"We are setting up a special purpose vehicle (SPV) with National Commodity and Derivatives Exchange (NCDEX) Spot Exchange Ltd to help farmers secure best price for their produce through a transparent auction process," state Development Commissioner G.V. Krishna Rau told IANS here.
As part of the state's agricultural marketing policy 2013, touted to be the first in the country, the SPV will rationalise market practices, grade the produce and provide warehouse-based sales in market yards for efficient price discovery.
"The SPV will modernise the agricultural produce market committees (APMCs) across the state for holding electronic auctions, grade the produce and arrange direct payment to farmers as in advanced markets," Rau said.
In the initial phase, major commodities and markets will be covered followed by smaller markets across the state and link their participants to the national market for reducing payment default risk, which is common in the absence of transparent auctions.
"The SPV will facilitate warehousing, bank financing for stored produce and other facilities. We will first focus on grains and cereals and extend the project to fruits and vegetables," Rau said.
As a joint venture with equal shareholding between the state government and the spot exchange, the SPV will incorporate other associated institutions for broad-basing its operations.
The spot exchange is a subsidiary of the country's premier commodity exchange (NCDEX) for farm products.
--IANS (Posted on 25-12-2013)