Farmer producer companies ( FPCs) in Maharashtra have decided to enter into soybean procurement at farm gate level.
Farmer producer companies ( FPCs) in Maharashtra have decided to enter into soybean procurement at farm gate level. The Maharashtra Federation of Farmer Produce Companies, or MahaFPC, said that it will explore forward market linkages to trade in soybean. MahaFPC is a federation of around 60 farmer producer companies. According to Yogesh Thorat, MD, MahaFPC , solvent extraction plant ADM Latur has responded positively to FPCs and has made various interventions in their procurement model so as to ease the business of FPCs. In the first phase, six FPCs from Latur started procurement centres for soybean. These FPCs are collecting the commodity from their member farmers and supplying it to ADM as per its quality standards formula of 10:2:2 (10 % moisture, 2% broken grains, 2% foreign matter ). Thorat said that price discovery is done on a daily basis based on the reference of mandis and rates are circulated to FPCs. If FPCs agree to the rate then contracts are signed and commodity is delivered within seven days. FPCs receive the payment three days after the delivery of the commodity. Farmers are getting additional Rs 50-100 per quintal than APMC, he said.
Thanks to the new mechanism, the potali rates in Latur market have gone up by Rs 100 per quintal. Potali rates are the average rates which farmers receive. With the arrival of 25,000 to 30,000 quintal of soyabean on a daily basis, an open auction is conducted for 5- 10 % of the total arrival and then commission agents usually fix the average rates below Rs 150- 200 of the auction rates. However, of late due to fear of competition from FPCs in procurement, traders have increased potali rates and farmers are benefiting. Thorat said that FPCs are now in direct competition with traders in APMC since they are also suppliers to solvent extraction plants. In the coming months, MahaFPC plans to link FPCs from adjoining district of Osmanabad and aims to supply at least 1,500 quintal a day to processors. This model of procurement is developing alternate marketing system for the farmers, he said. MahaFPC recently tweeted that it was preparing a plan for NCDEX trade for soybean and gram. NCDEX has said that a series of efforts undertaken by the exchange to connect farmers to derivative markets has started bearing fruit.
Participation of farmers on the exchange is witnessing rapid growth in recent times. More than 2,300 farmers have registered on the platform, which indicates more than 5% growth in September. For the first time, an FPO from Kerala also started trading on the platform in September. With this, the exchange has increased its reach to 14 states in terms of FPO participation. Around 99 FPCs have opened their accounts so far and more than 119 FPCs are in the process of opening their account with NCDEX, according to reports. As a result of the various initiatives taken by NCDEX, farmer groups are now using futures contracts to hedge against price dips during the harvest season and are getting better realisations. The exchange is creating awareness by educating farmers across the country and is planning to reach over 3 lakh farmers by March 31, 2018.