IMG for free movement of food grains to check price rise

Attributing spurt in prices of certain essential commodities to faulty marketing system, IMG Chairman and Chief Economic Adviser (CEA) Kaushik Basu said there was a need to make structural improvements in the system of food production and delivery, an official statement said.

The revision of the Agriculture Produce Marketing Committee (APMC) Acts, which are managed by the state governments, it was stressed, was essential to "encourage competition among traders and also to promote efficiency in retailing".

Although some states have already amended their APMC Acts, many states are yet to relax the norms that restrict sale of agriculture produce.

It was the second meeting of the IMG. The Group was set-up last month at the suggestion of the Prime Minister in order “to review the inflation situation and suggest corrective measures.”

Future Group Chairman Kishore Biyani deliberated on issues related to physical supply chain, information supply chain and knowledge supply chain. He emphasised that there was huge value erosion as commodities pass through various supply chain systems and procedures in place.

"... this could be avoided through better post harvest management techniques such as sorting, grading, crating and packing," he added.

Mother Dairy Managing Director S Nagarajan emphasised the importance of developing grading and standards, instant supply of information and plough back of the remunerative prices to farmers. Both Nagarajan and Biyani attended the meeting as special invitees.

Department of Agriculture & Cooperation Secretary P K Basu said that early warning systems are already in place with regard to agricultural production which includes weekly review meetings with all the concerned agencies and advance agricultural estimates released five times in a year.

He emphasised that agricultural prospect for Rabi 2010-11 are bright and this was reflected in moderating food inflation.

Others present in the meeting include representatives from Planning Commission, Department of Food and Public Distribution, commerce ministry, Competition Commission of India, among others.