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Towards reducing the large-scale state intervention in marketing of foodgrains in liberalised economic regime in Punjab

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D.K. Grover

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Abstract

Indian Journal of Economics and Development
Year : 2014, Volume : 10, Issue : 1
First page : ( 34) Last page : ( 39)
Print ISSN : 2277-5412. Online ISSN : 2322-0430.
Article DOI : 10.5958/j.2322-0430.10.1.004

Towards reducing the large-scale state intervention in marketing of foodgrains in liberalised economic regime in Punjab

Grover D.K.
Director, Agro Economic Research Center, Punjab Agricultural University, Ludhiana-141004. Email: dkg_59@rediffmail.com

JEL Classification: H23, H42, H53, Q13, Q18

Online published on 15 February, 2014.

Abstract
Escalating minimum support prices and effective price policy for paddy and wheat has resulted into paddy-wheat monoculture and the government purchase lost relevance to the demand and supply situation. The emphasis of the farmers has been on producing more irrespective of quality. Assured government purchases of foodgrains during the last four decades may be termed as a culprit for deterioration of farmers’ quality consciousness. Inadequate scientific storage of foodgrains remained a big unsolved issue. Paddy -wheat storage is mainly state owned. To reduce the large-scale state intervention and augment the foodgrains storage, public-private partnership needs to be developed. Hence, there is need to provide incentives for the storage of foodgrains at farmers’ level as well as with the private traders in order to reduce the dependence on state owned storage. Despite proactive government role, involvement of private traders in the market cannot be overruled. The small and marginal landholders expressed that the private traders not only offered lower price for their produce but also delayed the payments in 2009–10. A preferred policy approach would be to encourage private players in foodgrains market and assist producers to meet the challenges of commodity markets under strict government vigil on the procurement activities of private traders in phased manner.