Topic 1 : Dal, roti, cheeni
Introduction: International food prices have eased from it is used to be after Ukraine-Russia conflict, but India is showing a different picture.
The global food price index and India’s food inflation
- International food prices have eased considerably from their 2022 peaks.
- The benchmark FAO Food Price Index in December was 10.1 per cent below its level one year ago and 28 per cent down from its all-time high scaled in March 2022, after Russia’s invasion of Ukraine.
- But this story of global deflation is contrary to the Indian situation, where the official consumer food price index inflation ruled at 9.5 per cent in December.
- The domestic inflationary pressures are coming from basic foods: Pulses, cereals and sugar.
- In other words, dal-roti-cheeni. It’s not for nothing that the Centre is worried, especially with national elections due in hardly three months’ time.
- Retail food inflation averaged just 0.2 per cent during the year leading to the last Lok Sabha polls in April-May 2019.
The government's effort to control food inflation
- The government’s strategy to rein in food inflation has been a heterodox mix of export and trading curbs along with import liberalisation.
- Thus, exports of wheat, non-basmati white rice, sugar and onion have been banned, denying Indian farmers and agri- businesses the opportunity to benefit from high international prices, whether in 2022 (for the first) or now (for the other three).
- Stocking limits have been imposed in wheat and pulses for traders, processors as well as big-chain retailers.
- Curbs have been placed on sugar mills with regard to diversion of cane juice and intermediate-stage molasses for manufacture of fuel ethanol, industrial-grade rectified spirit and potable alcohol.
- Simultaneously, imports of major pulses and crude edible oils have been allowed at zero or very low duties till March 31, 2025.
- Notwithstanding all these supply-side measures, rice is retailing at an all-India average (modal) price of Rs 40/kg (Rs 35 a year ago), milled arhar (pigeon pea) at Rs 150/kg (Rs 110), chana (chickpea) at Rs 80/kg (Rs 68), sugar at Rs 45/kg (Rs 40) and onion at Rs 30/kg (Rs 25).
The pro-consumer bias in the government’s approach
- The government approach reflects an excessive pro-consumer policy bias.
- Such bias, apart from being anti-producer, isn’t in long-term consumer interest either.
- Both producers and consumers benefit from policy that is predictable and stable, not knee-jerk and reactive.
Measures to control food inflation in India
Supply-side measures:
- Increase agricultural productivity: Invest in research and development for improved crop yields and improved access to quality seeds, fertilizers, and irrigation technology. Promote crop diversification and sustainable farming practices.
- Strengthen supply chains: Improve storage and transportation infrastructure to reduce post-harvest losses and wastage. Enhance market linkages between farmers and consumers to reduce middlemen involvement.
- Manage buffer stocks: Maintain adequate buffer stocks of key food grains by the government to stabilize prices during times of shortage.
- Import essential commodities: Strategically import essential commodities like edible oils and pulses when domestic production falls short to meet demand and keep prices in check.
Demand-side measures:
- Targeted subsidies: Implement targeted subsidies for vulnerable populations to reduce their burden of rising food prices. This could involve direct cash transfers or subsidized access to essential food items.
- Fiscal and monetary measures: Utilize fiscal and monetary policies to regulate demand and control inflation. This could involve targeted tax cuts, interest rate adjustments, or temporary price controls on essential commodities.
- Consumer awareness and education: Encourage responsible consumption through awareness campaigns about seasonal price variations, storage practices, and alternative food choices.
Other measures:
- Address market inefficiencies: Crack down on hoarding, cartelization, and price manipulation practices by traders and middlemen to ensure fair market competition.
- Improve market infrastructure: Invest in modern wholesale markets and cold chain facilities to reduce post-harvest losses and price fluctuations.
- Enhance agricultural marketing reforms: Implement agricultural marketing reforms like contract farming and farmer producer organizations to empower farmers and provide them with better marketing options.
- Empowerment of farmers: Invest in education and training programs for farmers to improve their skills and knowledge about modern farming practices, market trends, and financial management.
