Farmer co-operatives have started acting as an aggregator for trading in agri products on spot commodity exchanges. Experts believe, this would lead to farmers’ direct entry into derivative exchanges, which has been a real challenge for government and commodity exchanges so far.
Aggregators are those who procure agri commodity from farmers at higher than prevailing market price and sell with profits through online registered exchanges.
Recently, the Haryana State Cooperative Supply and Marketing Federation (Hafed) signed a memorandum of understanding (MoU) with the National Spot Exchange (NSEL) for selling 33,000 tonnes of pearl millet (bajra) through online spot trading platform. NSEL managed to sell about 15 per cent of the allotted quantity through open auctions. The exchange hopes to sell rest of the quantity also soon.
Bajra sold through NSEL was initially procured by Hafed on behalf of Food Corporation of India (FCI). Since the foodgrain was of inferior quality compared to FCI-specified norms, the latter refused to lift it. Hafed which has about 1.5 million farmers associated with it, then opted to sell through online spot exchange to fetch money they spent on the procurement.
“This attempt by Hafed may lead other farmer co-operatives to tie-up with spot and future exchanges to bring farmers directly to online trading platform which has been challenging since the re-launch of futures trading in commodities in 2003. But, for that other cooperatives will need to take proactive measures just like Hafed and Nafed. This will bring growth to the bottom of the pyramid, that is rural India,” said Anjani Sinha, managing director of NSEL.
