Fodder Inflation

  • October 3, 2022
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
No Comments
Print Friendly, PDF & Email

 

 

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.
economy Fodder Inflation