Food inflation in the country is expected to augment to around 2% in FY20 rising from rate of 0.7% projected for FY19. Also, it could be noted that the lower prices of food have been one of the key factors that has aided the Reserve Bank of India to be more benefactor in its rate setting in recent times.

Moreover, a foreign broking firm Goldman Sachs in its recent report recognized the lower prices of food in past few months to the prices of cereals as well as vegetables that have been recorded low for some time.

Markets deregulation that observed delisting of vegetables from Agriculture Produce as well as Marketing Committee Act (APMC) in approx. 14 states, has also facilitated prices of vegetable, report further added. In case of cereals, policies of “active food management” have been helping, counting on government’s released stocks that are in excess in huge quantities and underwent in for greater imports over this front.

Moving ahead, the food inflation is improbable to show a rapid growth unless there is any sort of natural disturbances happening in terms of weather or natural calamity.  “Food inflation is likely to remain subdued going forward,” report by Goldman Sachs states, adding average food inflation will go up in the 1.5-2% range in FY20 from the 0.7% in FY19.

The firm said that the focus is now shifting towards farmers who are opposing the lower prices of food, also challenging higher returns over their crops.  Further, it might be noted that in past year of current government, there has been a number of protests by farmers, particularly the ones in the national capital (New Delhi) and ones at financial capital (Mumbai) to raise their anxieties.

Initially, the government had answered them assuring to double their incomes in coming five years, then again assured them a return of more than 150 percent as well as declared income funding of approx. Rs 6,000 per annum for small & marginalized farmers.