CII suggests measures to tame food inflation

New Delhi, Jan 19 (PTI) Industry body CII today said thatIndia and its neighbouring countries should sign a specialaccord for import and export of perishables to tide over thedemand-supply mismatch.

"A special agreement should be signed between India andthe neighbouring countries - for import-export ofperishables," CII prescribed in a 10-point recommendation totackle inflation.

This would be a confidence building measure and wouldease demand-supply challenges of similar commodities betweenIndia and the neighbouring countries, it said.

Food inflation, which stood at 16.91 per cent as onJanuary 1, continues to be quite high in the current yeardespite normal monsoons. This compares oddly with highinflation witnessed last year when almost half of the countryhad witnessed drought-like conditions that affected prices ofcereals and pulses.

While stating that recurrence of inflation is due to"deeper structural problems", CII said that in the short-term,government should lower import duties and tariffs on agri-products, which are now hovering around 30-50 per cent.

In order to ensure easy availability of fruits,vegetables and other perishables, including fisheries, CII hasasked full exemption of these items from the provisions of theAPMC Act.

APMC Act allows each state to sell agri-products only ingovernment-regulated markets.

CII also suggested that the state governments should takestern enforcement measures to curb hoarding and speculativetrading.

Besides, the industry body said the Centre shouldencourage the states to help build infrastructure, especiallycold storages, to save on wastages which would help boostsupplies and thereby help in price moderation.

"The Government should move towards a unified nationalmarket and allow free movement of fresh produce across thecountry without any taxes whatsoever," it said.

Most importantly, CII said, time was ripe to usher inmarket reforms by compressing the agri-commodities'' valuechain.

"The model of creating a marketing platform at villagelevel needs to be promoted where the buyers will come to theproducer groups directly rather than farmers going outside tosell their produce," CII said.