Government of KarnatakaDepartment of Agricultural Marketing

Karnataka State Agricultural Marketing Board

Presented By

G. N. Shivamurthy, IAS.,Director of Agricultural Marketing and

M.D. Karnataka State Agricultural Marketing Board

WEL-COME

Agricultural Marketing Reforms in Karnataka

Vision and Mission

• Vision: To promote and encourage participatory and equitable socio-economic development of farmers in particular and stakeholders of the market in general of Karnataka through vibrant, self reliant and competitive agricultural marketing system.  

• Mission: To develop participative, transparent and scientific Agricultural Marketing System with adequate infrastructure and user friendly e-initiatives.

Agricultural Marketing in BriefThe Karnataka Agricultural Produce Marketing

(Regulation and Development) Act, 1966 and Rules 1968There are 156 main and 355 sub-markets.92 agricultural commodities are notified for the purpose

of regulation (foodgrains, oilseeds, fruits, vegetables, cotton, jaggery, arecanut, coconut, cashewnut, livestock)

Around Rs. 33,000 crores worth commodities transacted in APMCs annually.

About 36,000 traders and 18700 commission agents are licenced to operate in the market yards

APMCs are managed by a Committee consisting of elected representatives of farmers (11), traders and commission agents (1), marketing co-op. (1), processing co-op (1), Govt. nominees (3) and official (1) ---Totally 18

Some of the Schemes• Provision of infrastructure facilities in market yards

through annual action plans of APMCs• Market Development under RKVY assistance• Rural Market Development under RIDF Scheme• Development of backward area markets• Technology parks for Rice and Maize• Floor Price Scheme- Revolving Fund• Capacity building through training and extention• Market information through website, sms, toll free

phone• Welfare schemes for farmers and shramiks

Karnataka on the forefront of Agricultural Marketing Reforms

• As per the Model Act 2003 of Government of India the State has amended the Act in 2007 and Rules in 2008 and brought in the following reforms. Major amendments include

---Establishment of Private Markets

---Establishment of Farmer-Consumer Markets

---Contract Farming

---Development of markets under Public Private Partnership

---Establishment of Grading and Standardisarion Bureau

---Establishment of Direct Purchase Centres

---E-Trading—Establishment of Spot Exchanges

STATE AGRICULTURAL MARKETING REFORMS COMMITTEE

The Karnataka Government constituted a Committee on Agricultural Marketing Reforms on 27-3-2013 to identify the major problems and suggest needed interventions

The Committee submitted its report on 15-5-2013 Major recommendations of the Committee are:

--- Introduction of Comprehensive Electronic Auction System in APMCs

--- Introduction of technology in all activities including weighment, payment, filing of returns, payment of market fee, charges, etc.

--- Encouragement to Warehouse based sales

---PACS and TAPCMS to act as aggregators

---Capacity Building

Transparency

• In all market operationsEffici

ency

• Use of technology

• Information dissemination

• Increased competition

Simplify

• Process flow in operations

• Financial process

Recommendations-Agricultural Marketing Reforms Report

AMRC Recommendations

• Leveraging technology

• Information Dissemination

• Integrating Markets

• Creating Virtual Markets

• Commodity Funding

AMRC Recommendations

• Farmer Producer Organisations

• Private Markets

• Secondary Market Linkages

• Creation of Infrastructure

• Capacity Building for Stakeholders

Karnataka Agricultural Marketing Policy 2013

The policy aims at

“Creating hassle free market for the agricultural produce to help the farmers to obtain best price for their produce.”

