From the field to the market
How India's farm produce is grown, priced, sold and protected against price swings: crop seasons, mandis, e-NAM, commodity exchanges and the products farmers use to plan their harvest.
2 main crop seasons: kharif with the monsoon, rabi in winter · 1,000+ mandis linked online through e-NAM · 22 crops with a Minimum Support Price announced each season.
Two seasons shape the year
Kharif, sown with the June monsoon: paddy, cotton, soybean, maize and pulses, harvested from September to November. Rainfall decides the crop, and the crop decides prices.
Rabi, sown in winter and harvested in spring: wheat, mustard, chana and jeera. Harvest arrivals in March and April often push mandi prices to their lows of the year.
Agriculture supports close to half of India's workforce. Prices move with the monsoon, harvest arrivals, storage and exports, which is why price discovery and risk management matter to growers and buyers alike.
From the mandi to the exchange
- APMC mandis: regulated market yards where produce is auctioned to licensed traders.
- e-NAM: the National Agriculture Market links mandis online, so buyers can bid beyond their local market.
- Commodity exchanges: NCDEX is India's main exchange for agricultural contracts; MCX lists a few, such as cotton and mentha oil.
- Minimum Support Price: government procurement prices announced each season for major crops.
Products in the agricultural trading field
- Futures contracts: a price agreed today for delivery later, on crops such as jeera, turmeric, dhaniya, guar, castor seed, cotton seed oilcake, kapas, maize and barley.
- Options on agricultural contracts: the right, without the obligation, to buy or sell at a set price: insurance against a fall in prices.
- Electronic warehouse receipts: produce stored in a WDRA-registered warehouse can be sold or pledged for a loan without moving it.
- Spot, forward and contract farming: electronic spot and forward markets, and agreements that fix a price between growers and buyers before sowing.
- Agricultural price indices: indices such as NCDEX's agricultural index track a basket of crops in one number.
Good to know: since December 2021, SEBI has suspended new futures in several crops, including wheat, chana, mustard, the soybean complex, crude palm oil, moong and non-basmati paddy. Check the exchange for what is open today.
How farmers use these markets
- Price discovery: exchange prices show what the market expects at harvest, before a single bag reaches the mandi.
- Hedging: locking in a price before harvest, often together through a Farmer Producer Organisation (FPO).
- Timing sales: storing produce against a warehouse receipt instead of selling at harvest-time lows.