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MahaFPC to procure 10,000 tn soyabean at farm gate level

Soyabean is currently trading at around Rs. 4,100 per tonne.

After a successful pilot last season, Maharashtra Federation of Farmer Producer Companies (MahaFPC) — the apex body of farmer producer companies in the state — has commenced soyabean procurement at farm gate level for the new season. MahaFPC has procured 1,000 tonne so far and has targeted procurement of 10,000 tonne in the state, said Yogesh Thorat, MD, MahaFPC.

Soyabean is currently trading at around Rs. 4,100 per tonne. The government has fixed soyabean MSP at Rs. 3,410 per quintal for 2019-20 as compared to Rs. 3,399 per quintal last season. MahaFPC has been promoting itself as a business facilitator between corporates and farmers and receives a service charge of Rs. 50-60 per tonne from corporates. Last year, MahaFPC had procured around 678 tonne as a pilot and after seeing the response from corporates it has decided to go into this business on a commercial scale, he said.

The country’s leading soyabean trade body, Indore-based Soybean Processors Association (Sopa), has forecast India’s total soyabean output at 89.8 lakh tonne for the 2019-20 season, as against 110 lakh tonne for the previous year.

Soyabean is a leading kharif oilseed crop, which sets the benchmark for edible oil availability for India. In major mandis of Madhya Pradesh, prices ruled between Rs. 4,000-4,100 a quintal, while in Maharashtra it was in the range of Rs. 3,900-4,100 a quintal earlier this month.Floods in key producing regions resulted in major damage to standing kharif soyabean crop.

Thorat said it will explore forward market linkages to trade in soyabean. MahaFPC is a federation of around 60 farmer producer companies. According to him, MahaFPC has been registered as a vendor with solvent extraction plants and is a business enabler by facilitating the purchase orders, assuring a delivery mechanism and the payments are received into the bank account of MahaFPC since the apex body is registered as a vendor with the corporate. We are not charging the farmers but only taking a service charge from corporates, Thorat said. The FPC assures delivery within 7 days in addition to a payment mechanism in days, he added.

Last season, solvent extraction plant ADM Latur had responded positively to FPCs and has made various interventions in their procurement model so as to ease the business of FPCs. MahaFPC has set up 15 points for collection and aggregation of soyabean this season at Latur, Beed and Osmananbad. The FPC plans to purchase around 8,000 quintal from Latur, a major soyabean producing region.

Last season, six FPCs from Latur started procurement centres for soyabean. These FPCs were collecting the commodity from their member farmers and supplying it to ADM as per its quality standards formula of 10:2:2 (10% moisture, 2% broken grains, 2% foreign matter ).

Thorat said that price discovery is done on a daily basis based on the reference of mandis and rates are circulated to FPCs. If FPCs agree to the rate then contracts are signed and commodity is delivered within seven days. FPCs receive the payment three days after the delivery of the commodity. Farmers are getting money through this process, he said.

Since the spot market rates are same as market rates, this time, MahaFPC is not tapping derivatives markets. Thorat said that FPCs are now in direct competition with traders in APMC since they are also suppliers to solvent extraction plants.

This model of procurement is developing alternate marketing system for the farmers, he added.

As a result of the various initiatives taken by NCDEX, farmer groups are futures contracts to hedge against price dips during the harvest season and are getting better realisations.

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Source: Financial Express