AMRC KAMP 2013

Karnataka Agricultural Marketing Policy 2013

• Improved access to markets – Accredited Warehouse as sub-market yards,

alternate and safe storage options – Access to market through aggregation at

village level– Linkages with financial Institutions – Simple process for pledge loans

AMRC KAMP 2013

Karnataka Agricultural Marketing Policy 2013

• Enable true price-discovery of the Agricultural produce– Primary value addition of agricultural

produce at village level– Grading and assaying at market yard and

warehouse– Market integration– Increased competition

AMRC KAMP 2013

Karnataka Agricultural Marketing Policy 2013

• Address delay in Payments

– Timely payment from buyer to be routed

through Bank accounts

– Online transfer of Payment

– Transparency in Payments

AMRC KAMP 2013

Karnataka Agricultural Marketing Policy 2013

• Empowerment of Farmers– Simplified marketing processes and ensuring online

timely payment to the farmers account. – Market Access; Physical, Information and Financial– Organize farmers groups to initiate primary value

addition and encourage village level aggregation– Farmer to decide when to sell the produce and at

what price, with a right to reject the price offered.

AMRC KAMP 2013

Increased competitionBetter Market Access

Timely payment

Farmer EmpowermentTrue price discovery

Market reforms

Karnataka Agricultural Marketing Policy 2013

Market automation

APMC

Unified Market Platform

APMC 1

APMC 2

Warehouse 1

Warehouse 2

Trader 1Trader 2

Traders 3

Market Integration Scenario

Single virtual Market

AMRC KAMP 2013

Amendments to Act

AMRC KAMP 2013

Enabling warehouse based sales

Single trader license

Private market fee

rationalization

Perishable - market fee

waiver

Exemption from market fee for FPOs

Concessional Market fee for Direct

purchase centers and Private Markets

Simplification of Contract farming

arrangements

Amendments to Rules

AMRC KAMP 2013

Simplified procedure for issue

of single trading license

Provisions to notify markets for trading on unified market

platform

Arrangement for Assaying

Enabling provisions for

online payments

S P V

• Rashtriya e Market Services Pvt Ltd.“A Special Purpose Vehicle (SPV) with

a Mandate to operate with cutting edge technology and be constantly adapting the practices of advanced markets to the agricultural markets in the state, to ensure market efficiency and competitiveness in the agricultural market system for the benefit of farmers and consumers, while making participation of all other market participants sustainable”

AMRC KAMP 2013

S P V Structure

• A JVC between GOK and NSPOT • Rashtriya e Market Services Pvt. Ltd ( 20th January

2014)• Share holding pattern of 50:50 • Chief Secretary GOK as Chairman

– 3 Directors each from GOK and NSPOT– 3 Independent Directors– Provision to raise the total to 12 directors– Certain matters Reserved for Government

(up till GOK holds up to 10%)

AMRC KAMP 2013

APMC

Unified Market Platform

Gadag Market

Warehouse Raichur

Shimoga Market

Trader 1Delhi Trader 2

Bangalore Traders 3Hubbali

Market Integration Scenario

Single virtual Market

Tiptur Market

Unified Market Platform

Trading platform capable of – • Providing multiple price discovery models• Risk management on par with exchanges• Flexible parameters for various markets• Displaying assayed parameters for quality

based bidding• Supporting browser based and SMS based

bidding

Unified Market Platform

Material accounting module capable of • Tracking of goods• Reconciliation of quantities arrived and

exited• Inventory tracking – trader wise,

commission agent wise, etc.

Unified Market Platform

Trade fulfilment module capable of

• Managing post trade processes.

• Integrated pre and post sale processing.

• Setting up flexible rules depending on the

market.

Unified Market Platform

Fund management module capable of – • Collecting funds from buyers and crediting to

sellers• Payment of commission agent charges• Collection of market fee• Collection of other dues – weighing, warehouse

rents, etc.• Maintenance of individual ledgers for

accounting

Unified Market Platform

Document management module capable of

• Generating sale bills, purchase bills, etc.

