PANKAJ KUMARMBA (AGRI-BUSINESS)
Faculty of Management StudiesBanaras Hindu University
Background of Project
Objective of Study
Research Methodology
Findings
Conclusion
Recommendation
Flow of presentationFlow of presentation
Price risk of agriculture.
It has been realized by policy maker that
introduction and proliferation of futures trading
will benefit Indian agriculture.
NABARD trying to pass on the benefits of
futures commodity market to Indian farmers.
Background of ProjectBackground of Project
1. To study the existing marketing channel of
wheat in Uttar Pradesh.
2. To study the relationship between the spot
and future prices of wheat.
3. To study the futures price dissemination
through different sources.
Objective of the StudyObjective of the Study
Nature of Research
Exploratory and quantitative
Data Collection
Research DesignResearch Design
Nature of Data
Wheat Price Source Duration
PrimarySpot Shahjahanpur
Mandi(UP)
34 Months
SecondaryFutures www.ncdex.com 34 Months
Survey Sample Coverage
No.
Farmers 47
Commission Agent 15
Wholesaler 19
Exchange Broker 15
Questionnaire Used
Structured, open ended and non disguised.
Sampling Technique
Judgmental and Snowball Sampling
☺Study Area
Shahjahanpur, Bareilly, Hapur, Muzaffarnagar, Meerut
☺Statistical Tools
Correlation, Standard Deviation, Weighted Average,
Mean, Line Graph, Bar Graph
☺Limitations of StudyThe accuracy of the findings mostly depends on willingness of the respondents.
Econometric analysis futures and spot prices are not conducted.
Only five districts of Uttar Pradesh have been selected for the study
Marketing Channels of wheatMarketing Channels of wheat
Farmer
Kachha Adathiya
Pucca Adathiya
Flour Miller Corporate Houses Government Agencies
Consumer
Marketing Channel
Channel 1 Channel 2 Channel 3
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Channel 1 Channel 2 Channel 3
85%
0%
15%
45%
25%30%
Small (< 20 Hactare)
Large (> 20 Hactare)
Variable Duration(Months)
r
Independent Dependent
Spot Price Futures Price 34 +0.81
Correlation (r) AnalysisCorrelation (r) Analysis
Months Correlation (r)
Sep04-Dec04 -0.23
Jan05-Apr 05 0.89
May05-Aug05 0.81
Sep05-Dec05 0.40
Jan06-Apr 06 -0.14
May06-Aug06 -0.21
Sep06-Dec06 0.46
Jan07-Apr07 -0.80
Quarterly ‘r’ Analysis of Spot & Quarterly ‘r’ Analysis of Spot & Futures PricesFutures Prices
0.00
200.00
400.00
600.00
800.00
1000.00
1200.00
Average Future Price wheatRate /qnt Shahjahanpur
Price Fluctuation TrendPrice Fluctuation Trend
0.00
20.00
40.00
60.00
80.00
100.00
120.00Monthly SD of Futures Price
Weekly SD of Spot Price
Analysis of Standard Analysis of Standard DeviationDeviation
Spot Price InformationSpot Price Information
Sources Price
Information
Newspaper 9%
Fellow Farmer 4%
Nearest Mandi 71%
Traders 10%
Other 5%
0% 20% 40% 60% 80%
Newspaper
Fellow Farmer
Nearest Mandi
Traders
Other
9%
4%
71%
10%
5%
Price Information
Price Information
Access to futures Price Access to futures Price SourcesSources
Overview of News Papers of Uttar Pradesh
Sl.No. News Paper Remark
1. Danik Jagran, Lucknow (Hindi) Spot Price of Mandi, Share Price
2. Hindustan Danik, Lucknow (Hindi) Spot Price of Mandi, Share Price
3. Rashtriya Sahara, Lucknow (Hindi) Spot Price of Mandi, Share Price
4. Amar Ujala, Kanpur(Hindi) Spot Price of Mandi, Share Price
5. The Economics Times, Lucknow
(English)
Futures Prices, Share Price,
6. Business Standard, Lucknow (English) Futures Prices, Share Price,
7. The Indian Express, Lucknow (English) Share Price, Mutual’s Fund
8. Times of India, Lucknow (English) Share Price, Mutual’s Fund
9. Hindustan Times, Lucknow (English) Share Price, Mutual’s Fund
10. The Pioneer, Lucknow (English) Share Price, Mutual’s Fund
Price Dissemination Price Dissemination
ConclusionConclusion1. Farmers are at the mercy of adathiyas of
Mandi.
2. Futures and spot market are highly correlated.
3. Spot and futures price showing similar fluctuation trend it means that both the markets are interrelated.
Cont…Cont…
17
4. Study don’t find any type of speculative activity in relation to wheat price.
5. Different sources having futures price information is not accessible by the farmer.
1. There is need to reform the marketing channel so that farmers will get fair price of their wheat produce.
2. As farmers are more dependent on adathiyas from sowing to selling, there is need to break this relationship by providing special loan to interested farmers.
3. Strengthening of warehouse receipt finance so that it helps the farmers to become more responsive to market opportunities.
Recommendations Recommendations
4. Involvement of private players as an aggregator who can do the futures trading of wheat on behalf of farmers.
5. An efficient futures market can ensure better return to farmers, reducing the need for government intervention through price support & subsidies so, it must be encouraged.
Cont…Cont…
7. There is need to create awareness among the farmers about the benefits of futures commodity market.
8. Easy availability of futures price movement of agri commodities for farmers, this information helps the farmers in making decision about which crop to grow.
Cont….Cont….
Thank YouThank You
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