Home Commodities Why we need a central law to govern inter-state agri-commodities trading

Why we need a central law to govern inter-state agri-commodities trading

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In this State of the Economy episode, Subramani Ra Mancombu speaks to former Union Agriculture Secretary Siraj Hussain on the report of the expert committee headed by him on the promotion of warehoused-based sales with a focus on e-Negotiable Warehouse Receipts. The report was submitted last week to help improve warehouse-based sales of agricultural produce.

The committee’s focus is on promoting trade in E-negotiable warehouse receipts (NWRs) through platforms like the Electronic National Agriculture Market (Enam) and other registered online trading platforms.

Key recommendations include the proposal to declare warehouses as deemed mandis if they adhere to State APMC laws, with the broad objective of enhancing farmers’ returns.

The committee’s recommendations were formulated through consultations with stakeholders representing State governments, small farmers, and agricultural businesses.

One recommendation put forth by the committee is the designation of warehouses as sub-market yards, simplifying the process of trading agricultural commodities stored within them.

This recommendation builds upon existing practices in States like Uttar Pradesh, where cold storages have already been declared as sub-market yards, facilitating direct trading between farmers and private entities.

Another aspect addressed in the report is the registration of warehouses with the Warehouse Development Regulatory Authority (WDRA). Hussain calls for the need for increased registration of warehouses to expand the ecosystem of E-negotiable warehouse receipts.

Challenges like grading standards and pledge financing against electronic NWRs are also examined, highlighting the need for policy interventions to address these issues immediately. The discussion underscored the importance of aligning grading norms with market realities and facilitating seamless financing mechanisms for farmers.

Hussain also said for a central law was needed to govern inter-State trading in agricultural commodities, ensuring transparency and accountability across State borders.

Listen in to know more.

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