A good road map to tackle food inflation

The Narendra Modi government has finally shown that it can think out of the box when it comes to tackling food inflation though it took almost two weeks for it to actually crack down on hoarders with the help of the state governments. But what is exciting about the outcome of the meeting Union finance minister Arun Jaitley had with the state food ministers on Friday is the road map outlined to tackle the supply side, which has been the villain of the food inflation conundrum.

It is going to map out areas where shortages are chronic, mobilise unused storage facilities and set up a price-monitoring cell in every state to enable real-time monitoring of retail and wholesale prices. It is hoped that Mr Modi’s Budget will incentivise the creation of cold storages, storage godowns and creation of an efficient supply chain from farm to table as it would eliminate or cut down wastage of essential items and increase availability significantly.

The previous government had a scheme whereby they had delineated a number of districts in which they incentivised intensive cultivation of pulses. With an increasing number of people switching to pulses, intensive cultivation is absolutely necessary in every area where pulses can be grown. The same system should be followed for fruits and vegetables. The farmer, too, should be protected because, as it happened under the earlier government, when the production of pulses increased, prices collapsed, and the farmers could not cover even their cost of production. It is very necessary for the government to look into this aspect.

Items like eggs and milk also need specific attention because it is ridiculous for a group of two or three entities to fix the price of eggs. The rate at present is Rs 5 for one egg. Milk prices are also expected to go up because of fodder shortage. A system can be put in place so that prices do not go through the roof due to profiteers.

Friday’s meeting also fixed responsibility on the shoulders of the join secretary, consumer affairs (Union government), as the national focal point for implementing the road map. At the state level his counterparts will be the commissioner for food and civil supplies, while at the district level the collectors and district commissioners will monitor availability and prices of essential commodities. A price stabilisation fund is also to be created immediately to enable state governments to set up outlets where essential commodities will be distributed at fair prices.

Knowing Mr Modi’s penchant for implementation and accountability, one hopes this road map will be implemented within the six-month time frame that has been provided.