India is a free market economy where prices are driven by demand and supply. It therefore determines the activities of both producers and consumers. The Essential Commodities Act (ECA) empowers the Centre to intervene in the market to protect consumer interests. The list of items under the Act includes drugs, fertilisers, pulses and edible oils, and petroleum and petroleum products. India started facing severe shortages of many commodities during World War II. The ECA was enacted way back in 1955 to regulate the production, supply and distribution in order to make them available to consumers at fair prices. India saw severe droughts in 1965-66 where it forced to imports food grain. But it has quickly overcome by adopting technology in Green Revolution under the role played by agriculture Scientist MS Swminathan. ECA (special provisions) 1981 was passed. The number of essential commodities which stood at 70 in 1989 has been brought down to 7 at present to protect the interest of the farmers and the large section of the people of BPL.
Agriculture plays a vital role in India’s economy. But the irony is that while there is a glut in production of vegetables and crops, there is a shortage of the same in the market. It has been pretty harrowing time from farmers to consumers. Tomato price have shop up due to severe supply shortage. Not far behind, potato and onion prices have also been creeping up. Is that a seasonal factor? Profiteers and black marketers take advantage of government failure to intervene. Onion crops in Rajasthan and Madhya Pradesh have got spoilt due to excessive rains. Also Maharashtra and South India farmers switch crops from cultivating tomatoes to other due to hardship and uncertainties of pestilence and low yields for several years. And bio-engineered seed variety later has proven to be susceptible to virus attacks. Indifferent weather like good rain in winter spoils their Ravi crops but is good for Kharif crops then.
The government has not developed infrastructure to help farmers producing perishable vegetables. The Consumer Affairs ministry have been criticized for failing to monitor the supply and price situation of essential commodities. Designated agencies NAFED, SFAC, FCI promote co-operative marketing and carry out procurement drive to keep buffer stock. When markets are flooded with produce, farmers get even below minimum support price (MSP). It is characterized by inefficiency and high costs to exchequer. However the procurement of pulses has never been fulfilled. More number of cold storage chains would be useful in helping farmers get better price for the produce and thereby increase their income.
India exports tomatoes to Pakistan, Nepal and Bangladesh. Traders have to fulfil pre-arranged orders before filling up local mandis that impacted domestic distribution. Despite country’s onion exports declined due to high minimum export price (MEP), it failed to suffice adequate domestic supply and contain a rise in price. Hope Kharif crop from central and western India soon arrive in mandis. Farmers kept demanding for inclusion of MSP for vegetables. After the indirect tax regime is rolled out on July 1, day to day commodities food grains, cereals, pulses, milk, vegetables and fruits are exempted from GST to make cheaper for the common man. However middleman economy put the market disruptive. Should government take no chance this time until Ravi crops arrives? Or the silver lining is that rural income would rise. Introduction of GI tag may help promoting economic prosperity of the producers.
Despite India has the largest population of hungry people in the world at a time when there is abundant food production within the country. India is one of the leading exporters of agricultural products in the world. But there is flipside to this great Indian agriculture story. Food grains are rotting in the warehouse. It is time the government affords priority to food storage and distribution. It is a huge paradox that Indian farmers are poor in food-rich India. The government machinery tries to control food price to satisfy the urban population at the cost of farmers’ lowest prices. In the name of subsidies for fertilisers and free power, it actually helps well-off farmers instead of poor farmers. India lives in village and all weather roads still do not connect rural habitations. Lack of transport facility, inadequate post-harvesting, bias procurement policy, and inadequate food processing has caused huge wastage to great Indian agriculture success.
