Removal of F&O in AGRICULTURE and FSB

The present double digit inflation is due to Futures trading in Commodities, thanks to the biggest jobber in business, our not so humble Agriculture minister. Despite World Bank warnings, UPA and Pawar went ahead with it. With Commodities Futures, the supply side has been monopolised by those who can control Agriculture, namely Pawar and his goons, numerous politicians, Relaince and ITC. These people have gained control over the supply of food grains and edible commodities over the last 8-9 years. Now, it doesnot surprise me when Pawar says that Onion prices will come down in 3-4 weeks, as he knows that his boys are playing the market till stocks last. As the supply is controlled, the prices are controlled by the same cartel, leading to inflated prices even when we had bumper and surplus harvests, against basic tenets of economics. Hope this explains the double digit food inflation seen under UPA. so in effect all of us are paying more for food due to the greed and selfish business desires of Pawar and his cartel.

So after having driven double digit food inflation for almost a decade, UPA wakes up to elections and decides to remedy it - The FSB! "Subsidize grain to 65% of the country" - Mummy's new mantra! Pappu sings in chorus as do the league of rogues. And who pays for this - Again all of us as the subsidy is funded out of our tax money.

In effect, we pay more for food to satisfy the lust of UPA and its cronies, and then we pay even more to help them claim fake credit for subsidizing it. So UPA creates an inflation problem and then announces a populist scheme to remedy it, which in effect is saying two negatives makes a positive!

Spare a thought - we had a PDS for almost 40 years which despite its inefficiencies worked. Why did we need FSB now?

To REMEDY the whole problem, Modi should abolish F&O in Commodities completely and offer Crop insurance to farmers, another brilliant scheme from ABV's time! Decontrol Fertilizer and eliminate fertilizer subsidies in fertilizer and bring in competition to offer farmers the best fertilizers and techniques to improve their crop production and maximize returns. Fertilizer subsidies have not benefited farmers but only the manufacturers who have continued to churn out poor quality goods in pre-historic contraptions called factories and gobbled up the subsidy. Ultimately, the net benefit of the subsidy to the farmer has been under 10 paise per KG, which can be easily bettered by competitive environment.