Anjani Sinha, MD National Spot Exchange, India: National Spot Exchange’s objective is to reduce cost of intermediaries and enable farmers to sell directly to consumers. When the farmer harvests they can bring produce to our warehouse. A receipt is issued to him. He can then sell immediately to us, and electronic negotiation will happen. Buyers anywhere in the country can see the price and bid. Different buyers can compete at that moment. This is how the price is discovered.
If he doesn’t want to sell on that day and wait for off-season premium. In that case a bank loan is obtainable against his warehouse receipt. Then he sells the produce, produces the receipt and the amount is paid to him.
Exchange also provides a payment and quality guarantee. Our role is as a facilitator and the transaction fee we charge only to the buyers. We provide the clearing house function.
In the villages where news or TV don’t reach, we go there with loudspeakers and make announcements about how they can use our platform. We also conduct small gathering in the village. We gather numbers and then we run an SMS server which monitors which farmer is interested in which commodity.
What NSEL Can Do For Sri Lanka
We’re working on creating a direct linkage between Sri Lankan farmers and Indian buyers. A subsidiary can take deliver from Sri Lanka and transport it to NSEL Sri Lanka. We have also been instrumental in bringing out regulatory reforms in various states in India, we can work with the local government here.