8.28 ndian onom
Small Farmers Agribusiness Consortium import duties and minimum export
(SFAC) has taken the initiative for prices, etc., create instability of policy
developing a Kisan Mandi in Delhi with for any investment in the agro-processing
a view to providing a platform to FPOs for industry.
direct sale of their produce to prospective (ii) The changes in policy parameters have
buyers, totally obviating or reducing limited impact on the price the consumer
unnecessary layers of intermediation pays, because of the time taken to arrive
in the process. The SFAC plan to scale at the decision and the same translating
its activities in other states based on the into additional/reduced supplies.
outcome of the experience of the Delhi (iii) It certainly does not impact the farmer
kisan mandi. who has received his remuneration based
on the price prevailing at the time the
sAFeGuArdInG AGrItrAde produce leaves the farm gate.
In recent times, India has become more conscious (iv) High prices of commodities in a particular
towards protecting its agricultural trade interests year do not translate into benefits to
the farmer in the same year, but create
at the international platforms. At the 10th
expectations, possibly not rational, of the
Ministerial Conference of the WTO (Nairobi,
same in the next year, enhancing cropped
December 2015), the Government of India
area in the next year/cropping season,
adopted the following approach towards agritrade
leading to oversupply and reduction in
prices and consequently of incomes.
(i) A Special Safeguard Mechanism (SSM)
for developing countries.
commodIty Futures mArKet
(ii) Public stockholding food for security
purposes, By the early 2017, out of the 113 commodities
(iii) A commitment to abolish export subsidies notified for futures trading, 43 were actively traded
for farm exports, and in 4 national exchanges and 6 commodity-specific
exchanges. Share of agricultural commodities
(iv) Measures related to cotton.
in the total turnover was over 20 per cent in
Decisions were also taken regarding 2015–16, with food items (refined soya oil,
preferential treatment to LDCs in the area of soyabean, chana, coriander and rapeseed/mustard
services and the criteria for determining whether seed) contributing over 50 per cent of it. The
exports from LDCs may benefit from trade remaining (80 per cent) turnover was contributed
preferences. by bullion, metals and energy contracts.
Policy stability: The changes in the agritrade A Committee set up by the Ministry of
policy hampers the concept of a market and needs
Finance, which submitted its report in April
to be discontinued with, due to the following
2014, and has observed that hedging efficiency of
the commodity futures markets is low. In order to
(i) Frequent changes in the policy parameters ensure that forward markets in commodities are
(goal posts) of trade in agricultural well regulated and the Indian commodity futures
products in the form of changes in market is compliant with international regulatory
33. Ministry of Finance, Economic Survey 2015–16, Vol. 2, requirements, the regulatory framework for
p. 122. the commodity futures market needs to be