Set up national common agri market: Survey

Setting agenda for marketing reforms and privatisation in agriculture and food sector, the 2013-14 Economic Survey calls for creation of a national common agriculture market by removing restrictions and bottlenecks for free trade.

“Removing market distortions will create greater competition in markets, promote efficiency, growth and facilitate the creation of a national agriculture market. Parliament has the power to legislate a national market across States under the Constitution,” it says.

Noting that as per the third advance estimates, this year will see record output of foodgrains at 264.4 million tonnes and oilseeds at 32.4 million tonnes, the Survey said that the country was in an anomalous situation of being largely self-sufficient in foodgrains, yet registering high food inflation. “This was due to the plethora of interventions by the UPA government which actually served as barriers to trade.”

In an attempt to seek a “paradigm shift” in the role of the government in foodgrains production and distribution, the Survey favoured setting up of alternative markets initiatives like direct marketing and contract farming. In pursuance of this goal, the government will examine all such acts and legislation that contain provisions that are restrictive and create barriers. These include the Agriculture Produce Marketing Act, Essential Commodities Act and Land Tenancy Act. The APMC Act creates cartels of buyers who possess market power, it said.

Stable trade policy

The government will also consider inclusion of agriculture-related taxes under the General Goods and Services Tax (GST) and establish a stable trade policy based on tariff interventions rather than non-tariff barriers. For generating investments in the agro-processing sector, it calls for greater incentives for the private sector.