Times Of India....
In a bid to douse the heat over rising prices of commodities, sharply articulated by Congress MPs last week, government is planning an ordinance which will provide more teeth to Forwards Market Commission, the regulator for the commodities futures market.
While a Bill to amend the law governing the regulatory aspects has been pending, Centre is likely to use some of the recommendations of the standing committee, which submitted its report on Friday, to promulgate an ordinance.
While the panel recommended far reaching changes in the Bill — ranging from ban on trading in coarse grains, pulses and sugar in the futures markets to withdrawing the provision that will allow foreign intermediaries and banks to trade in the market — government is unlikely to accept them since the idea is to deepen the market.
But the possibility of other suggestions like reducing the transaction size so that small farmers can also benefit, may be considered more favourably. Apparently keeping in mind the over-heating of commodity prices, the committee said:"The stage has not come where Indian farmers can be exposed to the risk of commodity derivative and options in goods." Benefits from commodity markets can be substantial but were being captured by middlemen and traders.
Government sources said prices were not stabilising despite a lock on exports and reduction in duties on imports. Attempts to import large stocks of wheat, pulses and sugar were not yielding much relief as these commodities were in short supply. There had been a global rise in dal prices with India restricting its exports. And cracking down on hoarding was very much dependent of the efficacy of measures taken by states.
The committee's views would find reflection in an ordinance between now and the budget session as the parliamentary panel noted that "...to permit derivatives and options in the name of farmers and small traders, is nothing but a ploy for protecting speculative financial interests" and that expansion of these contracts would only intensify negative effects.
Under-development and inability of government agencies to educate farmers on how commodity markets functioned had meant that the "intended benefit of commodity market has not been realised by farmers' community, for whom the ban of forward trading was lifted".
In a bid to douse the heat over rising prices of commodities, sharply articulated by Congress MPs last week, government is planning an ordinance which will provide more teeth to Forwards Market Commission, the regulator for the commodities futures market.
While a Bill to amend the law governing the regulatory aspects has been pending, Centre is likely to use some of the recommendations of the standing committee, which submitted its report on Friday, to promulgate an ordinance.
While the panel recommended far reaching changes in the Bill — ranging from ban on trading in coarse grains, pulses and sugar in the futures markets to withdrawing the provision that will allow foreign intermediaries and banks to trade in the market — government is unlikely to accept them since the idea is to deepen the market.
But the possibility of other suggestions like reducing the transaction size so that small farmers can also benefit, may be considered more favourably. Apparently keeping in mind the over-heating of commodity prices, the committee said:"The stage has not come where Indian farmers can be exposed to the risk of commodity derivative and options in goods." Benefits from commodity markets can be substantial but were being captured by middlemen and traders.
Government sources said prices were not stabilising despite a lock on exports and reduction in duties on imports. Attempts to import large stocks of wheat, pulses and sugar were not yielding much relief as these commodities were in short supply. There had been a global rise in dal prices with India restricting its exports. And cracking down on hoarding was very much dependent of the efficacy of measures taken by states.
The committee's views would find reflection in an ordinance between now and the budget session as the parliamentary panel noted that "...to permit derivatives and options in the name of farmers and small traders, is nothing but a ploy for protecting speculative financial interests" and that expansion of these contracts would only intensify negative effects.
Under-development and inability of government agencies to educate farmers on how commodity markets functioned had meant that the "intended benefit of commodity market has not been realised by farmers' community, for whom the ban of forward trading was lifted".