NCDEX Spot Exchange said it has signed an agreement with the Karnataka government to form a joint venture company to modernise APMC markets in the state by bringing in electronic auctions.
“The company, which is a 50:50 joint venture between the Karnataka government and NCDEX, is aiming to bring about this reform in up to 10 mandis in the state in this financial year,” NCDEX managing director and CEO Samir Shah told reporters here Monday night.
In the initial phase, that is this financial year, the company will cover up to 10 major markets and major commodities and subsequently the whole state would be covered, he said.
The company would also link participants in the markets on the state to the national market and reduce payment default risk that is common at present, he added.
The JV company would modernise APMC markets in the state by bringing in electronic auctions, providing for grading of the produce, arranging payment to farmers directly and usher in all other best international practices adopted in advanced markets.
“Warehousing for scientific storage of the produce, bank funding for the stored produce and other facilities would become possible, once the company becomes operational,” Mr. Shah said.
While grains and cereals would be the focus of the project initially, fruits and vegetables would be covered in the last stage of the project, he added.
The NCDEX Spot Exchange is a subsidiary of the National Commodity and Derivatives Exchange, which is the leading commodity exchange in the country for agricultural commodities.