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India has experienced persistent and high food inflation in the recent past. What could be the reasons?
1. Due to a gradual switchover to the cultivation of commercial crops, the area under the cultivation of food grains has steadily decreased in the last five years by about 30%. As a consequence of increasing incomes, the consumption patterns of the people have undergone a significant change.
2. The food supply chain has structural constraints.
​Q. Which of the statements given above are correct?
  • a)
    1 and 2 only.
  • b)
    2 and 3 only.
  • c)
    1 and 3 only.
  • d)
    1,2, and 3.
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
India has experienced persistent and high food inflation in the recent...
Agriculture Sector – Decadal Performance The growth rates in the production of key foodgrains in India have declined with each passing decade. Average growth in foodgrain production was highest in 1950s and declined in subsequent decades. It briefly improved in the 1990s and reached its lowest in the subsequent decade, (Figure 1), when the growth rate in incomes was at its highest pace. Within foodgrains, rice and wheat both recorded average growth rates lower than 1%. Growth rate in pulses was higher in the 2000s decade but has not been enough to keep pace with the changing demand pattern of the Indian population. Another significant feature is the volatility in growth rates which has increased in 1990s and 2000s.
The trend is no different when we look at growth rates in key commercial crops (Figure 2) with sugarcane and coffee hardly registering any growth in the last decade. However the growth rate of oilseeds and cotton was higher in the 2000s which is a positive sign.
As average growth rates may not provide the right picture given the volatility, we also need to look at overall production levels (Figure 3). If we see the production numbers from 1990 onwards, we can see the sharp volatility as explained above. Barring a rise in last few years, overall production has stagnated and remains at production levels seen in 1990s. Consequently, with a growing economy and population, supply of foodgrains emerged as a constraint.
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India has experienced persistent and high food inflation in the recent...
Explanation:

Food inflation is the increase in the price of food items over a period of time. In India, persistent and high food inflation has been a cause for concern in recent years. There are several reasons that contribute to this issue, and two of them are mentioned in the given statements.

1. Decrease in the cultivation of food grains: The first statement states that there has been a gradual switchover to the cultivation of commercial crops, leading to a decrease in the area under the cultivation of food grains by about 30% in the last five years. This has resulted in a decrease in the supply of food grains, which in turn has led to an increase in their prices. Additionally, increasing incomes have led to changes in consumption patterns, with people opting for more expensive and diverse food items. This increased demand for non-food grain items has further contributed to the rise in food inflation.

2. Structural constraints in the food supply chain: The second statement highlights the presence of structural constraints in the food supply chain. The food supply chain in India is characterized by various challenges such as inadequate storage facilities, inefficient transportation, and lack of proper distribution networks. These constraints lead to wastage of food items, delays in reaching the market, and increased costs. As a result, the prices of food items increase, contributing to food inflation.

Therefore, both statements are correct and provide valid reasons for the persistent and high food inflation in India. The decrease in the cultivation of food grains and the structural constraints in the food supply chain are key factors that have contributed to the rise in food prices. It is important for the government to address these issues by promoting the cultivation of food grains, improving storage and transportation infrastructure, and implementing effective distribution mechanisms to ensure a stable and affordable supply of food items.
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India has experienced persistent and high food inflation in the recent past. What could be the reasons?1. Due to a gradual switchover to the cultivation of commercial crops, the area under the cultivation of food grains has steadily decreased in the last five years by about 30%. As a consequence of increasing incomes, the consumption patterns of the people have undergone a significant change.2. The food supply chain has structural constraints.Q.Which of the statements given above are correct?a)1 and 2 only.b)2 and 3 only.c)1 and 3 only.d)1,2, and 3.Correct answer is option 'B'. Can you explain this answer?
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