Govt targets middlemen in food chain as inflation bites

July 11, 2014

Inflation bites
New Delhi, Jul 11: Every few weeks farmer Jay Narayan Singh hauls onions and potatoes in a hired lorry to a wholesale market an hour's drive from his home in the country's northern plains, only to sell his vegetables at a quarter of the prices retail consumers pay.

A law that dates back more than 50 years forces Singh and millions of other farmers to sell produce in regulated markets where middlemen take a hefty cut, boosting the cost of fruit and vegetables sold from handcarts and corner shops.

"The market is nothing but a haven for a clique of middlemen who indulge in profiteering, depriving both farmers and consumers of a fair price," Singh said.

As food inflation nears 10 per cent, the new government of Prime Minister Narendra Modi faces accusations that it is doing no better at reining in prices than the Nehru-Gandhi dynasty's Congress party, which suffered its worst election defeat in May.

Determined to avoid a repeat of the inflation scourge that contributed to the Congress downfall, Modi is taking aim at the Agriculture Produce Marketing Committee (APMC) Act.

The law aims to protect farmers from exploitation by rich landlords, and requires all produce to be sold through regulated markets in most of the 29 states.

Even big retailers, such as Reliance Industries, Wal-Mart Stores Inc, Shoppers' Stop and Britain's Tesco Plc, can only buy through wholesale markets governed by the Act.

But critics say too many people in the supply chain seek a cut, which exaggerates price rises during India's frequent supply disruptions because of a perennial shortage of storage.

Modi's food and finance ministers are now pushing states to let fruit and vegetable farmers sell to anyone they want, ending a practice that governs more than 7,000 wholesale markets.

"Allowing direct purchases will be a win-win proposition," said farmer Ved Prakash Sharma, as he oversaw labourers unloading sacks of vegetables at the Hapur wholesale market, about 60 km from the Indian capital, New Delhi.

"While we will get a fair price for our goods, consumers will have to pay less."

Authorities in the capital have already taken the step, but other state governments face a tough battle against entrenched vested interests in doing the same. Only Bihar has so far succeeded in revoking the Act.

Many middlemen who benefit from the system are supporters of Modi's Bharatiya Janata Party (BJP), which needs to keep voters sweet ahead of assembly polls due this year in Delhi, Haryana and Maharashtra.

Even some farmers could baulk at any assault on traders, who are often a source of credit in hard times after drought or crop failure.

Bargaining power

An opaque system of auction by traders' cartels leaves farmers with scant bargaining power.

Farmers who travel long distances to market often cannot afford to return home without a sale, said Naveen Yadav, a farmer who brought a truckload of okra to Hapur.

"After extensive research we found that the total margin of middlemen in the entire chain adds up to 75 per cent, ramping up costs for consumers," said Gokul Patnaik, chairman of GlobalAgri System, a Delhi-based farm consultancy.

In other countries where the food supply chain is better integrated, the margin ranges from 20 per cent to 30 per cent, he added.

Excluding fruit and vegetables from the APMC Act would cut prices by at least 5 per cent because direct selling would cut out middlemen's commissions and wholesale market fees, he said.

Numerous middlemen also add to a high rate of spoilage, as cargoes get repeatedly loaded and unloaded.

That leads to wastage of as much as a quarter of the value of goods, with consumers paying the cost, Patnaik said.

Levies such as wholesale market fees, purchase and sales taxes, and weighing and loading charges also boost final prices.

Some states add a tax to fund welfare programmes, such as Punjab, where levies add up to nearly 15 per cent of the value of goods.

Food minister Ram Vilas Paswan favours a uniform market in which farmers can sell whatever, and wherever, they want.

"There's no market for India as a nation," Paswan told reporters last month. "Everywhere you have sort of a barricade. We are trying to bring in the concept of India as one market."But Paswan could face resistance from state governments, which could fight measures that threaten earnings from taxes.

Farming forms 14 per cent of India's nearly $2-trillion economy and employs more than half its 1.2-billion population.

Debate over foreign players

Stamping out middlemen is not a panacea.

The government will have to give private players incentives to invest in alternative large markets, said Ashok Gulati, an agriculture expert at economic policy think-tank ICRIER.

