Indian Agriculture - Options for addressing supply-side constraints

1. Given the compositional shift in foodbasket of a common household and its impact on consumption demand, improved supply response is critical for ensuring price stability in food items.
2. Extension programmes and guidance to farmers regarding fertilizer and insecticide usage and alternate cropping pattern based on soil analysis could be undertaken and intensified.
3. As a strategy, regular imports of agricultural commodities in relatively smaller quantities with an upper ceiling on total quantity could be considered. The upper ceiling can be decided annually, relatively well in advance, after assessing the likely domestic situation in terms of production and consumption requirements.
4. Setting up special markets for specific crops in states/regions/areas producing those crops would facilitate supply of superior commodities to the consumers.
5. Mandi governance is an area of concern. A greater number of traders must be allowed as agents in the mandis. Anyone who gets better prices and terms outside the Agricultural Produce Marketing Committee (APMC) or at its farm gate should be allowed to do so. For promoting inter-state trade, a commodity for which market fee has been paid once must not be subjected to subsequent market fee in other markets including that for transaction in other states. Only user charges linked to services provided may be levied for subsequent transactions.
6. Perishables could be taken out of the ambit of the APMC Act. The recent episodes of inflation in vegetables and fruits have exposed flaws in our supply chains. The government-regulated mandis sometimes prevent retailers from integrating their enterprises with those of farmers. In view of this, perishables may have to be exempted from this regulation.
7. Considering significant investment gaps in post-harvest infrastrure of agricultural produce, organised trade in agriculture should be encouraged and the FDI in multi-brand retail once implemented could be effectively leveraged towards this end.
8. Government should step up creation of modern storage faclities for food grains.

Source : Economic survey