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National Spot Exchange, promoted by Financial Technologies, has joined hands with Kerala farmer associations to form a company, Western Ghats Agro Growers.
The new company will act as an aggregator of cardamom and pepper to tap the spot market.
NSEL has invested Rs 25 lakh in a first of its kind tie-up to set up the basic infrastructure and two grading centres at Idduki. NSEL will hold 51 per cent while Kerala Agro Processor Society will own the remaining. About 300 farmers have invested Rs 5 lakh in the venture.
Corporate venture
Inaugurating the new company on Friday, Union Minister for Consumer Affairs, Food and Public Distribution K.V. Thomas said the venture is an attempt to corporatise farmers, organise and make them equal partners in the agricultural value chain.
In general, price realisation for any commodity is higher after sorting, grading, processing, packaging or value-addition in any other form. Since the farmers sell their produce in bulk without any value-addition, they are not able to take home such incremental price advantage. This is the crux of the issue impeding agricultural growth in India, he said.
This is why farmers are still not better off, even though prices are going up and even though production is also going up in quantitative terms. Unless we turn the table and make agriculture more remunerative for the farmers, it would be difficult to get significant momentum in agricultural growth in our country, he said.
One-stop shop
Anjani Sinha, managing director, NSEL, said the initiative will go a long way in making agriculture more remunerative for the farmers, and thereby provide significant momentum in agricultural growth in our country.
“We also plan to make this venture a one-stop shop for all farmers’ needs such as procuring seeds, fertilizer and other nutrients. Farmers can also get loans up to 70 per cent after storing their produce in the company warehouse,” he said.
Gradually, the company will develop its own brand to market such produce directly in overseas markets. Hence, the cost of intermediation will go down and farmers will be able to fetch the maximum pie out of price paid by the consumer or by the overseas buyer.
“NSEL is also exploring the possibility of replicating this initiative in Bihar in next two to three months,” he added.
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