Middlemen still thrive in Bihar, the only state to have junked the Act, because it offered no alternative arrangement to growers, such as private markets or direct purchase centres.

Trying to modernise the food supply chain by meddling with every stage and every product would only lead to failure, a group of senior government officials warned recently.

"One way of playing an enabling role is to allow foreign direct investment into multi-product retail," they said in an internal memo, a copy of which was seen by Reuters.

Modi's BJP has ruled out foreign direct investment in supermarkets, however. Losing patience, Wal-Mart has dropped a wholesale joint venture with a local firm and France's Carrefour (CARR.PA) plans to close its four wholesale stores in India.

Still, revamping the act would be the best solution, farmer Jay Narayan Singh told Reuters.

"As a third-generation farmer, I can tell you the Act has outlived its usefulness and must be either abolished or overhauled to help both farmers and consumers," he said.

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News Network
December 16,2025

bengal.jpg

The deletion of over 58 lakh names from West Bengal’s draft electoral rolls following a Special Intensive Revision (SIR) has sparked widespread concern and is likely to deepen political tensions in the poll-bound state.

According to the Election Commission, the revision exercise has identified 24 lakh voters as deceased, 19 lakh as relocated, 12 lakh as missing, and 1.3 lakh as duplicate entries. The draft list, published after the completion of the first phase of SIR, aims to remove errors and duplication from the electoral rolls.

However, the scale of deletions has raised fears that a large number of eligible voters may have been wrongly excluded. The Election Commission has said that individuals whose names are missing can file objections and seek corrections. The final voter list is scheduled to be published in February next year, after which the Assembly election announcement is expected. Notably, the last Special Intensive Revision in Bengal was conducted in 2002.

The development has intensified the political row over the SIR process. Chief Minister Mamata Banerjee and her Trinamool Congress have strongly opposed the exercise, accusing the Centre and the Election Commission of attempting to disenfranchise lakhs of voters ahead of the elections.

Addressing a rally in Krishnanagar earlier this month, Banerjee urged people to protest if their names were removed from the voter list, alleging intimidation during elections and warning of serious consequences if voting rights were taken away.

The BJP, meanwhile, has defended the revision and accused the Trinamool Congress of politicising the issue to protect what it claims is an illegal voter base. Leader of the Opposition Suvendu Adhikari alleged that the ruling party fears losing power due to the removal of deceased, fake, and illegal voters.

The controversy comes amid earlier allegations by the Trinamool Congress that excessive work pressure during the SIR led to the deaths by suicide of some Booth Level Officers (BLOs), for which the party blamed the Election Commission. With the draft list now out, another round of political confrontation appears imminent.

As objections begin to be filed, the focus will be on whether the correction mechanism is accessible, transparent, and timely—critical factors in ensuring that no eligible voter is denied their democratic right ahead of a crucial election.

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News Network
December 21,2025

hadith.jpg

Invoking the teachings of Prophet Muhammad—“pay the worker before his sweat dries”—the Madras High Court has directed a municipal corporation to settle long-pending legal dues owed to a former counsel. The court observed that this principle reflects basic fairness and applies equally to labour and service-related disputes.

Justice G. R. Swaminathan made the observation while hearing a petition filed by advocate P. Thirumalai, who claimed that the Madurai City Municipal Corporation failed to pay him legal fees amounting to ₹13.05 lakh. Earlier, the High Court had asked the corporation to consider his representation. However, a later order rejected a major portion of his claim, prompting the present petition.

The court allowed Thirumalai to approach the District Legal Services Authority (DLSA) and submit a list of cases in which he had appeared. It also directed the corporation to settle the verified fee bills within two months, without interest. The court noted that the petitioner had waited nearly 18 years before challenging the non-payment and that the corporation could not be fully blamed, as the fee bills were not submitted properly.

‘A Matter of Embarrassment’

Justice Swaminathan described it as a “matter of embarrassment” that the State has nearly a dozen Additional Advocate Generals. He observed that appointing too many law officers often leads to unnecessary allocation of work and frequent adjournments, as government counsel claim that senior officers are engaged elsewhere.

He expressed hope that such practices would end at least in the Madurai Bench of the High Court and added that Additional Advocate Generals should “turn a new leaf” from 2026 onwards.

