The Hindu Business Line : Agri futures

The article “ Farm sector: Hope lies in futures markets” (Business Line, January 23) rightly observed that “the futures market offers the possibility of making up for the lost time and catching up with the rest of the world in one single stride. The commodity exchanges and futures markets are multiplying the real volumes of transactions. Futures markets could lead to a paradigm shift in Indian agriculture.’

The fact is that in a very short span of time, Indian commodity exchanges, particularly the Mumbai-based Multi Commodity Exchange of India Ltd. (MCX), have been able to ensure price-discovery and risk-management to a host of participants on their trading platforms. Consequently farmers, the real producers of grains and other agricultural products, who have participated in trading on MCX platform, for example, have been able to realise better and higher prices for their produce.

Recent instances are those of potato farmers in Agra and Tarkeshwar, in West Bengal, who have benefited from higher prices for potatoes. This is also true of mentha cultivators, as borne out in independent studies conducted by respectable academic institutions.

The Indian commodity exchanges, over their short span of operations, have demonstrated to the world their prowess in transforming the face of Indian agriculture and farmers’ fortunes.

It is time for the government to shed its ostrich-like stance in blaming commodity exchanges for last year’s rise in prices of wheat and pulses and banning futures trading in them.

The Abhijit Sen Committee has already exposed the government’s folly by giving the commodity bourses a clean chit. Now the Government must take a pragmatic stance towards commodity exchanges and spur them to play a growth-inducive role in the economy.

S. R. Kasbekar Mumbai