Conclusion: India’s farm sector needs a long-term policy and not a short-term knee-jerk reaction for every rise in food prices. Government must invest in farm infrastructure and must bring some predictable policies for farm sector.
Topic 2 : Covering the distance
Introduction: India and France are kindred souls on the global stage. They are both systemically important powers, with France being a Permanent Member of the UN Security Council. The relationship has attracted attention in all major capitals, from Washington to Berlin to Moscow to Beijing.
The complementarities in the relationship
- The two countries complement each other in many areas.
- They do not carry historical baggage and do not have any major bilateral differences.
- Where such differences exist, the two sides have shown a remarkable ability to overcome them.
- Relations between them are time-tested in every sense of the term.
The significance of recent Republic Day visit of France’s president
- The visit of French President Emmanuel Macron to India as the chief guest for the Republic Day exemplifies the natural bonds of friendship between the two countries.
- France occupies a unique position in India’s strategic thinking.
- It is seen as a country that has stood by India through thick and thin — in 1998 when India went nuclear, its support to India on Jammu and Kashmir, its advocacy of India’s claim to permanent membership of the UN Security Council, standing with India to counter Pakistan-sponsored terrorism or bolstering India’s capabilities against China.
France’s cooperation with India
- France’s cooperation on security issues such as in defence production, nuclear and space sectors and intelligence sharing has been open-ended and has strengthened Indian hard power.
- France has not shied away from sharing the most advanced defence and civil technologies and building India’s production and manufacturing base.
- It has promoted India’s interests within the European Union without hesitation, becoming both the gateway for and a strong partner of India in Europe.
- It has offered its biggest strategic asset, its vast Indo-Pacific territory, and equities in organisations such as the Indian Ocean Commission, to India.
- Indian Air Force planes have been deployed to Reunion Island.
- France has also refrained from commenting on India’s internal affairs.
- This is a remarkable record of cooperation between two countries.
- India has reciprocated by treating France as a dependable source of high-end defence equipment and technology that has led to military purchases worth billions of dollars.
The reason behind France-India bohemia
- France values its strategic autonomy like India.
- France’s ability to look at India differently from the Anglo-Saxon world gives it immense advantage in dealing with India.
- For India too, the relationship with France exemplifies its policy of strategic autonomy without being labelled anti-Western.
- In doing so, both countries celebrate their commitment to multiculturalism and pluralism at the domestic and international level.
- They empathise with each other’s challenges, such as at the moment of France’s sense of betrayal over the cancellation of the contract for French nuclear submarines by Australia and the accompanying announcement of the AUKUS grouping, or India’s experience with cross-border terrorism.
- The two countries have developed a culture of supporting each other.
- France was the co-founder of one of Prime Minister Narendra Modi’s flagship international initiatives, the International Solar Alliance.
- It was the first European country to accept the UPI payments system.
- Several mechanisms have been established to strengthen the India-France partnership in the Indo-Pacific region even though France is not a member of the Quad.
- Bilateral strategic maritime cooperation between the two predates the Quad.
- Every summit meeting between the leaders results in new areas of cooperation.
- The forthcoming one is expected to be no different.
- Apart from exceptional protocol gestures, the visit is likely to result in new announcements in the area of military and technical cooperation, relating to engines, aircraft, submarines and space, digitalisation, cyber security and climate change.
Role of President Macron in strengthening Indo-France relation
- President Macron’s personal contribution to the India relationship cannot be overstated.
- This will be his third visit to India, and with it, France gets the unique honour of being the country that has been invited the highest number of times as chief guest for the Republic Day.
- Furthermore, President Macron’s role at this time of global tensions and uncertainty is even more important.
- He is the youngest leader to be sworn in as President of France since Napoleon, yet today, in his second and last term, at the age of 46, he is the senior-most leader in Europe.
Conclusion: The world needs a bridge between the West and the East and between the North and the South. Prime Minister Modi and President Macron have a unique opportunity to harness their friendship to these ends. France bet on India very early on. India fully reciprocated. Today, those bets are paying off.