The Economic Survey 2014-15 has recommended setting up of a national market for agricultural commodities to overcome the problems of un-integrated and distortion-ridden markets hampering the farm sector.

However, the Survey also pointed out that while there is a constitutional provision to create a national market by enacting a legislation, it said that such a step can be seen as a ‘heavy handed move’ of the Central Government.

Before taking a measure such as enacting a legislation, the Survey has recommended three measures towards creating a national market.

“First, it may be possible to get all the states to drop fruits and vegetables from the APMC (Agricultural Produce Market Committee) schedule of regulated commodities; this could be followed by cereals, pulses and oilseeds, and then all remaining commodities,” it said.

“State governments should also be specifically persuaded to provide policy support for alternative or special markets in private sector,” it added.

Finally, the Survey also said that liberalising foreign direct investment in retail could create possibilities for filling in the massive investment and infrastructure deficit in the supply-chain side and help move towards a national market.

Ultimately, the Survey mentioned that the Central Government might have to take a stance of its own.

“If persuasion fails (and it has been tried for a long time since 2003), it may be necessary to see what the Centre can do, taking account of the allocation of subjects under the Constitution of India,” the Survey said.

“Once a law is passed by the Parliament to regulate trading in the specified agricultural commodities, it will override the state APMC laws, paving the way for creating a national common market,” it added.

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