Big retail, cooperatives to be roped in to tackle food prices

Tags: News
The BJP government proposes to rope in state marketing cooperatives, multistate farmers cooperatives and large private retailers with outlets in key cities and towns to rein in prices of essential commodities, vegetables and pulses.

Following a PMO directive, consumer affairs secretary Keshav Desiraju will convene a meeting of officials from state cooperatives, private retailers and farmers’ cooperatives like Iffco and Kribhco in next few days.

The idea is to enlist the marketing network of these cooperatives and large retailers like Big Bazaar and Reliance Retail to remove supply side bottlenecks in reining-in prices.

Onions, potatoes, rice, edible oils and other essential commodities would be routed through these networks to moderate prices and ensure hoarders do not take undue advantage.

Given the breakout of war in Iraq, over 48 per cent deficiency in monsoon and the cumulative impact of double-digit inflation in the past two years is expected to result in high prices of several commodities.

Though several state cooperatives do not deal with commodities of daily consumption, they may nevertheless be asked to set up temporary outlets for selling vegetables, rice, pulses, onions, potatoes and oils at affordable prices.

Private retailers would also be prevailed upon to assist the government in price management.

“An exploratory meeting of cooperatives, retailers, Iffco and Kribhco may be held in a few days to ensure timely delivery of commodities to citizens across the country,” a top official privy to the development told Financial Chronicle.

Prime minister Narendra Modi has assigned finance minister Arun Jaitley and his principal secretary Nripendra Misra the basic responsibility of managing prices and ensuring that “there were no localised shortages of any food items”.

While 22 items have already been delisted from the Agriculture Produce Market Committee (APMC) Act to ensure their free movement, five million tonnes of rice would be released in the market as part of efforts to defang the price rise and high inflation.

A chunk of the rice deliveries may be routed through state cooperatives, marketing federations, Iffco, Kribhco and private retailers, along with other commodities.

Nafed, Mother Dairy and public distribution outlets have already been asked to independently procure items like potatoes and onions and sell them at reasonable prices.

Consumer affairs secretary Keshav Desiraju has been asked to coordinate the government’s efforts with states to cool the prices of essential items.

Meanwhile, the PMO will also leverage its reach with state governments to involve them actively in the dehoarding drive and oversee their availability in the market.

With auctions taking place in Nashik onion market and the smooth movement of potatoes ensured by Madhya Pradesh government, the Centre is confident of managing the tricky price situation, the offiicial quoted earlier said.

While some government insiders view the several steps initiated by government as “over-reaction to the situation due to inexperience”, Modi’s core team of bureaucrats maintained, “Unless we move in early, we cannot take grip of the situation.”

With several states, including Madhya Pradesh under BJP regime, the Modi government has a distinct advantage in “managing prices”, the officials said.

Last year, the UPA government had alleged that Shivraj Singh Chauhan’s government in Madhya Pradesh was erecting stumbling blocks in the movement of onions.

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