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Profiteering in pulses- 50% profit margin -–Busn. Line
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Rising domestic demand, population pressure, shortfall in domestic production, hike in minimum support prices, speculation and high international prices have all been mentioned at various times as reasons for sharp rise in prices of pulses.
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The large difference between farm-gate and retail prices has been recognised and attributed to supply chain inefficiencies. Yet, when one looks at the pulses value chain, it is clear that the price consumers pay at the retail level bears little connection with wholesale rates. Margins at the retail level are as high as 20- 30 percent; and on occasions, profits are more than the price growers get at the farm-gate. In situations where the poor and the needy are truly hurt by unaffordable prices artificially maintained by greedy retailers, it is time for the government to step in.
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| Last two years, the country consumed an aggregate quantity of about 350 lakh tonnes of various pulses, domestic and imported, the total value of which was an estimated Rs 1.4 lakh crore, assuming an average wholesale rate of Rs 40,000 a tonne. At the retail level, however, consumers paid a staggering Rs 2.1 lakh crore for the same quantity assuming a conservative average price of Rs 60 a kilogram — easily a profit margin of 50 per cent. Allowing for 25 per cent to cover distribution expenses, overheads and decent margins, additional profits made at the retail level amount to Rs 35,000 crore. |
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While this has surely burnt a hole in the consumers' pocket, the benefit of high retail price has not flowed to the grower in any measure. This situation is unsustainable. The tragedy is that the government has been a mute witness to the goings in the marketplace; or perhaps, it had no clue.
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Our pathetic agriculture track record suggests that the shortage in pulses is unlikely to disappear anytime soon; and if anything, the supply shortfall would widen in the coming years. A time-tested way to insulate the poor from the ruthlessness of the market is to ensure supply of pulses through the public distribution system. Despite all its limitations of leakages and so on, PDS still reaches a large number of poor people. It should be relatively easy to include pulses with the existing supplies of rice, wheat and sugar. New Delhi has been rather lethargic in addressing food inflation and PDS-related issues. BL Editorial-030810
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Don't raise MSP, consumer affairs dept tells agri min
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| The Department of Consumer Affairs has suggested the agriculture ministry not to tinker with the minimum support price (MSP) and try the direct subsidy method instead.“At least for crops where the market prices are ruling high, a rise in MSP is acting as a trigger for a further price rise in the case of pulses,” said an official associated with the development. BL 040810 |
| Ram.K |
August 04 , 2010 ,05:32 IST |
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Consumer affairs officials are interested only in consumer welfare. Let them think about producers and farming being a high risk low income activity. Let them peruse the recommendations of The National Commission on Farmers and the revealing findings of the Standing Committee on Agriculture & and its neglect by the Government and in under pricing agri produce. If agriculture is not remunerative, where will you get food from? Let them stop giving facile and armchair advices. |
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Hike in MSP is to ensure higher production: F.M
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| Expressing concern over rising food prices, the Finance Minister, Mr Pranab Mukherjee, has said the hike in minimum support price to farmers was not a populist measure, but was taken to ensure higher foodgrains production in the country. |
The price situation was affected due to perpetual shortfall in the production of pulses and edible oils. India is facing pulses shortage of 3-4 million tonnes. Similarly, the shortage of edible oils is over one million tonnes.
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In 2009-10, the country’s pulses production is estimated at 14.59 million tonnes, while that of oilseeds at 24.92 million tonnes, according to official data. PTI 040810
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Fertiliser subsidy over Rs 2 lakh crore in last 3 years
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| In 2007-08, the total fertiliser subsidy bill stood at Rs 43,319.31 crore, which rose to Rs 99,494.72 crore in 2008-09 and in 2009-10 fiscal, it came down to Rs 64,031.94 crore. Total expenditure incurred on fertiliser subsidy in the current fiscal till June 30, 2010, stood at Rs 8,900 crore. BL 060810 |
Oil Subsisdies OVER Rs. 1 lakh crore FY 09
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The government had to provide huge funds to the oil PSUs to overcome under-recoveries on account of sale of petroleum products below the cost, Mukherjee said, adding that a provision of Rs 14,000 crore has been made in the supplementary demands for grants. Oil marketing PSUs were given a subsidy of Rs 1.03 lakh crore in 2008-09 to ensure that petro products were available at affordable prices. FM 040810
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RBI prunes (punishes) Chakrabarty's portfolio
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With RBI injecting liquidity at 5 per cent and inflation being at 10 per cent, they will never be able to control inflation, everything else remaining the same,” A top RBI official, who declined to be identified, said. B s 300710
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The reshuffle follows a statement by a senior RBI official on the monetary policy announced by the bank. The official had criticised the policy before reporters just two days after its announcement, saying the country needed a more aggressive policy. He had said the current level of rates were woefully low, and if the central bank was serious about pulling down inflation from its current level, it should have raised the rates more. B S 040810
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| Ram. K |
August 04 , 2010 ,05:54 IST |
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| Mr. Chakrabarty was right in stating that 0.25% increase in repo rate can in no way contain inflation. The RBI being the handmaiden of the Finance Ministry bowed to their diktats and did not not do the right thing by taking adequate measures to contain inflation. One person who talked the truth is now punished. It is in the name; RESEVE BANK is too reserved and does'nt serve the purpose for which it is created,viz, monetary and inflationary regulation.Instead, it plays to the tunes of the Finance Ministry and Governors are appointed from the cadre of Finance Ministry. What freedom of action can we expect from them? |
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| STRONGER STEPS NEEDED BY RBI TO CONTAIN INFLATION: S.S. TARAPORE |
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A 25-basis-point increase in the repo rate is not good enough to take care of inflation and inflationary expectations. The central bank should also reflect on the speed and timing of its policy decisions, and the relevance of the reverse repo window.
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| The gentle raising of the repo rate from 5.50 per cent to 5.75 per cent belies logical expectations based on the RBI's own analysis. The policy repo rate, the government securities interest rates and the deposit and lending rates reflect negative real interest rates, which are clearly detrimental to the economy. BL 300710 |
| Krsr/and 136 /070810 |
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