The wholesale food inflation rate for the week ended August 28 rose to 11.47 per cent from 10.86 per cent in the previous week.

Commodity Weightage Price in
Jan ‘09
Price in
Sep ‘10
Rice spot# 2.449 26-28 34-36 23.08
Wheat# 1.384 1182 1227 3.82
Fruits and
vegetables **
2.916 4130 13000 214.77
Milk @ 4.367 18 23 27.78
Oilseeds^ 2.666 2550 2600 1.96
Sugar^^ 3.618 1978 2720 37.51
Edible oils* 2.755 500 560 12
petroleum gas
NA 297.95 313.45 5.20

Lack of Governance to Blame as Food Stocks are Sufficient

Inflation continues to rule in the double digits as price of essential food commodities touches new highs.The Federal Government has stopped doing anything promising lower inflation figures in the next months thanks to lower base effect.However absolute prices as compared to 2 years are up almost 30-50%.The High Inflation has not affected the elite Indian classes as Stock Market make new highs and Industry maintains high growth rates.Naxalism is the direct outcome of this huge income inequality which is increasing every day.With no corrective measures being taken except some photo-ops by India’s opportunistic politicians except internal strife to Increase in India.

Manmohan opts for the poor to starve – ATimes

– Should unused food be allowed to go to waste or used to feed the hungry? An unprecedented “order” by India’s Supreme Court to Agriculture Minister Sharad Pawar to distribute food grain free to the poor, instead of letting millions of tonnes of it rot, has blown up into a core issue, raising questions about about the balance of judiciary and government, and how should a government deal with abject poverty.

“I respectfully submit that the Supreme Court should not go into the realm of policy formulation,” Prime Minister Manmohan Singh said on September 6, politely telling the court to keep away from what he perceived as exclusive governmental turf. “It is not possible in this country to give free food to all the poor people.”

# Rs / qtl;  * Price of sunflower oil per 20 kgs;  ** Ginger bleached Rs  per 50 kgs;  @ Rs /litre; ^sunflowerseed (Rs /qtl); ^^M 30 (Rs


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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