Institutional and implementation arrangements (WRD)

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The PIU (Agri Marketing) will be the implementing agency for MSWC programs with the help of MSWC. MSWC will give one officer of the rank of Deputy /Assistant Manager to work on PIU MSAMB. MSWC being State Govt Corporation it will implement its program. PIU (Agri Marketing) will only oversee the same. Whereas program of APMCs will be implemented by PIU (Agri Marketing), the procurements relating to MSWC will be the responsibility of PIU (Agri Marketing). The MSWC is a profitable Government Corporation with 800 godowns in Maharashtra and a track record of innovation, dynamism and partnerships with the private sector. Its storage capacity in the state is around 1.2 million tonnes, of which up to 40% is available to farmers to store their grains at a lower charge than for the trade. A partnership has been created so that under the MACP the State’s grain farmers can benefit from the package of financial instruments and scientific storage that MSWC and the APMC is developing with the Banks and the Commodity Exchanges. Currently farmers have the APMCs as the sole marketing route for their marketable surplus of grains. This has high costs, limits the producers’ ability to time the sales to benefit from seasonal changes in price as trading behaviour is often opaque. Additionally, farmers are often forced to sell at the least advantageous time, because of the need to pay back loans.
 
The planned intervention provides farmer with the choice of other marketing channels, which are lower in cost, transparent in processes, prices and quality assessment, provide assured payment and which enable farmers to store produce and take advantage of warehouse credit, futures markets and electronic spot exchanges.
 
Producers, individually or via Producers Groups (PG) and Associations will need to be able to deliver to the 40 MSWC and 40 APMC godowns a single quality commodity. For spot exchange lot size is around 1 bag. This will involve grading and cleaning, some field level quality assessment (e.g. moisture content), bagging, weighing and the delivery of produce within a narrow weight range. The product is assayed at the godown to verify quality (at Rs 500 per lot) and provided with a lot number. A choice can then be made as whether to sell the produce on the spot market on the same day, or to store the produce. In this case the decision needs to be made on whether to take advantage of warehouse credit scheme available and whether to lock the sales lot into a futures contract at an assured price. Lot size whether decided. 

Three days after the sale is made, the buyer electronically transfers the payment to confirm the sequence of nos. in received chapter structure NCDEX Spot account. Here deductions are made:

i) To MSWC, for storing the produce (at Rs 20 / MT / month) and assaying the product (at Rs 500 per lot) and handling (at Rs 1.50 per 50 kg bag)
ii) For NCDEX Spot (at 0.1% of the value of the sale)
iii) To MSAMB / APMC (at 1% of value of sale, plus another 0.05% for supervision), and, if applicable, interest on the warehouse credit (at about 1% per month of the loan).
 
The information given in table in the chapter on FCSC, under the para ‘Estimated Farmer Returns’, shows that the farmer will get extra return of 5.2%, 9.0% and 16.30% if the produce is sold in APMC as graded; same day spot sale and sale after 3 months after taking advantage of Warehouse Receipt Credit Scheme, respectively.
 
The information in the table mentioned above provides an estimate of the potential additional returns that farmers can obtain by using the FCSC for their producer association to grade, clean and pack grain and to facilitate marketing through the APMCs, the Spot Market at MSWCs facilities, 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.
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