The inflation rate for feed has reached 27.31%, the highest level since June 2013

The cost of fodder continues to rise, so there appears to be no respite for households that are dependent on livestock rearing for their livelihood. According to the All-India Wholesale Price Index (WPI), fodder inflation reached 27.31 per cent in October 2022, the highest rate since July 2013, when it reached 27.29 per cent.

As reported by the Office of the Economic Adviser, Ministry of Commerce & Industry, the WPI value for fodder increased to 227 in October 2022, representing an increase of 27.31 per cent over the same month in the previous year (1783).

In October last year, the WPI-based fodder inflation rate was 8.85 per cent. However, in August and September of 2022, it increased sharply to 25.54 per cent and 25.23 per cent, respectively.

While the overall WPI inflation has seen a downward trend in recent months and it has come down to 8.39 per cent in October 2022 — the lowest in 19 months — fodder inflation has been rising. The WPI fodder inflation has been rising since December 2021, hovering over 20 per cent during the last six months, May-October, 2022.

AN EXPLANATION

Price increases and their impact

In households whose livelihood depends on cattle rearing, rising fodder prices have a direct impact. Moreover, it also affects urban households indirectly since milk companies and cooperatives raise milk prices in order to compensate livestock owners. Food and nutritional security require the control of fodder prices.

According to the World Product Index (2011-12), fodder weighs 0.5314 and belongs to the category ‘Other Non-Food Articles’. This is one of the 697 items collected for wholesale price information. Milk prices are directly affected by the rise in the price of fodder.

According to the Indian Express, fodder inflation in August 2022 reached its highest level in nine years (25.54 per cent). As a result of the high prices of dry fodder, rural households in the country face hardships. Additionally, it was noted that the government’s plans to establish 100 fodder FPOs (Farmer’s Producer Organisations) remained on paper.

The government held a meeting on October 6 to assess the fodder situation in the country, during which states informed the Centre that the price of dry fodder had increased significantly. Rajesh Kumar Singh, secretary (animal husbandry), presided over a meeting attended by senior central officials and representatives from 14 states, including Uttar Pradesh, Rajasthan, Gujarat, Punjab, Haryana, Madhya Pradesh, and West Bengal.

In this context, the government approved a proposal to create 100 fodder-focused FPOs. Two years earlier, the Ministry of Fisheries, Animal Husbandry and Dairy endorsed the formation and promotion of fodder-centric FPOs to address the fodder shortage in the country. As a result of this move, the government has designated the National Dairy Development Board (NDDB) to be the implementing agency, to create 100 such FPOs by 2022-23.

Union Ministry of Agriculture and Farmers Welfare issued an order on November 4 stating: “The competent authority in the Department of Agriculture & Farmers Welfare has approved the designation of NDDB as the implementing agency under the scheme of formation and promotion of 10,000 Farmer Producer Organizations (FPOs) to form and promote FPOs. primarily fodder-centric, and animal husbandry activities as a secondary activity (fodder plus model)… NDDB has been assigned to form 100 FPOs during 2022-23 within the contours of the scheme guidelines.”