‘Scandalously High Amounts’

While stating that the court cannot examine the exact fees paid to senior counsel or law officers, Justice Swaminathan stressed that good governance requires public funds to be used prudently. He expressed concern over the “scandalously high amounts” paid by government and quasi-government bodies to a few favoured law officers.

In contrast, the court noted that Thirumalai’s total claim was “a pittance” considering the large number of cases he had handled.

Background

Thirumalai served as the standing counsel for the Madurai City Municipal Corporation for more than 14 years, from 1992 to 2006. During this period, he represented the corporation in about 818 cases before the Madurai District Courts.

As the former counsel was unable to hire a clerk to obtain certified copies of judgments in all 818 cases, the court directed the District Legal Services Authority to collect the certified copies within two months. The court further ordered the corporation to bear the cost incurred by the DLSA and deduct that amount from the final settlement payable to the petitioner.

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News Network
December 13,2025

New Delhi: School-going children are picking up drug and smoking habits and engaging in consumption of alcohol, with the average age of introduction to such harmful substances found to be around 13 years, suggesting a need for earlier interventions as early as primary school, a multi-city survey by AIIMS-Delhi said.

The findings also showed substance use increased in higher grades, with grade XI/XII students two times more likely to report use of substances when compared with grade VIII students. This emphasised the importance of continued prevention and intervention through middle and high school.

The study led by Dr Anju Dhawan of AIIMS's National Drug Dependence Treatment Centre, published in the National Medical Journal of India this month, looks at adolescent substance use across diverse regions.

The survey included 5,920 students from classes 8, 9, 11 and 12 in urban government, private and rural schools across 10 cities -- Bengaluru, Chandigarh, Delhi, Dibrugarh, Hyderabad, Imphal, Jammu, Lucknow, Mumbai, and Ranchi. The data were collected between May 2018 and June 2019.

The average age of initiation for any substance was 12.9 (2.8) years. It was lowest for inhalants (11.3 years) followed by heroin (12.3 years) and opioid pharmaceuticals (without prescription; 12.5 years).

Overall, 15.1 per cent of participants reported lifetime use, 10.3 per cent reported past year use, and 7.2 per cent reported use in the past month of any substance, the study found.

The most common substances used in the past year, after tobacco (4 per cent) and alcohol (3.8 per cent), were opioids (2.8 per cent), followed by cannabis (2 per cent) and inhalants (1.9 per cent). Use of non-prescribed pharmaceutical opioids was most common among opioid users (90.2 per cent).

On being asked, 'Do you think this substance is easily available for a person of your age' separately for each substance category, nearly half the students (46.3 per cent) endorsed that tobacco products and more than one-third of the students (36.5 per cent) agreed that a person of their age can easily procure alcohol products.

Similarly, for Bhang (21.9 per cent), ganja/charas (16.1 per cent), inhalants (15.2 per cent), sedatives (13.7 per cent), opium and heroin (10 per cent each), the students endorsed that these can be easily procured.

About 95 per cent of the children, irrespective of their grade, agreed with the statement that 'drug use is harmful'.

The rates of substance use (any) among boys were significantly higher than those of girls for substance use (ever), use in the past year and use in the past 30 days. Compared to grade VIII students, grade IX students were more likely, and grade XI/XII students were twice as likely to have used any substance (ever).

The likelihood of past-year use of any substance was also higher for grade IX students and for grade XI/XII students as compared to grade VIII students.

About 40 per cent of students mentioned that they had a family member who used tobacco or alcohol each. The use of cannabis (any product) and opioid (any product) by a family member was reported by 8.2 per cent and 3.9 per cent of students, respectively, while the use of other substances, such as inhalants/sedatives by family was 2-3 per cent, the study found.

A relatively smaller percentage of students reported use of tobacco or alcohol among peers as compared to among family members, while a higher percentage reported inhalants, sedatives, cannabis or opioid use among peers.

Children using substances (past year) compared to non-users reported significantly higher any substance use by their family members and peers.

There were 25.7 per cent students who replied 'yes' to the question 'conflicts/fights often occur in your family'. Most students also replied affirmatively to 'family members are aware of how their time is being spent' and 'damily members are aware of with whom they spend their time'.

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