Agri experts warn against market-distorting steps

Stock limits, import duty cut recently to cool food inflation

- SANDIP DAS

A HOST OF measures taken by the government in recent weeks to cool the prices of food items, such as reduction in import duty on edible oils, stock limits on pulses and wheat, monitoring of stocks and restricting sugar exports could have an adverse effect on trade and hit farmers incomes, analysts feel.

Imposition of stockholding limits on agricultural commodities could discourage traders from purchasing it from farmers, besides distorting the market. Such steps, agriculture economists say, should be avoided, being not in sync with free market principles. "Putting stock limits is like strangulating markets, which is against the interest of farmers, but pro-consumer. It reflects inherent consumer bias in agricultural policies,"Ashok Gulati, agricultural economist & former chairman, Commission for Agricultural Costs and Prices (CACP), said.