8/7/2019 World Food Prices Live Mint Article

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04 LEADINGTHENEWSFRIDAY, APRIL 8, 2011, DELHI WWW.LIVEMINT.COM

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Plan panelto invitefeedback for12th PlanBY SAN G E E T A S I N G H

sangeeta.s@livemint.comNEW DELHI

The Planning Commissionwill invite comments fromstakeholders as well as thepublic on its approach paperfor the 12th Five-Year Plan,

which will guide Indias eco-nomic development in the pe-riod 2012-17.

Feedback will be sought on-line after the Plan panel meetson 21 April to approve the ap-proach paper under the chair-man of the commission, PrimeMinister Manmohan Singh.

We are redesigning thewebsite of the 12th Plan to getpara-wise and chapter-wisefeedback from various stake-holders, including relevant

ministries, and the generalpublic, said an official at thePlan panel, asking not to beidentified.

An approach paper carriesgeneral guidelines on whichthe Plan is based. Once read-ied and made public, the de-tails of Plan programmes andsector-specific strategies are

worked out.The idea is to get as much

feedback as possible in areassuch as governance, climatechange and environment pro-tection, market conditions

with special reference to entre-preneurship, which has beenadded in a (five-year) Plan forthe first time, capacity forgrowth and employment, andinnovation and technology,

the official said.The consultation would helpthe commission finalize the12th Plan as well as decide sec-tor-wise allocation of moneyfor the plan period.

The panel had also soughtcomments from civil societygroups, experts and the publicduring the preparation of theapproach paper through its

website, meetings and onlinesocial media. Stakeholders

were consulted on 12 criticalareas around which the 12thPlan will revolve, including en-hancing skills and employ-ment generation, transport in-frastructure, climate change,inclusiveness, energy security,rural transformation and agri-culture growth, education andpreventive healthcare.

We are also creating aware-ness about the Plan processthrough conclaves being or-ganized in partnership withthe Confederation of IndianIndustry, said Arun Maira, amember of the Planning Com-mission who is closely associ-ated with the making of thePlan. Two such seminars havealready happened in Chennaiand Chandigrah and we planto have more.

Consultation with stake-holders and the public willh el p m ak e t he P la n m or emeaningful, said N.R. Bhanu-murthy, professor at the Na-tional Institute of Public Fi-nance and Policy.

We have already seen thePlanning Commission has got

good feedback on various is-sues that it sought opinionon, he said. I believe furtherconsultation will add value tothe Plan document.

The Planning Commissionmeeting will include financeminister Pranab Mukherjee,agriculture minister SharadPawar and rural developmentminister Vilasrao Deshmukh.The approach paper, after be-ing approved at the meeting,

will go to the National Devel-opment Council of chief minis-ters for endorsement, beforethe preparation of Plan docu-ments begins.

PAY PARITY

Minimum daily wages hiked to `115

BY P R A S H A N T K . N A N D A &

A SI T RAN JAN M I S H R ANEW DELHI

Th e g ov er nm en t o nThursday raised theminimum wage for dailylabourers by 15% to `115 in amove that can potentially ben-efit 20 million workers in sec-tors such as construction, agri-culture and stone breaking.

The revision, effective 1April, is based on the consumerprice index for industrial work-ers, which rose by 10.95% be-tween April 2010 and February.

Pronab Sen, principal advis-

er to the Planning Commis-sion, said the hike makes thegeneral wage rate consistent

wi th w ag espaid under thegovernmentsflagship rural

jobs scheme, wh ic h w er erevised in Jan-uary.

Wages paidunder the Ma-hatma GandhiNational RuralEmploymentGuaranteeScheme were linked in Januaryto the consumer price index foragricultural labourers for eachstate. The rural developmentministry, which oversees the

scheme, estimated this wouldincrease wages by 17-30%.Sen, however, said the Union

governments minimum wagerate for daily workers is onlyprescriptive. Nothing compelsstate governments to hike their

wage rates.Labour and employment

minister Mallikarjun Khargehas written to all chief minis-ters requesting them to revisetheir wage rates. In order tohave a uniform wage structureand to reduce the disparity inminimum wages across thecountry, national floor levelminimum wage is fixed, whichalso requires to be revised from

time to time, Kharge wrote inhis letter, a copy of which hasbeen reviewed byMint.

The labour ministry has forsome months been consideringa move to amend the Mini-mum Wages Act, 1948, to makethe minimum wage statutoryand fix minimum wages for allforms of employment.

