Build resilience against price volatility

Soaring fuel prices have cast a gloom over the uptick in economic activity and public mobility after Assam unlocked to near pre-COVID level. The prices of cooking gas and food items have also been persistently high burning larger holes in people's pockets when they needed more money to turn over a new page after being ravaged by two waves of the pandemic. If an economic cushion is not created by the State Government through measures to bring down the prices of essential commodities, the cascading impact is going to be long lasting. Petrol was selling at over Rs 100 per litre in over a dozen districts and touched Rs 99.50 in Guwahati on Friday. The price of a subsidised domestic LPG cylinder has increased to Rs 948 in the capital city and over Rs 1000 in the Dima Hasao district making life miserable for low-income households. The subsidy amount refunded since October 2020 is a paltry sum of Rs 52 and provides hardly any relief to the consumer from the price hike impact on the monthly household budget even for the average middle class and salaried houses. The price of diesel has also surpassed the Rs 90 mark in the state impacting the running cost of commercial vehicles including public transport. Oil Manufacturing Companies have attributed the fuel price hike to a surge in international crude oil rates. If global prices of crude oil continue to rise hike in the prices of petrol, diesel and cooking gas in the coming days is inevitable. India imports about 85% of crude oil and 50% of natural gas required by the country to meets its fuel demands which explain the price volatility with rising and fall in the international oil rates. Public transportation has become costly in the state due to a steady hike in fuel prices affecting commuting budgets for daily commuters. The State government has remained a mute spectator when fares have been hiked by transporters arbitrarily and have ignored a warning by the Government of punitive steps if fares are increased. Skyrocketing prices of vegetables, cereals, and pulses have made average consumers wary of loosening purse strings for all commodities and re-prioritised household food budget. Prices of most vegetables have increased by Rs 20 a kilogram while most mustard oil brands are selling at over Rs 200 a litre. Household savings are dipping while those who lost business and livelihood during the two waves of the pandemic are finding it difficult to cope. The state not attaining self-sufficiency and remaining dependent on vegetables, mustard oil supplies from other states is a major factor of high price volatility. Climatic and soil condition is favourable to grow mustard in the state as is evident from vast stretches of mustard cultivations. However, there are a handful of mustard oil extraction units that fail to cater to the large market. The government has attributed to a hike in prices of edible oil in the country to import 60-70% of its requirement. An increase in domestic production can only cut down the import quantities, but will also generate huge employment. Mustard seed de-oiled cakes have high demand in fish farming as fish feed supplement and fetch the remunerative price and in turn, can augment local fish production. Failure to harness such potential points towards lack of required efforts by the Agriculture and Horticulture departments and gaps in schemes and projects. Similar is the case with vegetable farming, including potatoes and onions. The state produces around 80,000 MT from 8,000 hectares of land while Maharashtra produces 88.54 lakh MT grown on 5 lakh hectares, Bihar produces 12.40 lakh MT on 55,000 Hectares which speak volume about the huge dependence of Assam on onion supplies from these states. Likewise, the area under potato cultivation has not increased and production is also stagnant at around 7 lakh MT when West Bengal produces around 127 lakh MT, Uttar Pradesh-155 lakh MT and Bihar produces around 77 lakh MT when Assam needs around 40 lakh MT of potatoes to meet its demand. An increase in production of major crops can help the state economy to grow as the money will circulate within the state instead of flowing out due to procurement of essential commodities, particularly vegetables and pulses which the state has a high potential to become self-sufficient. This will require more investment in agricultural and horticultural sectors which can be possible only if farmers and agri-Horti entrepreneurs have easy access to bank loans and adequate crop insurance coverage and sufficient cold storage facilities to preserve perishable produces. While the state can do little to moderate the fuel price, augmenting the production of vegetables and fruits only requires awareness among farmers and entrepreneurs about the availability of the huge market within the state. The State government overhauling the agricultural planning process to reorient it with local market demands can help build the resilience of the state against high price volatility.