BUSINESS

Inflation takes a toll on farmers

By Abhijit Roy, Commodity Online
March 22, 2007 11:26 IST

Soaring inflation is beginning to hurt the heart of rural India - the farmers and labourers.

According to the consumer price index data released by the labour ministry, price rise in essential commodities has taken a toll on farmers and rural labourers across the country.

Farmers and rural labourers paid almost 10 per cent more for food and other products this February as compared to a year ago, says the data.

The consumer price inflation was 9.8 per cent for agricultural labourers in February. For rural labourers, it was 9.47 per cent.

Consumer inflation calculations assign more weightage to food and daily use products including clothing and fuel. It is an important measure, because it measures the impact of costly food items on the poor.

Last month, the Congress party lost the elections in two states, Punjab and Uttarakhand recently. One of the reasons cited for the poll debacle has been the surging rise in essential agricultural commodities.

The Congress party now faces elections in the most populous, and politically significant state of Uttar Pradesh next month.

And the consumer price inflation for agricultural labourers in Uttar Pradesh was more than 9 per cent in February.

According to the Labour Ministry data, inflation was highest, at 12 per cent, for farmers in Madhya Pradesh and Bihar.

"The overall rise can be attributed to the increase in the price of wheat and wheat flour, jowar, maize, pulses and groundnut oil," the data pointed out.

Since April 2006, consumer price inflation has almost doubled. It was at 5.5 per cent in April.

The data also shows that real wages have risen in rural India, but the rise would not be enough to match the price rise.

Abhijit Roy, Commodity Online

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