‘Agri futures trading should be discouraged’

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New Delhi, Jul 23: A Parliamentary Committee has suggested that futures trading in farm products needs to be discouraged as it is leading to artificial rise in prices and not benefiting the Indian farmers.

“Futures trading in agricultural commodity should be discouraged to contain the speculative and paper trading which generally result in artificial rise in prices,” Parliamentary Standing Committee on Agriculture said in a report.

The Committee, headed by Samajwadi Party MP Ram Gopal Yadav, noted that futures trading has not been beneficial either to the farmers or consumers.

It pointed out that traders and middle men are earning at the cost of the farmers.

In its 41st report tabled in Parliament on Tuesday the Committee, however, said forward market help the stakeholders in price discovery based on which the producers (farmers) can take informed decision.

The committee emphasised that small and marginal farmers, who are unable to take the advantage of forward trading, needs to be protected against any sharp fall in prices.

Pointing that 82% of the farming community in India is constituted of small and marginal farmers, the panel said, “Forward market can wait but the small farmers can not wait, as they are forced to sell their produce just after it is harvested.”

It also said the remunerative price at the time of harvesting is more important to the farmers than a higher price at a future date.

The Standing Committee has suggested that farmers have to be made aware about futures trading in agri-commodities so that they know the prices of their produce well in advance and plan their production accordingly.

The 33-member committee include noted scientist M S Swaminathan, Sharad Joshi, M P Virendra Kumar and Datta Meghe.