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BY ANNOUNCING ITS belated but welcome decision to relax trade-related restrictions on several essential commodities and prune the list of scheduled items under the Essential Commodities Act, 1955, the Centre has once again demonstrated its characteristic nature — do the most rational thing, but after exploring other possibilities and as the last resort. Rising from its ostrich-like posture the Government has accepted the ground realities of the agriculture sector. The psychosis of shortage has given way to a comfortable — or is it an uncomfortable — surplus following continued expansion in production and liberalised imports. However, several statutory restrictions on trade — vestiges of the past — had continued to distort the market by creating artificial pockets of surplus and shortage. Primary producers were choking on constricted marketing opportunities and competition from cheap or subsidised imports. Controls and restrictions on marketing of indigenous produce — relevant perhaps in times of shortage — had clearly outlived their utility. Thankfully many of them are gone now. For wheat, rice, paddy, coarse grain, sugar, edible oilseeds and edible oils the country will be one marketing zone and there will be no licensing, storage or movement restrictions.

Afree-trade regime is a win-win situation for stakeholders. It improves the marketability of crops as producers (will) enjoy more stable markets, traders (will) do business without the fear of outmoded but punitive statutes, and consumers (will) have easier access to goods. Importantly, processors and traders will now be able to plan and execute their businesses better. Sourcing from an expanded supplier-base and building inventory without fear of inspectors' visit would surely boost business confidence and improve open market off-take. However, the benefits of free trade will flow back to primary producers if, and only if, the marketing infrastructure is improved and expanded. This should be the next area of attention and the initiative must come from State governments. It is heartening that not only curbs on domestic trade, but also on export of a number of commodities such as wheat and its products, non-Basmati rice, coarse grain and pulses have been removed. Removal of quantitative ceiling may not translate into large-scale export of foodgrains in the short-run; but a window of opportunity is surely open to the private sector to explore overseas markets as and when the conditions are favourable.

Abolition of restrictions and controls is a necessary condition for the success of agribusiness, but it is by no means a sufficient condition. Production cost and quality are key issues. For a number of crops and regions, there is an urgent need to raise the low level of productivity and improve quality. Scientific water management as also strengthening the system of delivering credit and physical inputs must get priority attention. We need to produce globally acceptable quality at comparable cost so as to remain competitive in overseas markets and at the same time deliver economic benefits to domestic consumers. Indian agriculture needs policy and financial support for attaining global competitiveness. The Finance Minister has promised to focus on strengthening agriculture and agribusiness in the coming Budget. The National Agriculture Policy — an outstanding statement of intent issued some 18 months ago — is languishing for want of official initiative to take it forward. Will the Budget spur action?

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