Cartels oppose futures in farm items: Sen panel

The panel was appointed by the Finance Ministry on February 28, 2007 to study the impact of futures trading on price rise of essential commodities and suggest measures to improve farmers' income.

The panel had submitted its detailed report on April 29 and the Centre suspended futures trading in chana, soyoil, rubber and potato in a week after submission of this report.

Although the committee was not able to firmly establish that futures trade caused spike in prices of farm commodities, it said that cartels in all farm commodities have been moving prices to their advantage.

"There are cartels of traders for pulses in Akola and Mumbai, gur in Muzaffarnagar and Hapur, menthol in Chandausi, guar seed in Jodhpur, pepper in Kochi, jeera in Unjha, chilli in Guntur and Nizamabad, turmeric in Nizamabad and Sangli and soyoil in Indore, who command significant control on price determination of these commodities," the panel stated in its report.

Hence, the report noted, "The greatest criticism of futures trading has come from these trade interests. The kind of representations received by the government and the Forward Markets Commission testifies to this fear (of losing pricing power) among these groups."