Helped over 8,000 farmers hedge commodity price risk: NCDEX
Over 8,000 farmers across the country participate on NCDEX platform to hedge their commodity price risk, it said in a statement here.
Spread across Rajasthan, Madhya Pradesh and Bihar, farmers are using aggregation of produce to gain bargaining power and using the futures platform to smoothly hedge their location and basis risks to protect their income, the statement added.
To double their income by 2022, farmers need to achieve higher crop yields and sell larger surpluses. Finding it difficult to compete in formal markets and without the assurance that their efforts would pay off, farmers remained unwilling to take risks in increasing their production.
Using its national online footprint, the exchange has collaborated with Farmer Producer Companies (FPCs) to demonstrate that investments in linking farmers to markets, coupled with supply-side activities such as capacity building and input supply, can have a major positive effect on raising farmer incomes.
"We believe the only way to increase incomes for 560 million Indian farmers is by connecting them to modern, transparent, liquid primary and secondary markets. "By collaborating with partners to enable small holders to market their crops on the futures platform, NCDEX provided the much-needed incentive for investing in production. More farmer groups are expected to come forward to access the futures platform," NCDEX MD and CEO Samir Shah said.
NCDEX focused its efforts on educating FPCs and building a community of skilled farmers who are trained to become marketers. Over 135 programs were conducted in association with National Skills Foundation of India across Rajasthan and Madhya Pradesh, educating over 4,000 farmers, it said.
Educational modules were also included on 'mandi.com' show aired on DD Kisan, produced by NCDEX for educating farmers on post-harvest management and marketing of their produce.
As a result, four FPCs are now actively hedging on the exchange platform. As soon as they procure goods, they take a sell position on exchange platform. Later, as month on month spreads get lucrative, they begin rolling over their positions to next month.
This has ensured that farmers have received almost 15-20 per cent higher returns over last year. Additionally, timely settlement and payments have helped build liquidity for farmers, NCDEX said.