Derivatives For Farmer Welfare

Harsh and I have co-authored a piece on using financial derivatives for replacing the minimum support price (MSP) system for farmer welfare:

With reduced risk thanks to commodity options, there will also be less of a need to keep crop inventories as buffer stocks. Farmers will be able to increase their incomes rather than forcefully smoothing production for consumption. Moreover, by not coercing farmers to sub-optimally diversify into different crops and different plots, agricultural productivity would increase and more land could be reforested, providing significant cumulative environmental benefits.

More here.