Use milk co-op model to strengthen farm chain

FOOD ECONOMY: Efficient supply network is essential to ensure adequate supplies at reasonable prices

To reduce wastage and ensure market-linked prices for farmers, the Economic Survey has suggested the cooperative milk supply chain model be extended to other agricultural products. It also proposed taking perishables out of the Agricultural Produce Market Committees (APMC) Act and emphasised on the need to step up investment in food processing, cold chains, handling and packaging.

Farmers have to realise market prices, it said. An efficient supply chain is essential to ensure adequate supplies at reasonable prices and provide adequate compensation to farmers. “The successful experience of cooperatives in the milk sector in managing the supply chain and providing remunerative prices to producers may be emulated,” the survey said.

Price stability
The survey called for an improved supply response system to ensure stability in prices. It said regular imports of agricultural commodities in small quantities, with a cap, could be considered, adding mandi governance was an area of concern. More traders should be allowed to function as agents in mandis. “Anyone who gets better prices and terms outside the APMC Act or at its farm gate should be allowed to do so. Perishables like fruits and vegetables could be taken out of the ambit of the APMC Act,” it said.

During rabi season 2011-12, 28.35 million tonnes (mt) of wheat were procured, compared with 22.52 mt in 2010-11. In kharif season 2011-12 (as on November 1 2011), the total procurement of rice stood at 8.5 mt. As on as February 1, the stock position of foodgrain in the central pool stood at 55.2 mt, comprising 31.8 mt of rice and 23.4 mt of wheat. While the cost of grain rose, the issue price has been kept unchanged since July 2002. As a result, food subsidy has been rising. In 2010-11, it rose eight per cent to Rs 62,930 crore.