The hike in minimum wagescould lead to a further rise inprices, analysts said.

This may not have muchimpact in the rural areas as therural job scheme already paysa higher wage, said N.R. Bha-numurthy, professor at the Na-tional Institute of Public Fi-nance and Policy. I do not seeany production activity takingplace at the revised wage rateeither in urban areas.

The minimum wage for dailyworkers was previously revisedto `100 from `80 from 1 No-

vember 2009.The Centre for Indian Trade

Unions said the 15% hike washardlyenough, par-ticularly withinflation beinghigh. Food in-flation underthe wholesalep ri ce i nd ex h as b ee n i ndouble digitssince J une2009.

Can a fami-ly of four sur-

vive in todays world with just`115? the labour organiza-tions vice-president M.K.Pandhe said. Governments

wage policy needs to be revised

and linked to the objective ofpoverty alleviation.Twelve states had higher

minimum wage rates than the`100 prescribed by the govern-ment before the latest hike,Sen said.

The Union government hadset up five regional committeesto reduce regional disparitiesin minimum wages for similar

work. The disparity, said thelabour ministry, is due to dif-ferences in socioeconomic andagro-climatic conditions, pay-ing capacity, productivity andother local conditionsinflu-encingthe wagerate.

prashant.n@livemint.com

General wage rate willbecome consistent withwages under rural jobsscheme; may put morepressure on prices

INFLATION CONCERNS

Record foodgrain outputunlikely to ease pricesBY R U C H I R A S I N G H

ruchira.s@livemint.comNEW DELHI

Indias estimate of recordgrain output is unlikely tosoften food inflation as per-ishable commodities and fuelare expected to add pressure,economists said on Thurs-day.

Indias food inflation asmeasured by the Wholesale

Price Index (WPI) for the week ended 26 March stoodat 9.18% year-on-year, downfrom 9.50% a week ago.

On Wednesday, agricultureminister Sharad Pawar saidIndia would have a recordfoodgrain output of 235.88m il li on t on ne s ( mt ) i n2010-11 on the back of a goodharvest of wheat and pulses.

A normal monsoon lastyear and a prolonged winter with late rains have helpedthe wheat crop. A harvest of84.3 mt is likely this year,higher than the previousforecast of 81.5 mt and last

years output of 80.8 mt, Pa-wars estimate showed.

But inflation is unlikely totaper much with the arrivalsof the winter-sown crops inthe market, as the fruits and

vegetables, fibre and fuel sec-tions of WPI are in the drivingseat for inflation, economistssaid.

The Rabi crop has beengood, but it is unlikely to easepressure on overall food pric-

es, said Rupa Rege Nitsure,chief economist at the Bankof Baroda in Mumbai. In thecurrent week, the higher levelo f p ri ce s h as c om e f ro mfruits, vegetables, poultry,and fuel remains a big wor-ry.

I n t he w ee k e nd ed 2 6March, wheat prices were uponly 0.29% year-on-year,

while vegetable prices wereup 11.41% and petrol costrose 23.14%.

In a survey byMint, six an-alysts and economists pro-

jected food inflation between8% and 11% in the April-June

quarter, with crop arrivalsseen keeping it at lower lev-els, but the destructive im-pact of the summer heat onperishable commodities ex-pected to take it back to dou-ble digits.

While prices of vegetablesand fruits would continue todisplay some volatility re-flecting their perishable na-ture, prices of cereals andpulses may show a mild de-

cline in the coming weeks,Aditi Nayar, economist at rat-ing agencyIcraLtd, said in anemail. Food inflation is like-ly to print at 9.5% for March2011.

But higher arrivals of cere-als may not push down prices

vastly if exports of wheat arepermitted by the govern-ment, in which case overseassales would keep prices sup-ported.

Poor storage and transportfacilities could lead to dam-age of foodgrains, whichcould also keep cereal pricesfrom slipping too much.

Mild decline: Higher arrivals of cereals may not push down prices if the government allows exports of wheat.

RAMESH PATHANIA/MINT

TEMPORARY RESPITE

World food prices dip, but may reboundBY R UD Y R U I T E N B E R G

feedback@livemint.comPARIS

World food prices that fellfrom a record last monthmay rebound, the UN said, aftergrains rallied on reports ofshrinking stockpiles.

