The Hindu Business Line : IT's on the board

But with commodity trading promising to become as big as stock trading in the coming years, do not be surprised to find a farmer taking notes from an electronic board before pulling out his mobile to tell his brother what to sow. The National Multi-Commodity Exchange of India (NMCE) is executing a project to install ticker boards giving out both futures and spot prices being quoted by different exchanges.

The project covers 225 APMC yards and taluka headquarters in Gujarat, but it is only a pilot project that the Forward Markets Commission (FMC) plans to take up at the national level in the coming years. The NMCE has already installed about 50 such boards in different APMCs and taluka headquarters of Gujarat and is now making an effort to encourage farmers to use the information flowing on the boards.

The project is being backed by the Forward Markets Commission (FMC), the Gujarat Government and the other commodity exchanges - MCX and NCDEX. Each of the boards costs about Rs 35,000 to install, while the running expenses come to about Rs 10,000 per year.

The NMCE is also in discussion with the National Informatics Centre (NIC) to disseminate spot prices of different commodities from major APMC yards across the country. The data is collected by NIC and is available on its Web site, www.agmarknet.nic.in but the NMCE wants it to be widely distributed through its ticker boards.

For the Gujarat project, the NMCE has set up a server at the central server room of the Gujarat State Wide Area Network (GSWAN) at Gandhinagar. Data from the three commodity exchanges flows into the server, formatted and converted from English to Gujarati before being sent out to the ticker boards.

"For taluka headquarters that are already linked with GSWAN, we use the State Government's network, while for the APMC yards, Internet connectivity is used," says Niraj Gupta, Vice-President, (IT) of NMCE. For other States, Gupta says that technology is in place and the Gujarat pilot project has proved that the system works.

"We believe that the project will be extended across the country in the next couple of years, starting with States that already have networked their district and taluka offices," he says.

Board placement problems

Some problems have also emerged in the pilot project. Most of the farmers do not seem to be interested in the information flowing on the ticker boards. In several places, the boards have been placed at a location where not many farmers get to see them. For instance, the Vasna APMC in Ahmedabad is a market for perishables and it will require a lot of time and training effort for the farmers visiting the yard to start using the information to take sowing decisions.

At Unjha, the world's largest market for psyllum husk (Isabgol) and cumin seed, farmers say that the ticker board could have been useful had it been put at a better place. "The ticker board has been put at `Rain Basera', which is a waiting room where nobody goes to see it. It should be put up in a more prominent place so that more people can see it. With the onset of the season, farmers will come from all over, they should get to see it and benefit from the information," says Praveen Patel, a leading cumin seed trader at Unjha. The NMCE's Gupta admits that the placement has indeed been a problem at some locations. "The exact place where the ticker board is put is decided by the APMC concerned and other factors such as protection from the vagaries of weather sometimes prevent their placement at a very prominent place," he says.

But are the farmers actually using the information? Praveen Patel describes the ticker boards as "useful" but says not many people are actually looking them up. Gupta says that the farmers and traders will gradually get used to the idea and the NMCE has been carrying out extensive education and awareness programmes to make them popular.

"The benefits of the ticker boards are manifold. Farmers can see what commodities are quoting at an attractive price in the futures and take an informed decision on what to sow. Traders can also benefit by the whole process of transparent price discovery that the commodity exchanges enable," says Gupta.

The Indian farmer may take some time to get to that level, but a beginning has surely been made.

eworld@thehindu.co.in

More Stories on : E-Commerce & E-Business | Commodity Exchanges

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