Budget 2021

Integration of spot, derivative market to boost agri eco-system

Suresh P Iyengar Mumbai | Updated on January 12, 2018

The proposal to set up an expert committee to study and promote creation of an operational and legal framework to integrate the spot and derivatives market in the agricultural sector will help farmers improve their post-harvest risk by hedging on the commodity exchanges and improving their realisations.

B Thiagarajan, Chairman and Joint Managing Director, Blue Star, who is on the CII National Committee on State Level Coordination, said the move would give a fillip to the entire agriculture eco-system and help reduce post-harvest wastage with development of cold storage facilities besides encouraging investments in agriculture processing units in rural areas.

Farmers can get better prices by sorting and grading their produce before finalising a deal based on the price signals from the transparent online platform, he added.

Veeresh Hiremath, Research Analyst, Karvy Comtrade, said the move will help the derivative commodity exchange include more delivery centres based on the quality of the produce and farmers’ interest. The price polling mechanism conducted by commodity exchanges to settle futures contracts can become more transparent with the emergence of an online national agriculture market, he added.

Published on February 01, 2017

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