Govt should have acted with firmness to check hoarding: Sen

The government should have acted with more firmness to curb hoarding and speculation in food prices, Planning Commission Member Abhijit Sen said today.

"Whenever prices start rising, some people see opportunity to make money. So, there is bound to be certain degree of speculation and that must have happened. On that front, probably, the government did not act with resoluteness that it could have," Sen told reporters on the sidelines of a conference on 'Green Revolution 2'.

Pointing out that the speculation depends on the expectation of price rise, he hoped that "the situation is going to improve and not worsen in the coming days".

Driven by rising prices of sugar, pulses and vegetables, food inflation soared to a decade's high of nearly 20 per cent in December 2009 before moderating a little bit in January.

Attributing the food inflation to high global prices and domestic drought, Sen said: "When people talk about prices, they normally forget about two very important issues."

"High global prices restricts the ability of the government to import food items at lower prices," he said.

"Secondly, if we do not want to import, then we have to produce more. Last year, we targeted (to produce more) but faced the worst drought in 30 years and hence lower output."

Last year, key crops - rice and pulses - grown in the kharif season (June-September) suffered due to poor rains. Rice output is estimated at 72.45 million tonnes against 84.46 million tonnes in the same season in 2008-09.

On raising farm sector investment, Sen said: "The expenditure on agriculture of the central as well as the state governments has increased many-fold in the last 4-5 years. The issue now is to make that expenditure work."

As regards growth prospects during the current fiscal, he said that the agriculture growth is likely to be negative in the first half of the current fiscal and would largely depend on the outcome of rabi crops.

"So far, we had good progress of rabi crops. Unfortunately, temperatures are going up at the moment and I can't say exactly how much growth would be this year. This will depend on the rabi season (October-June)," he said.

While sharing the strategy for the second Green Revolution, Sen said the government should seriously work to generate enthusiasm in farmers, decentralise a few farm schemes and amend or scrap the Agriculture Produce Marketing Council (APMC) Act to achieve the second Green Revolution in the country.