Abstract
Food inflation in India for the past few years has been at a historic high. However, the evidence suggests that higher food prices, while adversely affecting those who spend most of their income on food, have not necessarily been helpful to smallholder farmers. The volatility of food prices at the wholesale and retail levels has also remained high, creating uncertainties for consumers and producers. This article reviews recent trends in food prices in India, examines the sources of food price increases and volatility, separates the relative roles of demand–supply imbalances, cost-push factors and speculation and draws out some of the implications of those factors.
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