B1.2 Warehouse Receipts Development

or to store at MSWC for three month.   These are contrasted with the returns for a farmer selling un-graded product through the APMCs shortly after harvest.

27. Price  risk  management  business  model:   Warehouse  receipt  financing:  Selected  MSWC warehouses will shift to an electronic warehouse receipts system from a manual one and will be networked to enable an efficient warehouse receipt financing system. Warehouses in selected APMCs will also provide this service. Electronic receipts will be transmitted immediately to the banks  with which MSWC  and APMC  have an agreement  and loans to be issued against  it automatically based on the value of the receipt. The benefit is that farmers or CIGs are able to deposit their commodities at a MSWC / accredited APMC warehouse and get immediate access to credit from the participating  banks  against the value of the commodity.  The MSWC  has expertise in scientific storage, is committed to having up to 40% of its godown space available to farmers and offers storage at a nominal rate to farmers. This package of instruments (i.e. high quality storage, independent quality assessment and warehouse credit) will enable producers not to make distress sales, but instead to be able to take advantage of the price increases that take place after the main harvest season. As per the provisions of the MSWC Act, the Warehouse Receipt of the MSWC is negotiable. Even then, the NCDEX spot has entered with agreement with Union Bank of India to develop these arrangements.

28. This  service  will be available  at 40  MSWC  and 40  APMC  warehouses.  The APMCs  that participate in this activity will be located in the vicinity of MSWC warehouses selected and be subsets  of the APMCs  there  are being modernized  under  MACP.  The capacity of relevant MSWC and APMC personnel will be upgraded through targeted capacity building activities based on an assessment of capacity building needs.