Nafed to retail food items below market price

Written by fe Bureau | New Delhi | Updated: Jan 29 2010, 08:44am hrs
In a bid to reduce the impact of steep rise in prices of essential items like pulses and edible oils, the government is considering a proposal to sell these items around 20% below the market rates directly to consumers through retail outlets of National Agricultural Cooperative Marketing Federation of India (Nafed).

While the details of the plan are being worked and scheme is to be launched on a pilot basis in Delhi, sources said it could be expanded to other state through tie-ups with other cooperative marketing federations.

At present, Nafed has 12 outlets located in Delhi and Shimla and very few in other parts of the country.

There will be a little subsidy component from the government, which has been approved by the Cabinet, minister of state for food and agriculture K V Thomas said on Thursday at the sidelines of a function here.

Thomas said government would sell around 20 items through Nafed, at 20% lower than the prevailing prices.

Sources told FE that the Nafed easy kit (which would comprise the 20 essential items) would be available to consumers only for a short duration of time in a month so that there is no hoarding by unscrupulous elements and only genuine consumers get the items at prices below market rates.

Nafed is trying to enter in the market. We had a discussion with the Delhi chief minister (on this issue). We have agreed for a 20% subsidy on Nafed items, the official said.

Prices of essential items have skyrocketed over the past year pushing the food inflation to 17.4% for the week ended January 16, from 16.81% in the previous week.

Thomas said selling goods through Nafeds outlet would not be on a permanent basis, rather it is meant to only intervene when there was a crisis.

Nafeds presence in the market is not the final solution. The final solution depends on availability of food items, Thomas said. Sources also said Delhi government is discussing with Nafed to selling food items at discounted prices.

The state government at present is using the outlets of Mother Dairy and Kendriya Bhandar for selling pulses, cooking oils, sugar and wheat at low prices. The food and civil supplies department of the Delhi government will supply 15 essential food items at discounted rates from the first week of February. Pulses, rice, cooking oils, sugar and tea leaves among other items will be packed and sold as a package of 15 items from more than 500 shops.

In 2008-09, Nafed sold various consumer products and registered a total turnover of Rs 22.74 crore.