Price support shouldn't be the only way to incentivise farming: Survey

As the government battles to keep food inflation within manageable limits, the annual Economic Survey of the Finance ministry said that existing price support mechanism, should not be the sole tool to incentivise farming, but instead methods other that should also be considered.

The Survey also said that unlike previous years, when food inflation was mainly driven by higher protein prices, in 2012-13, the pressure has been coming mainly from cereals. “I believe that the real culprit in high food inflation is not prices as in many cases our Minimum Support Price (MSPs) is lower than international rates, the real culprit here inefficient food management,” eminent agriculture economist and chairman of Commission for Agriculture Costs and Prices, Ashok Gulati told Business Standard.

He said agriculture growth has been pegged at around 1.8% in 2012-13, which though lower than the annual target of 4% is much better considering that monsoons were patchy in 2012, clearly shows that Indian farming has developed a resilience to vagaries of nature. The survey also called for stable and consistent policies in agriculture where agriculture plays an important role and private investment is stepped up.