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Posts Tagged ‘Labour Bureau

Fewer cereals still for more rupees

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RG_cereal_staples_chart_20130309

The Labour Bureau of the Government of India has done us a most valuable service by disaggregating from the consumer price indices, separate indices for the individual items that a household typically buys, whether every day, periodically (weekly or monthly) and even annual purchases.

I have charted here the data for the cereal and cereal substitutes. This group consists of rice, wheat, maida (flour), suji (coarse wheat flour), bread, sewai (rice vermicelli), maize atta, wheat atta, tapioca, jowar, sago, ragi, bajra, maize, sattu (ground cereals) and the grouping of beaten or flattened rice (chira, muri, khoi, lawa (CMKL)).

The chart describes the movement – over 96 months from 2006 January to 2013 December – of the price indices (not the prices) for these foods. These are calculated as all-India prices using the consumer price index for industrial workers (CPI-IW) and the base is 2001 = 100.

There are several significant findings from examining the movement of this group of price indices. (1) Over 2008, 2009 and 2010 the rise was steadily upward with a pronounced spike in some items that lasted from 2009 August to 2010 May. This is noteworthy as no spike is visible (for the group as a whole) during 2007-08 when there was a worldwide steep rise in the prices of foods.

(2) From around 2010 May, maida, maize atta, CMKL, bread, wheat atta, rice, wheat increased at a muted rate and even remained flat over short periods whereas other cereals and cereal substitutes rose steeply and/or showed volatility in their indices. (3) From 2012 June the price indices of all items in this group rose steadily and steeply – more steeply than at any time since 2006 January and have continued this accelerated pace until the end of the recorded period, 2013 December.

This is another excellent release into the public domain of valuable indicators by the Labour Bureau which help describe the relentless rise in the prices of food staples in India. As the Labour Bureau has shown, whether it is the consumer price indices it maintains or whether it is the individual goods and services necessary to maintain an acceptable minimum standard of living for the households engaged in agriculture, manufacture or which are dependent on self-employment, the so-called ‘India growth story’ that the ruling government and its supporters speak triumphantly about in fact imposes burdens on the working classes that have grown heavier every month.

Faster, higher, dearer – dizzying pace of food price rise in India

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The alarming tale of food prices, from 2004 January to 2013 August, that have squeezed the household budgets of cultivators and rural labourers.

The alarming tale of food prices, from 2004 January to 2013 August, that have squeezed the household budgets of cultivators and rural labourers.

For most of 2013, the central government broadcast, through important cabinet ministers and official statements, its worry about economic growth, that every effort must be made to steer India back towards a high economic growth rate. In the food and agriculture sector, that effort has led, in the last four to five years, to a gulf in growth rates between agriculture and the combination of processed and packaged foods and beverages (which the food retail industry is being arrayed around). While the agriculture sector (including fisheries and livestock) has been growing at or just above 4% a year for the last several years, the processed foods and beverages industry has been growing at around 15% a year.

The effects of this growth (setting aside criticisms of how such growth is measured) in both these allied sectors – the one much larger but the other which is a feature of urbanising India – may be seen in the transformation of cultivation and of food. That is why, not only has the consumer price index for rural citizens climbed without let every year for the last nine years, there is evidence in this index data to show that the rate of increase has accelerated in the last few years.

The trend we have all become painfully familiar with, in states and towns measured and unmeasured.

The trend we have all become painfully familiar with, in states and towns measured and unmeasured.

The consumer price index for agricultural labourers (usually abbreviated to CPI-AL) from 2004 January to 2013 August shows a steady rise for all the 20 states in the set (see the chart alongside). Compiled by the Labour Bureau, Ministry of Labour and Employment, the data shows that the average CPI-AL of these states has been rising around 50 percentage points a year for the last four years. Using quarterly averages (taken for June, July and August) for 2013, 2012 and 2011 and comparing them with the same averages a year earlier, we see that the all-India increases in the index for 12 months (2013 over 2012) is 12.96%, for 24 months (2013 over 2011) is 22.68% and for 36 months (2013 over 2010) it is 34.08%.

