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Vinson Kurian

Thiruvananthapuram , Dec. 3

For National Spot Exchange Ltd (NSEL), Kerala is the ideal place to commence spot commodity trading operations, as there are no agriculture produce marketing committees (APMCs) to contend with.

The Multi Commodity Exchange of India (MCX), National Agricultural Co-operative Marketing Federation Ltd (Nafed) and Financial Technologies India Ltd are the promoters of NSEL.

APMC ACT

Mr Anjani Sinha, Managing Director and CEO of NSEL, said that implementation of the Model APMC Act will create a situation where only APMC licence holders would be allowed to buy from farmers.

This would ensure that end-users are denied direct access to farmers/producers.

What they get instead will be another glorified intermediary to be dealt with while making purchases.

This will defeat the professed aim of ensuring the best possible prices for farmers/producers.

APMC laws were created to ensure good prices for farmers through open auction system, but they are also feared to bring about a monopolistic scenario in which only the Government can create APMCs.

ACT SHUNNED

It's not surprising, then, that the Model APMC Act has come to be shunned by most of the States.

The existing APMC systems in some States have left the market largely regionalised and fragmented, which goes against the grain of a structured marketplace.

The less said about the futures market, the better. In Kerala, for instance, the major beneficiaries of this system have been traders in the Kochi delivery centre, with farmers based in far-flung areas being reduced to fringe players.

STRUCTURED MARKET

Here is where the relevance of a set-up such as the NSEL becomes evident.

The NSEL platform has been conceived from the felt need for creating a national-level, electronics-based and transparent spot market.

It will make for a place where farmers can sell at the best possible rates and end-users can buy at the most competitive rates.

More Stories on : Commodity Exchanges | Kerala

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NSEL finds Kerala ideal for launching operations

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