An Eye Opener – Salient points from BJP President, Shri Nitin Gadkariji’s Presentation on Food Inflation

published on February 10, 2010

‘Food Inflation is the comprehensive failure of economic policies of congress led UPA government. It is an irony that a govt. led by economist Prime Minister has failed the “Aam Aadmi”, who has to face huge hardships for managing Dal Roti. It is a collective responsibility and failure of vision and action. Agriculture, Commerce, Food and Consumer Affairs, Finance Ministry are all responsible for present price rise. 
 
Govt must study in details of how Commodity Exchanges are manipulated to jack up food prices. The record of last year transactions on forward exchange in essential commodities clearly establish that it is 99 % speculation & less than 1 % deliveries. These exchanges are used for manipulation. BJP demands permanent de listing of essential food-agriculture commodities from forward trading list.
 
 
Mr Gadkari observed
 
Its result of Failure of Govt. Economic Policies
Wheat, Rice, Sugar, Dal price doubled in past few months.
General Inflation and food inflation shows wide variations.
In last six months general inflation grew from 1% to 8% but food price index went up from 12% to 20%.
Government failed to manage buffer stocks properly.
Consumers paying 3 times more than the price paid to farmers.
Forward Trading of Essential Commodities resulted in 99% speculation trading, actual delivery less than 1%
Beneficiaries of all these policies are Multinationals, Corporate Companies, Manipulators, Speculators and Black Marketers.
Profit of Commodity companies gone up by 500 to 2,900 % in last quarter of 2009.
It is observed that whenever Congress comes to power inflation zooms up. Inflation was in double digit during Congress Raj in 1991/1995 when Dr. Manmohan Sing was Finance Minister. Now again Inflation is marching to 10%. Food Inflation touching 20% after 11 years.
 
In spite of record production of Rice 991 lakh tons in 2009, Price increase from Rs.10/kg in 2004 to Rs.32/kg in 2010.
Farmers got Rs.9.50/kg but Customer paying Rs.32/kg.
Wheat Production is up from 758 lac tons of 2006/07 to 805 lac ton in 2008/09, Farmer got Rs. 10/kg, Consumer pays Rs. 24/kg. Forward Trading re-started in May 2009
 
At commodity exchange
 
Out of 14 lac ton turnover actual delivery 1,400 ton
99.99% speculative trading during May to Dec 2009
 
Sugar
 
Import-export Manipulation
     –  48 lac ton exported in 2008-09 @ Rs.12.50/kg.
     –  Now importing  Raw Sugar @ Rs.36/kg
Govt. gave Export & Transport Subsidy to Exporters.
Why govt. did not created buffer stock of Sugar ? 
Prices up from Rs 22 to Rs.45 to 50/kg in one year.
 
Speculation & Manipulation at Commodity Exchange
 
2009 Turnover 79 lac ton but delivery 1.11 lac ton
Speculation 98.6%
Banned from forward trading since May 2009
In the case of Pulses Price went up by 200 to 400%. In 2004 during the NDA/BJP Govt., Chana Dal available at Rs. 25/kg, which has gone up to Rs.56/kg in January 2010. Tur Dal that was available then at Rs.24/kg had gone up to Rs.100/kg in January 2010
 
Tur Dal scored Century and Sugar Half century
 
Edible oil
 
Price of Groundnut Oil gone up from Rs.40 to Rs.100 per kg.
In 2008-09, India imported 75 lakh tons edible oil, i.e. more than 50% of its consumption.
Indian food security is getting pledged to the foreign multinationals and Commodity Exchange players.
 
Manipulation & Speculation at Commodity Exchanges are horrible.
 
 
Channa
 
Turnover 2, 59,43,840 ton – Delivery 50,710 ton.
Speculation 99.80 %
 
Jeera (Cumin)
 
Turnover 21,82,923 ton   Delivery 3,402 ton
Speculation 99.84%
Price went up from Rs.104 to Rs.146 per kg in 2009
 
Guar Seed
 
Turnover 9,02,97,720 ton. Delivery 21,550 ton.
Delivery 0.02%.and 99.98% speculation.
 
Turmeric ‘Haldi’
 
Turmeric ‘Haldi’ is ideal example of Commodity Exchange Manipulation
Turnover 1,32,72,060 ton
Delivery 3,880 ton
Speculation 99.97%
Price went up from Rs 38 to Rs130/kg
 
Potato
 
Inclusion of Potato in the list of Forward Trading is reflection of how Commodity Exchanges are misused in India
Turnover 32,53,020 ton, actual delivery 4,080 ton
Speculation 99.70% and delivery 0.30%
Price went up from Rs.6 to Rs.14/kg.
 
BJP demands

 
Removal of Food Articles from Commodities Exchange Forward Trading List
Ensure Food Security and Create buffer stocks.
Stop Economic Policy of Robbing Farmers and Looting Common Man
Steps to bring down price of wheat, rice, sugar, dal by making these commodities available at subsidised rates through PDS to APL category along with BPL. 
Monitoring and Action against
Hoarders
Black Marketers
Multinationals/Corporate Manipulation/Profiteering.

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