Futures trading in rice, wheat
a farmer is often worried about the price a season's produce is likely to get. Prime Minister A B Vajpayee called this the "risk of the market' while inaugurating rice and wheat futures trading on the Ahmedabad-based National Multi-Commodity Exchange (nmce) in December 2003. Futures trading of these commodities brings the promise of reducing that very risk. But whether it actually benefits the poor farmers remains to be seen.
"What is especially heartening for me is its promise of de-risking Indian agriculture in terms of irrational and erratic price fluctuation,' said Vajpayee. India is the second largest producer of wheat and rice in the world after China, with a production of 185 million tonnes in 2002. However, there are few market mechanisms to guard against the risks that its large farmer population faces due to price fluctuations.