Feb. 6: Prime Minister Manmohan Singh said the worst is over and food prices would stabilise soon even as the Centre decided to set up a committee of chief ministers and Union ministers to suggest steps to bring down prices of food items.

“I believe the worst is over as far as food inflation is concerned. With good crop prospects, remunerative procurement prices in place and Indian prices being broadly in line with international prices, I am confident that we will soon be able to stabilise food prices,” Dr Manmohan Singh said while addressing the Conference of Chief Ministers on Prices of Essential Commodities on Saturday.

The PM asked the states to take action against hoarders using the power available to them under the Essential Commodities Act to prevent creation of artificial scarcities. Dr Singh also asked the states to ensure that food released by the Centre quickly reaches the targeted beneficiaries. “I think our distribution system is hopelessly outdated, with the exception of a few states, and it needs a complete overhaul. The state governments should give focused attention to developing market intervention mechanisms which can act as a supplement to the public distribution system,” said the PM. Dr Singh assured that there are adequate stocks of rice and wheat to maintain food security. “The Rabi prospects are very encouraging. Post-monsoon rains have been good. All this augurs well for our ability to stabilise food prices at a reasonable level,” said the PM. He urged the CMs to introspect why more attention is not being paid to highly cost-effective means of raising productivity and production. “Agriculture is a state subject. I urge the chief ministers to strengthen and modernise the agricultural extension services,” the PM said. Dr Singh added that the government had earlier intervened through the open market sale scheme (OMSS) under which 30 lakh tonnes of food grains have been allocated to state governments for sale to retail consumers. “I regret to say, however, that lifting of wheat and rice by the state governments under the scheme has not been encouraging in most states,” said the PM.Additionally, a large quantity of wheat was released for tender sale to bulk users like flour mills at prices lower than prevailing market prices. “There has been a substantial pickup of off-take under this scheme and this has had a dampening affect on wholesale prices in recent weeks,” said the PM. More recently, the government announced the release of 25 lakh tonnes of wheat and 10 lakh tonnes of rice through the PDS at prices based on support prices. The PM said the prices of pulses have risen much more steeply than other food articles as domestic production had stagnated over the past several years. “The National Mission on Pulses is being set up now to address this issue,” he said. On sugar, the PM said that given the lower domestic output of sugar the government allowed the import of duty-free raw and white/refined sugar. Stating the government has allowed accelerated sale of sugar processed out of imported raw sugar, the PM said the processing of imported raw sugar must be expedited and all impediments in its way removed. “I appeal to the Uttar Pradesh government to assess us in this process,” said the PM.

Age Correspondent New Delhi