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U.S., India Join Hands to Strengthen
Commodity Futures Markets
October 13, 2006
NEW DELHI – In an effort to improve price
and market information tools for India’s farmers,
the United States Agency for International
Development (USAID) and the Government of India
Forward Markets Commission launched a 4.5 crores
rupees ($1 million) Commodity Futures Market program
today in New Delhi.
Speaking at the
event, USAID India Mission Deputy Director Beth
Hogan said: “A major thrust of the effort is to
improve how futures markets serve the needs of
India’s 120 million households involved in farming.
The commodity futures market can serve as a price
risk and information tool for farmers.” L. Mansingh,
Secretary, Department of Consumer Affairs,
Government of India and Forward Markets Commission,
Chairman S. Sundareshan, also attended the launch.
The program will
promote vibrant and safe commodity futures markets
in India and represents a practical benefit from
cooperation between the United States and India
under the Agricultural Knowledge Initiative. The
Agricultural Knowledge Initiative was launched by
President Bush and Prime Minister Singh in July 2005
with the objective of applying research and
commercial linkages in the agricultural sector to
address practical challenges in the rural economy.
A more robust and transparent commodity futures
market will encourage more efficient agricultural
production, storage, marketing, processing and
financing, and will improve the overall performance
of the agriculture sector. Developing economies with
large agricultural sectors have benefited from
commodity futures markets in recent years. A robust,
well-regulated commodity futures market helps
farmers manage prices and borrow from banks against
hedging contracts or warehouse receipts.
The Forward Markets Commission will lead the
work on regulatory issues for the market place.
USAID support will be used for technical assistance
from Financial Markets International, Inc. and to
bring in expertise from the U.S. regulator, the
Commodity Futures Trading Commission.
The project builds on a USAID-supported
assessment of the commodity futures markets in India
that identified steps and strategies to improve
their management. The assessment was developed in
close cooperation with Department of Consumer
Affairs; the Forward Markets Commission; the
Ministry of Agriculture; the Ministry of Finance;
the National Bank for Agriculture and Rural
Development and the leading Indian commodity
exchanges, Multi Commodity Exchange of India (MCX),
National Commodity and Derivative Exchange of India
(NCDEX) and National Multi Commodity Exchange of
India (NMCE).
Related Link: Read full text of the speech
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