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Posts Tagged ‘public distribution system

Why USAID should quit India and look after America

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The 'Feeding America' county-level food insecurity map. the social situation confronting the great mass of the population, young and old, is characterised by economic insecurity, depressed wages and unprecedented levels of debt.

The ‘Feeding America’ county-level food insecurity map. the social situation confronting the great mass of the population, young and old, is characterised by economic insecurity, depressed wages and unprecedented levels of debt.

There is no practical, moral, democratic and defensible reason any longer for the United States Agency for International Development (USAID) and the United States Department of Agriculture (USDA) to continue to have anything to do in India (or anywhere else) relating to food or hunger or poverty.

This is because the growth of food insecurity in the USA has paralleled the rise in the numbers of those who are poor, by any measure whether in terms of income, lack of access to a balanced diet, lack of access to essential social sector services. According to studies that have been released from late 2013 onwards, the number of households in the USA that live on less than US$2 per day more than doubled between 1996 and 2011, from 636,000 to 1.46 million. Moreover, there are now nearly 3 million children who live in households that earn less than $2 per day.

It is absurd and deeply cynical for the government of Barack Obama, the White House, the US State Department, and a host of top-ranking thinktanks to continue to claim that Indo-American ties require USAID and USDA to continue propagating agricultural models and advocating technology-centric solutions in India to solve our problems of poverty and hunger. India must halt all activity with these two agencies and advise them bluntly to turn inwards – for by their own charters that is where they are needed.

The latest evidence comes from Feeding America, which is the national network of food banks in the USA. It has just released its annual report on local food insecurity which shows that one in six Americans – including one in five children – did not have enough to eat at some point in 2012. The report found that there are dozens of counties where more than a third of children do not get enough to eat. The incidence of hunger has grown dramatically. The percentage of households that are “food insecure” rose from 11.1% in 2007 to 16% in 2012.

According to separate data from the Organisation for Economic Cooperation and Development (OECD), food insecurity is more widespread in the USA than in any other major developed country, with the rate of food insecurity in the US nearly twice that of the European Union average, which is by itself worrying for what purport to be the so-called ‘advanced’ economies (whereas India is ’emerging’).

US_hunger_detail_20140421That we have a situation wherein USAID and USDA (“from the American people”, is the sanctimonious tagline attached to USAID interference, when the American people do not know what injustice is being done to other people in their name, and when they are being robbed of food so that American foreign policy goals are fulfilled) continue to set aid agendas in South Asia while a fifth of American children are hungry is an international social disaster fostered by the current economic system and its political defenders.

In the USA both Democratic and Republican administrations (there is no real difference) have become adept at starving anti-poverty programmes, but have taken that expertise to new levels under Obama. The US Congress and the White House have overseen two successive food stamp cuts in just six months: first in November 2013, when benefits were slashed US$36 per month for a family of four, and again in January 2014, when benefits were cut by an average of US$90 per month for nearly a million households.

Even when the US Census had signalled the new levels of impoverishment reached by the average household, some US$4.1 billion was cut from the food stamps, or SNAP, programme citing “waste, fraud and abuse”. It is significant to note here that exactly the same kind of language has been used in India to call for the curtailing and eventual dismantling of our Public Distribution System (PDS). In cutting about US$90 a month in benefits for 500,000 households – more than a week’s worth of assistance for a typical American family in need – they now encroached on the US$1.50 per person per meal equation (around Rs 90, which may buy two meagre vegetarian thalis in an Indian city).

The government of the USA has done this at a time when, according to the Stockholm International Peace Research Institute (SIPRI), it spent in 2013 US$640 billion which amounted to 36% of the entire world’s total military expenditure. Still unsatisfied by such heinous perversion, the American White House and Congress discontinued unemployment benefits for some three million people (and their two million dependent children), but continued to stall the prosecution of the financial criminals responsible for the 2008 crash.

The concentration of wealth at one social pole is coupled with disastrous social conditions at the other. A generation of young people in the USA has been thrust into poverty and joblessness – almost 16% of young people aged 25 to 34 have incomes below the national poverty line. In comparison, 10% of people in the same age group were in poverty in 2000. The median income of young households is $8,000 less than it was in 2000, in real terms.

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How 27 million more rural households are buying PDS rice in India

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Rural and urban, the reliance on PDS cereals has risen dramatically in just five years.

Rural and urban, the reliance on PDS cereals has risen dramatically in just five years.

