The Prime Minister’s Economic Advisory Council (PMEAC) on Tuesday pitched for reforms in farm marketing, especially in view of high inflation.
It said the Agricultural Produce Marketing Committee (APMC) Act, in place in a number of states, restricts the freedom of farmers to sell, preventing the modernisation of the chain, and contributing in good measure to inflation in food articles that remain at uncomfortably elevatd levels. It said the supply chain needs to be modernised and regulatory obstacles in the way cleared.
The council forecast the farm sector growth at 3.5% for the current fiscal, compared with a projected 1.8% for 2012-13, on anticipation that seasonal monsoon showers would be normal this year.
?This (3.5%) is slightly lower than the average of the 11th Plan period… However, if the 2013 monsoon turns out to be significantly below normal, even that may be harder to achieve,? the PMEAC said in its latest review of the economy.
The council fears that price pressure may not moderate significantly in 2013-14, as it expects headline inflation moving around 6%, with primary food inflation around 8%, fuel at about 11% and manufactured goods at around 4%. This is mainly because some price revisions are to be made in administered products ? refined petroleum products, fertiliser and electricity ? and benchmark prices of crops would be raised due to higher input costs.
?(Moreover) the supply chain for perishable food products still remains incomplete, as also the reform of their market structures. The combination of these factors will tend to keep inflation on the higher side,? it said. Inflation in March dropped to its lowest in more than three years at 5.96% from 6.84% a month before, as food, fuel and manufactured products turned cheaper. However, although food inflation declined for the first time in five months in March, it still remained elevated at 8.73%.