New Delhi: There is an urgent need to amend the Agricultural Produce Marketing Committee Act in order to control the food inflation, the government’s Economic Survey for 2013-14 (Apr-Mar) today said.
“The problem of intermittent surges in food prices has persisted in India despite various reform measures undertaken. The high costs of intermediation have a cascading effect on prices. The Committee on Agricultural Reforms (2013) recommended, inter alia, a barrier-free national market for the benefit of farmers and consumers,” the survey presented in Parliament said.
India’s inflation rate based on the Wholesale Price Index rose to a five-month high of 6.01% in May from 5.20% in April.
The rise was mainly led by food price inflation, which increased to 9.50% from 8.64% a month ago. Within food, vegetable prices surged 6.7% on month, led by a 19% spurt in potato and a 9% rise in onion prices.
Late last month, the government in a bid to combat rising prices of essential goods asked states to crack down on hoarding and de-list fruits and vegetables from the Agriculture Produce Marketing Committee.
The survey today said it is essential for farmers to be part of a competitive, common, national market in order to keep prices under check.
“The Committee on Agricultural Reforms (2013) noted that, ‘by and large, the APMCs have emerged as some sort of Government sponsored monopolies in supply of marketing services, facilities, with all drawbacks and inefficiency associated with a monopoly,” the survey said.
The survey also suggested ways to facilitate creation of a barrier-free national market and recommended allowing sale and purchase of all perishable commodities such as fruits and vegetables, milk, and fish in any market, which could later be extended to all agricultural produces.
Exempting market fee on fruits and vegetables and reducing high incidence of commission charges on agricultural and horticultural produces would also go a long way in creating a robust, common market, it said. The survey also said “facilitators can also tie-up a link to the commodity exchanges’ platform to disseminate spot and futures prices of agricultural commodities.”