Sebi chairman Ajay Tyagi today called for bringing more farmers into the futures trading by linking them with commodity exchanges.
At present, about 50 farmer producers’ organisations covering nearly 50,000 farmers are linked with commodity derivatives exchanges and are able to realise market-linked price for their produce, he said.
“For a large country like ours, we need to link a large number of FPOs with commodity exchanges,” Tyagi said at a seminar on ‘Linking FPOs with commodity exchanges’, jointly organised by Sebi and Nabard here.
Speaking on the occasion, Nabard chairman Harsh Kumar Bhanwala said weak market linkage is the biggest challenge that most FPOs face today.
Due to this weak link, FPOs find it difficult to compete in the formal markets and remain unwilling to take risks and increase production or add value for improved marketability.Harsh Kumar Bhanwala, Chairman, Nabard
Tyagi highlighted the initiatives undertaken by Sebi, such as new norms for warehouse providers, assayers, position limits, allowing hedge funds to participate in commodity markets and introduction of options as a new derivative product, to improve the market linkages.
Bhanwala suggested that NCDEX may organise a massive awareness building campaign for FPOs at district levels and share details about the technology, systems and procedures of the trade, benefits available to farmers and the expectations of the commodity exchanges from the farmers/FPOs.
“Nabard as a champion of facilitating farmers' welfare has so far promoted over 2,000 FPOs in 29 states. These FPOs have since been moved on to the digital platform,” he said.
He said financial, market inclusion will help farmers in improving their income from farming.