Future trading of agricultural commodities in Punjab: Prospects and problems Sekhon M K, Chaudhary Anurag* Punjab Agricultural University, Ludhiana, 141004, Punjab *Corresponding author: anuragchaudharypau@gmail.com
Online published on 24 March, 2023. Abstract Price risk management and price risk reduction for small and marginal farmers have always been the most important issues for agricultural policy of agriculturally dominated states, particularly, Punjab. In order to manage the price volatility, the Government of India has been encouraging commodity futures markets. Further, it is very difficult for the small and marginal farmers to trade in commodities futures because of small quantum of their produce, however, if they join together and set up some collective organizations such as FPOs then they can hopefully trade their produce in commodity markets and minimize the price risk. This study was conducted among 67 FPOs registered in Punjab in the year 2020-21. About 57% of FPO members were totally unaware about the future trading, 32% considered it to be a gambling practice, while remaining 11% considered it to be a profession of big players like ITC, Wallmart, Adani, etc. It was observed that the collection centers of NCDEX were quite far away from the location of FPOs, moreover there was problem of grading and standardization as well. It was recommended that maximum number of FPOs should combine together and take up future trading on large scale as it will minimize the risks and losses, further governments should provide infrastructural support for future trading of agricultural commodities. Top |