A price protection scheme launched jointly by NABARD and National Commodities and Derivatives Exchange (NCDEX) a year ago has started helping farmers, especially turmeric cultivators, manage price volatility by participating in options trading in the derivatives market.
Under the scheme, NABARD provides subsidy on put option premium for farmer-producer organizations (FPOs) in seven states. The crops covered under the scheme are turmeric, cumin (cumin) and coriander (dhania).
FPOs, Small Farmers Agri Business Consortium, National Cooperative Development Corporation, NAFED, State Rural Livelihood Missions and cooperative societies promoted by NABARD have been made eligible organizations. It has been launched in Andhra Pradesh, Gujarat, Madhya Pradesh, Maharashtra, Rajasthan, Telangana and Karnataka.
first stage
In the first phase, 80 FPOs and 1.34 lakh farmers have been covered under the scheme, with 6,544 tonnes of produce hedged. But Rashtronati Farmer Producer Company in Maharashtra’s Washim district achieved a turnover of ₹1 crore in the first nine months of the current financial year.
According to NCDEX sources, FPOs participating in the scheme gained ₹6.31 crore from the Minimum Price Insured during January-March 2025, indicating early evidence of income protection and better market decision making.
Notably, hedging of FPOs has helped the price of the golden spice hit five-year highs on the spot market and the National Commodities and Derivatives Exchange (NCDEX).
turmeric prices
Currently, turmeric prices are around ₹14,355.05 per quintal, up from ₹10,689.02 a year ago. Turmeric April contract on NCDEX is trading at ₹15,090 per quintal. In December 2025, the April futures had risen to ₹17,000.
Turmeric prices have risen as its production was lower than the initial estimate of 12.04 lakh tonnes in 2024-25. In the third advance estimate of the Agriculture Ministry, it has been estimated at 11.48 lakh tonnes. During 2025-26, production is estimated to be around 11.4 lakh tonnes.
Low supply and strong demand from exports and pharmaceuticals are the reasons for prices to remain at these levels.
Ganesh Govinda Mahale, CEO of Rashtronati Farmer Producer Company in Washim district of Maharashtra told business Line That his organization had hedged 30 tonnes of turmeric under a price protection scheme.
increasing participation
“We sold 150 more in the spot market and made good profits,” he said. Rashtronnati, which has a paid-up capital of ₹9.75 lakh, has 900 members, including 180 women. Members grow turmeric in 500 acres.
Rashtronati’s turnover in the financial year 2024-25 was ₹58 lakh, of which ₹27 lakh came from turmeric. Then this year the turnover increased rapidly and it became ₹1 crore.
“This option has been possible due to increased participation of farmers in trade and better market connectivity,” Mahale said.
Under the scheme, FPOs fix the floor price through strike options (strike price minus premium), thereby getting a guaranteed minimum price for their produce. This assurance allows them to make marketing and sales decisions with confidence, knowing that their downside risks are protected.
keeping a close eye on the markets
NCDEX sources said the scheme has mandated FPOs to closely monitor futures and spot price movements. In turmeric and cumin, FPOs proactively closed positions when prices were favourable, thereby maximizing returns rather than waiting for expiry and letting it go.
Basically, the FPO adopted a strike option by offering to sell at a price that they felt was profitable for them. When a buyer does not exercise an option due to a drop in price, they get compensated for it.
If prices rise above the strike rate, FPOs give up the premium and sell the produce at a higher price in the open market.
According to NCDEX sources, more than 150 awareness and training programs were conducted on option pricing, expiration strategies, purchase and delivery planning. Agriculture Sector Development Department of NABARD facilitated and integrated the FPOs.
NCDEX sources said wider participation of institutions like FPOs in commodity derivatives and structured hedging could play a role in stabilizing farm incomes.
The price protection scheme can change the present scenario in which farmers, who are price takers, have to settle for lower prices during the peak arrival season. NCDEX sources said this is because they lack protective tools like options trading.
Despite efforts, FPOs still face barriers ranging from awareness gaps to cost. The silver lining is that 28 FPOs arranged margin for futures transfers – a testament to their growing confidence in the market.
Published on February 15, 2026
