The National Commodities and Derivatives Exchange (NCDEX) is now in discussions with several state governments, including Andhra Pradesh and Maharashtra, to implement its mandi modernisation project.
"We have been approached by several state governments to start the project on a pilot basis. We have seen a delegation from Uttar Pradesh. But nothing has been finalised yet," Ramesh Chand H C, executive vice-president (south), NCDEX, said.
The exchange's first project began in Gulbarga in Karnataka, where it started modernising the mandi (or agriculture produce marketing committees - APMC). The cost of modernisation was to be born by the mandi where everything from agri commodities entering into the mandi to auction of that goods electronically and record-keeping was done on computers. This had helped mandis that were modernised to increase collection of mandi taxes and streamline operations with a great degree of transparency.
Currently, the firm is running the mandi modernisation project in Karnataka. "In Karnataka, the pilot was started in 2010, and we have recently completed the Phase I. Out of 54 APMCs in the state, we have covered 15 and we are trading eight commodities."
Within all mandis modernised in the state, goods offered by a farmer in one mandi can be purchased by any trader from any connected mandi, giving the farmer efficient pricing.
Under the modernisation project, the firm provides facilities like grading, shorting and storage to the farmers at the mandi itself. This helps a farmer get his money as per the quality he is bringing in and middleman chain has been shortened and their commission levels have also come down.
After the Phase I in Karnataka, the Phase II would involve standardisation and grading', where all APMCs in the state will be integrated. In the third phase, infrastructure and technology would be developed for web-based mandis in order to facilitate national trading, Vijay Kumar, chef business officer, NCDEX, said.
"Once the mandis will be inter-linked and web-based, it will allow a trader to trade from any place, and it will increase competitiveness," he said while addressing the media at the exchange's launch of Gold 100 gram contract' in Hyderabad. The contract is based on gold bars of 10 grams with 999 fineness.
"As the technology and infrastructure have already been built, it will take around six months to roll out the project in a new state (as opposed to Karnataka, where it took nearly three years for the project to complete the first phase)," he added.