Charting the journey of India’s agri commodity indices to 250% in four years
During the course of the Eleventh Five Year Plan (2007-12) in India, the salient features of the sweeping change being quietly implemented in India’s agriculture and food structure became easier to distinguish. Many of these changes have been prefaced by the central government and its agencies pointing grimly to a farm sector that is under-performing in terms of its growth rate and which they emphasised is wanting for private sector investment.
Although elsewhere in Asia, Africa and South America the relation between food commodity trading and speculation, and continued high local food prices has been a contentious subject, India from one Plan period to the next has decided to pursue a talismanic 4% per year growth rate, attaching to this objective the idea of ‘inclusion’. The relationships between how capital is employed in the food and agriculture sector, what in fact happens to agricultural produce during its journey to urban shops, and the reasons for the steady rise of agri-commodity futures indices in India are still only irregularly researched.
Profiting from speculation in food staples – and protecting the household from the effects of hoarding – is behaviour that is the subject of legislation from 1955 when the Essential Commodities Act came into force, and also from 1980 with the Prevention of Black Marketing & Maintenance of Supply of Essential Commodities Act. The recent changes in agriculture and food however, employ many simultaneous mechanisms and methods, which legislation from an earlier era can only partly forestall.
[From ‘Food and Agriculture: Trends Into the Early Twelfth Plan’, a forthcoming paper.]