FMC asks commexes to focus on farmers

In a move to bring farmers and hedgers on commodity exchanges to impart depth and liquidity to the futures market, the commodity market regulator, the Forward Markets Commission (FMC), has made it mandatory for exchanges to hold over three-fourth of awareness programmes for farmers and hedgers only. These programmes are those that are funded by the regulator and are over and above the ones organised by these exchanges on their own.

While the nine-year old online nation-wide commodity futures segment has grown multifold in terms of volumes, farmers and genuine hedgers are not seen in several commodities which are traded on futures exchanges, especially agri commodities. Only in a few commodities hedgers are attracted towards this market. Farmers are away despite the fact that the market was opened in 2003 for attracting farmers to ensure that they get higher prices for their produce and hedge risk related to crop in the beginning of the sowing season.

Early this week, FMC had sent circulars to all commodity exchanges — MCX, NCDEX, NMCE, ACE and ICEX — to organise over 300 events targeted at creating awareness amongst farmers, hedgers, brokers and investors regarding benefits of commodity futures and every three out of four events should be targeted at farmers and hedgers (hedgers events can be along with trade-industry associations) to make them aware of the benefits of futures. Half of the expenses of all these programs will be funded by the FMC.