Causes of Rising Food Prices
It can be noticed that the prices of foods have consistently increasing day by day (corn, rice, wheat and oilseed crops). The main causes of rising food prices and inflation are the increasing population of the country Population is increasing day by day. Increasing population means more consumption of goods and as a result demands of goods rising in the market. Due to this, the demand for energy rises and there are higher expenses of extracting of oil as well as prices of oil rose up to peak. With the increase in oil price, the food production cost raised and inflation increases.
Drought is another reason. The main cause of rising food prices is drought and floods that continued occurred, delivers harmful results. In 2007 drought cracked in Australia which down the production of wheat and cereals stocks lower. These are the factors that are responsible to lift the food prices but only temporally.
Another major cause of rising food prices and decline global stocks is that people in some countries who prefer to eat high protein food like beef and other domestic animals than vegetables and staple food. The consumption of more meat of people will ultimately cause the food prices to rise currently.
Sometimes in emerging countries, diet change is responsible for rising food prices. Due to hike to a price of the food, it creates the deficiency of food supply in the market that becomes the causes of turbulence of international market. People in developing countries face the problem of food and shelter. Even they do not get food and due to starvation, they lost their lives. For the security of food, there is need to control rising prices of the goods.
Furthermore, another reason for increasing fuel price is that we more dependent on other countries who dominate the supply of oil and its price. For the country economic growth, Energy is an essential part. But it looks inappropriate if we more dependent on other countries who dominate the supply of oil and its price.
So for energy security many types of biofuels are formed and developed that is was too expensive to use on one time (upon a time) for protective policy As a result, Government established renewable energy section but the feedstock demands of coarse grains and oilseeds will keep growing in future. This is one major root causes that raise on the drives up the food prices at the higher level.
Because of an absence of a firm and forward-looking economic policy and the implementing machinery being faulty, the nation is facing a continuing rise in prices and decline in the purchasing power of the rupee.
The root of the evil of price to be traced to the failure of both the overall policies of the government and its implementing machinery as well as to the role of the wholesale traders and stockists who act in collusion with the government officials.
The existence of a large amount of black money is one of the main causes of artificial scarcity and rise in prices. According to some estimates, the accumulated black money in this country is about 10,000 crores. Unless this huge black money is unearthed or destroyed its impact on the price level can never be eliminated. It is said that government is formed with the help of black money holder’s is naturally reluctant to the help of action against them.
The growing deficit financing in the country is exerting mounting inflationary pressure on our economy and this, in turn, is causing a continued rise in prices. No wonder that with such a trend of increasing deficit of financing the inflationary pressure on the economy grew tremendously causing great price rise.
Population Growth
The ever-increasing cost of living has created a grave economic situation for the poor and middle-class people. The population growth is increasing day by day but resources are scared its effects on the poor and middle-class people.So increasing population growth has posed a serious threat to the stability of the society as a whole. Due to growing population, the rise in prices of essential commodities has badly affected the people of the fixed income groups. They have to struggle hard and long to keep their body and soul together.Due to increasing population, the lot of burdens imposed on the government and it is not possible for a government to fulfill the needs of all people.When a man is unable to provide himself and his family with the barest necessities of life he is tempted to earn money by adopting unfair means.This leads to corruption and malpractices. In fact, rising cost of living is the check and price line. Otherwise, it is bound to create economic explosion leading to social tension and political imbalance.
Remedies
Government expenditure and taxes should be reduced. The basic and almost the only cause of price rise is overspending by the government. The expenditure is excess than the income from the taxes and the loans whether for development or otherwise and making up the deficit by printing new currency notes and imposing fresh taxes on goods and services. Every new note every new tax immediately increases and cost of goods and services becomes higher expenditure by the government thus resulting still more new notes and taxes and still higher prices.
The ever-increasing cost of living has created a grave economic situation for the poor and middle-class people. Increasing cost is the serious danger and it creates hindrance in the development of the country. The rise in prices of essential commodities has badly affected the people of fixed income groups. They have to struggle hard and long to keep their body and soul together. When a man is unable to provide himself and his family with the barest necessities of life. He is tempted to earn money by adopting unfair means. This leads to corruption and malpractices. In fact, rising cost of living is the check and price line. Otherwise, it is bound to create the economic explosion of social tensions and political imbalance.