States that experienced the steepest increase in the CPI-AL over 36 months are Gujarat with 32%, Punjab 32.4%, Odisha 32.5%, Rajasthan 35.1%, Maharashtra 35.3%, Manipur 37.6%, Andhra Pradesh 37.9%, Kerala 38.4%, Tamil Nadu 39.2% and Karnataka 48.2%. That is why we have witnessed the widespread trend of migration by rural populations towards smaller urban agglomerations, with the impacts recorded in various data releases from Census 2011.

The Labour Bureau data contains evidence that for all states which have CPI-AL measured, the rate at which the index is rising is accelerating. This acceleration is visible when the period 2004 January to 2013 August is divided into five phases. These are represented by the circles in the illustrated chart (the main image above), the phases 2004 Jan to 2005 Dec, 2006 Jan to 2007 Nov, 2007 Dec to 2009 Oct, 2009 Nov to 2011 Sep and 2011 Oct to 2013 Aug). These points (five for each state) are plotted against not the ordinary scale of the CPI-AL but against a range of point increases in the CPI-AL. Hence this shows the rise in the CPI-AL and the more recent speed of that rise.

When India’s food growers cannot afford fuel, light and food

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This group of ten charts describes the trends over more than seven years of the food, and the fuel and light components of the consumer price index numbers for agricultural labourers. The data has been taken from reports issued by the Labour Bureau, Ministry of Labour and Employment, Government of India.

This group of ten charts describes the trends over more than seven years of the food, and the fuel and light components of the consumer price index numbers for agricultural labourers. The data has been taken from reports issued by the Labour Bureau, Ministry of Labour and Employment, Government of India.

This group of charts describes the trends of two indexes – food, and fuel and light – for agricultural labourers in ten states. The consumer price index (CPI) that is usually invoked by the government, by industry, by the corporate associations (such as chambers of commerce), and by economists and banks is a number for that month considered to be ‘national’.

This has no meaning, for what you and I buy is not at a ‘national’ market but at a local one – we may even buy from a roving street vendor, provided our municipal corporation or council has the sense not to outlaw these vendors (which sadly is discrimination common in metropolitan cities).

A consumer price index, in order to be of any use, must be local, and must relate to those who can set some store by it. That is why it is most useful to look carefully at what CPI includes, and it does include much detail, which this small group of charts helps reveal.

The consumer price index numbers for agricultural and rural labourers (with a base of 100 fixed to the year 1986-87) is calculated by the Labour Bureau, Ministry of Labour and Employment, Government of India. Who are agricultural labourers? The Bureau’s definition is: “Agricultural labour households – the rural labour households, who derive 50 per cent or more of their total income from wage paid manual labour in agricultural activities, are treated as agricultural labour households.”

According to the Bureau, a person is considered an agricultural labourer, if she or he “follows one or more of the following agricultural occupations in the capacity of a labourer on hire, whether paid in cash or kind or partly in cash and partly in kind” and the occupations are: farming including cultivation, growing and harvesting of any agricultural commodity; production, cultivation, growing and harvesting of any horticultural commodity; dairy farming; raising of livestock, bee-keeping or poultry farming; any practice performed on a farm “incidental to or in conjunction with the farm operations” (this includes forestry, market-related activities such as delivery and storage, and the actual movement of produce to markets).

The collection of rural retail prices every month from shops and markets is done by the Field Operations Division of the National Sample Survey Office (NSSO). In 20 states it collects data from 600 representative sample villages every month, with one-fourth of the sample being covered every week. Prices are collected either on a market day (which is most commonly a set day of the week) for those villages that do not have daily markets, or on any day for those that do.

And here we have – for Andhra Pradesh, Uttar Pradesh, Maharashtra, Madhya Pradesh, Tamil Nadu, Rajasthan, Karnataka, Gujarat, West Bengal and Bihar, ten of India’s most populous states – the proof of how much India’s growers of food are burdened by the rising price of fuel and light (that means of electricity and power, diesel, kerosene and coal) and of food (cultivators and food growers also buy what they do not grow or husband).