Food price spike: FM blames it on inefficient farm market
Press Trust of India / New Delhi Nov 16, 2009, 18:14 IST
As the prices of food items soar, the government today said that the farm market is imperfect as it neither provides remunerative prices to the farmers nor fair prices to customers.
"Our agriculture markets are characterised by market imperfections...A huge gap exists between the consumer price and the price received by primary producers...While farmers do not get (remunerative) prices, consumers end up paying more than what should be paid if agriculture markets are competitive and efficient," Finance Minister Pranab Mukherjee said here.
There is a chain of intermediaries which do not always work competitively in the agricultural markets, Mukherjee told a CII seminar on 'competitive policy' in the Capital today.
"There is tremendous scope of increasing competition in the (farm) market to formulate policy changes and innovate products which in turn would contribute to farmers as well as consumers," he said, adding that despite low inflation food prices have been on the rise.
On the sidelines of the same seminar, Cabinet Secretary K M Chandrasekhar attributed the rising food prices to supply constraints.
Mukherjee said it will be a challenge for Competition Commission to locate and curb anti-competitive practices in the system.
Not inefficient but exploitative farm markets, the real cause in hike in food prices.Shorn of high sounding verbiage, what it means is that middle men gobble up the lions share with little value addition and both the producers and consumers are exploited by these middle men. Go to any market, be it a mundy, whole sale or retail shop, you will witness the same scene of exploitation of producers and consumers by the ruthless traders. Government is equally responsible for this sorry state of affairs by being unwittingly a party to this exploitation of farmers. Instead of lamenting,government should take remedial steps.
Establishing terminal markets and wide dissemination of market prices and curbing the activities of the plundering by dalaris are some of the steps urgently called for besides providing are storage facilities and pledge loans from banks.
Content Guide
As the prices of food items soar, the government today said that the farm market is imperfect as it neither provides remunerative prices to the farmers nor fair prices to customers.