The public distribution system (PDS) is the only means by which a large and rapidly growing number of households in India’s districts and towns is able to mitigate somewhat the rising cost of a basic food basket in an attempt to reach a calorific and nutritional minimum. The share of PDS in the consumption of rice and of wheat (and ‘atta’) has risen steeply between the last such survey, in 2004-05, and the 2009-10 survey, whose results have been released.

I combined the data from the latest report based on the 66th round of the National Sample Survey Office – (NSSO, Ministry of Statistics and Programme Implementation, Government of India) which is its quinquennial survey of household consumer expenditure – with the results of the two censuses (2001 and 2011). The result? The number of rural households reporting consumption of PDS rice was 63.3 million in 2009-10 compared with 35.9 million five years earlier.

Likewise, the number of rural households reporting consumption of PDS wheat (or ‘atta’) was 44.6 million in 2009-10 compared with 16.1 million five years earlier, the number of urban households reporting consumption of PDS rice was 15.1 million compared with 8 million, and the number of urban households reporting consumption of PDS wheat (or ‘atta’) was 12.9 million compared with 3.5 million.

The day India said ‘yes’ to Wal-Mart

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Update – The real nature of the neoliberal economy of India has become clearer with the decision – against the run of public opinion and against the evidence from the agricultural and food sectors – to permit opening up the retail sector.

Since the decision was taken, the central government has spared no effort in a cynical and devious campaign to claim that permitting foreign direct investment in retail will benefit farmers and consumers. On Sunday, 27 November 2011, large advertisements were released in newspapers proclaiming the benefits of this decision. Nothing is further from the truth. India’s urban households, those eking out livelihoods from informal work and precarious manufacturing sector jobs, recognise the untruth and see the evidence in the 10%-15% annual food inflation. Our trade unions know this and our left parties know this.

Ranged against this population, rural and urban, are the ministries and industries who see in the permission a new means to control access to food and the provisioning of food. That is why I support the opposition represented by the Communist Party of India (Marxist), whose concerns reflect those of this broad majority.

The CPI(M) has said correctly that this decision “will destroy the livelihoods of crores of small retailers and lead to monopolisation of the retail sector by the MNCs”. The party’s statement said: “Coming in the backdrop of persistent high inflation, growing joblessness and agrarian distress, this decision shows the utterly callous and anti-people character of the UPA Government. The Government seems to be more eager to meet the demands of the US and other Western governments and serve the interests of the MNCs like Walmart, Tesco and Carrefour, rather than protect those of its own people.”

India’s central ministries – now even further disrobed to reveal their predatory nature as instruments of the country’s business satraps – have held up the flimsy excuse that conditions imposed will safeguard the farmer, consumer and small retailer. This is lies.

The restriction that foreign retail outlets are limited to operating in cities of over 1 million population is meaningless because those are precisely the places where the MNCs want to go, to tap the lucrative segment of the market. It is in these cities – there are 53 cities with populations of over a million – that small retailers are mostly concentrated. India has the highest shopping density in the world, with 11 shops per 1,000 persons – these have evolved as neighbourhood suppliers and represent a cultural integration of small supplier and household familiarity.

The result is a rich density of trusted small retail – India has over 12 million such shops and these employ directly over 40 million persons. Well over 95% of these shops are run by self-employed persons in floor areas of under 500 square feet (about 48 square metres). It is these small shopkeepers in urban areas who fear for their future with the now-sanctioned entry of the MNC retailers. International experience shows that supermarkets everywhere invariably displace small retailers. Small retail has been virtually wiped out in the developed countries like the US and Europe. South East Asian countries had to also impose stringent zoning and licensing regulations in order to restrict the growth of supermarkets, after small retailers were getting displaced.

Then there is the cunning untruth that the condition for making at least 50% of the investment in ‘backend’ infrastructure will benefit rural populations, as this is said to lead to more cold chains and other logistics, benefiting the farmers. International experience has, however, shown that procurement by MNC retailers do not benefit the small farmers – we have seen this in India despite the specious and manufactured ‘case studies’ produced by India’s management schools (the several worthless and compradorist Indian Institutes of Management and their similarly worthless competitors). Over time, smallholder farmers receive depressed prices and find it difficult to meet the arbitrary quality standards. Allowing procurement by MNCs will also allow the central government to reduce its own procurement responsibilities, and this will directly affect the food security of those millions of rural and urban households which depend India’s public food distribution system.

