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Millennium Post

Hoarding worries

The anti-inflationary measures proposed by union finance minister Arun Jaitley sound good on paper, but it is important to ensure that they don’t remain all talk and no action. With wholesale price inflation reaching a five-month high of 6 per cent, pushed up by hikes in prices of staple food items like potatoes and onions, the government’s move against hoarders would be significant. In the wake of worries spurred on by delay in monsoon, it is likely that traders would rush to stock up and siphon off millions of kilos of essential food items, particularly cereals like rice, wheat and vegetables like onions and potatoes. The tendency to hoard is a logical fallacy since most of these goods are perishables and end up rotting in private granaries and warehouses. With higher potato and onion prices sending food inflation to 9.50 per cent in May from 8.64 per cent in April, the anti-inflationary measures could help check these unseemly proclivities among middle-order traders, who buy off food items, including fruits and vegetables, from farmers at lower prices and create a high-demand-low-supply bottlenecks to shoot up the selling prices.

    In this light, removal of curbs on sale of fruits and vegetables is a good move to ensure that the food items reach people, especially the poor. The delisting of fruits and vegetables from the Agricultural Produce Marketing Committee Act and the order to bring in reinforcements of onions and rice from the government storehouses would hopefully help bring the situation under control in the days to come. Hoarding is precisely what fails the public distribution system in this country, which, continues to rattle under the humungous weight of corruption in spite of putting in place legislations to ensure fairer and wider resource allocation. Delhi has already shed enough ‘onion tears’, and, plagued by onion woes, even voted out the last state government. It remains to be seen how the new dispensation at the centre allays the fears of inflation-stricken aam aadmi. A combination of measures geared to face the weak monsoon as well as combat the hoarders in a low agricultural output situation should help.
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