AP Markfed business set to touch Rs 400 crore this fiscal

Buoyed by a record procurement of maize to the tune of 2.89 lakh tonnes through a strong village-level marketing organisational network formed by the self-help groups under the Indira Kranthi Patham (IKP) and a record sale of about 2.4 lakh tonnes of fertilisers through the primary agricultural cooperative societies (PACS), the once loss-making Andhra Pradesh State Cooperative Marketing Federation Limited (AP Markfed) is confident of wiping out the losses accumulated over the years and making a record business of Rs 400 crore this fiscal.

Speaking to Business Standard, M T Krishna Babu, managing director, AP Markfed, said, "Markfed has done a business of Rs 340 crore till now. We expect to make a net profit of Rs 4 crore by the end of this fiscal, wiping out backlogs to the tune of Rs 2.5 crore."

The federation has been underperforming for the past few years. While it registered a loss of Rs 4.25 crore in 2002-03, the loss in the succeeding fiscal 2003-04 stood at Rs 3.72 crore. With the proactive role of the federation through effective market interventions, last fiscal saw the total business of the federation shoot up to Rs 282 crore and end up at an operating profit of Rs 1.2 crore.

Earlier this year, Markfed had come out with a unique initiative to procure maize through the establishment of 286 more centres across 134 mandals in seven major maize-growing districts of Karimnagar, Nizamabad, Adilabad, Medak, Mahabubnagar, Warangal and Ranga Reddy.

Highlighting the strength of the marketing network created at the village level, Krishna Babu said, "Of the total 2.89 lakh tonnes procured so far, 1.69 lakh tonnes was procured by village organisations (VOs) alone. There are 29 VOs who procured 1,000 tonnes, a major achievement for them while 120 VOs procured 500 tonnes." Markfed plans to procure 75,000 tonnes more maize that takes the total procurement to about Rs 3.8 lakh tonnes.

Enthused by the success of the marketing network, Krishna Babu said, "we will extend it to other commodities such as coarse cereals, pulses and commercial crops and also across the state in future."

AP Markfed deals in procurement of four coarse cereals "� maize, bajra, jowar and ragi "� and four pulses "� red gram, green gram, black gram and channa "� at minimum stipulated price (MSP) on behalf of National Agricultural Cooperative Marketing Federation of India Limited (Nafed). The federation also deals in commercial crops such as turmeric, chilli, rajma and tamarind.

The record sale of fertilisers this fiscal was an all-time high for Markfed. Explaining this Babu said, "During 2001-02 when the state had a good monsoon spell, the sale was just about 13,000 tonnes.

This year too, a good monsoon had seen a spurt in the sale of fertilisers, and we could scale up our sale to 2.4 lakh tonnes." Markfed expects to sell 25,000 tonnes more in the coming months.

"The record sale can be attributed to two things "� the aggregation of the demand for fertilisers by the VOs and being able to bear the lorry freight and selling at much lower than the MRP," he said. While the price per bag was Rs 250.80, Markfed could supply it to farmers at Rs 242.50, incurring freight charges as low as Rs 20 per tonne. Last year, the federation sold about 1 lakh tonnes of fertilisers while in the fiscal prior to it, it was 40,000 tonnes.

Markfed has also procured about 39,500 tonnes of chilli since last year and distributed about 34,000 tonnes through retail trading, supply to government institutions, public distribution system, open auctions and supply to Kerala.

The federation has supplied about 3,000 tonnes of chilli to cooperatives in Kerala in the last seven months, Babu said. "We are also doing a three-month future contract trading for about 50 tonnes of chilli on the NCDEX," he added.

The federation plans to scale up operations in the coming months by extending its village-level marketing network all over the state.