• Generating permits for transportation, with

automated verification

• Management of returns to be filed

• Elimination of reconciliation currently required

Process flow in UMP market:

Produce exposed on the platform ready for sale

Bid finalization

SMS to Farmer

Unique lot Number given

Bidding across for the lots available

Highest bidder wins lot

Post auction Activity

Sale bill

Payment

Delivery

E permit

Farmer with produce comes to APMC

APMC Gate entry

Connecting markets

UNIQUENESS OF THE KARNATAKA PROJECT

Breakaway from the traditional IT architecture

Not a mere computerization effort,

Redesigning of the market structure

More comprehensive and

all encompassing

Ease of adding markets and

ease of replication

Phases of Implementation

SlNo Month & Year No of Markets

1 February, 2014 3

2 July, 2014 4

3 August, 2014 10

4 September, 2014 14

5 October, 2014 7

6 November, 2014 8

7 December, 2014 8

Phases of Implementation

SlNo Month & YearNo of

Markets

1 January, 2015 3

2 March, 2015 1

3 April, 2015 1

4 June, 2015 2

5 August 19

Total 74

SL Market Live On SL Market Live On

1 Tiptur 22/02/14 19 Turvekere 04/09/14

2 Arasekere 22/02/14 20 Huliyar 04/09/14

3 Chamrajnagar 22/02/14 21 Hosdurga 08/09/14

4 Gadag 09/07/14 22 Sira 09/09/14

5 Chitradurga 17/07/14 23 Bhadravathi 09/09/14

6 Tumkur 28/07/14 24 Bagalkote 15/09/14

7 Bijapur 30/07/14 25 Haveri 15/09/14

8 Challakere 01/08/14 26 Soundatti 18/09/14

9 Hubli 01/08/14 27 Ramdurga 21/09/14

10 Dharwad 08/08/14 28 Siddapura 26/09/14

11 Gubbi 11/08/14 29 Bailahongal 26/09/14

12 Bellary 12/08/14 30 Channagiri 27/09/14

13 Mandya 15/08/14 31 Harapanahalli 27/09/14

14 Raichur 16/08/14 32 Annigere 07/10/14

15 Kottur 21/08/14 33 Haliyal 11/10/14

16 Koppal 22/08/14 34 Hiriyur 11/10/14

17 Mundargi 26/08/14 35 Bhimasamudra 21/10/14

18 Yadgir 01/09/14 36 Manhalingpura 21/10/14

List of 74 UMP Markets

SL Market Live On SL Market Live On

37 Bidar 29/10/14 56 Tarikere 06/08/2015

38 Mysore 31/10/14 57 Bhalki 06/08/2015

39 Thirthhalli 01/11/14 58 Kalaghatagi 06/08/2015

40 Shimoga 05/11/14 59 Basavakalyan 08/08/2015

41 Yellapura 11/11/14 60 Humanabad 09/08/2015

42 Byadgi 14/11/14 61 Badami 07/08/2015

43 Ranebennur 18/11/14 62 Shiggon 10/08/2015

44 Sagar 18/11/14 63 Talikote 11/08/2015

45 Birur 20/11/14 64 Chintamani 11/08/2015

46 Sirsi 25/11/14 65 Hagaribommanahalli 11/08/2015

47 Surpur 20/12/14 66 Savanur 12/08/2015

48 Madhugiri 23/12/14 67 Kushtagi 13/08/2015

49 Kadur 08/01/15 68 Lingasugur 17/08/2015

50 Nargund 08/01/15 69 Sedam 21/08/2015

51 Pavgad 10/01/15 70 Shahapur 25/08/2015

52 Gajendragada 21/03/15 71 Santhesaragur 28/08/2015

53 Laxmeshwar 23/04/15 72 Gundlupet 29/08/2015

54 Hosanagar 20/06/2015 73 Kollegal 31/08/2015

55 Kunigal 30/06/2015 74 Belgaum 31/08/2015

List of 74 UMP Markets

MONTH WISE DETAILS OF TRANSACTIONS IN ALL MARKETS

Month Number of Lots sold on UMP

Traded quantity in quintals

Value (Rs in Crores)

Feb 726 12048 10March 1913 31606 27April 4080 40409 43May 3938 35918 42June 2750 33998 44July 9708 78695 79Aug 44319 245298 149Sep 90204 735870 278Oct 107384 1439244 337Nov 200679 2477258 566Dec 293943 1174145 682Jan 313998 3397476 1267Feb 400309 5938794 1936

March 276877 6741137 1049April 218142 5671473 877May 140175 6251556 1135June 91987 6288286 629

Total 2201132 40593214.88 9151