BSE initiates talks to offer e-platform for MSP procurement

Suresh P Iyengar Mumbai | Updated on October 29, 2019

The Bombay Stock Exchange

BSE has initiated talks with various States and government agencies involved in execution of Minimum Support Price (MSP) for procuring agriculture commodity through its trading platform.

Ashishkumar Chauhan, Managing Director and CEO,  BSE told BusinessLine that the exchange is in discussion with Maharashtra and few other State Governments on the benefits of using the exchange's commodity platform to buy agriculture products from farmers under the government's assured minimum support price.

The exchange has one of the best IT platform and all other allied infrastructure such as quality testing of commodity, warehousing facility and transfering money to the farmers' bank account directly without intervention of middlemen, he said.

The entire process on the  exchange platform can avoid pilferage and make the whole process more transparent, he said.

"While we can handle any commodity that the Government wants us to procure, to start with we have shown  interest in handling cotton, oilseeds and pulses," he said.

The 150-year-old stock exchange has ventured into commodity derivatives trading last year with the launch of futures trading. Despite the difficulties in handling agriculture commodity, the exchange entered into the space in less than a year. It's earlier planm was to join the sector after an year.

Earlier, the Centre had proposed to increase the food subsidy allocation by 7.5 per cent to Rs.1.84 lakh crore for this fiscal, mainly due to a rise in MSP.

MSP is is a sort of market intervention by the Government to ensure farmers get base minimum price for certain agriculture produce. Commodities covered under this include paddy, wheat, barley, jowar, bajra, maize and ragi in cereals; gram, tur, moong, urad and lentil in pulses; groundnut, mustard, toria, soyabean, sunflower seed, sesamum, safflower seed and nigerseed in oilseeds and raw cotton.

In the case of cereals, Food Corporation of India and other designated state agencies provide price support to the farmers. NAFED, Small Farmers Agri-Business Consortium (SFAC) and other designated Central agencies would procure pulses and oilseeds. Cotton Corporation of India is the central nodal agency for undertaking price support operations for Cotton. NAFED would supplement efforts of CCI for cotton procurement. The losses, if any, incurred by the nodal agencies in MSP operations will be fully reimbursed by the Government.

Published on October 29, 2019

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