As part of steps to control high food prices, PM’s Working Group on Consumer Affairs — led by Gujarat Chief Minister Narendra Modi – on Wednesday called for ban on futures trading in essential items and favoured liberalising agri-markets via organised retail.

The group has made 20 recommendations with 64 action points, ranging from banning futures trade in essential items to making offences under the Essential Commodities Act as non-bailable. It has also suggested setting up of special courts for early trials.
The Working Group, set up in April 2010 to find ways to control retail prices, on Wednesday  submitted the report to Prime Minister Manmohan Singh in New Delhi.

Apart from Gujarat, Chief Ministers of Andhra Pradesh, Tamil Nadu and Maharashtra were members of the group.

“Considering lack of strong linkages between spot and future markets at present, the Modi Report suggested that for the time being, essential commodities should be kept out of the futures market,” an official release said.

The report suggests delisting essential commodities like rice, pulses and edible oils from the Future Markets, to contain inflation.

Food inflation rose to 11.49 per cent for week ended February 12 from 11.05 per cent in the previous week.

Commodity markets regulator FMC has already suspended futures trading in rice, tur and urad, but wheat and sugar are still traded.

The Working Group has also recommended liberalisation of agriculture markets for improving efficiency of distribution channels by increasing participation of the organised sector and cooperatives in retail, agro-processing and post-harvest infrastructure.

The report has called for “price stabilisation fund” for government intervention when prices become unreasonably high.

To stop the hoarding and black marketing of daily necessities, the PM’s Group has recommended setting up of Special Courts under the Essential Commodities Act (ECA) for speedy trials.

“Offences under Section 10-A under the ECA should be made non-bailable and Special Courts should be set up for speedy trial of offences,” the release said.

It also recommended raising the detention period to one year from six months for black marketing under the Prevention of Black Marketing and Maintenance of Supply of Essential Commodities Act, 1980.

Identifying farm infrastructure growth as sluggish, the report has suggested time-bound development of agri-marketing infrastructure like storage capacities in food deficit regions, cold chains and agro-processing.

It has emphasised upon the need to prepare a 10-year Perspective Plan for improving Agri-infrastructure of backward and forward linkages for agriculture production and marketing.

Besides, it has suggested that the government evolve a single “National agriculture Market” by setting up ministerial coordination mechanism at national and regional levels for policy making.

The report has further recommended that the government enlarge the scope of priority sector lending to agri-marketing activities and speedy reform of APMC Act across the country.

It has also asked the government “to explore unbundling of Food Corporation of India (FCI) operation in terms of procurement, storage and distribution functions.”

The report has said that there should be an extensive use of the technology to disseminate information to stakeholders on production, imports, stocks and overall availability of essential commodities.