Atharva Manohar Desai

Since 1990, Maharashtra State Agricultural Marketing Board (MSAMB) has successfully supported a Pledge Loan Scheme operated by selected APMCs. Under this scheme, farmers obtain loans to the extent of 50-75% of the value of the commodity they store in APMC godowns. These loans are provided by APMC using funds provided by MSAMB. The APMCs participating in this program have a 100% repayment rate on loans made under this program. However, limited funds available with MSAMB for this activity have limited the number of farmers who are able to benefit from this service provided by APMC. Hence, the project proposes to enhance access to this service by facilitating the expansion of the warehouse receipt financing for farmers through selected godowns of Maharashtra State Warehousing Corporation (MSWC). The scope would increase further with the Warehousing Act of 2007 which allows private godowns getting accredited for warehouse receipt through financial institutions.

This sub-component aims to improve access to price risk management services for farmers. Availability of finance against stored produce and improved knowledge on price risk management allows farmers and farmers’ organizations to obtain better price realization for their produce.

In addition, trading through Electronic Commodity Exchange provides an alternative marketing channel, which increases potential for better price realization. With the amendment of the APMC Act in Maharashtra, establishment of Electronic Spot Markets that allow online trading trough electronic commodity exchanges (outside APMCs and across state boundaries) have become possible. The National Commodity and Derivative Exchange Limited (NCDEX), the Multi Commodity Exchange Limited (MCX), and National Spot Exchange Limited (NSEL), three national commodities exchanges, are in process of setting up systems that make this feasible in Maharashtra. Hence, the project proposes:

• To build capacity of farmers on price risk management for Cereals and Pulses PAs, and the associated PGs,
• To support a pilot activity that will provide access to trading through Commodity Exchanges for farmers, and,
• In parallel, work in partnership with the MSWC to support the emergence of this new trading conduit through capacity building, upgrading of Godowns and facilitating access to trading screens.

• Maharashtra is a leading producer of fruits, vegetables and flowers. The production of fruits in Maharashtra stood at 100.54 Lakh MT and that of vegetables at 77.29 Lakh MT in the year 2008-09. The state has strength in production of grapes, mangoes, banana, pomegranate, oranges, tomato, and onion. Though the production of these fruits and vegetables has increased many folds, poor post harvest practices are followed leading to substantial loss in value of these commodities.
• Similarly, Maharashtra is also a major cereals and pulses producer. The total production of cereals, pulses and oilseeds was 161.18 Lakh MT in the year 2008-09. Inadequate availability of post harvest facilities at the village level also leads to loss to cereals and pulses producers. Graded product will bring additional return to producers due to value addition.
• These constraints affect the income of the farmer, mainly due to inadequate post harvest handling facilities at village level. In order to address these issues and to provide village level basic infrastructure for post harvest handling like cleaning and grading of food grains and cleaning, grading, packing of fruits and vegetables in more hygienic conditions, it is proposed to establish the Farmers’ Common Service Centers (FCSCs) by the Producers’ Associations (PAs) formed by the Producer Groups (PGs) of the farmers or by producers.
• Group Activity is more effective for the benefit of the members of the group than the individual efforts. Informally formed small groups called as self help groups have exhibited their strengths in various fields including agriculture, in improving financial conditions of the members.
• FCSCs are conceived as small scale commercially viable entities owned by PAs. The FCSCs will support 250-300 members, through Producer Groups (similar to SHGs) of around 12-19 active members in each Producer Groups (PGs). The FCSC will mainly deliver some basic value added activities, in grain and horticulture and carry out input marketing and output marketing. This would involve supply of inputs like seeds, fertilizers, manures, pesticides, cattle feed to the members & farmers and also aggregation of produce, its cleaning, grading and marketing.
• Around 15-20 PGs will be formed in a village or a group of villages within the radius of 3-5 Kms. These PGs will be federated in to a PA which will be registered under the Society Registration Act, 1860 with the Charity Commissioner to have the legal status / other suitable Acts. While forming PAs, the existing groups eligible for inclusion in PA will be considered besides the new groups to be formed. The inclusion of existing PGs in formation of FCSC should have at least 12-19 active members, the working of the group should have been stabilized and it is functioning regularly and it should be willing to join FCSC and share the responsibility of contribution for the FCSC infrastructure.

The planned development of Virtual Market is innovative and experimental. Virtual Markets for agricultural products are very much in their infancy but with new technological development, field results are undergoing significant revision and refinement. There will be a three-phase program which will as follows.

• Explore options
• Pilot systems and finally
• Deliver an integrated e-platform within the MSAMB web site with the capacity to disseminate offers, buying enquiries and prices via local language SMS.

• Formation of farmers groups which will perform the activity of aggregation of their produce,
• Value addition to the produce
• Warehouse receipts development
• Selling of produce at the Rural Haats
• Providing e- marketing platforms for trade of agricultural produce.