2011/11/25 – This is a turning point for India’s economy. The central government has allowed foreign investment up to 51% in the retail sector for ‘multi-brand’ ventures, and has allowed 100% foreign investment for single brand retailers.

With this permission, the ruling United Progressive Alliance has ignored utterly the concerns of hundreds of representations made over the last year by small traders and wholesalers, and by grocery shops’ assocations all over India, against the entre of foreign direct invetment in the retail sector. The ruling United Progressive Alliance has also ignored the needs and conditions of hundreds of thousands of smallholder farming families, who will from now on be steadily exposed to increasing levels of coercion to submit to corporate and industrial farming pressures, or to quit cultivation and join the masses of informal labour in urbanising towns and cities.

India’s powerful business and indutries associations – the Confederation of Indian Industry (CII), the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Associated Chambers of Commerce and Industry of India (ASSOCHAM) – have vigorously for the last two years been manoeuvring the ruling political alliance towards this position. They have been aided substantially by representations from the countries and regions who have the most to gain from this permission being given – the USA and the European Union.

The so-called economists and analysts who are regularly polled by the business media and whose pronouncements are used to justify the progression of policy towards such permission, are making a variety of claims about the effects the expected foreign investment will have on India. They are saying that this “much delayed reform” will help unclog supply bottlenecks and help ease food inflation, that it will benefit farmers who can get better prices for their produce and will bring in international expertise to streamline supply chains in India.

This is rubbish meant to distract. The big retail corporations have for years been demanding entry into a country which is estimated to have a retail sector whose annual sales are said to be around US$450 billion. But this is a sector populated by tens of thousands of tiny family-run shops that account for 90% of this enormous volume of sales. This is a turning point for India’s economy, for it signals the start of yet another struggle to first block, and then throw out the retail conglomerates.

Here are some of the many news stories on this important matter:

Moneycontrol.com – ‘Don’t expect investments to flow instantly: Bharti Walmart’ – After a long wait, the government has finally allowed 51% foreign direct investment (FDI) in the multi-brand retail. It has also decided to raise the cap on foreign investment in single-brand retailing to 100% from the current 51%. …

The Hindu – ‘Cabinet approves 51 per cent FDI in multi-brand retail’ – In a bid to remove the impression that UPA II was suffering from “decision making paralysis” and kicking off the second generation reforms, the Union Cabinet on Thursday gave its approval to allowing 51 per cent foreign direct investment (FDI) in …

Shanghai Daily (subscription) – ‘India to allow global chains to open multi-brand retail stores’ – MUMBAI, Nov. 24 (Xinhua) — India’s cabinet has given the green light to foreign investors to take up to 51 percent stakes in multi-brand retail stores later Thursday after a meeting chaired by Prime Minister Manmohan Singh, said a report by the …

MarketWatch (press release) – ‘Government of India Unleashes Potent Phase II Reforms’ – WASHINGTON, Nov 24, 2011 (BUSINESS WIRE) — The US-India Business Council (USIBC) today hailed India’s steady progress in advancing major economic reforms with the Cabinet’s approval of opening India’s vast multi-brand retail sector to foreign direct …

Reuters India – ‘India opens supermarket sector to foreign players’ – India threw open its $450 billion retail market to global supermarket giants on Thursday, approving its biggest reform in years that may boost sorely needed investment in Asia’s third-largest economy …

Wall Street Journal – ‘Carrefour Welcomes India’s Decision To Open Multi-Brand Retail Market‘ – PARIS (Dow Jones)–French retail giant Carrefour SA (CA.FR) said Thursday it welcomed the Indian government’s decision to open the country’s multi-brand retail market to foreign investment. “Carrefour will follow with attention the finalization of the …

Voice of America – ‘India Opens Retail Sector to Foreign Supermarkets’ – November 24, 2011 India Opens Retail Sector to Foreign Supermarkets VOA News India’s Cabinet has approved a plan to open up the country’s $450 billion retail sector to foreign supermarkets, a reform that could unclog supply bottlenecks that have kept …

Wall Street Journal – ‘India Unlocks Door for Global Retailers’ – MUMBAI—India paved the way for international supermarkets and department stores to establish joint ventures, a major step in opening one of the last great consumer markets that has been off-limits to many of the world’s biggest …

Hindustan Times – ‘Left and Right sharpen knives for FDI battle’ – The Cabinet’s approval of 51% FDI in multi-brand retail is likely to flare up into a major political controversy with the main opposition parties gearing up to oppose it. While BJP leaders Sushma Swaraj and Arun Jaitley jointly condemned any such move …

