Food prices: Exports regulated, action against hoarders (Lead)

January 13th, 2011 - 11:20 pm ICT by IANS  

Pranab Mukherjee New Delhi, Jan 13 (IANS) Worried over the frequent “unacceptable” rise in food prices, the government Thursday unveiled a slew of anti-inflation steps, including regulating exports and imports, sale of onions through government agencies, utilising state-run companies to source pulses and stringent action against hoarders.”Prices of most manufactured goods and services have been reasonably stable, food prices have frequently risen at unacceptable rates,” the Prime Minister’s Office (PMO) said in a statement.

“The current bout of inflation is driven by a rise in prices of vegetables and fruits which is more difficult to manage because these commodities are not held in public stocks,” it added.

The government has been on the backfoot after opposition parties raked up the issue of price rise in rallies across the country. India’s food inflation has soared to over 18 percent, led by onions which are selling in most parts of the country at Rs.55-60 per kg.

Among some of the measures that the PMO suggested Thursday are sale of onions at Rs.35 per kg by state-run National Agricultural Cooperative Marketing Federation (NAFED) and the apex federation of consumer cooperatives, NCCF, through their retail outlets.

“The arrival of onions from Pakistan will also help cool prices. Import of 1,000 tonnes of onions has already been contracted. Export of onions stands banned,” said the PMO.

The government will also review import and export of all essential commodities to ensure supplies in the domestic market.

It also warned of severe action against black marketers and hoarders of food items.

“Cartelisation by large traders will be strictly dealt with. Government will take stringent action against hoarders and black marketers manipulating market prices,” said the statement.

Though food inflation, has came down to 16.91 percent for the week ended Jan 1 according to official figures released Thursday from 18.32 percent in the previous week, prices of vegetable still continued to soar.

The measures were announced after three-hectic days of consultations among senior ministers of the government, which was initiated by the prime minister himself Tuesday.

He had entrusted his senior-most colleague in the cabinet, Finance Minister Pranab Mukherjee, to suggest a way out of spiralling inflation.

Citing reasons for rising prices of food items like meat, eggs and fish, the goverment said it was a result of,”fast growth of the economy, leading to rising income levels, combined with the effect of several inclusiveness programme which put greater income in the hands of the relatively poor.”

“The only lasting solution to food price inflation lies in increasing agricultural productivity,” the statement added. It also said there was a need for facilities like cold storages to improve the supply chain of perishables like milk and meat and that this would help bring down prices of such items.

Some of the other actions laid out by the PMO are:

* State units to intensify purchases of essential commodities, particularly edible oils and pulses, for distribution through their retail network

* Existing schemes for subsidized distribution of edible oils and pulses to be continued

* Exports of edible oils and pulses, as well as non-basmati rice to remain banned

* A Committee of Secretaries under the Cabinet Secretary to review the price situation with individual states

* An inter-ministerial group to be set up under the chief economic adviser to review the overall inflation situation

* A scheme to support the state governments in the setting up of farmers’ mandis and mobile bazaars and to improve the functioning of civil supplies corporations and cooperatives

* State governments to be urged to consider waiving mandi tax, octroi and other local levies to bring down prices further

* Awareness campaigns to make people aware of cheaper alternatives to pulses like yellow peas dak to influence consumption patterns in favour of such alternatives

* Involve Residents’ Welfare Associations and self-help groups in distribution of essential commodities to address local shortages and ensure that supplies reach the households with least intermediation cost

* Investments to be encouraged in supply chains including provisions for cold storages

* Storage capacities to be increased to stock last years bumper kharif crop.

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