An Indian customer purchase vegetabkes from a shop at a market in New Delhi on February 16, 2011.  Under attack for high food prices and slow reforms, Prime Minister Manmohan Singh said his UPA has not given up its economic agenda and promised clear measures in the upcoming Budget. Food inflation has been hovering above 15 per cent in the past few months before falling to 13.07 per cent in the last week of January.   Rising food prices have pushed about 44 million people into poverty in developing countries since last June, the World Bank warned. Food costs are continuing to rise to near 2008 levels, when price spikes in food and oil had devastating impacts on the poor, the development lender said, noting its numbers were released ahead of a Group of 20 finance chiefs meeting this week.   AFP PHOTO/RAVEENDRAN
An Indian customer purchase vegetabkes from a shop at a market in New Delhi on February 16, 2011. Under attack for high food prices and slow reforms, Prime Minister Manmohan Singh said his UPA has not given up its economic agenda and promised clear measures in the upcoming Budget. Food inflation has been hovering above 15 per cent in the past few months before falling to 13.07 per cent in the last week of January. Rising food prices have pushed about 44 million people into poverty in developing countries since last June, the World Bank warned. Food costs are continuing to rise to near 2008 levels, when price spikes in food and oil had devastating impacts on the poor, the development lender said, noting its numbers were released ahead of a Group of 20 finance chiefs meeting this week. AFP PHOTO/RAVEENDRAN

Once again, everyday food items such as pulses, potatoes, onions, tomatoes are in the news. Prices of the staple diet of millions, that is dal-roti, ought to be the concern of the policy-makers.

No doubt about it. According to reports, as in the previous years, it is the price of popular dals such as arhar and urad which heads the table of food items which have seen a sudden and sharp spurt in recent days. Last year the Government had taken steps to ensure that there was no inordinate pressure on the price of pulses.

A buffer stock on the lines of wheat and rice was supposed to be built for release in periods of shortage. Given that production of pulses was hit due to two successive years of draught, government agencies had contracted imports from Malaysia, Canada and other producing countries. Clearly, there is a mismatch in supply and demand, with the hoarders exploiting the situation to make a killing by raising prices of some pulses to even Rs. 200 per kilo.

The Government is keen to put a cap of Rs. 120 per kilo on the price of all varieties of pulses. This will prove difficult should the supply continue to be poor in the current season before the onset of the monsoon. However, the authorities have done well to clamp down on unscrupulous traders and speculators. Reacting to the sudden spurt in prices of essential food items, a number of steps were taken in the last couple of days.

This should help warn the black marketers and hoarders not to exploit the situation for fear of stringent punitive action by the central and State authorities. To begin with, the market regulator, Securities and Exchange Board of India, on Thursday banned future trading in chana dal with immediate effect. Investors were asked to wind down their existing positions in the commodity. In the past one month, futures prices in chana had risen by nearly 18 percent, closing at Rs. 6812 per quintal on Thursday.

Also, in order to ensure that sugar prices remain in line, the Government clamped a 20 percent duty on sugar exports. Since international prices of sugar are ruling high, the additional duty on its exports will help stabilise both supply and prices of the sweetener in the domestic market. Due to delayed harvest in Brazil, the world’s largest producer of sugar, sugar prices in the global market have witnessed over 50 percent increase in recent weeks.

Along with speedier imports of pulses to contain the price rise, the only protein-source of millions, the Government on Thursday indicated that it might explore opportunities to grow pulses in Mozambique on land to be leased from the local parties or from the Mozambique government.

More than half a million tonnes of pulses are to be imported on an urgent basis to check the pressure on their prices in the domestic market. State governments were also asked to explore the possibility of selling pulses at subsidised prices for a limited period till the price situation eased. This is already being done in fair price outlets in the national capital. As for vegetables, like in previous years some of the rise in the prices of tomatoes and onions is seasonal and the situation is likely to ease after the monsoon. Hoarding, speculation and cartelisation among traders is also being checked.

Indeed, the intelligence bureau and the Directorate of Revenue Intelligence have been roped in to crack down on speculators and cartels in food items. The year-on-year rise in the price of pulses is a staggering 31 percent, though overall retail food inflation was about eight percent in May this year. Hopefully, the urgency shown by various government agencies in checking the spurt in food prices will result in moderating them in the coming weeks and months. Cracking down on speculation and black-marketing aside, the Government needs to ensure abundant supplies of essential food items to check the recurring problem of high prices at this time every year.

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