What must be done about the soaring food prices?

Recently published data show that food prices in December 2019 were 14 per cent higher than in December 2018. And within food items, vegetable prices were higher by as much as 60 per cent. To understand the impact of soaring food prices, let us examine a factory worker. Vijay is a factory worker who earns the minimum wage. He lives in a city with his wife, his mother and two children. A year ago, his family used to spend Rs.350 every week for buying 8 kilos of vegetables, adding up to Rs.1500 per month. Now they can buy only 5 kilos per week for that amount. They are cutting down on their purchase of onions and other items whose prices have gone through the roof. Even then, spending on vegetables has risen from Rs.1500 to 2200 per month.

In addition to vegetables, Vijay is spending more on milk, dal, cooking oil, sugar, wheat and rice. As both he and his wife work, they do not have the time to go to the ration shop and wait for hours to buy their supplies. At the ration shop he could get subsidized food grains, which are often of very poor quality. They are also spending Rs.1500 every month to buy water because they do not get clean drinking water supply where they live.

Vijay’s salary has not gone up since December 2018. His factory owner says prices of raw materials have gone up while sales are down; so he cannot afford to pay more to the workers. In fact, he is thinking of asking some workers to go home. Vijay is afraid that if he is laid off from work, he will not get another job easily. The job market is in a very sad state.

With higher spending on food, Vijay is forced to cut down on non-food spending. He cannot afford to buy new uniforms for his children, even though their old ones are torn. With less nutritious food, the children are now more susceptible to diseases. Vijay will not be able to afford the medical expenses if any of his family members were to fall sick.

Such is the plight of millions of minimum wage workers all over India. Millions of other workers are earn much less than Vijay and they find it even harder to survive.

While food prices paid by urban workers have risen steeply, the prices received by peasants remain abysmally low. For instance, peasants received only Rs.3 per kilo for the onions they grew last season. Many were unable to sell even at this low price. They left their onions to rot at the mandi, to save the cost of transporting them back to their village. As a result of that experience, many peasants decided not to sow onions this season, which has contributed to the current shortage.

Whenever the prices of vegetables and other food items rise, government spokesmen blame “hoarders and profiteers”. However, they hide the fact that the biggest hoarders and profiteers are none other than Reliance and other big capitalist companies. It is these big capitalists who finance the political parties in power at the centre and the states.

In the name of liberalisation and privatisation, central and state governments have cut down on public procurement of agricultural produce. They have encouraged the expansion of big private companies in agricultural trade. These companies have cold storage facilities and the money power to accumulate large stocks of vegetables, fruits, and other food items. Whenever there is a shortage, they are able to pocket record profits. They buy from farmers at low prices and sell only when prices reach their peak.

With no government support, most peasants are forced to sell their produce at dirt cheap prices. There are no facilities for cold storage near their farm, so they have no choice except to sell all perishable goods soon after harvest, at whatever price they get.

The steep rise in food prices is forcing working class families to cut back on non-food spending. It is thereby aggravating the problem of inadequate demand for industrial goods, leading to further closures of factories and further layoffs.

What is to be done to solve the problem of unaffordable food prices?

The domination of private profiteers over agricultural trade has to end. Only then is it possible to ensure adequate availability of food at affordable prices for all, alongside a stable and secure livelihood to all those who till the land.

Both foreign trade and domestic wholesale and large-scale retail trade must be nationalized. They must be brought under social control and reoriented to serve the goal of ensuring prosperity and protection for all. It will then become possible to narrow the huge gap which exists between the prices paid by urban workers and the prices received by the peasant producers for every kilo of onions, tomatoes, rice, wheat, dal and other agricultural products.

What is needed is for the central and state governments to take immediate steps to create a public procurement system covering all agricultural crops. They must ensure that peasants are provided with agricultural inputs at affordable rates and all farm output is bought by public agencies at stable and remunerative prices. They must invest in creating adequate facilities for cold storage for perishable food items.

The public procurement and storage system must feed into a public distribution system geared to ensure the supply of all essential food items at affordable prices for all. Workers’ and peasants’ organisations and people’s committees in the villages and towns must monitor the public system and ensure that there are no leakages caused by private profiteering interests and corrupt officials.


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