Measures Taken To Stabilize Prices Of Essential Food Items
The prices of food items are inter-alia affected by mismatch in demand and supply, shortfall in production owing to adverse weather conditions, seasonality, increased transportation costs, supply chain constraints etc.
The Govt. measures to stabilize such increase in essential food prices include various measures:
- Policy Measures to arrest Prices: The government has taken various measures from time to time to stabilize prices of essential food items which, inter-alia, include appropriately utilizing trade and fiscal policy instruments like import and export duty, Minimum Export Price, export restrictions, etc. to regulate domestic availability and moderate prices.
- Giving impetus to Production: To enhance the production of edible oils, Government has reduced the standard rate of duty on crude palm oil by 5 percent from 30.06.2021 and will be in effect up to 30th September, 2021. The Government on 30th June, 2021, has amended the import policy of Refined Palm Oils from “restricted” to “free” with immediate effect and for a period of up to 31.12.2021.
- Schemes: A Centrally Sponsored Scheme i.e. National Food Security Mission (Oilseeds and Oil palm) has been implemented by the Department of Agriculture, Cooperation and Farmers Welfare in the country with effect from 2018-19 for increasing production and productivity of oilseeds and thereby edible oils. This mission comprises of three sub-missions namely, NFSM-Oilseeds, NFSM-Oil Palm and NFSM-Tree Borne Oilseeds and is being implemented through the State Department of Agriculture and Horticulture.
- Regulations: Essential Commodities (Amendment) Act, 2020 provides for an objective and transparent criteria based on price triggers for imposition of stock limits. It also provides for exemption to processors and value chain participants subject to overall ceiling of installed capacity of processing or the demand for export in case of an exporter. The objective is to encourage investment in post-harvest management activities such as storage and processing as well as logistics and supply chain management; leading in turn to an increase in farmers’ income. The amendment also provides that Government can regulate the foodstuffs under extraordinary circumstances which may include war, famine, extraordinary price rise and natural calamity of grave nature. However, Hon’ble Supreme Court in 12.01.2021 has stayed implementation of the Essential Commodities (Amendment) Act, 2020.