Review of food policy

New Delhi, July 28 (UNI) The government today informed the Rajya Sabha that as per the existing procurement policy, the Government agencies (FCI and State Agencies) carry out Minimum Support Price (MSP) operation in all areas of the country having marketable surplus of foodgrains.

Replying to a question, Minister of State for Consumer Affairs, Food and Public Distribution Akhilesh Prasad Singh said the farmer is free to sell his produce to the government agencies at MSP or to the private traders, as is advantageous to him.

In the last Rabi Marketing Season (RMS) 2006-07, there has been more active participation by multinationals and private players, he said and added that a proposal to purchase foodgrains at a rate higher than MSP has been formulated in the Department of Food and Public Distribution.

On the rising prices, Dr Singh said a Price Monitoring Cell is monitoring the prices of 14 essential commodities namely wheat, sugar, rice, gram dal, tur dal, mustard oil, vanaspati oil, salt, tea, milk, atta, potato, onion and groundnut oil.

A comparison of average retail prices of 14 essential commodities between January to June 2006 reveal that prices of wheat, sugar, tur and gram dal had shown increasing trend across all centres which report retail prices.

The Government has already taken steps to arrest the increase in prices by taking measures such as augmenting domestic supplies through imports at reduced duty rates, ban on exports of pulses and sugar and regular monitoring of prices of essential commodities.

Other steps include advice to state governments to initiate steps to ensure availability of essential commodities at reasonable prices.

The Minister denied that there was any proposal for expanding the list of essential commodities under the Essential Commodities Act, 1955. The inclusion of any commodity depends on the demand and supply position, he added.

On the sugar sector, Dr Singh said the sugar industry has been delicensed vide Department of Industrial Policy and Promotion's Press Note dated August 31, 1998. Entrepreneurs, subject to applicable laws/ regulations, are free to set up sugar mills anywhere in India based on their individual economic and other considerations.

The Minister denied that the commodity fugure trading has added to the quantum jump in the prices of foodgrains during preceding months.

He said reasons for rise in prices of foodgrains were mainly shortfall in domestic supplies relative to demand and hardening of international prices, of certain foodgrain items.

Regarding import of sugar, the Minister said the government has decided to allow imports of white sugar at zero percent duty.

However, the countervailing duty will be applicable on such imports and a Notificated dated June 23, 2006 permitting import of white sugar without any quantitative restrictions upto September 30, 2006 has been issued in this regard.

The landed cost of imported sugar is higher than the domestic prices. The provision made for imports is only an enabling provision to facilitate imports of sugar if the domestic sugar prices increase relative to international price.

Dr Singh further said that Dussehra and Diwali festivals fall in the month of October, whereas the imports of white sugar has been allowed only upto end of September, 2006.

UNI BBS VJ DS1500