DBT for Farm­ers is More Im­por­tant

The Economic Times - - Economy & Companies - Our Bu­reau

New Delhi: The gov­ern­ment should un­der­take path-break­ing re­forms such as abo­li­tion of stock lim­its for traders and adopt­ing di­rect cash trans­fer to farm­ers in­stead of min­i­mum sup­port prices for crops other than wheat and rice, the lat­est sur­vey of the econ­omy said.

“The stock lim­its im­posed un­der Es­sen­tial Com­modi­ties Act, 1955 end up cur­tail­ing de­mand for farm pro­duce and so price. There is need to lift all re­stric­tions on per­mit/li­cens­ing re­quire­ments, stock lim­its and move­ment re­stric­tions along with the laws on which they are based,” the sur­vey is­sued on Fri­day said.

While the cur­rent sys­tem is in place, stock lim­its should be re­laxed when sow­ing sea­son be­gins, so de­mand for farm­ers’ pro­duce in­creases. Two months af­ter pro­cure­ment sea­son, the stock limit should be grad­u­ally halved to help con­sumers with­out hurt­ing farm­ers, it said.

“In con­trast, re­quests for en­hanc­ing stock lim­its come when pro­cure­ment process has com­menced or is com­pleted. How­ever, the ideal sit­u­a­tion re­lates to do­ing away with the stock hold­ing lim­its,” it said.

The sur­vey also noted that at times farm­ers were not gain­ing from min­i­mum sup­port price (MSP) mech­a­nism in which state agen­cies pur­chase out­put at a re­mu­ner­a­tive price.

“This year, de­spite sig­nif­i­cantly higher MSP for pulses and scal­ing up of pulses pro­cure­ment to build a buf­fer stock close to 2 mil­lion, there were re­ports of sales be­low MSP in sev­eral mar­kets dur­ing the pro­cure­ment sea­son,” it said, adding that there were sim­i­lar re­ports about wheat also.

“To make farm­ing re­mu­ner­a­tive, de­liv­ery of in­puts should be made cost ef­fec­tive through di­rect ben­e­fit trans­fer mode (DBT),” the survery said.

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