The State government has decided to set up a Special Purpose Vehicle (SPV) — a joint venture between the government and NCDEX Spot Exchange Ltd. (NSPOT) — to help producer-seller to secure the best price for commodities at agricultural produce marketing committees (APMCs).
The SPV will be set up with a share capital of Rs. 10 crore, which will be shared equally between the government and NSPOT. The SPV will be registered under the Companies Act, 1956.
G.V. Krishna Rau, Principal Secretary, Cooperation Department, told The Hindu that the State Cabinet had approved the proposal to establish the SPV. The SPV would enable the government to implement the Karnataka Agricultural Marketing Policy 2013, unveiled in September.
The SPV would bring in competition, enhance capacity building, and usher in an era of single unified licence market in the State. NSPOT would provide a fully functional electronic platform to enable the SPV to carry on with the information technology-related activities.
“The partner (NSPOT) will provide the expertise in online trading, material accounting, document management, fund processing, trade fulfilment process and other activities with the government mandate,” Mr. Rao said.
The core business of the SPV would be to provide the unified market platform to APMCs and integrate existing primary markets to create a Statewide market for farm produce and other products. There were 155 APMCs and all markets would be covered under the SPV in a phased manner, he said.
The SPV was likely to be launched on Republic Day next.
The SPV would provide dispute resolution process for settling disputes involving farmers, buyers and commission agents in respect of quality of produce. It would provide price information to farmers to enable them to take an informed decision on selling their produce, said Manoj R., Additional Secretary of the Cooperation Department, who drafted the Agricultural Marketing Policy.
The SPV would integrate weighing of the produce with auction, so that recording of weight could be done against the respective lot number without any manual intervention. The amount payable/receivable would be communicated to the buyer/seller as soon as the weight was recorded in the system.
Officials said that payment to farmers would be done directly after collecting the amount from the buyer. It would set up enough safeguards to ensure timely payment to the farmer and provide appropriate compensation mechanisms linked to the margin money deposits.
The new system would reduce the role of middlemen and unfair trade practices. The SPV would draw up test parameters and the testing process for every commodity by roping in reputed firms.
Mr. Rao said that besides a web interface for stakeholders, the SPV would provide automated generation of sales invoices by commission agents, cess accounting, collection and reconciliation and filing of returns.