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A national agricultural produce marketing committee (APMC) is in the works, under the National Commodity & Derivatives Exchange (NCDEX) Spot Exchange, a subsidiary of NCDEX.
NCDEX Spot Exchange, India’s only e-spot market, has linked 35 APMCs, or mandis, in Karnataka electronically. Through this, a farmer or trader under a mandi can trade in any of the linked mandis through an electronic platform developed by NCDEX Spot Exchange and the Karnataka government.
“We plan to link all major mandis in the state, with an annual trading turnover of Rs 30,000 crore, within the next two years, using the unified market platform,” said Samir Shah, managing director & chief executive of NCDEX. The spot exchange has received proposals in this regard from Telangana, Andhra Pradesh and Tamil Nadu. Through this programme, states like Gujarat, Haryana and Maharashtra have started procuring agricultural commodities for food-safety schemes.
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Shah plans to convert the e-market venture into a national electronic market platform, linking APMCs across the country. There are 630 major APMCs in India; including smaller mandis, the number comes to about 7,500.
Farmers across many states have to transact only through government-designated APMCs, with licensed entities.
The Economic Survey presented by the National Democratic Alliance government in July had proposed to create a “conducive environment for a competitive national market for food… Parliament can make a law for a national market. This law can override state APMC laws and restrictions that have been placed on farmers’ right to sell food within and outside the state”.
Under the proposed law, APMCs will become one of the many trading avenues.
The NCDEX Spot Exchange, which clocked a turnover of about Rs 10,300 crore in 2013-14, is likely to record a turnover of Rs 25,000 crore this financial year. The exchange started recording an operating profit from 2013-14, delivering goods worth about Rs 12,000 crore. “We would like to see annual delivery volume of Rs 50, 000 crore in the next two years,” said Shah. About Rs 35 crore had already been invested in this venture, he said, adding capital requirement in the near future was expected to be met through internal accruals.
An electronic market offers many facilities and market infrastructure, including scientific warehouses, assaying and grading of commodities, collateral and finance facilities and a transparent, electronic trading platform. Even this company has started financing farmers who deposits commodities in the warehouse recognized by the e-market and banks with whom it has tied up funds them and in case farmers sale directly they can be given spot payment with the help of these banks which means farmers are no more dependent on middlemen.
