Editorial
Govt's new price control measures
Raise number of importers and eliminate middlemen's clutch
Set against a backdrop of spiralling prices and in light of their latest discussion with wholesale traders the government has decided to implement a seven-point action programme. This includes vigorous open market sale from mid-June, emergency import of six lakh tonnes of rice, removal of restrictions on transportation of rice and storage at some known locations, permission to carry cereals beyond five tonnes and free movement of rice-laden trucks and vans through the rickshaw-free streets in the capital between 11am and 4pm.The approach is food centered for obvious reasons. Boro production on which hopes were pinned to offset the inflationary fallout of Aus and Aman deficits is estimated to be lower than projected earlier on. More to the point, food expenses account for 60 percent of the budget of the poor and middle-income groups who constitute more than 80 percent of the populace. While citing the crisis management measures contemplated by the government we would like to turn our attention to the news that the Centre for Policy Dialogue (CPD) has, at the behest of the commerce ministry, put across 30 recommendations for containment of the rising prices of a wider variety of essentials in a report lately filed to the government. Let's focus on a select few recommendations which we think provide the key recipe for reinvigorating supplies and bringing down prices to a tolerable level. In order of priority these are: lowering of tariff on import of essentials; if possible, zero-tariff on food import; reducing the number of middlemen and commission agents along the distribution channels, increasing the small businessmen's access to import trade by bank lending and other forms of encouragement and greater involvement of TCB in import and distribution of essentials. Besides, at the retail level, prices vary widely from place to place. In most cases, the packaged stuffs have no price labels affixed to them. The listed dealers offload their goods to retail sellers at a commission that varies from dealer to dealer which largely explains the differences in the retail prices. To obviate this problem the highest retail price should be clearly mentioned on the packaged commodity (aside, of course, from the expiry date). Market prices of imported essentials are manipulated by a tiny minority of importers who have monopoly business. On the other hand, as far as the commodities produced domestically go, middlemen at different tiers intervene between the producers and the consumers and skim off profits leading to exorbitant prices at the retail outlets. So, we need to increase the number of importers and reduce the number of hands that a commodity changes since leaving the grower.
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