Implications of Food Price Shocks on Availability of Food: Evidences from the Indian Economy

Abstract

In the backdrop of liberalized trade of agricultural commodity in post WTO regime, reform measures is reflected in the change of domestic prices vis-à-vis international prices of food articles. Physical availability of food is purposively selected as a food security indicator in this paper due to its conceptual linkages of food price movement and domestic food supply. A declining trend in the per capita availability of food grains in the post reform period suggests a net export of food grains. Government intervention in procurement and distribution of food grains helps in insulating the shock of food prices in post food crisis situation. Empirical evidences also suggest that there exists a bi-directional causality in between relative price and net export, or food grains production, or government procurement of foodgrains. A responsive change in foodgrains production, net imports, foodgrains procurement and change in the government stock is followed by food price shocks.