"Sharp increase in prices of food articles and growing foodgrain stocks in the public sector may be pointers to the need for both relative price shifts in demand and reconsidering traditional instruments of food management," said the Survey.
The Survey noted the zero import duties on edible oils lead to huge imports, hurting domestic producers. To address this, the Survey suggested a price band in a manner that harmonises the interests of farmers, processors and consumers, through imposition of import duty at an appropriate rate.
The Survey said the recommendations of the C Rangarajan committee on decontrolling the sugar sector should be brought about in a fiscally neutral manner and issues considered for implementation in a phased manner.
On the ambitious Food Security Bill, the Survey favoured its quick implementation and said subsidy for it could be provided by minimising other expenditure.
Inflation in cereals increased to 17 per cent in the third quarter of 2012-13 from 6.3 per cent in the first quarter mainly due to high price of wheat, rice and maize.
"Food Corporation of India has undertaken open market sales for domestic use and exports, these operations have so far limited impact on domestic prices," the Survey said.