fap_ empowering small & marginal farmers_21!10!11

8/2/2019 FAP_ Empowering Small & Marginal Farmers_21!10!11

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EMPOWERING SMALL & MARGINALFARMERS THROUGHTRANSPARENT MARKET MECHANISM

TM

Umang B. Patel | National Spot Exchange Limited


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PRINCIPAL OF THETRANSPARENT MARKET

MECHANISM Efficient Providing equal opportunity to both buyers and

sellers

Leading to Efficient Price Discovery

Transparent

Electronic Screen providing Bid & Ask visibleacross the country

Neutral

Should be neutral to Buyer & Seller

Shouldnt be tilted in the interest of Buyer

who are better Organized

Have much more Information & Money power

TM


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Enable Backward & Forward Linkages

Well connected with large number of Buyers &Sellers

Providing Performance Guarantee toCounter Parties

Elimination of followings:

Credit Risk, Grade & Quality Risk

Delivery & Payment Risk

Making physical trade seamless

PRINCIPAL OF THETRANSPARENT MARKET

MECHANISM


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MAJOR ISSUES FACED BY

SMALL & MARGINAL FARMERS

Lack of Bargaining Power

Lack of Holding Capacity

Lack of Alternative Market Platform

Dependent upon Local APMC Traders only Lack of Adequate Price Information

Lack of Institutional Marketing Support

Indian Farmers get 30%-40% of the price

paid by the End User in a number ofproducts

As against 60%-65% in Developed Countries

High Cost of Intermediation

Multiple Market Intermediaries


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COMMODITY VALUE CHAIN(FOR AGRICULTURAL PRODUCE IN INDIA)


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TMA SCHEMATIC REPRESENTATION OF

COMMODITY VALUE CHAIN(IN INDIA & USA)


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HOW TO EMPOWER SMALL &

MARGINAL FARMERS?? By providing better Price Realization of their

Farm Produce By providing access to Pan India Electronic Spot

Market

Where, he can sell his produce, even if it is just1(one) bag

By providing better Bargaining & NegotiationPower To prevent Distress Selling

By Providing latest Price Information ruling atvarious centers

By providing Comparable & Actionable PriceInformation Where, When & Whether to sell can be decided

in advance


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To develop a Common Indian Market, bysetting up a national level electronic spotmarket and providing a state of art trading,

delivery and settlement facilities in variouscommodities, which can be accessed fromacross the country.

MISSIMISSI

ONON

PROMOTPROMOT

ERSERS


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CORE COMPETENCIES|

NSEL Electronic Spot Trading Facility

Multiple Commodities

Specific Delivery Centers

Standardization of Commodities Scientific Sampling & Testing

Grading & Quality Certification

Facilitating Collateral Financing & Borrowingagainst Warehouse Receipt

Customized Service

Scientific Packaging & Storage

Transportation

Logistic Handling & Shipment


10/23

TM NSEL BUSINESS PRACTICESFOR SMALL & MARGINAL

FARMERS Trade execution through Spot Exchange Compulsory Delivery based on defined contracts

No Futures or Speculative trading

The minimum trading lot is 1 bag, which helpsthe small farmers to sell their produce on thispan India market, even if he has marketablesurplus of only 3-4 bags.

Farmer is entitled to quote Selling Price

No such entitlement is allowed in APMC Auction

No further cost burden on Farmer regarding

Registration Cost

Unloading & Weighing Charges

Sampling, Testing & Grading cost


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TM NSEL BUSINESS PRACTICESFOR SMALL & MARGINAL

FARMERS Get Cash Payment on the Same Day of Trading(T+0)

If Current Price is unfavorable

Farmer can hold his Farm Produce in NSELWarehouse

Entitled to avail a Bank Loan against WarehouseReceipt

Get informed about Current Market Rate

By SMS Facility Intensity 2(two) times a day


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NSEL - THE PROCESS

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TERMINAL OF NSEL

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WHY FARMER REALIZE BETTER

PRICE ON NSEL THAN APMC

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In APMC auction, farmer has to bear theexpenses of Labor, Unloading and Weighingcharges

