IT APPLICATION FOR SALE OF AGRICULTURAL PRODUCE IN KARNATAKA STATE

KARNATAKA AGRICULTURAL MARKETING IN BRIEF The Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966 and Rules 1968 There are 157 main and 355 sub-markets. 92 agricultural commodities are notified for the purpose of regulation (foodgrains, oilseeds, fruits, vegetables, cotton, jaggery, arecanut, coconut, cashewnut, livestock) Around Rs. 35,000 crores worth commodities transacted in APMCs annually. About 36,000 traders and commission agents are licenced to operate in the market yards APMCs are managed by a Committee consisting of elected representatives of farmers (11), traders and commission agents (1), marketing co-op. (1), processing co-op (1), Govt. nominees (3) and official (1) ---Totally 18

PRICE DISCOVERY MECHANISM Price Discovery through Supply and Demand Support Price Schemes Methods of Sale in APMCs- - Mutual Agreement - Auction - Tender (Physical and Electronic) - e-Trading

MANUAL TENDER SYSTEM OF SALE

ELECTRONIC TENDER SYSTEM OF SALE

6  Electronic Display Boards in APMCs  On line Market Information through  Toll free telephone to provide market information. On an average about 100 farmers get the information daily.  About 2,00,000 farmers have registered for Market SMS DISSEMINATION OF MARKET INFORMATION

AGRICULTURAL MARKETING REFORMS IN KARNATALA As per the Model Act 2003 of Government of India the State has amended the Act in 2007 and Rules in 2008 and brought in the following reforms. Major amendments include ---Establishment of Private Markets ---Establishment of Farmer-Consumer Markets ---Contract Farming ---Development of markets under PPP ---Est. of Grading and Standardisation Bureau ---Establishment of Direct Purchase Centres ---E-Trading—Establishment of Spot Exchanges

STATE AGRICULTURAL MARKETING REFORMS COMMITTEE  The Karnataka Government constituted a Committee on Agricultural Marketing Reforms on to identify the major problems and suggest needed interventions  The Committee submitted its report on  Major recommendations of the Committee are: --- Introduction of Comprehensive Electronic Auction System in APMCs --- Introduction of technology in all activities including weighment, payment, filing of returns, payment of market fee, charges, etc. --- Encouragement to Warehouse based sales ---PACS and TAPCMS to act as aggregators ---Capacity Building

Transparency In all market operations Efficiency Use of technology Information dissemination Increased competition Simplify Process flow in operations Financial process Recommendations- Agricultural Marketing Reforms Report

KARNATAKA AGRICULTURAL MARKETING POLICY 2013 The policy aims at “Creating hassle free market for the agricultural produce to help the farmers to obtain best price for their produce.” AMRC KAMP 2013

KARNATAKA AGRICULTURAL MARKETING POLICY 2013 Improved access to markets – Accredited Warehouse as sub-market yards, alternate and safe storage options – Access to market through aggregation at village level – Linkages with financial Institutions – Simple process for pledge loans AMRC KAMP 2013

KARNATAKA AGRICULTURAL MARKETING POLICY 2013 Enable true price-discovery of the Agricultural produce – Primary value addition of agricultural produce at village level – Grading and assaying at market yard and warehouse – Market integration – Increased competition AMRC KAMP 2013

KARNATAKA AGRICULTURAL MARKETING POLICY 2013 Address delay in Payments – Timely payment from buyer to be routed through Bank accounts – Online transfer of Payment – Transparency in Payments AMRC KAMP 2013

KARNATAKA AGRICULTURAL MARKETING POLICY 2013 Empowerment of Farmers – Simplified marketing processes and ensuring online timely payment to the farmers account. – Market Access; Physical, Information and Financial – Organize farmers groups to initiate primary value addition and encourage village level aggregation – Farmer to decide when to sell the produce and at what price, with a right to reject the price offered AMRC KAMP 2013

Increased competition Better Market Access Timely payment Farmer Empowerment True price discovery Market reforms KARNATAKA AGRICULTURAL MARKETING POLICY 2013 Market automation

AMENDMENTS TO ACT AMRC KAMP 2013 Enabling warehouse based sales Single trader license Private market fee rationalization Perishable - market fee waiver Exemption from market fee for FPOs Concessional Market fee for Direct purchase centers and Private Markets Simplification of Contract farming arrangements

AMENDMENTS TO RULES AMRC KAMP 2013 Simplified procedure for issue of single trading license Provisions to notify markets for trading on unified market platform Arrangement for Assaying Enabling provisions for online payments Provisions for dispute resolution Provisions for transaction charge to be levied

S P V Rashtriya e Market Services Pvt Ltd. “A Special Purpose Vehicle (SPV) with a Mandate to operate with cutting edge technology and be constantly adapting the practices of advanced markets to the agricultural markets in the state, to ensure market efficiency and competitiveness in the agricultural market system for the benefit of farmers and consumers, while making participation of all other market participants sustainable” AMRC KAMP 2013

S P V Structure A JVC between GOK and NSPOT Rashtriya e Market Services Pvt. Ltd ( 20 th January 2014) Initial Share holding pattern of 50:50 Chief Secretary GOK as Chairman – 3 Directors each from GOK and NSPOT – 3 Independent Directors – Provision to raise the total to 12 directors – Certain matters Reserved for Government (up till GOK holds up to 10%) AMRC KAMP 2013

APMC Unified Market Platform APMC 1 APMC 2 Warehouse 1 Warehouse 2 Trader 1 Trader 2 Traders 3 Market Integration Scenario Single virtual Market AMRC KAMP 2013

UNIFIED MARKET PLATFORM Trading platform capable of – Providing multiple price discovery models Risk management on par with exchanges Flexible parameters for various markets Displaying assayed parameters for quality based bidding Supporting browser based and SMS based bidding

UNIFIED MARKET PLATFORM Material accounting module capable of Tracking of goods Reconciliation of quantities arrived and exited Inventory tracking – trader wise, commission agent wise, etc.

UNIFIED MARKET PLATFORM Trade fulfilment module capable of Managing post trade processes. Integrated pre and post sale processing. Setting up flexible rules depending on the market.

UNIFIED MARKET PLATFORM Fund management module capable of – Collecting funds from buyers and crediting to sellers Payment of commission agent charges Collection of market fee Collection of other dues – weighing, warehouse rents, etc. Maintenance of individual ledgers for accounting

Process flow in UMP market: Produce exposed on the platform ready for sale Bid finalization SMS to Farmer Unique lot Number given Bidding across for the lots available Highest bidder wins lot Post auction Activity Sale bill Payment Delivery E permit Farmer with produce comes to APMC APMC Gate entry

MAJOR ISSUES Amendments to Act and Rules Changing of multi licence of traders to single licence Registration of Farmers/Traders/Commission Agents Assaying of commodities On line payment Immediate payment to farmers/Working Capital for Traders Logistic arrangements Training of Secretaries of APMCs and staff Awareness Creation among APMC members/Farmers/Traders/Commission Agents etc.