National weather forecast: Cloudy with a chance of price falls

livemint.com:

tur dal prices alone have shot up 60% in two years—Prakash said he has been forced to grow his own food. “We had to reduce the quantity of nutritious items like pulses and vegetables in our diet. We almost never buy and cannot afford any fruit other than the occasional banana," he explained.

“I am lucky someone gifted me a cow—at least there’s milk at home. After spending on food and paying for private education (for two children), I am left with nothing." While they may not be following in Prakash’s furrow, millions of Indians have found themselves facing the same predicament in recent years, and like him, they have been forced to economize in all kinds of ways to put food on the table. In a paper released last month, the Reserve Bank of India (RBI) noted that food inflation averaged 6.3% during the 2020s (June 2020 to June 2024), compared to just 2.9% between 2016-2020.

This sharp divergence is largely due to supply shocks following adverse climate events, it said. High food inflation, the central bank warned, has turned “endemic." While consumers have been left reeling by inflation, farmers have not seen their incomes multiply. That’s because high crop prices—be it of pulses, vegetables or cereals—have often resulted from climate-induced production losses.

In fact, trade policies such as export restrictions on cereals and duty-free imports of oilseeds have negatively impacted farm incomes. One factor, rainfall, plays an outsized role in determining how farmers (and consumers) fare each season. But nothing is set in stone—a bumper harvest can lead to a crash in farm-gate prices, whereas freak weather events can cause widespread damage to crops, leading to a price spike.