Commodity Exchange helps in Transforming Farmers from Producers to Marketers
With an aim to bring transparent markets to farmers’ doorsteps, the Multi Commodity Exchange of India (MCX) has implemented the idea of rural service centres, or ‘Gramin Suvidha Kendra’.Headquartered in Mumbai, the Multi Commodity Exchange of India Ltd (MCX) is a state-of-the-art electronic commodity Futures Exchange. The demutualised Exchange set up by Financial Technologies (India) Ltd. (FTIL) has permanent recognition from the Government of India in order to facilitate online trading and for clearance and settlement operations for commodity futures across the country.
Sarita Bahl, Vice President, MCX, tells YourStory the story on how they came about to create these rural service centres, thereby transforming them from mere producers to marketers and aimed at ensuring that the benefits of commodity exchanges reach the recesses of rural India.
What is the Gramin Suvidha Kendra by MCX all about?
Multi Commodity Exchange of India Limited (MCX)http://36ohk6dgmcd1n.c.yom.mail.yahoo.net/om/api/1.0/openmail.app.invoke/36ohk6dgmcd1n/5/1.0.35/in/en-IN/view.html - 132bedd9f99fd7ba__ftn1 is a demutualised commodity exchange with permanent recognition from the Government of India. It has a market share of around 80 percent of the Indian commodity futures market and 2000 registered members.
MCX was ranked as the world’s sixth largest commodity exchange in the year 2010. The exchange envisions a unified Indian commodity market driven by market forces and a level playing field for all stakeholders. It aims at bringing together farmers, consumers, traders, exporters, importers on a single platform.
In June 2006, MCX and India Post formed a strategic alliance to create rural service centres, ‘Gramin Suvidha Kendra’ (GSK) aimed at ensuring that the benefits of commodity exchanges reach the recesses of rural India, through a single-window service for farmers’ pre and post harvest requirements.
GSK is a unique marketing Public Private Partnership (PPP) model based on trust and credibility, and brings transparent markets to farmers’ doorsteps.
By providing price information, GSK benefits farmers by helping them decide what to sow and when to sell. GSK also provides services such as addressing technical queries, scientific warehousing facilities, quality agricultural or non-agricultural inputs and bank loans. MCX has entered into partnerships to bring these services under a single hybrid window making the model revenue generative and sustainable.
How did you come up with the idea?
Markets in much of India do not function well for those who are most in need of them – reliable market information is hard to find for many farmers, critical inputs are scarce and expensive in times of need and even if available, often of doubtful quality, many service providers tend to be absent from the villages and so on.
By leveraging its core domain knowledge on how to create efficient market places using modern technology, MCX endeavours to bring markets to the masses, working with an institute – India Post – that is not only widely present in rural areas but is also highly regarded by most rural dwellers. The ultimate aim is to create a sustainable and comprehensive process of rural development.
How was the support from employees for this CSR initiative?
At MCX, CSR activities are viewed as ‘opportunities’ and thus called Corporate Social Opportunities (CSO). The potential opportunities that arise from these CSO activities improve the welfare of the economically marginalized, while simultaneously guaranteeing long term project sustainability and adding value to MCX’s business interests. Employee engagement and buy in are part and parcel of our CSO work.
What was the outreach of the project?
As of April 2011, the “Gramin Suvidha Kendra” operates through 26 centres spread across 6 states, reached out to many farmers through over 400 branch post offices of India Post.
What is your background?With a masters in Medical and Psychiatric Social Work from Tata Institute of Social Sciences, Mumbai coupled with management and science degrees I, Sarita Bahl, bring in 24 years of work experience. My forte lies in my ability to function across different sectors and in various fields like Inclusive Business, Communications and Training.
What are the challenges in terms of CSR initiative?
The GSK model was launched with the primary objective of providing price information using postal network and with an idea to provide access to markets for the farmers in future as it becomes feasible. It was a challenge to broaden its scope and area of functioning to help scale up the model.
Moving away from gratis price information model to putting in place services that would make the model sustainable called for intense rounds of discussions with partners and farmers. Each service had to be rolled out in line with the regulatory framework of the exchange and ensuring that the exchange never steps out of line from its core business. Managing diverse partners and to mould the model to fit in with their objectives to benefit farmers is one of the biggest challenge in such a project. Hence constant dialogue and intense interactions are required to strike the right balance between all partners.
How did NSIH benefit you? Please share your experiences with us.
Being one of the winners of the NSIH-2010 is a source of continuous motivation and inspiration to us. The fact that NSIH award winners go through a rigorous procedure of selection and short listing made us also critically evaluate the model and study it in more depth. Awards like these also help raise our own standards vis-à-vis performance and ensuring that we continue to create that much needed difference that adds value to overall development of the country.
For more information, please check out MCXIndia.