Market for agricultural commodities proposed

A national common market is needed for agricultural commodities, said the Economic Survey for 2014-15 which was tabled in parliament by Finance Minister Arun Jaitley yesterday.

The annual report card on the state of the country’s economy said that the un-integrated and distortion ridden agricultural market is one of the most striking problems in agriculture growth.

The survey, tabled a day ahead of the union budget suggested 3 incremental steps as possible solutions to the problem. “Recognition for setting up a national market, farmers’ markets and need for the central and state governments to work closely to reorient their respective APMC Act [agricultural produce market committee act],” the survey said.

The survey suggested that all states should drop fruits and vegetables from APMC schedule of regulated commodities.

“State governments should also be specifically persuaded to provide policy support for alternative or special markets in private sector,” the survey suggested.

The survey said that liberalisation in foreign direct investment (FDI) in retail could create possibilities for filling in the massive investment and infrastructure deficit in supply chain inefficiencies.

As a last resort constitutional provisions can be used to create a national common market for agricultural commodities, the survey said.

Currently, markets in agricultural products are regulated under the APMC Act enacted by respective state governments which notifies agricultural commodities produced in the region.

The APMCs charge multiple fees of substantial magnitude that are non-transparent like a market fee of buyers, a licensing fee from the commissioning agents and fees from a whole range of functionaries.