10/17/13 Current Event

India has been hoping that abundant monsoon rains would cause higher food prices for months.  Inadequate infrastructure and populist election spending have offset the monsoon bonus.  Much of India's farmland is irrigated by the monsoon rains that normally come between June and September.  There should be more productive fields in most of the country because the rains have continued into October this year.  More production means more supply which should cause lower prices.  That chance is looking continually slimmer because even if the harvest is successful, the products become stuck on potholed roads and in the inefficient storage and distribution systems of India.  General election also offsets the monsoon bonus.  India governments usually spend more on social programs ahead of elections.  Political parties spend money organizing rallies to attract voters.  India's inflation continues to increases, and even miraculous rains might not defeat it.  I think that it is awful that no matter how great their harvest is and no matter how much monsoon rains they have, India continues to plumit into inflation.  Increased products should mean more supply.  That shoud lower prices, but India must improve their infrastructure and populist elections before inflation can decrease.

I wrote this current event using information from my brain and the site http://blogs.wsj.com/economics/2013/10/16/india-is-still-waiting-for-its-monsoon-bonus/.