ANNOUNCEMENTS
Improving India’s food production system with regards to quantity is a basic need along with other nutritional and qualitative aspects that need to be addressed. Additionally, crude oil, being a basic input in the food production process plays a pivotal role in discerning food prices and impacting production. Literature on the effects of oil prices on food prices has also been well established globally, but scantly in the Indian context. It suggests that an increase in oil prices generally causes the food prices to shoot upwards. This has caused severe food price inflation, making people turn to more affordable and sustainable sources of energies. Much attention has been given to biofuels over the last few years but it nonetheless has its own drawbacks. We therefore turn to another sustainable energy source, namely, solar energy. It is cheap, can be made accessible and also energy efficient, unlike bio-fuels. Our objective is to gauge effects of solar energy prices on food prices in the current Indian economy and predict future demand for this energy through time series forecasting. Monthly data for the years 2000-2021 collected from websites that are public, government or have reliable NGO sources will be used. VAR and VECM econometric models will be employed to do the same. In the short run, a bi-directional causality was found between food prices and oil prices. Solar energy prices are a much more stable energy source than oil in food production, especially in the long run. Due to extremely high oil prices, oil price inflation will be a severe issue in the future and will force us to substitute oil for other renewable energies. Policy recommendations highly favor a large-scale solar energy transition in the near future.
