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MEDIA ROOM

NABARD and SEBI to encourage marketing of agriculture commodities by Producer Organisations on trading platforms of commodity exchanges
India | November 2017
NABARD in association with SEBI organised a National Seminar on “Linking Farmer Producers’ Organizations (FPOs) with Commodity Exchanges on 15th November 2017. NABARD’s Chairman, Dr. Harsh Kumar Bhanwala, in his inaugural speech, mentioned that weak market linkage is the biggest challenge that most FPOs are facing today. Due to this weak link, FPOs find it difficult to compete in the formal markets and remain unwilling to take risks in increasing production or adding value for improved marketability. He suggested that NCDEX may organize a massive awareness building campaign for FPOs preferably at district level and share the details about the technology, systems & procedures of the trade, benefits available to farmers and the expectations of the commodity exchanges from the farmers/ FPOs. Further, he also highlighted the importance of financial inclusion as well as market inclusion of farmers so that their income from farming may increase. NABARD as a champion of facilitating farmers welfare has promoted more than 2000 FPOs in 29 States in the country. These FPOs have since been moved on to digital platform.

SEBI Chairman, Shri Ajay Tyagi, highlighted the need to bring in more farmers to the fold of future trading to achieve the goal of increasing farmers’ income. He also said that currently about 50 FPOs covering about 50000 farmers are linked with commodity derivatives exchange and able to realize market linked price for their produce. For a country like India, we need to link a large number of FPOs with commodity exchanges. He highlighted some of the initiatives undertaken by SEBI like new norms for warehouse providers, assayers, etc. new norms of position limits, allowing Hedge funds to participate in commodity markets and introduction of option as a new derivative product.

Representatives from SEBI, NCDEX, NeML, NABARD and about 50 FPOs from all over the country participated in the seminar and shared their experiences relating to future trading.Based on the discussions in the seminar,  concrete action plan for linking of FPOs with commodity exchange will emerge,  which will provide impetus to increasing farmers income.