Food Prices May Skyrocket Due to Production Shortfall in Andhra

Even as the retail inflation touched a 16-month high at 5.69 per cent in January and is likely to rise further.

Published: 15th February 2016 05:01 AM  |   Last Updated: 17th February 2016 08:01 AM   |  A+A-

VISAKHAPATNAM:  Even as the retail inflation touched a 16-month high at 5.69 per cent in January and is likely to rise further, Andhra Pradesh appears to be heading for a major increase in food prices due to shortfall in crop production. The last week spurt in rise of chilli in Guntur market was an indicator. The area under cultivation in the state decreased by 2.66 lakh hectare. As against normal area of 25.21 lakh hectare, the total area sown in rabi season is 22.55 lakh hectare (89 per cent of the total area).

Last year there was deficit rainfall  across the country. The AP recorded six per cent deficit rainfall. As on February 10 this year, all the major reservoirs are holding 285.59 tmc against 345.72 tmc the same day last year. “The irrigation authorities of the upper riparian states of the Krishna and the Godavari rivers, have not been cooperating. Due to uncertainty over availability of water a significant number of farmers preferred not to take up cultivation,” said an official in the agriculture department.

The state government’s ambitious plan to construct the new capital of Amaravati, also seems to have had its impact on the crop cultivation. The activity in the capital city area and the zoom in real estate prices in its surrounding areas, has brought down the area under cultivation from 2.23 lakh hectare to 1.6 lakh hectare in Guntur district and from 2.28 lakh hectare to 1.73 lakh hectare in Krishna district. Not so surprisingly, the paddy cultivation in the state, considered a food bowl, fell to 6.55 lakh hectare against the normal cultivation area of 7.85 lakh hectare.

For the sixth consecutive month, the retail inflation increased touching 5.69 per cent in January in the country. As per the Consumer Price Index (CPI), costlier food prices have triggered the rise. The price data collected by the government from select towns by the Field Operations Division of National Sample Survey Organisation (NSSO) and from selected villages by the Department of Posts, has indicated that the food inflation too touched 6.85 per cent in January, where the retail prices of cereals and products increased by 2.19 per cent.

“The vegetable prices also rose by 6.39 per cent across the country. The situation is no different in the AP. However, we cannot quantify it at this juncture,” said a top officer of the Marketing department. He did not rule out a steep increase in prices, particularly those of pulses and vegetables over the next six months.

Inflationary Trends

  • Area under cultivation fell short by 2.66 lakh hectare in AP during rabi as on February 10. Total area under cultivation is 22.55 lakh hectare against normal cultivation area of 25.21 lakh hectare
  • As on February 10, all the major reservoirs are holding 285.59 tmc against 345.72 tmc on the same day last year, impacting crop production
  • Nation-wide retail inflation touched 5.69 per cent in January, while food inflation shot up to 6.85 per cent.
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