In a significant move to ensure fair market prices and increase farmers’ incomes, the Maharashtra government has launched a dedicated hedging desk in Pune.
The initiative, part of the first phase of the Balasaheb Thackeray Agribusiness and Rural Transformation (SMART) Project, initially focuses on cotton, turmeric, and maize.
The Chief Minister’s Office (CMO) stated that the programme will eventually expand to include a wider range of crops.
Supported by the National Commodity & Derivatives Exchange (NCDEX) and its research arm, NCDEX Institute of Commodity Markets and Research (NICR), this initiative aims to protect farmers from financial losses caused by fluctuating market prices.
Meanwhile, Chief Minister Devendra Fadnavis described it as a major step forward for agricultural development. Hedging, explained as a ‘fence protecting a farm’, is designed to minimise risks from potential future price drops, while options trading allows farmers to secure favourable prices.
Established based on recommendations from the World Bank and the project’s implementation framework, the hedging desk will provide crucial training and guidance to individual farmers and Farmer Producer Organisations (FPOs) on participating effectively in the commodity futures market.
Moreover, agriculture contributes 12 per cent to Maharashtra’s Gross State Domestic Product (GSDP), though crop production remains highly dependent on natural factors. As several farmers often lack control over their produce prices despite successful harvests—an issue the government has traditionally addressed through policies, modern agricultural practices, and crop insurance schemes.
Recognising the limited resources and market knowledge of individual farmers, the government has set up this centralised Agricultural Hedging Desk in Pune. The desk will collaborate with FPOs and Cluster-Based Business Organisations (CBBOs) to offer technical insights into commodity contracts and risk management strategies, reported PTI.
Over 3,000 farmers are expected to receive training in hedging tools and strategies. Additionally, the desk will provide real-time market intelligence, including trends, supply-demand changes, and global prices, and promote the establishment of storage centres near farms via FPOs.
Meanwhile, a dedicated risk management cell will analyse various risk types and formulate mitigation strategies, publishing annual commodity price risk assessment reports for cotton, maize, and turmeric with current insights, forecasts, and policy recommendations. Awareness and training programmes on commodity derivatives will also be conducted. At least 50 FPOs involved in producing and marketing these three key crops will be registered and facilitated to trade in the futures market.
A formal agreement for this hedging desk was signed between NCDEX and the SMART Project on April 8, 2025. Special focus will be given to FPOs and farmers in major cotton, turmeric, and maize cultivating regions, including Hingoli, Washim, Sangli, Yavatmal, Akola, Nanded, Amravati, Chhatrapati Sambhaji Nagar, and Beed.
Headquartered in Pune, the project’s operations have already commenced across the state.
Hedging and options trading are anticipated to bring substantial benefits to Maharashtra’s farmers; for example, a farmer uncertain about future prices at sowing time can use options trading to lock in a minimum selling price, safeguarding them from market volatility.
Ultimately, this initiative aims to help farmers secure stable incomes, plan their finances more effectively, and feel more confident about investing in agriculture.
(With inputs from PTI)