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Indian Economic Policy

Notes The total storage capacity in the country is now 35 million tonnes.
(v) Organisation of Co-operative marketing Societies : The Government has given active
encouragement to the organisation of multi-purpose co-operative societies with emphasis on
credit and marketing. The primary marketing societies have been encouraged to form central
marketing societies and apex marketing societies (at the state level) and the National Agricultural
Co-operative Marketing Federation (NAFED). The Government has also provided larger
financial resources to the co-operative marketing societies and federations through the State
Bank of India and other nationalised banks.
In this connection, we should refer to the setting up of the National Co-operative Development
Corporation (NCDC) by the Government of India in 1965 to plan and promote programmes for
the production, processing, storage and marketing of agricultural produce through co-operative
societies.
(vi) Setting up of Special Boards : The Central Government has set up a number of development
councils for special commodities like rice, pulses, jute, millets, cotton, tobacco, oilseeds, sugarcane,
arecanut, etc. The Government of India has also set up export promotion councils such as
Cashewnuts Export Promotion Council and the Agricultural and Processed Food Export
Development Authority.
(vii) Boost to Export of Agricultural Products : Under Government support, export of agricultural
products has shown an increasing trend in recent years — as for example, ` 7,880 crores in
1992-93 and ` 34,000 crores in 2003-04. India’s agricultural exports include pulses, rice, wheat,
tobacco, sugar and molasses, poultry and dairy products, spices, cashew nuts, sesame and
niger seed, groundnut, oilmeals, castor oil, shellac, fruits and vegetables, meat and meat
preparations, marine products, etc. The share of agricultural exports in India’s exports ranges
around 12 to 15 per cent.
Foreign Trade Policy (2004-09) of the Government of India has emphasized the importance of
agricultural exports and has initiated a new scheme - Special Agricultural Produce Scheme - for
promoting the export of fruits, vegetables, flowers, minor forest produce. The Government is
earmarking funds to assist states for development of Agro Export Zones (AEZ)
(viii) Agricultural Marketing Reforms : The Government appointed an Inter-Ministerial Task Force on
Agricultural Marketing Reforms to suggest measures for making agricultural marketing system
more vibrant and competitive. The Task Force has in its report submitted in June 2002 recommended:
(i) Promotion of direct marketing and contract farming;
(ii) Development of agricultural markets in private and cooperative sectors;
(iii) Expansion of future trading to cover all agricultural markets;
(iv) Introduction of negotiable warehouse receipt system; and
(v) Use of information technology to provide market-led extension services to the farmers.
The Government of India has drafted and circulated a Model Act on agricultural marketing
which, among other items, will provide for the establishment of direct purchase centers, farmers’
markets for direct sale to consumers (thus eliminate middlemen, such as wholesale and retail
traders), complete transparency in the pricing system, payment to farmers on the same day,
public private partnership for professional management of existing markets, etc. In 2004, state
Governments agreed to adopt the Model Law.
(ix) Futures Trading : As part of economic reforms, the Government permitted the resumption of
futures trading in gur, potato, castor seed, pepper, turmeric and hessian. During 1997-98 the
Government extended futures trading in coffee, cotton, castor oil jute goods. In the 1998-99
budget, the Government announced futures trading in oilseeds, oilcakes and edible oils. The
Government has allowed international futures trading in pepper and caston oil.
In 2003-04, the Government of India initiated major steps towards introduction of future trading
in all commodities by setting up the National Level Commodity Exchanges. The major
agricultural commodities traded at these exchanges are wheat, kapas (cotton), soya oil, guar

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