Namnews – ‘Government Opens Up Country’s Retail Market’ – It’s official – the Indian retail market is now open to international chains, setting the stage for a major change of the local industry. Earlier today, the Indian government approved Foreign Direct Investment of up to 51% in multi-brand retail, …

Bloomberg – ‘India Allows Foreign Investment in Retail, Paving Wal-Mart Entry’ – India approved allowing overseas companies to own as much as 51 percent of retail chains that sell more than one brand, paving the way for global retailers such as Wal-Mart Stores …

indiablooms – ‘India opens retail to foreign players’ – New Delhi, Nov 24 (IBNS): India on Thursday decided to allow foreign direct investment (FDI) in its closely-guarded multi brand retail market, paving the way for global supermarket giants to step into the $450 billion sector that was widely seen as one …

Tehelka – ‘Cabinet approves 51% FDI in multi-brand retail’ – The Cabinet cleared 51 per cent foreign direct investment (FDI) in multi-brand retail on Thursday paving the way for global retail giants like Wal-Mart and Carrefour to enter India. The Cabinet also cleared 100 per cent FDI in single-brand retail. …

Newser – ‘India to allow more foreign retail investment, likely paving way for Wal-Mart’ – India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global …

NetIndian – ‘Cabinet clears 51% FDI in multi-brand retail’ – After dithering for a long time, the Union Cabinet today cleared a proposal to allow 51 per cent Foreign Direct Investment (FDI) in multi-brand retail and raised the cap to 100 per cent in single brand retail. This will allow global retail giants like …

Boston.com – ‘India opens more to foreign multibrand retailers’ – AP / November 24, 2011 NEW DELHI—India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global …

Retail Week – ‘Indian cabinet approves foreign investment in retail‘ – The Indian government has cleared the way to allow multinational retailers including Tesco, Carrefour and Walmart to enter its retail market. We provide a range of advertising opportunities. By advertising with us, you are guaranteed to reach the …

Atlanta Journal Constitution – ‘India opens more to foreign multibrand retailers’ – AP NEW DELHI — India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global retailers such as …

Houston Chronicle – ‘India opens more to foreign multibrand retailers’ – NEW DELHI (AP) — India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global retailers such …

IBNLive – ‘FDI in retail cleared; multi brand 50 pc, single brand 100 pc’ – The Union Cabinet FDI in multi-brand retail and single brand retail despite division within the UPA on the issue.

Moneycontrol.com – ‘Cabinet approves 51% FDI in multi-brand retail’ – Indian retailers finally get a chance to rejoice as the Cabinet today cleared the bill to increase foreign direct investment to 51% in multi-brand retail and 100% in single brand. Commerce and industry minister Anand Sharma said that he would give a …

Business Standard – ‘Too early to celebrate for Pantaloon retail’ – Valuations may prove to be a hurdle, while real gains will take time to yield. Stocks of organised retail companies like Pantaloon Retail and Shoppers Stop have been in action in the recent past on hopes that foreign direct investment (FDI) in the …

BusinessWeek – ‘India Allows Foreign Investment in Retail, Paving Wal-Mart Entry’ – Nov. 24 (Bloomberg) — India approved allowing overseas companies to own as much as 51 percent of retail chains that sell more than one brand, paving the way for global retailers such as Wal-Mart Stores Inc. …

Washington Post – ‘India to allow more foreign retail investment, likely paving way for Wal-Mart’ – NEW DELHI — India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global retailers such as Wal-Mart. …

STLtoday.com – ‘India opens more to foreign multibrand retailers’ – AP | Posted: Thursday, November 24, 2011 10:36 am | Loading… India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to …

Newser – ‘India to allow more foreign retail investment, likely paving way for Wal-Mart’ – India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global …

Wall Street Journal (blog) – ‘FDI in Retail: If Wal-Mart Builds It, Will Indians Come?’ – The Indian government deserves credit for doing what , for at least five years, it has been contemplating: setting the stage for the creation if a modern retail industry. It is unlikely that the Cabinet was seized by Adam Smith-like …

Houston Chronicle – ‘India opens more to foreign multibrand retailers’ – NEW DELHI (AP) — India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global retailers such …

Zee News – ‘Cabinet clears FDI in multi-brand retail’ – New Delhi: In a major decision, the government Thursday approved 51 percent FDI in multi-brand retail paving the way for global giants like WalMart to open mega stores in cities with population of over one million. The nod from the Union Cabinet came …

This permission, given by a ruling political coalition that has allowed food inflation to rage on unchecked for the last three years, which has regularly pushed up the prices of petrol (gasoline) and diesel, and whose record on tackling corruption and graft is shamefully weak, will not go unchallenged.

