Prime minister Manmohan Singh recently asked chief ministers to invoke the Essential Commodities Act, 1955 to check rising prices of food commodities. Bharat Kumar Shah, chairman, food grains and pulses’ committee in the Federation of Karnataka Chambers of Commerce and Industry (FKCCI), claims that it is government intervention that is causing the price spiral.

What is the status of food stocks in the state? What could we expect from the national committee to be set up by the Central
government?
There is no problem on the front of food grain stocks in the state. If ever any national panel is set up to stabilise prices of essential commodities, it must comprise traders (represented by their federations) and farmers from the different states. Not politicians alone, who have no clue.

What has caused the risein prices?
In the main, this rise in prices has been caused by the unnecessary intervention of government agencies. About 90% of Indian tur dal and urad dal requirement is being met by imports from Africa and Burma. The importing agencies are central government agencies like MMTC Ltd, National Agricultural and Cooperative Marketing Federation of India Ltd (NAFED) and the State Trading Corporation (STC).

Whenever the government imports pulses, the selling price is high. That is not the case with private players who also import pulses. Why is the government still importing pulses when we have surplus yield here? Why does the government buy tur dal from other countries at Rs70-80 a kg, when tur dal sold by Indian farmers is priced half that much? This year, we have a surplus of tur dal, 26 lakh bags of it; last year, we only had 20 lakh bags. Madhya Pradesh has produced 5 lakh bags of tur dal. However, the government agencies continue to import the dal. This kind of intervention results in the escalation of prices.

How could the prices of rice, sugar and dal be brought down by the government?
There is a phenomenal difference in the wholesale and retail prices of these. Tur dal is sold at Rs65-68 in the wholesale market, but corporate players and retail traders sell it at Rs 92-93. This burden is borne by the buyer. However, the farmer gains nothing at all from the steep prices.

What immediate measures could the government take to rein in the price rise?
Firstly, storage by the producers should be stopped. Secondly, the government must curtail interest-free loans for those storing goods in warehouses. Middlemen indulging in such storage also obtain loans for storage. Thirdly, no government agency must interfere with the import of pulses.