This step is likely to put India on the global agro-commodities map, even when the futures contracts will be domestic and not international. With this the government has formally accepted the Kabra Committee recommendations submitted way back in 1994.

India is a large importer of edible oils, and it exports considerable quantities of oilseeds. In absence of sufficient hedging mechanism, prices, and availability remains a battling ground for the government, trade and the farmers. Oilseed import continues to be banned despite repeated pleas by the oilseeds extraction industry and the government having given in principle permission for oilseeds imports in March thisyear.

"We are happy that the government has decided to include futures in the entire oilseeds complex", said Vijay K Aggarwal, chairman, Forward Market Commission, in charge of all agro commodity futures on around 23 commodity exchanges in the country. "This will add tremendous volumes on the existing exchanges".

Currently, there are just seven commodities that have futures trading. These are gur, turmeric, pepper, raw jute and jute goods, potatoes, and castorseed. By August this year, there will be futures in coffee, cotton and castoroil. Last year, futures were permitted in hessian.

According to Aggarwal, the combined volume of these seven commodities is placed at around Rs 28,000 crore pe annum, or Rs 2,350 crore per month. "The total trading volume in edible oils complex will be much more than all these seven commodities put together. What is more, futures in oilseeds complex will give India a "tremendous opportunity" to cash on the near-total absence of futures market in the South East Asianregion, barring of course, Singapore Commedity Exchange (Simex, which is coffee dominated) and Malaysia Commodity Exchange which has only palm oil futures). "Futures trading in India's oilseeds complex will give necessary price signals to policy makers at least three months in advance," Aggarwal added, "This will help ease the recurring pressure on the availability and price for edible oils".

"It has been a resourceful day for us", said Navinchandra Shah, president, Bombay Oils and Oilseeds Exchange said. "Five years' of crusading efforts to get futures for all oilseeds and edible oils has finally borne fruits."Even before the Kabra Committee recommended futures for 17 commodities in its much-debated report in 1994, Shah has been trying to impress upon the government to permit futures trading in oilseeds. "It is now a challenge for the exchange. We will soon call a board meeting to consider various related issues."

Permission for futures trading will attract all the three entities engaged in the oilseedseconomy -- the farmer, the trader and the exporter. This will give the much-needed hedging facilities to all these three players, which in turn will help boost the oilseeds in the country.

"It is a welcome step in the right direction," said Pradeep Kotak, president, Indian Oilseeds and Produce Exporters' Association (IOPEA), one of the leading exporters of groundnut. "If introduced, futures trading will take away the wind off from the illegal trades in oilseeds, especially immediately after the monsoons each year."

The Kabra committee had recommended futures trading in all oilseeds like castorseed, groundnut (its oil and even cake), copra (its oil and cake), sesame seed (oil and cake), soyabean (oil and cake), sunflower seed, cotton seed (oil and cake) rapeseed and mustarseed, coffee, pepper jute cotton and castor oil.

Lastly, Further, as per Sinha's announcement toda, the agricultural sector will get higher budget allocation. The 1998-99 plan allocation for agriculture will be increased by 58 per centto Rs.1,627 crore from Rs 677 crore (1996-97's revised estimates). This will be utilised for rural water supply and also for watershed development programmes all of which will be unified.

The watershed development programmes are aimed at increasing the availability of the irrigated land in the country, which currently is just one-third as against three-fourths of the rainfed land, leading to excessive dependence on the rain gods.