SMART JOURNAL OF BUSINESS MANAGEMENT STUDIES VOL. 19 NO. 2 PAPER 7
10.5958/2321-2012.2023.00017.9
PERCEPTION AND EXPERIENCE OF THE FARMERS IN COMMODITY FUTURES TRADING - A STUDY
 
M. Lethesh* and C. Viswanatha Reddy**
*    Research Scholar (Ph.D.,), Dept. of Business Management, Rayalaseema University, Kurnool, India.
**    Professor & Head, Dept. of Business Management Rayalaseema University, Kurnool-518 007, (A.P.)
Over the past years, the farmers have experienced the risk related to their income because of the volatility of the prices of the agricultural commodities. In spite of several efforts by the Government, there is no improvement in their condition. Due to lack of knowledge about the advantages of price discovery and price risk management, they are unable to adopt the alternative strategies like hedging in futures markets. Against this backdrop, this paper intends to spot the factors influencing the farmersí participation and overall experience in futures trading. Based on survey data, four factors were extracted and they could explain 74.09 per cent of the variation. The effect of the four extracted factors on overall experience of the farmers in futures trading, was tested through multiple regression analysis. With respect to each extracted factor, the influence of the individual variable on overall experience of the farmers, was also measured through multiple regression analysis. The study found that nine out of seventeen variables indicated significant positive, impact while four variables did not record any significant positive impact on farmers overall experience in futures trading. The study concluded that the outcome of the study would be helpful to the farmers, to take decisions regarding timing of selling their farm produces, physical delivery, etc., and to safeguard themselves from the price related risk.
 
KEYWORDS: Agricultural Commodities, Price Risk Management, Futures Market, Farmersí Perception, Level of Awareness and Overall Experience in Futures Trading JEL CLASSIFICATIONS: C21, C38, G13, G18, O13 and Q13 FULL TEXT