By IANS
Bangalore : The central government will soon set up a Forward Marketing Commission (FMC) to regulate the functioning of the commodity stock market on the lines of the Security Exchange Board of India (Sebi).
“The FMC will be set up after parliament passes the bill to amend the relevant act. The commission will be empowered to regulate the commodity stock market on the lines of Sebi,” union Minister of State for Commerce Jairam Ramesh told reporters here Monday.
Re-launching the Coffee Futures Contract of the National Commodity and Derivatives Exchange Ltd (NCDEX) here, Ramesh said the FMC would have stringent provisions that will be based on the Abhijit Singh Committee report to ensure farmers get better prices for their produce.
“The parliamentary standing committee on agriculture has favoured empowering the FMC to regulate the commodity stock market and help stabilise the agriculture system for fetching remunerative prices for the farming community,” Ramesh pointed out.
The bill proposes to confer statutory status to the commodity stock market and the FMC will have the required laws and regulations by the year-end to regulate the futures trading in farm products.
“It is essential more and more farmers/growers participate in the future trading and commodity stock trading to benefit from the new system. There is also need to ensure primary participants in the trading and delivery of commodities in accordance with contracts to check volatility,” Ramesh told NCDEX officials, who were present on the re-launch occasion.
NCDEX managing director and CEO P.H. Ravikumar said the coffee futures contract was being re-launched in response to such a demand from stakeholders, including the Coffee Board, a statutory body under the Union commerce ministry.
Coffee Board chairman G.V. Krishna Rau said coffee valued at $409 million was exported from October 2006 to August this year in value terms, as against $411 million in the coffee year of 2005-06 (Oct-Sept).
Coffee is predominantly grown in Karnataka (57 percent), Kerala (24 percent) and Tamil Nadu (9 percent).
According to a NCDEX statement, barring coffee, all other soft commodities require amendments to state statutes, which recognise only mandis such as regulated physical markets for agriculture produce comprising traders, commission agents, brokers, processors, surveyors and warehousemen.
Coffee, however, is not governed by any state statute on agricultural marketing.