An index of 55 food commodi-ties dropped 3% to 229.8 pointsfrom an all-time high of 236.8 inFebruary, the UNs Rome-basedFood and Agriculture Organiza-tion (FAO) said in an online re-port on Thursday. That was thefirst slide since June and came as

wheat fell 6.6% and corn 5.2% inChicago trade last month.

Prices have rallied since as UScorn stockpiles fell to their lowestsince 2007 and soybean invento-ries shrank to the smallest since2003. Costlier food contributedto riots across West Asia andNorth Africa that toppled leadersin Egypt and Tunisia and is driv-ing up inflation, spurring centralbanks to consider higher interestrates that may slow growth.

We may see that prices springback and resume the upwardtrend, Concepcion Calpe, aneconomist at the FAO, said in aphone interview on Thursday.

Corn has more than doubledin the past 12 months amid con-cern that higher planting in theUS, the worlds largest grower,

wont be sufficient to rebuildglobal stocks. US corn stockpilesat the start of March fell to 6.52billion bushels, the lowest for thedate in four years, the Depart-ment of Agriculture reported lastmonth.

Wheat surged 68% in the past12 months and soybeans gained45% as flooding in Canada, Chi-na and Australia and drought inRussia and Europe ruined crops.China is now contending with an

increase in pests in its wheat-growing regions while US cropconditions are rated at their

worst since 2002.The FAOs food-price index

fell for eight months in a row af-ter reaching its previous peak inJune 2008, a situation that proba-bly wont be repeated this year,Calpe said.

Its very unlikely to continue tofall, Calpe said. The fear is thatthe price index has fallen not be-cause of fundamentals but be-cause of events that go beyondthe market itself, for example Ja-pan.

Japan was hit by its strongest

earthquake on record on 11March, followed by a tsunamithat crippled a nuclear plantnorth of Tokyo, causing radia-tion to leak. Food prices fell lastmonth on concern Japan mightcut food imports, Calpe said.

The FAOs cereal price indexdeclined to 251.9 points from258.6 in March and its cooking-oil gauge fell to 259.9 from 279.3,the first drop in nine months forboth. The index for sugar de-clined for a second month to372.3 points from 418.2.

Farmers in the US, the worldslargest exporter of corn, wheat

and soybeans, will plant theirsecond-most acres of the grainsince 1944, according to a gov-ernment survey last week. Inven-tories will still take more than a

year to rebuild to a comfortablelevel, the USDAs chief econo-mist, Joe Glauber, said yesterday.

Global food prices probablywill rise in this centurys first halfbecause of an expanding popula-tion, higher incomes, slowergrowth in yields and the effect ofclimate change, Ross Garnaut,the Australian governments cli-mate-change adviser, said lastmonth.

In a lot of countries you havepositive income growth, and thishas a positive effect on demandfor a lot of products, includingmeat, Calpe said.

The FAOs meat price indexcontinued to climb in March, ad-

vancing to 168.6 points from167.9, while the gauge for dairyprices jumped to 234.4 pointsfrom 230. Food output will haveto climb by 70% from 2010 to2050 as the world populationswells to 9 billion and rising in-comes boost meat and dairyconsumption, the FAO forecasts.Producing 1kg (2.2 pounds) ofpig meat can take 3.5kg of feed,USDA data shows.

World grain production in2010-11 is forecast to drop 1.1%to 2.24 billion tonnes, the UNagency said in a separate report

on Thursday, little changed fromits March outlook. Cereal usageis estimated at 2.28 billiontonnes, exceeding production.The FAO raised its projection forending stockpiles by 1.7 milliontonnes to 479 million tonnes.

Global wheat output will be654.8 million tonnes, up 1.1 mil-lion tonnes from the previousUN outlook. The harvest ofcoarse grains including corn andbarley will be 1.11 billion tonnes,2.7 million tonnes less than fore-cast in March. Milled-rice outputis seen at 466.5 million tonnes,little changed from a month ago.BLOOMBERG

The new rate,effective 1 April, is

based on theconsumer price index

for industrialworkers

THE COST OF FOOD

Source: FAO

2002-2004=100 2002-2004=100240

210

180

150

120

425

350

275

200

125Jan Mar M ay J ul Sep Nov

Feb Apr J un A ug o ct D ec

FAO food price index Food commodity price indices.

MarApr

MayJun

JulAug

2010 2011

SepOct

NovDec

Jan MarFeb

20112008 2010

Sugar

Oil & Fats

Cereals

Dairy

Meat

2007

2009

YOGESH KUMAR/MINT