Fodder Inflation
- October 3, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
No Comments
Fodder Inflation
Subject: Economy
Context:
Fodder inflation at 9-yr high, late rains, crop damage deepen crisis
Details:
- The Wholesale Price Index or WPI-based fodder inflation – 25.54 per cent in August 2022, the highest in the last nine years.
- Fodder Inflation has been rising since December 2021.
- The overall WPI inflation in August 2022 at 12.41 per cent is the lowest since September 2021.
Cause:
- Shortage of green fodder and dry fodder -paddy and wheat straw is not fully converted into good quality fodder rather burned.
- Combine harvesters leave the large part of the stalk on the field and need a second round of cutting for fodder.
- Crop damage- due to late and heavy monsoon rain.
- Changing cropping pattern-farmers are now moving away from cereal crops that yield fodder.
- Decline in grazing grounds-due to conversion of land into protected areas and growth of invasive plants.
- Breed and crossbreed-Cows crossbred with foreign breeds like Jersey and Friesian Holstein were introduced in India in the 1970s, give more milk but require more to eat.
Concept:
- The high fodder inflation has a direct impact on rural livelihoods since as per the National Statistical Office report ‘Situation Assessment of Agricultural Households and Land and Livestock Holdings of Households in Rural India, 2019’,
- 43.8 per cent of the total 9.3 crore agricultural households use green fodder, 52.4 percent dry fodder, 30.4 per cent concentrates, and 12.5 per cent other animal feed during July-December 2018.
Common Inflation types:
- Currency inflation: It is caused by the printing of currency notes.
- Credit inflation: This happens when credit expansion leads to a rise in the price level.
- Deficit-induced inflation: It happens when expenditure exceeds the revenue, and the government can ask RBI to print money to meet the budget deficit.
- Demand-Pull inflation: It happens when an increase in aggregate demand over the available output leads to a rise in the price level.
- Cost-push inflation: This may arise from the overall increase in the cost of production.