Economic Survey 2014: Govt has an agenda to liberalise agricultural markets, looks at ways to cut subsidies
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The Modi government has advocated far reaching reforms in food production, distribution and marketing, and suggested food stamps or direct transfer of subsidy instead of procurement and distribution to subsidy, as well as a Central law to end the grip of middlemen, the Economic Survey said.
- It also proposed corporate involvement in facilitating farmer markets and setting up supply-chain infrastructure by including these activities in the list of activities under corporate social response
- The government says a change in approach towards grain procurement is necessary. It said foodgrains are central to food security but it also wants to take into account data that shows that expenditure on cereals in rural India has fallen from 24.2 per cent of total consumption expenditure in 1993-94 to 12 per cent in 2011-12.
- In urban areas it has fallen to 7.3 per cent from 14 per cent over the same period. "The continued emphasis on procurement and distribution of rice and wheat is contrary to the ground reality that shows changing preference functions of consumers. A shift to a direct cash transfer system or food stamps would anchor our food policy to the requirements of the people and would additionally reduce fiscal deficit," the survey said
- The Survey notes that the system of Agricultural Produce Marketing Committees (APMC), which forces farmers to sell only at mandis has outlived its utility. It says the Centre has powers to change the way farm produce is sold in states. It said states had created trade barriers.
- To establish a common, national market, it has also suggested review of the Land Tenancy Act, pursuing direct marketing and contract farming, examining the inclusion of agri-related taxes under the General Goods and Services Tax (GST) and providing incentives to the private sector to scale up incentives. Traders said a common market won't help.
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