Rising Food Prices: Is The Government In Control?

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Unfortunately, No seems to be the answer, according to food policy analyst Devinder Sharma, till the Government cracks down on middlemen.

"The good part is that we have ample stock. We never had crisis of food shortage. So, why are the prices going up? Political will can bring down food prices."

Sharma was discussing the issue on BoomNews's show #IndiaHangout with Govindraj Ethiraj and Ayaz Memon.

"Corruption and inflation were two major issues before the elections, and rising food prices is the first major challenge for the Modi Government," Memon said.

Sharma was of the view that prices zoom right at the wholesale mandi (market) stage. "So, middlemen are taking advantage. For example, onion production was down only 4.8% last season but prices went up 600%. Maharashtra, Rajasthan have all seen increase in crop coverage. So, why are prices rising now?"

He was also against the general view of disbanding the Agricultural Produce Marketing Committee (APMC). "Disbanding APMC has not brought down prices. Bihar has not had an APMC since 1997. Have prices come down there? Prices can come down only if Government gets cracking. Big retailers want to extract goods from farmers at low prices. Government has to manage the chain from the producer to the consumer. Only 30% farmers get benefit of minimum support price (MSP), 70% are out of the system."

Sharma was very vocal against economists supporting the idea of imports. "We have been very kind to economists who want duties to be cut on imports. Let them suggest this idea to America, they will be thrown out of the country. By opening up your market, you are destroying your own production capacities."

Sharma feels that it is time for India to relook at the paradigm of development. "India cannot afford to pull people out of agriculture. Why can't we have skill development in agriculture? Why can't we create millionaires in the villages?"