Linking Farmer with Commodity Exchanges

In this paper we will discuss how the link between the farmers and commodity exchange can be strengthened. The government has to take several initiatives like, keeping the price level stable, providing proper price informations to the farmers etc.
The market risks also has to be minimized. The main problems of the farmers are lack of agricultural infrastructure, irregular credit flow, price instability etc. There are many ways in which the farmers can be linked with the commodity exchanges.

The farmers suffer from several issues like, price instability, lack of agricultural infrastructure, same kind of cropping pattern, restrictive environment of the market, irregular credit flow to mention a few. The farmers are used to choose crops according to the spot prices. This tendency heeds towards overproduction and decrease the crop prices. Therefore, the farmers’ income also get lowered.

The link between commodity exchange and the farmers can be improved in the following ways:
The government should make the price stable. It can set the price benchmark and introduce a transparent pricing system.
The government can maintain neutrality by avoiding the conflicts between several kinds of, sometimes vested, interests.
The government can minimize the market risks through an efficient risk management system.
The government can promote the use of future market among the farmers. Then, the farmer would consider the future prices of the crops before going for them.
The state or central government can provide the correct price information to the farmers through news papers, kisan call center, several news agencies etc.
The link between the farmers and the commodity exchange may be further enhanced by installing several price ticker boards in the rural areas.

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Last Updated on : 27th June 2013

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