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World Bank says follow Gujarat

Gujarat government's legislative reforms, administrative measures and use of technological platforms to manage food supplies is a model worth emulating, the World Bank has said in a recent report on food inflation. HT reports.

india Updated: Sep 12, 2011 21:41 IST
HT Correspondent

Gujarat government's legislative reforms, administrative measures and use of technological platforms to manage food supplies is a model worth emulating, the World Bank has said in a recent report on food inflation.

Drought-prone Gujarat has managed to maximise the usage of water and electricity while upgrading technology, and amended laws to enable farmers to sell their outputs directly to private buyers, the Bank report said.

Foodgrain stock management, increasing agricultural output and productivity, managing risks and involving the private sector in food supply management would be critical to rein in rising prices, it said.

The report also said India and neighbouring Pakistan must focus on developing the role of private sector in food grain marketing while delinking of safety nets from direct public procurement of wheat and rice from farmers.

In India, the public distribution system is characterised by high leakages and poor targeting in several states while many have also registered good performances.

The report, which noted that over the long term policies aimed at increasing agricultural output and productivity would ease pressures on food prices, underlined that foodgrain stock management needed to improve.

It also recommended that government must explore development of market-based tools and assistance for managing risks, including those that affect the government's budget in areas such as weather insurance, hedging on futures markets.

The World Bank in its report also said that over the last 25 years, prices of agricultural commodities have risen faster than prices of industry or services.

Food inflation in India was at 9.6%for the week ended August 27 after touching a double digit figure in the previous week. However, inflation in food items, which has been above the 9% mark for the fifth week in a row, has become a major challenge for the government.