Survey for lifting ban on farm futures

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New Delhi: The government should lift the ban on futures trading on rice, sugar, tur and urad and decontrol sugar sector, saying the resultant price discovery would help farmers and other stakeholders, the Economic Survey said on Thursday.

"Lift the remaining ban on futures contracts to restore price discovery and price risk management... Its effectiveness depends on the wider participation of all the stakeholders categories," said the Survey for 2008-09.

Expressing concern over declining investment in farm sector and a low growth of 1.6 per cent in 2008-09, the Survey said India's dependence on import of pulses, edible oils and other commodities had also put pressure on the economy by way of rising prices.

As part of measures to control inflation, the Centre had imposed ban on futures trading on rice, tur and urad in early 2007, while the trading in sugar has been suspended from May 26 till December this year.

The Survey, however, emphasised on improving productivity to ease demand-supply situation. "The agriculture sector faces challenges on various front. On the supply side, the yield of most crops has not improved significantly and in some cases fluctuated downwards...There is clearly a need for renewed focus on improving productivity," the Survey said.