Why are cereal prices high?

This is priceless. ROFL stuff. Article 1 says that the Central Government is not allowing export prices of wheat to fall below a certain level. That level, incidentally, would make their minimum support price look ridiculous by placing a huge subsidy (that only means much bigger than the current one) burden on government, but that’s my observation, not the article’s. As per the article, it is ministers of the Central Government who are refusing to allow wheat export prices to fall below the prices at which the Central Government sells wheat to biscuit manufacturers.

And then there is Article 2 that blames State governments for prices not falling and for stocks piling up and rotting in godowns. It even cites economic theory by mentioning that record stocks should send prices crashing down and ends by saying that the fact that they are not must be because of hoarding.

Ah! There it comes!!! The evil hoarder is responsible for all the miseries of the common man and government is the saviour. Let the crackdown start and let’s have punitive punishment meted out to the greedy people who are ready to watch millions starve.

Yes! Repeat after me until you really believe it!! Government manipulation of the money supply and its tampering with the price mechanism have nothing to do with high and ever rising prices. If you repeat it enough times, it will become the truth. So repeat it blindly without thinking.

Why are cereal prices high?
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One thought on “Why are cereal prices high?

  1. Amit

    sir, could you explain the inflation in the onion prices (sometime during NDA’s rule).
    I was young then. But reading your article, the news reports came back to my mind.
    Even then, the hoarders were blamed. It was said that onion was available in the market but was released in small quantities.
    What could have been the actual reason? Was it an actual shortage in the supply of onion (due to lesser production), or was it something else?

    Please do explain (any other better example to explain this will also do).


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