Warehousing firms to purchase crop from farmers directly

July 31, 2020: Named as ‘Surakshit Mandi’, the company sent teams to villages daily in a 10-km radius where the warehouse is located to make farmers aware of the alternative platform.

Taking advantage of the three major agriculture reforms implemented by the government, integrated warehousing companies are planning to foray into direct purchase from farmers by facilitating their premises for buying-selling of crops. With a little more support from the government, warehouses can become effective alternative market yards of mandis in the post-reform era.

“A pilot project at Kota and Sri Ganganagar in Rajasthan was launched in May after the government allowed direct purchase from farmers amid the lockdown restrictions. Nearly 100 tonne of barley, wheat and chana were sold through our warehouses,” said Siraj Chaudhry, CEO of NCML, which is managing warehouses across the country having 1.5 million tonne capacity. The company will expand the operation to other states like Andhra Pradesh and Gujarat when kharif harvests will start coming from October, Chaudhry said.

Named as ‘Surakshit Mandi’, the company sent teams to villages daily in a 10-km radius where the warehouse is located to make farmers aware of the alternative platform. Most of the farmers surrounding the warehouses sold their wheat to government agencies to avail the benefit of minimum support price (MSP), which was higher than prevailing market rates. Due to Covid-19 restrictions and rules on social distancing, the government had opened up a large number of wheat procurement centres, this year.

The advantages of warehouse to function as market yard, compared to a mandi, include protection of the unsold produce for the farmers and more participation of traders due to quality guarantee issue. “When farmers brought their produce, it was suitably assayed, graded and listed for e-auction on the groups’ electronic platform — mktyard.com. Farmers acceptance was taken basis the bids received online, and the money was deposited into the farmers account on the very same day,” Chaudhry said.

The Centre during first week of April had allowed farmers to sell their produce at government-accredited warehouses on its electronic national agriculture market (e-NAM) platform to make it more convenient and help cut middlemen in the agri-value chain while reducing the monopoly of the mandi system. Some government incentives to farmers to keep their unsold inventory at warehouses will be a big boost for agriculture trading from these premises, experts said.

Later in first week of June, the government promulgated three separate Ordinances to usher in the reforms in agriculture marketing and commodities as part of the economic package to counter Covid-19 pandemic. The ordinances amended the Essential Commodities Act and brought in two new Central laws on barrier-free inter-state trading of farm goods and contract farming. The changes to the EC Act removed cereals, edible oil, oil seeds, pulses, onions and potato from its purview from the draconian stock holding norms.

Source: Financial Express