Written by fe Bureau
| New Delhi | Updated: Jun 2 2014, 06:24am hrs
The cause of high food inflation is pilferage and wastage caused by an inefficient supply chain between farm and fork, according to Crisil Research, reports fe Bureau in New Delhi. For instance, the countrys granaries continue to overflow but food inflation has averaged 8.1% in the last decade, and over 10% in recent times. This is despite agriculture growth surging to 3.6% in the last 10 years from 2.9% in the decade before. So, the thesis about food inflation being high because supply is struggling to catch up with demand has little grain of truth. Once the produce leaves the farm, multiple forces come into play, ramping up prices in plain sight: The adverse impact of the APMC Act and high minimum support prices, poor supply chains, massive spills, layers of scalpers and utterly inefficient use of stocks. The governments main mission should be to improve its supply chains and reduce wastage. In short, changing the farm-to-fork game is the biggest challenge for the new government in its battle with food inflation.