Govt should share risk of foodgrain management

The government should revamp its storage system and rope in private sector to ensure better management of foodgrains to tame soaring inflation,suggested chief economic advisor Kaushik Basu on Friday. Speaking at a seminar organised by industry body FICCI,Basu said that in order to cut exposure to food price rise,it is quintessential to tweak our system to do better. We need to give much more thought on management of foodgrains to protect the most vulnerable section of the population. We need to bring in more players into this area and government should not be the only one sharing the risk, he said.

Elaborating on foodgrain management,Basu said that equal importance need to be paid to the distribution system as well. Foodgrains,if,distributed in smaller quantities to a large number of players is bound be a more effective technique to rein in price rise that to do a release it in bulk to a big player. It (bulk release of foodgrain) creates monopoly. From January,the government has been releasing foodgrains in smaller stocks and some of the downward pressure you see on food prices is probably due to this fact and this mechanism is managed better but not good enough.