Effects of Food Inflation on District Economic Vulnerability: A Case Study of Udham Singh Nagar

Abstract

Food is the most basic and essential need of human survival with a direct effect on health, productivity, and well-being. In addition to having a biological role, food is also one of the leading factors in determining social stability, economic growth, and human dignity. In line with this, the idea of human welfare revolves around the availability, accessibility, and affordability of food and these are universally accepted as being fundamental rights. Food affordability becomes a particularly pressing matter in developing economies like India and, in particular, in the regions of which a significant part of the population continues to rely on agriculture and low-paid jobs. In this background, inflation of food which refers to a prolonged rise in the prices of food commodities has become one of the biggest economic and social problems. Food inflation has a more immediate and direct effect on households as compared to general inflation since food accounts a significant portion of total consumption expenditure. Empirical surveys have repeatedly shown that low-income households in India are using a large share of their income to food, which makes them very vulnerable to even small changes in prices. Therefore, it can be suggested that increasing food prices can significantly reduce real income and purchasing power, particularly of economically disadvantaged groups. Although producers and especially large-scale farmers might be beneficiaries of the increased prices, small-scale and marginal farmers, landless labourers and informal workers of the urban poor are the net beneficiaries of food consumption and therefore suffer the negative impact. The inabilities of these groups to face stagnant or slightly rising incomes that do not match the rising food prices are common. Food inflation, therefore, increases the level of economic vulnerability and forces households to make hard trade-offs in terms of consumption, savings and investment in some basic services like health and education . The current research paper examines how the problem of food inflation affects economic vulnerability and poverty in the Udham Singh Nagar district of Uttarakhand. The study uses an empirical methodology, which incorporates the use of secondary data, to examine the dynamics, driving factors and the consequential outcomes of the rising food prices at the household level.