At its first national council meeting in Chandigarh, the Confederation of Indian Industry (CII) has suggested a board for facilitating futures trading in commodities.The proposed future trading board is aimed at all major commodities, says the CII recommendations on "Reforms in Indian Agriculture". Top functionaries of CII including its national president, Rajesh V Shah, vice-president Vijay R Kirloskar were present in Chandigarh for the national council meeting during which the paper was okayed.
The CII recommendations on agriculture say that the Essential Commodities Act of 1955, which applied to the movement, pricing and storage of agri-commodities, must be set aside in line with ground realities.
All controls on "free movement, stocking limits, future trading must be removed" eventually allowing an open market pricing policy. The role of Food Corporation of India must be "re-examined as the operations of FCI were too large and complex". The rising costs indicated the inability of FCI to cope withthe current situation, the paper said. The complex controls on agricultural trade had put a strangle hold on agri-exports.
Further constraints were created by lack of adequate bulk storage and handling facilities at ports and rail heads. A critical, albeit controversial issue was that of input subsidies which were "huge fiscal burden as these were concentrated in richest states among the richest farmers". Following are the some of the CII recommendations :
Trading activity must be facilitated through setting up future trading boardReal investment in Indian agriculture was on downslide which must be arrestedControl on free movement, stocking limits, future trading must go to allow an open market pricingRole of FCI must be re-examinedSubsidies on power, waster and fertilisers be gradually reducedGovernments should invest in creation of rural infrastructure in villagesReforms were needed in area of rural credit. ``Agriculture contributes 30 per cent to our GDP andemploys 64 per cent of total labour force,'' said CII's regional director (northern region), Piyush Bahl. However, historically the situation was vastly different from other developed countries where industrialisation and urbanisation were accompanied by a decline in population growth. Little doubt agriculture became relatively less important but in India, population was growing thus leading to pressure on agri-sector, he added.Observers feel India's ability to produce more food would be its litmus test to ensure a successful future. He said that it was unfortunate that seven year old reform process barely touched the agri sector. The country should have taken a leaf out of China's book where first reforms in agri sector were initiated and then industry and trade. Consequently they attained and sustained an overall growth rate of 9 per cent for over a decade.
The fundamental element was the good earth and land ceiling and tenancy laws promoted the proliferation of small and marginal holdings and powerand irrigation continued to be in short supply. Foodgrain storage facilities, monopolised by the government were hampered by wastage and lacked an effective grading system. The CII recommendations say that policy planners must realise that it "would be dangerous to relegate agriculture to the back burner because without agricultural growth, it would be difficult to sustain the forms in other sectors of the economy". The country must appreciate"bi-directional relationship between agriculture and industry and growth in agriculture would trigger off and spurn growth in industry with active involvement of corporate sector bringing in capital, efficiency and technology to bring in socio-economic change" says the CII agenda for reforms which is likely to be sent to union government and various state governments soon.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.