In case of NSEL, no such expenses are

payable by the Farmer

Buyer pays higher price on NSEL

Standardized Quality & Graded Commodity

Saves Brokerage cost, Commission & other

intermediary charges The net impact of all these saving is a benefit of

at least 3%-6% increase in Farmers PriceRealization


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NSEL - FARMERS CONTRACTS

State Commodi

ty

Location

Bihar Maize Maheshkhoont

Gujarat Castor SeedChandisar, Jagana,Kadi, Palanpur,Panthawada , Patan,Sidhpur, Visnagar,

Lakhani, Iqbalgadh,Dhanera, Bhabhar,Deesa

Groundnut Maliya Hatina

Karnataka Arecanut Channagiri, Shimoga

Chana Gadag

MP Soyabean Ganj Basoda, Vidisha

Maharashtra

Chana Osmanabad

Maize Jalgaon

Soyabean Jalgoan, Nandurbar

Raw Cotton Jalgaon

Orissa Maize Umarkote

Rajasthan Barley Chomu, Jaipur, Sikar,

SrimadhopurSo abean Kota


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VOLUME CONTRIBUTIONCastor

seed

Volume (In MT)

Platform January February March April May June Total

NSEL* 2771.48 5091.53 2370.60 3613.95 5516.93 2752.95 25472.85

RespectiveAPMC**

16371.50

21120.80

29592.20

59857.40

58506.40

47738.40

233186.70

Contribution(%)

16.93 24.11 8.01 6.04 9.43 5.77 10.92NSEL DeliveryCenters*

RespectiveAPMCs**

Palanpur Palanpur

Chandisar

Jagana

Kadi Kadi

Panthawada Panthawada

Patan Patan

NSEL DeliveryCenters*

RespectiveAPMCs**

Sidhpur Sidhpur

Visnagar Visnagar

Deesa & Lakhani Deesa

Iqbalgadh

Dhanera Dhanera

Bhabhar Bhabhar

TM

Sources:www.agmarknet.nic.in, www.nationalspotexchang

FARMERS CONTRACT
http://www.agmarknet.nic.in/http://www.nationalspotexchange.com/http://www.nationalspotexchange.com/http://www.agmarknet.nic.in/http://www.nationalspotexchange.com/


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FARMERS CONTRACT

PERFORMANCECASTOR

SEEDSr. No. Year 2011

MonthVolume (InMT)

Turnover (InCr.)

1 January 2771.48 12.69

2 February 5091.53 27.73

3 March 2370.60 12.45

4 April 3613.95 17.83

5 May 5516.93 26.20

6 June 2752.95 12.42

7 July 1543.95 7.138 August 837.60 4.15

9 September 973.88 4.54

Total 25,472.85 125.12

TM

Farmers Enrolled till now: 70,000 (approx.)
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IMPACT ANALYSIS

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http://www.nationalspotexchange.com/http://www.nationalspotexchange.com/


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IMPACT ANALYSIS


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NSEL


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NSEL

WAREHOUSE RECEIPT

FINANCING

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Depositing thecommodity

Getting theLoan

Commodity Pricescan be visible anddecision taken forthe selling or hold

Issuing

WR

SubmittingWR

ADVANTAGES TO FARMERS BY
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TM ADVANTAGES TO FARMERS BY

TRANSPARENT MARKET

MECHANISM No More Price Taker, Enabled to Quote SellingPrice

Increase Holding Power due to WarehouseReceipt Finance

Price Dissemination, Thoughtful Selling Decision

Farmer able to drive Off Season Price Premium

Get to know other centers prices easily onterminal

Reduction in Intermediation Cost High PriceRealization

Standardized Quality Maintenance ofCommodities

Sampling/Lab Testing, Grading, Quality
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fap_ empowering small & marginal farmers_21!10!11

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