Indian futures market can learn lessons from China: ICRIER

India can learn lessons from China to boost farmers' participation in the country's commodities futures market, according to the think-tank ICRIER.

"Given its similarity with India in terms of dominance of small and marginal farmers, it (China) provides some interesting lessons," the Indian Council for Research on International Economic Relations (ICRIER) said in its working paper on 'linking farmers to futures market in India'.

China introduced several innovative schemes, such as 'thousand villages and tens of thousands of farmers', to link farmers to futures since 2005. Another scheme called 'insurance plus futures' was introduced in 2016.

Some of the key takeaways from China's experience in this regard are: state support for futures market is critical, encouraging use of futures by farmers and consistently training and educating farmers for that, easing government protection from the commodity market by reducing the number of commodities covered under MSP-scheme and reducing MSPs for others besides innovative and customised products, the paper added.

Highlighting problems faced in linking farmers to the futures trade in India, the ICRIER paper said, "Despite being over a century old, the agri-futures market lacks depth and liquidity in India. There is limited association of farmers with futures market."