Friday, December 11, 2009


Capitalistic system of governance is supposed to leave the business to businessmen, confining itself to the sacred function of ensuring consumer protection from economic and safety considerations. In India during Nehruvian days government entered the business in a large way and practically every industrial sector was dominated by public enterprises with government investment. It was only recently that government changed its policies vis-à-vis industry and allowed private sector to flourish. But entrepreneurship development requires constant government support and it is the duty of the government to come to the aid of industry when ever there is an economic downturn or demand slump. Look at a country like the US, the very epitome of capitalistic economy, where government provides prop for the private industry through public purchase programs in a large way.

"In his appearance at the National Association of Farm Broadcasters convention in Kansas City, Vilsack announced the agency's intention to purchase $82.6 million in pork, cherry, plum and apple products for federal food nutrition assistance programs."Today's actions will help stabilize prices and markets, stimulate the economy, and provide high-quality food to Americans in need of USDA's nutrition assistance programs," Vilsack said in a news release. The USDA intends to purchase $50 million in pork, $12 million in tart cherries, $1.8 million in dried plums and $18.6 million in apples and apple products.The purchases support the school lunch and breakfast programs, the summer food service program, the Food Distribution Program on Indian Reservations, the Commodity Supplemental Food Program and The Emergency Food Assistance Program. In addition, the agency makes emergency food purchases for distribution to victims of natural disasters".

The PPP model of industrial development involves, government's participation in some form but leaves the day to day management in the hands of the private partner. In India PPP models are increasingly being adopted for projects requiring large investments. The Minimum Support Price program for agricultural crops that is in vogue at present can be considered a good example of government intervention program for the farming sector but food processing sector is not that fortunate in having such a benefit so far. Use of processed food products for feeding programs which was widely prevalent few years ago is more or less replaced by "on the site" cooking and serving hot foods in many states. Governments, both at the State and Central level must be more sensitive to the problems of the food processing sector which has the critical backward links with agriculture, horticulture and livestock and generates high employment.

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