Inception of Agri-Derivatives Market for Protecting the Farmers of Bangladesh from Price Risk: A Chattogram Perspective

Abstract

This study aims to explore the necessity of developing agricultural commodity derivatives market in Bangladesh, a South Asian country, where fluctuation in price of essential agricultural commodities has become a regular phenomenon. No market mechanism is there by which farmers can get protection against the risk arising from price fluctuation in the country. As such, frequent loss incurred from such adverse price movement is de-motivating many of them to switch their profession. In this study data from both sources, primary and secondary, has been used. Primary data has been collected through the use of structured questionnaire and has been analyzed through descriptive statistics. The study reveals that with an opportunity of prefixing the price during the time of cultivation almost all of the respondents expect that they would not worry regarding a price decline, would be able to recover their production cost, would get their expected level of price, would be able to ensure fair price and predict the price they would get after harvesting more accurately. This implies that they desires for a market mechanism through which they would be able to get protection against the decline in price and it is the agricultural derivatives market that can fulfill their desire well. This study would help the policy makers and expect to inspire them to conduct a survey at large scale so that proper steps can be taken for the successful inception of agricultural derivatives market in the country that would benefit the farmers of the country.