'Food Inflation will Go Back to 7-8 percent by March-April'


Kolkata, Jan 12 (IANS): Food inflation, negative right now, is expected to go back to 7-8 percent by March-April because of the "structural problem" which persists in the agriculture sector coupled with changes in the consumption pattern across all economic classes, Principal Adviser to Planning Commission Pronab Sen said Thursday.

"Food inflation in India is in negative term. By March-April it is going back to 7-8 percent. The principal reason is the outcome of our economic growth. But changes in consumption patterns have occurred not only in the country but also across all the economic classes," Sen said at a programme organised by the Bharat Chamber of Commerce (BCC) here.

"Real problem (for inflation) is not the production. The real problem is that consumption of fruit and vegetables and animal husbandry has gone up faster than ever before in rural areas," he said.

Food inflation remained at the negative zone at minus 2.9 percent for the week ended Dec 31, 2011.

"At the moment what you have is the base effect (for negative food inflation) and the un-natural base effect that took place last year. Every year during winter, vegetable prices come down. Last year they went up. This year they come down," he stated.

Sen said a main reason for the high food inflation regime in the country was because of structural problems in agriculture.

"Self consumption by the agricultural households is increasing. So you are not getting surplus coming to the food and vegetable markets… that is the structural problem. It is a supply side issue," he said.

Stating that the supply side issue has at least two dimensions, Sen said: "One is the production dimension and other is the transport and logistics dimensions. The production dimension cannot be sorted out until you have logistics problem sorted out."

  

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Title: 'Food Inflation will Go Back to 7-8 percent by March-April'



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