The assertion by the new food processing minister, Harsimrat Kaur Badal, that minimising post-harvest wastage will be her top priority assumes significance given that it comes days before the Reserve Bank’s credit policy announcement Tuesday. Food inflation has contributed over 50 per cent to overall inflation in the past few years, and is one of the items that weighs heavily in the RBI’s scheme of things.
Ms Badal’s assertion reflects the fact that the government has already started to focus on ways to bring down food prices and increase the availability of fruits and vegetables. For instance, simply by tackling the losses of fruits and vegetables due to wastage and bad storage, the government can increase their availability by one-third. In terms of value, the rating agency Crisil estimates the wastage at Rs 70,000 crores in 2010-11, or one-third of the entire production. So despite the production of fruits and vegetables having gone up by 5.3 per cent in the past few years, there is a shortage due to wastage that leads to high inflation in prices.
This is the same with foodgrains, where the estimated loss due to bad storage varies between Rs 50,000 crores and Rs 60,000 crores annually even while people continue to starve and the prices of foodgrain rise. The Narendra Modi government is well aware of this, and if it can convince the RBI that it would tackle the wastage and other related issues like hoarding, it would give the RBI the much-needed leeway to ease its tight monetary policy.
