Encourage farmers, allow banks in futures trading: Govt panel

A government panel on plantation crops has suggested that small farmers should be encouraged to take part in futures market by setting up an organisation similar to a mutual fund like UTI.

The task force for plantation sector has also suggested that banks should be allowed to participate in such trading.

The task force, appointed by the commerce ministry to evolve a mechanism for protecting growers of tea, coffee, rubber and spices from price volatility, suggested forming an organisation or cooperatives to facilitate farmers' participation in futures trading.

It also recommended strengthening insurance scheme for the plantation growers and workers. Centre should subsidise the premium for the insurance scheme amounting to Rs 720 crore in the 11th Plan, it said.

The panel, headed by former Insurance Regulatory and Development Authority chairman N Rangachari today submitted its report to Minister of State for Commerce Jairam Ramesh, who will now take it to the Group of Ministers (GoM) on Plantation after which the Cabinet will take a decision.

"The GoM is likely to meet in mid-February (to discuss) the recommendations of the task force," Ramesh said. The task force made a strong case for commercial banks to participate in the derivative trading.