Food Prices, Health and Nutrition: Red-flag indicators for India’s 12th Plan

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Macroscan, the website is maintained by Economic Research Foundation, professional economists seeking to provide an alternative to conservative and mainstream positions, has posted an article I have written on ‘Food Prices, Health and Nutrition: Red-flag indicators for the 12th Plan’. Here is the opening section.

India rice price trends

The long-term impacts of food inflation on the rural and urban poor are yielding worrying indicators in the nutrition and health sectors. The debate over the provision of the National Food Security Bill and over the reform of procurement for the public distribution system has helped a great deal to bring to the foreground persistent inequities in food access and quality. What remains are the health and nutrition dimensions that are also determined by access to food, the prices at which food items are available and the extent to which food inflation determines nutritional choices for citizens in low income categories. Some of these linkages are brought out by reading together new data from the National Sample Survey Organisation’s 66th Round, and recent trends in retail food prices.

Retail prices of the separate elements of a common food basket are recorded by the Ministry of Food and Consumer Affairs (FCA), Department of Consumer Affairs, for 49 cities. This is a new series of 22 items, compared to the 16 items the FCA had maintained until early 2011. For rice and wheat there is a curious pattern to the price rise. The price band for the 49 cities moves up over time, but it also expands over that time. This can be seen in Chart 1.

With Bharat Nirman-centric infrastructure programmes deepening the connectivity between food supplying districts and consuming regions and with growing investment in agri-logistics and in food retail chains, in fact the reverse ought to happen. That is, food basket staples should be displaying greater homogeneity in retail prices. However, there are a variety of other factors influencing the price band (for the FCA’s 49 cities as much as for district kirana shops) and some of these are external factors such as energy costs, new demand centres arising in fast-urbanising towns which skew distribution costs and corner investment, and the offtake by the food processing industry which is growing at an annual rate of 14%-15%.

India rice and wholesale price index

While a number of factors are at work behind the divergences over time between states and between rural and urban consumption centres, these are not reflected by the movement of the Wholesale Price Index. However, it can convincingly show the variance between types of measurements. The Office of the Economic Adviser maintains the Wholesale Price Index (WPI). After indexing the upward movement in WPI (new series 2004-05) for rice from January 2006 and also indexing the minimum and maximum prices per kilo of the 49 cities’ price trendline, Chart 2 is the result.

As pointed out in a number of articles and commentaries on MacroScan by Jayati Ghosh and C P Chandrasekhar, there is a gap between the rate of increase of CPI for food items and the WPI for those items. This we can see in Chart 2. What we also see is that from October 2008 to January 2010 the rise in WPI accompanied, more or less, the rise in the lower limit of the rice price trendline. From January 2010 onwards, the difference in the growth rates of the WPI for rice and of the rice trendline is significant. This is the ‘fair average quality’ of rice. Yet the gap between the lower price trendline and the WPI is now greater than it has been at any time during 2007-08, when the global food price shocks took place.

How have these price trends hurt households in the lower deciles of consumption in both rural and urban areas? One of the early results of the 66th Round of the NSSO, ‘Key Indicators of Household Consumer Expenditure in India, 2009-10’, provides an answer. The state- and decile-grouped summary data tables show that for 16 major states, the rate of increase in monthly per capita expenditure (MPCE) on food has been faster than the rate of increase of the total MPCE. What has been the impact in the states? For example, with both food and total MPCEs indexed to the levels found in each state by the NSSO in 2003,  the food MPCE rose by 87% in 2009-10 in rural Maharashtra whereas the total MPCE rose by 65%. In 2005-06, food MPCE in rural Maharashtra had risen 14% and the total MPCE had risen 19%.

[Macroscan, the alternative economics website, has the full article.] [pdf only is here.]

Food inflation crippled India’s households in 2010

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Vegetables, fruits and cereals market in in the city of Surat, Gujarat state, IndiaThe price of a basket of staple foods has become crippling in rural and urban India. The government’s response is to favour agri-commodity markets, greater retail investment and more technology inputs. For food grower and consumer alike, the need for genuine farm swaraj has never been greater.

