Use e-auction to procure agri commodities: Govt to states

Govt adopting all routes possible to take states on board for mandi linking program

The central government has written to all state governments to opt, where possible, for e-auctions to procure agricultural commodities. This was done a few days before the Union Budget was presented. This is part of a plan to get going in a national common market for agri products, linking all the wholesale markets run by Agricultural Produce Marketing Committees (APMCs).

According to the official Economic Survey for 2014-15, there are 2,477 principal regulated markets based on geography (the APMCs) and 4,843 sub-market yards regulated by the APMCs. The Centre aims to link all these, to create one market.

The first step has been to get each state to change its APMC law, to allow private market yards or markets. Some states have denotified fruit and vegetables from their Act. This is not considered enough and the recommendation on e-auction is the next step. Half a dozen states have begun procuring sugar for public distribution by using the e-auction facilities provided by NCDEX E-Markets (NEML), a subsidiary of the National Commodities and Derivatives Exchange (NCDEX).

The Centre has lauded NCDEX’s mandi modernisation programme (MMP), under which all APMCs of Karnataka have already been linked electronically and farmers get one state price for commodities traded on this common platform. The Survey said in Karnataka, 51 of the 155 main market yards and 354 sub-yards have been integrated into a single licensing system. Rashtriya e-market Services, a joint venture created by the state government and NCDEX Spot Exchange, offers automated auction and post auction facilities (weighting, invoicing, market fee collection, accounting), assaying facilities in the markets, facilitation of warehouse-based sale of produce, commodity funding and price dissemination NCDEX is also implementing a Unified Market Platform, whereby all mandis in the state are being unified for single trading. Apart from Karnataka, it has started unifying mandis in Telangana and Andhra Pradesh. Among other states in discussion with NEML are Punjab, Haryana and UP.

NCDEX has also launched forward trading in several agricultural commodities, such as castor seed, cumin, maize and sugar. Says Samir Shah, managing director of NCDEX, “Exchange-traded forwards available on the national online platform of NCDEX plug in the missing link in the organised commodity value chain. The exchange has started a membership drive specially for farmer producer organisations, through which farmers can sell their produce directly on the NCDEX forwards segment. There are lakhs of physical traders who buy commodities from APMC markets nationwide. The forwards segment provides them an alternative platform to sell these.”