The Hindu Business Line : Making e-auction system better

This endeavour is not only welcome but also imperative, given the reality that it is only in the South that e-auctions have been in force for the last couple of years.

More so, it is only in Coonoor that the auctions are totally electronic. In the other two Southern centres, it has been partial most of the time.

Reforming e-auctions is a highly relevant topic and needs topmost priority because tea trade continues to be done manually.

After earmarking Rs 70 lakh and forcing the trade to go for e-auctions, it has now dawned on the powers-that-be what the trade had been saying all along — that the system is faulty and has not improved the outcry method. Even the Union Minister of State for Commerce, Mr Jairam Ramesh, has conceded that e-auctions, so far, are a failure.

The Minister has even announced his intention to institute legal action against the developers of the previous software, but who would compensate the players who lost in the process?

The market reports of Coonoor Tea Trade Association as also the individual brokers had, many times, recorded that because of the compulsory e-auctions, prices slumped since manual push was absent.

And on the many occasions when the e-auctions failed, the brokers repeatedly asked for manual sale until such time a foolproof system was uniformly pressed into operation.

Seeking permission to conduct manual sale as the e-auction failed and the ad hoc allowing of the manual sale in the midst of e-auctions — all caused a lot of mental agony to the traders in their smooth business flow.

New software

It is for this reason that Mr Ramesh said, "In reality, we have lost two years in implementing e-auctions." Now, the Government has handed over the job to NSE.IT, a subsidiary of the National Stock Exchange.

Maybe, it would be a year before the new software comes into operation, but even now, there are many practical complaints about the working of e-auctions in Coonoor.

So, the ambience is right for a deeper look into the reformation of the e-auctions.

It is encouraging that Mr Ramesh has made it clear that there would be no forcing to go for e-auctions. If the system is favourable, then, obviously, that would be the most preferred choice for the players.

Players also complain of arm-twisting by the authorities to force them to go for the e-auctions.

It happened in the case of Teaserve auctions, the world's first e-auctions, and later in the auctions of the tea trade centres. Teaserve fetches the lowest price among all the auctions in the world and the Coonoor auctions come next.

So, e-auctions had not helped better price recovery.

That's why the approach of the Tea Board Chairman is welcome.

It would be highly relevant to gather the views of the players and develop a software that best-addresses their views.

One such view, for instance, calls for a single platform for all auctions throughout the country on a single day.

Here, the buyers would have access to the lots all through the specified time and then only, the auctioneer knocks the sale. Another view conflicts transparency with privacy and insists that anonymity of bidding should be upheld.

In other words, just replacing the outcry system with electronic consoles would not serve the purpose.

The software should be for the players and not the players for the software.

More Stories on : Tea | E-Commerce & E-Business

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Plea to extend credit support for jatropha

Fresh spurt of rains likely in Kerala, TN

Stream of serenity

Planters annual conference

AP imposes power cuts to save kharif crops

Spot rubber declines further

Volume continues to be low at Coonoor tea auctions

Making e-auction system better

Amul to be sole GCMMF milk brand in Gujarat

Kerala loses monopoly over coconut cultivation

World coffee exports down on dip in output

Cardamom planters float new company for direct marketing

Pepper futures soar on buying support

Prices of pulses zoom; more crop damage feared