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