National Spot Exchange wants to sign MoU with Bihar govt for expansion

The National Spot Exchange (NSE) has proposed to sign an agreement with Bihar government seeking to expand its area of operation in the fields of agriculture and food processing.

NSE managing director-cum-chief executive officer Anjani Sinha called on deputy chief minister-cum-finance minister SK
Modi and submitted the proposals for signing the Memorandum of Understanding (MoU) with the state's agriculture and food and consumer protection
departments.
 
Sinha said the NSE is a pan India institutionalised, transparent delivery based electronic spot exchange which enables the farmers to sell farm produce directly to the processors and exporters located anywhere in India.

It has been promoted by Financial Technologies India Limited and NAFED, the apex national-level farmers' cooperative, Sinha said.

"NSE's objective is to reduce intermediation marketing efficiency, our pilot project, which we launched in Khagaria district's Maheshkhunt region this year has proved highly successful as the NSE was able to purchase 30mn tonnes of maize from farmers there at extremely competitive prices, thereby benefiting farmers, who didn't have to worry about how and where to sell their produce, he said.

The NSE is already operational in seven states of the country including Maharashtra, Karnataka, Bihar, Rajasthan, Madhya Pradesh, Gujarat and Uttar Pradesh. Sinha said NSE had offered its facilities to support the farmers of Bihar in all  commodities, which are not highly perishable and where Bihar has got marketable surplus.

NSE has entered into MoU with various state governments such as Madhya Pradesh, Rajasthan, Maharashtra and last month it has signed mou with Orissa government.

"We are interested to sign a similar MoU with the state government through department of Agriculture+, he said adding
the agriculture extension network of the department of agriculture could work jointly with NSE for creating awareness
among farmers about e-trading facilities.

NSE can provide its services to the department of food and consumer protection in respect of procurement of maize under
MSP operation.

For this purpose, government may appoint NSE as its state agency to carry out this job, Sinha said.

"It will also be extremely beneficial to the farmers of Bihar, because the spot price in Bihar for maize is always ruling at lower than MSP. National Spot Exchange has done MSP operation in Andhra Pradesh in cotton, where around 14000 farmers were directly benefited," he said.  Sinha said the NSE can provide its procurement service in mentha oil, which is a costly cash crop.

Most of the mentha oil processors and exporters are already connected with NSE and therefore, NSE can buy out entire mentha crop of Bihar, he said.

For this purpose, certain modifications are required in the current VAT notifications, he said , adding in order to
boost the mentha production, the government should exempt mentha oil from VAT, as it is produced by farmers.

"If the government wants to attract industrialists to set up menthol industry in Bihar, it should provide suitable tax benefits and incentives/subsidies to this industry and then, within one year, there could be revolution in the trade, which in turn will double the farmers, income producing mentha oil.

Jammu announced similar tax benefits and incentives and with 1-2 years, most of the exporters set up their processing factories there.

In order to support agriculture marketing and to revolutionise agriculture economy, national spot exchange will work with the government for exploring various ideas concerning various farm produce, which are produced in the state, he added.