Low food inflation should not make govts complacent: expert

Pinstrup-Andersen noted that global food prices started rising from 2001 and took off in 2007-08. They retreated temporarily following the global financial crisis, but still recovered and peaked in early 2011. Since then, there has been a general fall, especially pronounced over the last one year.

“The sharp increases during the past decade were essentially an adjustment for the previous long-term cyclical declines, compounded by extreme weather events, market disruptions and private investment funds seeking returns from price volatility. We must be prepared for the next price hike, which could originate from weather-related shocks,” he warned.

Pinstrup-Andersen said that it was important to get agricultural policy right by allowing transmission of world market prices to domestic markets to ensure that appropriate price signals are sent to domestic producers and consumers. Targeted compensatory measures could be pursued if necessary to protect poor producers or consumers.

These, he added, should also be accompanied by investments in rural infrastructure — roads, irrigation and electricity — and increasing crop productivity per unit of land and water, so as to increase food supply elasticity and enable producers to respond to price signals.