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What is the issue?
Markets should develop capacity to absorb higher milk and foodgrain output.
What are the recent developments?
- Falling producer prices of food crops and milk have emerged as a major issue over the last year.
- The Centre has awarded increases in support prices (e.g. MSP) in the case of cereals and pulses.
- The Maharashtra government has accepted the protesting dairy growers’ demand to buy milk at Rs.25 a litre.
What is the concern?
- Procurement - Higher support prices sometimes lead to negative outcomes.
- This is especially true if they are not backed up by procurement and additional demand.
- Evidently, the total pulses procurement was over 4 million tonnes in 2017-18.
- But this procurement amounted only to less than a fifth of pulses output.
- So it could not arrest a fall in prices to well below the support price level.
- Contrastingly, wheat and paddy prices for farmers are encouraging.
- This is because, in this case, procurement accounts for a third of the output.
- Approach - Falling producer prices is often mistaken to be a case of excess production.
- However, this could not be relevant in all cases as malnutrition is still rampant in India.
- Evidently, the net per capita daily availability of foodgrains (including cereals and pulses) has only now crossed the 500-gm mark.
- For milk, the per capita daily availability of over 350 gm is just a little more than the dietary recommendation.
- Inequality - Clearly, there are inequalities in food intake across income groups.
- This is particularly true in the case of vegetables, fruit, milk and eggs.
- So it is clear that the population can absorb a higher output of food, eggs and milk.
- The real issue is thus of sorting out market limitations through a range of steps.
What could be done?
- The procurement and public distribution system need to be strengthened and streamlined.
- An efficient PDS -
- opens up additional demand
- addresses nutritional deficiencies
- helps stabilise the market by utilising a part of the produce
- Public kitchens, which have begun in the southern States, should be promoted elsewhere.
- States can introduce milk and its products in mid-day meals and in railway stations at cheap rates.
- In all, Indian agriculture needs a distribution system that can cope with much higher levels of output.
Source: BusinessLine
