Farmers’ group protests against Sebi ban on trading in seven agricultural commodities

The Swatantra Bharat Party, the political wing of farmers’ group Shetkari Sanghatna, has announced it will launch open-ended agitation outside the Securities and Exchange Board of India (Sebi) headquarters in Mumbai against its decision to suspend trading on seven soft commodity exchanges.

Anil Ghanwat, leader of the party, has urged farmers to get involved in the sit-in, which is due to start on January 23.

Sebi originally banned trade in chana, wheat, rice (no basmati), soybeans and their derivatives, mustard seeds and their derivatives, crude palm oil and moong until December 2022.

Market regulators extended the ban until December 20, 2023, and met with fierce opposition from farming groups as well as other stakeholders.

Trading bodies pointed out that mature markets have always allowed trading in agricultural commodities on the exchanges, as this is necessary for better price realization and futures price orientation.

Speaking to The Indian Express, Ghanwat pointed out that Sebi’s decision was against farmers.

Founded by the late Sharad Joshi, a fervent advocate of open markets and farmers’ access to technology, the party had spearheaded a massive movement for the introduction of GM cotton in India. It had several representatives in local bodies and the legislature in Maharashtra.

Many agricultural organizations have said that futures markets enable scientific price discovery for international commodities such as soybeans, palm oil, and others. Agricultural producer companies also trade with the exchanges to trade and hedge their produce for better price realization.

The central government’s decision to ban trading of cotton (ginned, seedless kapa) on the Multi-Commodity Exchange (MCX) has directly led to a reduction in prices for kapa (raw, unseeded cotton) in the open markets. Farm groups have pointed out that commodity markets give them a third way to offload their produce.

The party said the decision also affected the business of processors and traders. “We have called on all farming organizations and other stakeholders affected by this decision to join us,” he said.