Technology bug bites farmers in Punjab

It is helping them to keep them informed of latest farm-related developments. These days, farmers in small places like Mullanpur, Jalalabad and Jagraon near Ludhiana; and Ajnala, Taran Taran, and Mannawala near Amritsar log in the PC to do something unusual""browse the net and check the price at which the commodities were being traded in the international market.

There has been a sea change in the way business is done in the semi-rural areas in some of the small towns.

They sort through their e-mails to see if an analyst has sent a note on the reasons for the price movement on the exchange, and any suggestions as to what to buy and when to sell.

At the same time, farmers and traders of guar seed, mentha oil, urad, chana, wheat and cotton in nearby towns are also studying global price trends in their respective commodities on computers.

Internet services are becoming cheaper and technology is bringing about a sea change in the way business is done in semi-rural areas in Punjab, especially as commodity trading becomes a rage.

"Information like changes in tax structure and their impact on traders helps us get an insight into the US and other Asian markets, including that of China", says Arun Kumar, a Mullanpur-based trader, who has got a dial-up connection at home.

Kumar gets all the services from analysts free of cost, which he further passes on to farmers in the language understandable by them. The analysis is sent by various agencies as soon as the exchange in other countries closes.

Since the price movement in these exchanges affects prices in the local market, these analyses and price movement charts are in much demand even in these small trading centres. Computer has brought the world of trade to his home.

Dinesh Joshi, manager, operations, Ludhiana Stock Exchange Commodities Trading Services Ltd, says, "Detailed analysis enables a trader to maximise his returns. with the click of a button they become a part of the global market. There is a daily volume of around Rs 120-150 crore in commodities in and around the Ludhiana only. Besides agri commodities, huge volumes come from gold, silver and crude trading. The analysis on cotton trading benefits a large number of farmers in Abohar. Last year, prices of cotton had gone down markedly due to the demand-supply mismatch."

"Moreover, as compared to equities, there are very less margin payments that are required to be paid for trading in commodity market. This is coupled with the fact that farmers do not have the requisite knowledge to understand the complexities of financials of companies as compared to commodities. Seeing the huge potential of online commodity trading, many players in the region are now eyeing commodities trading as the next big thing and have started expanding their wings in this direction, including us," added Gaurav Joshi, Commodities Head at Vikson Finance and Investments, Chandigarh.

"With an introduction of detailed analysis, everybody has an opportunity to be updated and become aware of the developments," says another trader, who could not complete his graduation.

Dinesh further says that due to high cost of transportation, farmers could not take the maximum benefit out of this. Once the warehouses are set up in all the cities of Punjab for the use of commodity warehousing, it will reduce the transportation cost, benefiting farmers substantially.

"There are other issues also like different taxation policies in different states. However, due to trading facilities, the farmers are getting the benefit of live current market rates. They pressurise the buyer for selling at genuine market rates. Not only farmers, but even consumers and traders are benefiting by hedging and arbitraging. Many brokerage houses are planning to source the detailed analysis from international markets. They would be delivering the market updates in local languages to traders, says a broker," he adds.