Pune: An Indira Gandhi Institute of Development Research (IGIDR), Mumbai study has shown that average price increases are to the tune of over 6 per cent for several pulses, over 3.5 per cent for most edible oils, 15 per cent for potatoes and 28 per cent for tomatoes in the 28-day lockdown as compared to prices during the month preceding the lockdown in urban markets.
Associate Professor Sudha Narayanan and Research Associate Shree Saha of IGIDR conducted the study on ‘Urban food markets and the lockdown in India’.
SURVEY IN 14 CITIES
The cities where the survey was conducted included Bengaluru, Chennai, Coimbatore, Delhi, Porvorim, Gurgaon, Hazaribagh, Indore, Kozhikode, Kumbakonam, Latur, Malappuram, Mumbai and Noida.
The study states: “On March 24, 2020, the Indian government announced a 21-day national lockdown that has since been extended to May 3, 2020. The lockdown has left urban food markets in disarray with severe supply bottlenecks and restrictions on doing business.”
It is observed that at a time when food prices in India were declining consistently, supply disruptions consequent to the lockdown have reversed the trend. Based on an analysis of publicly available data on wholesale and retail prices for 22 commodities from 114 centres.
It was found prices have increased since the lockdown and show no signs of reverting to the pre-lockdown levels as of April 21, 2020. Despite guidelines that allow the movement and transactions in essential commodities, it appears that law enforcement and the bureaucracy have privileged maintaining the lockdown over maintaining food security, which has been compromised severely.
MAXIMUM 20 PERCENT RISE IN FOOD PRICES
The study pointed out that smaller cities have seen a much higher increase in prices with at least a few cities seeing a rise in retail food prices by as much as 20 per cent. A survey of 50 food retailers in 14 cities revealed serious operational challenges associated with sourcing supplies, transportation and police harassment. At the same time, several innovative arrangements have evolved as well.
The government needs to ensure that basic food processing industries, such as pulse mills, flour and sugar mills, crushing units and solvent extractors, whole produce edible oil can resume functioning with financial support where needed and to ensure the safety of workers in these industries.
Many cities have tried to enforce price controls. They should better focus on removing the supply chain bottlenecks and supporting supply chain actors rather than attempt to impose a cap on prices.
Enhancing supply is key to ensuring prices do not soar and would additionally minimise the impact of overzealous law enforcement.
Even in the best of times, food prices in urban India put healthy diets mostly out of reach for a majority of the urban poor. At this time, relief has been patchy at best. It is likely that even when food prices recover, the large number of workers who will continue to be out of work would need access to food and cash to help them tide over the crisis.