ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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NEW DELHI-Return to Free Market in Foodgrains

NEW DELHI Return to Free Market in Foodgrains?
B M THE Prime Minister made an important announcement at his press conference on the 1st of this month. He said that the price support policy and operations were to be reviewed. He did not spell out the content or the direction of the proposed review. But the working of Morarji Desai's mind was indicated by his remark that price support operations should normally be resorted to only when the prices fall sharply. This is in contrast to the official view so far that price support policy and operations were necessary to prevent any fluctuation in market prices of agricultural produce, in particular of foodgrains. Price support operations are supposed to ensure remunerative prices to the producers to prevent any setback to the efforts of farmers for higher production and productivity, particularly in a period of good crops. It was for this reason that support prices for foodgrains and several other agricultural commodities were actually revised upwards even after the bumper crops in the last two years and a firm assurance was held out to farmers that prices for their marketable surpluses would not be allowed to decline below the fixed support prices and the government would purchase all that they would offer at that price. In the case of foodgrains, especially wheat and paddy, this arrangement has also worked in practice because fairly extensive public purchase arrangements have come to be built up over the years.

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