Farmers' Participation in India's Futures Markets: Potential, Experience andConstraints

摘要

Improving agricultural marketing and reducing price risk for India's small and marginal farmers has been an important policy agenda for several decades (Chand 2012; Sahadevan, 2012). Although the government has made considerable efforts to improve themarket linkages for smallholders, the direct benefits especially in price risk management, except for support prices, have remained somewhat limited. Though the government policy has aimed at protecting small farmers from market and other failures, thishas often not worked due to various reasons including 'elite capture' and 'social exclusion' such as in cooperative and other institutions (Feder et al., 2011). Since 2000s, there has been increased policy thrust on improving small holder market accessand risk management (Acharya, 2004; Ranjan, 2005). Development of commodity futures and forward markets is one outcome of this market- oriented approach. Futures trading in India has seen various structural improvisations in the recent years and there has been effort to improve the performance of commodity exchanges, thereby enhancing trading and market efficiency. However, futures trading in agricultural commodities has not yet attracted significant participation especially of producers. While the futures markets should help in price discover)' and risk management, there is considerable debate in India on its usefulness and impact. The Forward Markets Commission (FMC) has recently been replaced by the Securities and Exchange Board of India (SEBI) as the commodity derivative market regulator. This may offer a new scope for improving participation in agricultural commodity derivative markets (Ghosh and Dey, 2015).