With the Centre still grappling with the idea of a pan-Indian electronic marketing platform for agricultural produce which could ensure better price realisation for the farmers, 26 state dairy cooperatives have shown the way: dairy commodities such as butter, skimmed milk power (SMP) and ghee have been traded on an electronic platform created by them since June last year.
The platform has ensured quicker settlement of transaction. The cooperatives, including Gujarat Cooperative Milk Marketing Federation (AMUL), Karnataka Cooperative Milk Producers’ Federation (Nandini) and Bihar State Milk Cooperative Federation (Sudha), earlier used to sell their produce to bulk buyers by issuing time-consuming tenders, thus exposing them to volatility in commodity prices.
The platform promoted by National Dairy Development Board in collaboration with National Cooperative Dairy Federation of India (NCDFI) conducts weekly e-auction where cooperatives sell their produce to big private players, including ITC Foods, Britannia Industries, Vadilal industries, Patanjali etc.
Since the launch of NCDFI eMarket here in June last year, more than R270 crore worth of trade has already taken place. According to KC Supekar, managing director of NCDFI, more than 220 buyers have been registered in the exchange which is expected to increase once the digital platform starts trading on commodities such as sugar, cattle feed etc, through this platform. Around 15,000 tonne of butter, SMP and ghee have sold through eMarket so far.
“Through quicker and transparent settlement, cooperatives have been able to sell their produce to highest bidders,” Supekar told FE.
NCDFI eMarket has been launched through the technical support from NCDEX market, a wholly subsidiary of commodity bourse NCDEX.
Supekar said the electronic platform is designed in such a way that it set a base price and the volume of dairy products to be sold is announced prior to the auction.
The private bulk buyers bid for the volume of commodities and not the price while the system increases the price once the demand exceeds the volume of dairy commodities offered to be sold on the platform.
For avoiding default in payment by the buyers, a security deposit of R4,000 per tonne for butter and SMP and R6,000 per tonne for ghee has to be deposited with the exchange.
“All the payments between buyers and sellers of dairy products are settled through online bank payment and purchasers take their delivery of the products from concerned dairies,” Supekar said.
NCDFI has been entrusted with the task of ensuring that all the dairy products sold through this electronic platform adhered to the prescribed standards.
Since commencement of its operations, state milk cooperatives from Bihar and Karnataka and Jalgaon milk union have a substantial share in the overall trade in NCDFI eMarket.
Thanks to the dairy cooperatives, India is ranked first in global milk production, with an annual output of 146.3 million tonne (MT) during 2014-15 compared to 137.6 MT reported in 2013-14, thus recording a growth of 6.26 %. The Food and Agriculture Organization (FAO) has reported a 3.1% increase in world milk production from 765 MT in 2013 to 789 MT in 2014.
NCDFI is an apex body of 26 state-level dairy cooperatives which are connected 198 district cooperative milk unions and about 1.5 crore dairy farmers in the country.