Parking Space for the Poor: Restrictions Imposed on Marketing and Movement of Agricultural Goods in India

Agricultural markets in India have been regulated since 1928 with the inception of the "Royal Commission of Agriculture." Policy intervention in agriculture was virtually absent till the Bengal Famine of 1943, in which more than a million people died. The famine provided a major impetus for formulation of a comprehensive food policy in India. The Food Policy Committee which was set up after the disaster, suggested an interventionist government policy in the food grain market. Intervention began in the form of administrative controls, monopoly procurement schemes and public distribution, but it now encompasses a wide array of restrictive tools. This was done on the premise that private trade would function efficiently in normal periods but in periods of drought and crop failure, the profit motive would lead them to hoard supplies and earn abnormal profits. Ever since, the Indian government has followed a policy of de-control and re-control of agricultural markets.Thus this paper talks about restrictions imposed on marketing and movement of agricultural goods in India.[Working Paper No. 0009]