Maharashtra Govt Launches Hedging Desk for Cotton, Turmeric, Maize Farmers

The Maharashtra government has taken a major step in the development of the state's agriculture sector by launching a hedging desk in Pune. The hedging desk has been set up under the Balasaheb Thackeray Agribusiness and Rural Transformation (SMART) Project. The hedging desk will help the farmer in getting a fair price for their agricultural produce and increase their income.

Hedging is a risk management tool used to minimise the risk and protect the value of a financial asset, such as shares, bonds, commodities, or currencies, from an adverse change in its price in the future. 

Crops  covered under the Hedging Desk Initiative

• The hedging desk will initially cover three crops: cotton, turmeric, and maize. Later, more crops will be added.
• The Hedging desk will focus on farmers and the Farmer Producer Organisation (FPO) in regions cultivating cotton, turmeric and maize, especially in the Hingoli, Washim, Sangli, Yavatmal, Akola, Nanded, Amravati, Chhatrapati Sambhaji Nagar and Beed regions.
• 50 FPOs involved in the production and marketing of these agricultural commodities will be registered and facilitated to trade in the futures market.

About the Heding Desk 

• The hedging desk was established at the recommendation of the World Bank.
• The Maharashtra government has established the Hedging desk with the support of the National Commodity and Derivatives Exchange (NCDEX) and its research wing, the NCDEX Institute of Commodity Markets and Research (NICR).

Aim of the Hedging Desk 

• It will provide training and guidance to farmers and Farmer Producer Organisations (FPOs) on participating in the commodity futures market.
• Training and awareness programmes on commodity derivatives will also be conducted.
• Provide technical insights on commodity contracts and risk management strategies to the  FPOs.
• A risk management cell will analyse different risk types and formulate mitigation strategies. 
• It will publish annual commodity price risk assessment reports for cotton, maize and turmeric, offering current insights, forecasts and policy recommendations.  

National Commodity & Derivatives Exchange (NCDEX) 

Established: 2003

NCDEX is one of three recognised commodity exchanges in India, the others being the Multi Commodity Exchange of India Limited (MCX) and the Indian Commodity Exchange Limited (ICEX).

Agriculture and non-agriculture commodity derivatives are traded on NCDEX.

Headquarters- Mumbai

Regulator of Commodity Exchange- Securities Exchange Board of India (SEBI)