Paperless agri-commodity trading to be launched next week

Paperless trading of agricultural commodities will soon become a reality. Come Tuesday, the Warehousing Development and Regulatory Authority (WDRA) will set in motion the process of issuing electronic negotiable warehousing receipts (eNWR).

Apart from launching its portal, which would help warehouses to register with it online, the WDRA will issue registration certificates to two entities that have been selected to run commodity repositories.

“These two repositories will be responsible for maintaining the entire lifecycle of eNWR from creation to withdrawal,” said WDRA member Petluri Srinivas.

Upon registration, these repositories — run by the NSE-backed National Commodity and Derivative Exchange (NCDEX) and BSE-promoted Central Depository Services (India) Limited (CDSL) — can commence enrolling WDRA-registered warehouses for issuing eNWRs.

WDRA would pass on the list of warehouses registered so far with it to these two bodies, who would get them to open an account so that they can issue the eNWRs to their customers, Srinivas said.

As on June 30, as many as 1,436 warehouses across the country had registered with WDRA.

Helping farmers The eNWR is expected to go a long way in helping farmers not only get better prices for their produce by selling in any market in the country, but also aid them in raising cheaper finance to meet their requirements.

“If any warehouse wants to issue eNWR, they have to register with any one of the repositories,” said an official who works with a repository. “These eNWRs are just like currency, farmers can sell them or pledge them to raise a loan,” he said.

“It would be a game-changer for farmers. Once their commodities are dematerialised, banks and other financial institutions will be very happy to give them loans. In other words, they would have easier access to institutional farm loans, at lower rates,” the official said.

The eNWRs have distinct advantages over the paper-based receipts. They allow farmers or depositors to have access to a large number of buyers across the country and thus would increase their bargaining power. They can do multiple transfers without physical movement of goods.

Moreover, farmers don’t even have to cart their produce to the market for selling. Once sold, the buyer would be able to pick up the purchased commodity from where it has been stored.

Even consumers of these agricultural commodities such as industries, processors, wholesalers and retailers benefit as they will be able to procure graded produce with a seal of quality assurance, the official said.

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