Food price spike: FM blames it on inefficient farm market

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.