In the backdrop of the raging food inflation hovering at close to 20 per cent, a number of experts in the field of agriculture on Wednesday called on finance minister Pranab Mukherjee to involve the private sector to address the problem of supply constraints. (See: Food inflation eases to 18.22 per cent)
Agrculurists Sharad Joshi, Chengal Reddy and economists like Ashok Gulati proposed that private sectors firms be allowed to set up storage facilities for farm produce and thus incentivise direct procurement of farm produce from farmers.
They further asked for the farm debt waiver scheme to be reviewed and fertiliser subsidy be rationalised.
According to Gulati, India currently had only half the storage capacity that was needed for agricultural produce and there was an urgent need to double the storage capacity with public-private partnership. He said the government should ask the private sector to build the storage capacities. Gulati was speaking to reporters after the pre-Budget meeting.
Gulati, director in Asia, International Food Policy Research Institute (IFPRI) said he had asked for incentivising direct buying through retailers or cooperatives from farmers so that the value chain could be compressed.
He added benefits could be passed on to both consumers as well as farmers only when the value chain was compressed. He said that at present farmers did not get even one third of the price the consumer paid.