Farmers upset over extension of ban on agricultural futures


- Occasional

- It is necessary to have protection against the risk of business price of commodity

- Angry Maharashtra farmers announced to start agitation against SEBI office in Mumbai

In an effort to curb inflation, the central government had imposed restrictions on stocks of agricultural products like soybean, soya oil, mustard, gram and palm oil a year ago and also banned futures trading of these products for one year. Now that the inflation is coming down, the government has relaxed the stock limit due to which it will be easier for big traders and processors to hold large stocks but at the same time the government has decided to extend the ban on futures for another year.

It means that the farmers who sell their crops by taking advantage of future prices and the businessmen who hedge the risk of their business have been disrespected. Farmers of Maharashtra who are angry against this decision of the government have now announced to start agitation against the office of SEBI in Mumbai from 23rd January-2023.

In Maharashtra, Madhya Pradesh and Rajasthan, gram, soybean and mustard crops are grown in particular. At the time of planting of these three commodities, the farmers have decided to plant their fallow after seeing its future prices.

Apart from this, when the time of income of new goods is coming, they have been selling in advance, if necessary, after looking at the futures prices. Two years ago, the exchange had started special option deals for products like chickpeas, soybeans and mustard. The special benefit of which was given to the farmers. Farmers used to buy put options in option deals. Due to which some of their profit was certain. Also, at the time of delivery, they also got the right to decide whether to deliver the goods or not. So at the time of delivery, if the market price was higher than the price at which they wanted to sell, they also had the ability to cut a deal and sell their goods in the open market instead of giving delivery. Although this was still the beginning, it was the beginning of a happy time for the peasants. At one time, these farmers ensured their security by selling more than 2700 tons of goods together in various commodities.

More than 10 lakh farmers, especially from Gujarat, Rajasthan, Maharashtra and Madhya Pradesh, are currently connected to exchanges like NCDEX that run agricultural commodity futures.

These farmers were preparing for more business in the new season with new plans based on their experience, but their plans and dreams of secure earnings have come to a screeching halt when the government ordered the closure of futures. Naturally, now these farmers are ready to go to war against the government.

In this way, the policy of the government is unplanned. National level commodity exchanges were allowed to start in 2002-03 by the NDA government itself. But since then there have been many questions against the working system of these commodity exchanges. Over two decades, several committees have given their studies and reports.

Everyone's tone is the same, price hikes have nothing to do with futures trading. However, the government does not know this and if it does, it is not ready to believe. On one hand, the government promises to increase the income of farmers and on the other hand, it destroys the transparent infrastructure that increases the income of farmers.

In today's highly volatile and volatile market, protection against price risk is essential for all involved in commodity trading. This option can give futures of exchanges so no one benefits from holding futures. Well now the farmers have come on the road so the matter will get a new controversy. It remains to be seen whether the rights of the farmers will win in this war or the stubbornness of the government.

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