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LATEST NEWS UPDATES | 'Increase in production to help in controlling prices'

'Increase in production to help in controlling prices'

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published Published on Mar 14, 2012   modified Modified on Mar 14, 2012
-The Indian Express
 
Increasing farm production and removing market imperfections would help in controlling prices of commodities, a report has said.

The report on 'State of Indian Agriculture 2011-12', tabled in the Lok Sabha, said that the principal factors behind the higher levels of inflation in the recent period are constraints in production and distribution especially in high value items such as pulses, fruits and vegetables, egg and meat.

Increase in prices can be attributed to both supply and demand factor, it said, adding the per capita availability of some of the items such as cereals and pulses have been declining resulting in some pressure on their prices.

"The enduring solution to price inflation lies in increasing productivity, production and decreasing market imperfections," the report said.

Food inflation, which touched 12.21 per cent in October 2011, had remained a cause of concern for policy makers for the last two years.

Market imperfections include lack of infrastructure facilities like efficient transport facilities, storage, processing, marketing and credit facilities.

It said that there is also a need to improve the efficacy of minimum support price (MSP) to control the prices.

The main objective of MSP is to ensure remunerative prices to the growers for their produce with a view to encourage higher investment and production and evolve a balanced and integrated price structure in the context of overall needs of the economy while safeguarding the interest of consumers by making available supplies at reasonable prices.

It said that there is a need to extend the price support mechanism effectively across the country and invest in building market infrastructure in the states.

It further said that the farming community requires facilities for efficient marketing including scientific storage so that wastage and produce deterioration are avoided.

"The states need to implement market reforms in their entirety to provide effective marketing channels to the producers," it added.

The report said that inefficiency in the wholesale market is leading to loss of quality and increase in the gap between the producers an consumer prices.

Further, the report said that India should "try hard" for the successful conclusion of stalled Doha Round of talks under the WTO. The move would help the country to protect domestic farmers.

The Indian Express, 12 March, 2012, http://www.indianexpress.com/news/increase-in-production-to-help-in-controlling-prices/922954/


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