The retail prices of staple foods rose steadily through 2010, far exceeding in real terms what the Government of India and the financial system call “headline inflation”, and exceeding also the rate of the rise in food inflation as calculated for the country. These calculations ignore the effective inflation and its increase as experienced by the rural and urban household, and they ignore also the considerable regional variations in India of a typical monthly food basket.

Vegetables, fruits and cereals market in in the city of Surat, Gujarat state, IndiaMoreover, from a household perspective an increase in the prices of food staples is not seen as an annual phenomenon, to be compared with some point 12 months in the past. It is intimately linked to employment (whether informal or seasonal), net income, and the pressures on the food budget from competing demands of medical treatment, education and expenses on fuel and energy.

When real net income remains unchanged for over a year or longer, the household suffers a contraction in the budget available for the food basket, and this contraction – often experienced by rural cultivator families and agricultural labour – is only very inadequately reflected by the national rate of increase in food inflation.

An indicator of the impact on households is provided by the price monitoring cell of the Department Of Consumer Affairs, Ministry Of Consumer Affairs, Food and Public Distribution. This cell records the retail and wholesale prices of essential commodities in 37 cities and towns in India. Data over a 36-month period (2008 January to 2010 December) for the prices of cereals, pulses, sugar, tea, milk and onions reveals the impact of the steady rise in the Indian household’s food basket.

In 33 cities and towns for which there are regular price entries, the price per kilo of the “fair average” quality of rice has risen by an average of 42% over the calendar period 2008 January to 2010 December. In 12 of these urban centres the increase has been over 50% (Vijayawada, Thiruvananthapuram, Hyderabad, Bengaluru, Patna, Cuttack, Bhubaneshwar, Indore, Bhopal, Shimla, Karnal and Hisar).

The average price rise over the same period for a kilo of tur dal, for 32 cities for which there is regular price data, is 46%. In 11 of these urban centres the increase in the price of tur dal has been over 50% (Puducherry, Bengaluru, Patna, Agartala, Nagpur, Mumbai, Indore, Ahmedabad, Shimla, Jammu and New Delhi). Where wheat is concerned, from among the 27 cities and towns for which there are regular price entries over three years, in 10 the per kilo price rise is 30% and more.

Vegetables, fruits and cereals market in in the city of Surat, Gujarat state, IndiaIf in search of a comforting cup of tea over which to rue the effect of the steady price rise, this too will cost a great deal more than it did three years ago. For 25 urban centres with regular price data, the average increase over the same period of 100 grams of loose tea leaf is 38% and in 11 of these cities and towns the increase is between 40% and 100%.

The sugar with which to sweeten that cup of tea has become prohibitively expensive over the January 2008 to December 2010 period. For the 32 cities and towns for which there is regular price data, the average price increase for a kilo of sugar is 102%, the range of increase being between 76% and 125%.

This increase for sugar – relatively homogenous for the price reporting centres – exhibits the countrywide nature of the price rise of the commodity. Nor is there a household economy case for substituting sugar for gur, or jaggery. For the 17 towns and cities reporting data for gur prices over the same 36-month period, the increase in price over the period has been an average 118% with 11 of these centres recording an increase of over 100%.

Vegetables, fruits and cereals market in in the city of Surat, Gujarat state, IndiaAdding a third element of higher cost to the humble cup of tea is the price of milk. For the 25 towns and cities which recorded increases in the per litre price of milk over the 36-month period (one city recorded a drop) the average rise is 37%. In seven cities a litre of milk costs at least 50% more in December 2010 than what it did in January 2008 – Ahmedabad, Bhopal, Indore, Jaipur, Jodhpur, Patna and Hyderabad.

In conspicuous contrast are the rates of increase in price of cooking media – groundnut oil, mustard oil and vanaspati. Over the January 2008 to December 2010 period the 37 urban centres recorded average price increases of 10%, 9% and 10% respectively for groundnut oil, mustard oil and vanaspati.

Finally, the volatile allium cepa, or common red onion. In 29 cities and towns reporting regularly the per kilo prices of onion, the increase in price of the vegetable has been astonishingly steep. The average increase for 29 cities is 197.5% and in 14 the increase has been 200% and above – New Delhi, Shimla, Ahmedabad, Indore, Mumbai, Rajkot, Agartala, Aizawl, Bhubaneshwar, Cuttack, Kolkata, Chennai, Hyderabad and Vijaywada. In pale comparison is the otherwise worrying average increase of 39.5% for a kilo of potatoes – this is the 36-month average increase recorded by 27 urban centres.