Price Risk Management Business Model (WRD)

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.
 
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.

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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.
 
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.

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