New Delhi With no political consensus as yet to allow the foreign direct investment (FDI) in multi-brand retail, India needs to undertake structural reforms urgently to curb food inflation that surged to a 15-month high of 10.49% in April on dearer vegetables and protein-based products. Economists said these reforms should focus on four fundamental aspects: raising productivity, curbing wastages, better distribution and delivery system, and ensuring fair returns to producers to keep them engaged in the farm sector. Prices of food articles rose in April, from 6.89% the previous month, on soaring rates of vegetables and protein-based edible products, showed official data released on Monday. Prices of vegetable soared a whopping 60.97%, egg, meat and fish 17.54% and oilseeds 16.66%. Inflation had stood at 6.89% in March. “The food inflation has been driven by higher prices of vegetables, fruits and protein-based products such as pulses, milk, egg, fish and meat, and edible oils. This is because of the fact that supplies have not kept pace with a change in the consumption pattern of people who are increasingly opting for a more healthy diet regime,” said PH Pai Panandiker, president of RPG Foundation. “The government must make appropriate policies to bring in the private sector into farming in a big way so that farmers' returns soar. Moreover, the agreement between the seller and the buyer must be strictly adhered to for the sustenance of such contract farming,” Panandiker said, adding that the government needs to have a long-term farm policy to improve productivity of crops. Madan Sabnavis, chief economist at CARE Ratings, said despite bumper production of some commodities, the lack of adequate infrastructure in preserving the items and the absence of an effective delivery system are adding to inflationary pressures. “Adequate cold storages need to be set up so that farm items don’t get wasted.... If grain prices remain at reasonable levels, animal feed rates (some of the grains are used as feed) will also go down. This will bring down the cost of rearing such animals and may help reduce food inflation,” he said. Analysts said as much as one-third of fruits and vegetables produced in India get wasted each year, which, if prevented even partially, will have a salutary effect on food inflation. Sabnavis said the government needs to do away with the policy of announcing the benchmark prices even for crops it doesn’t procure from farmers and let the market determine their prices. “Prices of such items may still not be controlled, but it will at least prevent an irrational upward spiral in the market rates.” Interestingly, Sabnavis also advocated farming by states to boost production and curb prices, especially of crops that witness frequent fluctuation in prices. “If the government wants it can formulate policies accordingly.” Some analysts said the idea of farming by states makes sense as the government has vast tracts of unutilised land, some of which are still arable, and it has the access to sophisticated farm practices. Moreover, states can employ labour meant for the MNREGA in such more productive activities, they added. Analysts also pointed out that the APMC Act, which has effectively barred farmers from having a greater say in the trade, needs to be amended by all states as the middle men are raking in huge profits at the cost of both producers and consumers. To improve supplies of milk, egg and meat, the government needs to focus mainly on the adoption of better technology as well as improved breed and control of disease in them, said R Venkataramanan, the joint director at the state-run Indian Veterinary Research Institute. Venkatraman, who is spearheading efforts to control animal diseases, said the foot and mouth disease (FMD) alone drags down the animal’s milk output by 25% and hurts its breeding as well as work capacity. According to an official study, FMD alone is reducing India’s milk output by 20 million tonne, or more than 17% of its annual production. The direct impact on the economy due to losses in production of milk and meat stands at a staggering R18,000 crore a year. Venkataramanan said the government is ramping up efforts to control diseases in animals, which will produce adequate results by 2015. Some farmers in western Uttar Pradesh said the government’s incentives to boost meat exports are hurting milk production, as farmers are tempted to sell the cattle once their best productive period is over. “The problem is you can't produce the cattle in huge numbers in a short period to boost milk output, but you can sell them off to the butchers anytime you want even if the animal can still produce milk, albeit less, for some more years. This is the main reason why milk production will always lag consumption. But policymakers won't pay attention to the problem,” said a farmer, who is planning to set up a dairy unit in Uttar Pradesh.