Food Inflation: How To Decode The Onion Price Puzzle

Dr. D agreed there was a room for a business solution in addressing the pervasive food waste problem. The bustling grandeur of Chicago was our next stop, where I had the honor of meeting Julie Smolyansky, CEO of Lifeway Foods . Lifeway Foods produces probiotic Kefir yogurt. Julie noted the rewarding benefits of offering a healthy product to consumers as earning profit and promoting health does not have to be mutually exclusive. I then jumped on the bus to venture to The Plant on Chicago’s South Side. The Plant is a renovated warehouse housing various food projects under its roof. Small food-based businesses use The Plant’s certified kitchen to smoke meat, bake bread and brew beer. An aquaponics farm grows an impressive selection of greens. All the food waste produced by these various projects is processed in an on-site anaerobic digester which converts the food into bio-gas and energy to power the warehouse. This site visit deeply increased my understanding of the closed-loop food system. Leaving Chicago I understood what it meant to be a large scale health food producer, as well as felt greatly inspired by the pioneers of The Plant, who are redefining what it means to be a sustainable food and energy system. Though I never spoke directly to farmers on my trip, in Pittsburgh I met with Neil Stauffer from Penn’s Corner Farm Alliance . As farmers are strapped for time and resources organizations like Penn’s Corner steps in to provide marketing and distribution services.

After subtracting the cost of logistics, 10-15%, the difference in cost price and selling price is still high. A huge markup is taking place in the retail chain and traders are cornering huge profits. Onion prices have had a tumultuous political history and, therefore, the government is trying to control the price rise. It could impose an export ban or revise the minimum export price upwards and limit stocks for traders. However, these short-term measures would have a limited impact on prices and in solving long-term problems related to production and marketing of this essential commodity. It seems that government agencies like Nafed are unable to efficiently monitor price rise regularly in the domestic market. Also, it does not take timely remedial action when there is a probability of a major shortfall in supply. So far, the government does not have any effective regulatory cell to monitor and foresee such abrupt increase in prices of essential foodstuffs with inelastic demand. The issue of rising onion prices is symptomatic of a longer-term problem, which requires serious thought and quick action in food management. Warnings of a spurt in onion prices have been in the public domain for the last 3-4 months but the government has not responded with the required urgency. Some speculation and hoarding must be taking place. But blaming only these for the price rise does not seem logical. Economists and the media have been alerting policymakers on this subject. A review of the causes of onion price rise needs to differentiate between long-run and short-run shortages since each has to be tackled differently. The demand and supply gap is a major factor that needs deeper probing.

Food Lion donates $500K as shutdown ends WIC benefits in NC

The Salisbury grocery chain announced Wednesday it will donate gift cards to seven N.C. food banks across the state, including Second Harvest Food Bank of Metrolina in Charlotte. That follows an N.C. Department of Health and Human Services announcement Tuesday that it will stop issuing benefits tied to the federally funded Special Supplemental Nutrition Program for Women, Infants and Children, known as WIC. That program provided supplemental food, health-care referrals and nutrition education to nearly 264,000 women in North Carolina in September. DHHS says approximately 80 percent of those eligible in October have been issued food benefits, but there is not sufficient funding to issue additional vouchers. The agency says it is working with the federal government to secure funding to keep the stateas WIC clinics open. The referral and education programs will continue. For now, DHHS says those in need of assistance can apply for food stamps or will be referred to food banks and food pantries in their communities. In the interim, Food Lion has stepped in to distribute gift cards to food banks in Asheville, Charlotte, Elizabeth City, Fayetteville, Raleigh and Winston-Salem. aFood Lion is pleased to take a leading role across the state in providing critical funding to North Carolina food banks that will begin to receive increased requests in the coming weeks,a says Beth Newlands Campbell , president of Food Lion.