After NCDEX, the country’s largest commodity derivatives exchange MCX has initiated the process to onboard farmer producers organisations (FPOs) for participation in futures trade in agricultural commodities
Sources told FE that in a recently held webinar organised by the agriculture ministry, MCX has shown interest in onboarding FPOs on their platform, which according to an official, would help farmers take sowing decisions well in advance based on future prices of the commodities.
Benefits and incentives for farmer-producers
“The platform offered by MCX helps efficient price discovery through competitive pricing, while delivery and payment are assured by exchange,” an official said, adding that FPOs onboarding into commodity exchanges also enhances farmers’ collective ability to take credit from financial institutions.
The commodity exchange has decided to reimburse assaying charges, warehouse rent, storage, cost of bags, transportation, funding of cost of market to market, broker fee, repository related fee, mandi fee etc for the collectives.
On the NCDEX platform, during April-July (2025-26), 46 FPOs consisting of mostly small and marginal farmers have traded Rs 150 crore worth of the commodities – cotton, cumin, castor, coriander, turmeric, cotton seed oil cake and guarseed. Along with these commodities, MCX would additionally offer mentha for future trade on its platform.
Move to trade on the NCDEX platform has ensured that 25 farmers’ collective have clocked sales in excess of Rs 1 crore in the first four months of the current fiscal.
An agriculture ministry official said that selling through commodity bourse has led to formalisation of agricultural trade, with payment going into the FPO bank accounts while ensuring aggregation and procurement from farmers members by collectives.
“With MCX, farmers’ collectives have multiple options of participating in the future trades of commodities in the exchanges,” Ganpatram Chaudhry, CEO, Mandor Kisan Farmer Producer Company, a Jodhpur, Rajasthan based farmers collective, told FE.
The collective sold Rs 1.5 crore worth of agri-commodities – jeera or cumin and castor seeds on NCDEX out of the total sales turnover of Rs 2.25 crore in FY25. The target is to achieve Rs 4 crore business on the platform in the current fiscal while in the first quarters the collective with 750 farmers, has sold Rs 1.5 crore of agri-commodities on the NCDEX platform.
Farmers groups have also stated that more commodities should be opened up for future trade while the Securities and Exchange Board of India has extended the suspension of trading in derivative contracts for seven agricultural commodities – paddy (non-basmati), wheat, chana, mustard seed and its derivatives, soybean and its derivatives, crude palm oil, and moong till March 31, 2026.
In FY25, 340 FPOs have crossed Rs 10 crore sale turnover, while over 1100 farmers collectives have reported sales exceeding Rs 1 crore.
Cumulative turnover of these farmers’ collectives have crossed Rs 15,282 crore.
Over 9,450 FPOs are currently on board the government’s e-commerce platform ONDC. Over 200 collectives are selling their products on platforms such as GeM while sales of agri-produce have also commenced in a significant way via Amazon and Flipkart.
Broader strategy for formalising agriculture
Several farmers’ collectives formed in the last five years through the central sector scheme have also carried out procurement of oilseeds, pulses and grain under minimum support price (MSP) to boost their businesses.
The scheme for formation of 10,000 new FPOS was aimed at enhancing collective bargaining power of farmers through local aggregation and reducing cost of production through leveraging economies of scale, financial assistance up to Rs 18 lakh per FPO for a period of three years.
The scheme has a budgetary provision of Rs 6,865 crore for the five years since FY21, and will run through FY26.
Provision has been made for matching equity grants up to Rs 2,000 per farmer member of an FPO with a limit of Rs 15 lakh per collective. Credit guarantee facility upto Rs.2 crore loan from eligible lending institutions for these collectives.
The scheme also entails a credit guarantee facility up to Rs 2 crore of project loan per FPO while Rs 25 lakh per FPOs is provided to cluster-based business organisations for five years to boost marketing of products.