ISLAMABAD: The federal government will announce a mechanism to regulate the commodity market in the upcoming annual budget 2021-22 (FY22).
Sources said that the government wants to streamline the commodity market system as it will not only help transform the agricultural landscape, but also promote financial inclusion, improve storage, in addition to handling standards to reduce post-harvest losses suffered by farmers.
The high ups of the economic team think that the government, through the introduction of Electronic Warehouse Receipt (EWRs), can develop an ecosystem for storing, preserving, trading and providing ease in financing of a range of agricultural commodities.
Similarly, it will also have considerably greater economic gains for farmers and eventually impact the national economy.
The commodity system will be applicable to futures contracts settled in delivery – growers are already exempt as presently no contract traded at PMEX is actually settled in physical delivery, while it will also mitigate any fiscal impediments to growth of the EWR regime and in turn offer obvious advantages to farmers and growers to access markets and financial systems.
The economic team also has a point of view that linking the agri economy with a formal financial system not only enhances the tax-net and indirect tax revenue but also improves income streams of farmers by providing them direct access to markets and eliminating the role of arthis.
