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Focus on best practices in agri supply management at Agri Supply Chain
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Tuesday, 27 January, 2015, 08 : 00 AM [IST]
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Our Bureau, Mumbai
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fiogf49gjkf0d The Confederation of Indian Industry (CII) Institute of Logistics organised a conference on 'Agri Supply Chain 2015' at Palladium Hotel in Mumbai recently.
Among other things, the well-attended conference saw experts from the industry sharing their best practices in agri commodity supply chain management.
On the occasion, the institute in association with NCDEX, released an exclusive report titled “A case for Establishing a Warehouse Receipt Transactions Registry.” The report pertained to agri supply chain industry.
The aim of the conference was to share industry best practices in agri commodity supply chain management, aid banks to understand/appreciate commodity market risks faced by them and also equip them with the necessary risk mitigation tools, highlight the issues in warehousing industry and look at what could be the policy measures that can be recommended to the government for growth.
Warehouse receipt financing is an important instrument to improve credit access to agricultural producers. The efficiency of the inventory credit system in the country and the ecosystem that it creates for structured warehouse financing will go a long way in development of the agricultural sector in the country. With commodity financing still not finding much support from the banking fraternity, the white paper throws light on how warehouse receipt transactions registry will help in bridging the information gap and help in confidence building. It looks at different aspects of warehouse receipt systems across the world and builds a strong case for Warehouse Receipt Based Transactions Registry (WRTR) and also from the perspective of common clearing.
Samir Shah, managing director and chief executive officer, NCDEX, while speaking at the conference, stated, “Warehouse financing is a crucial enabler in the holistic development of the agricultural markets in India and there is a perceived trust deficit that the banks have as far as the sector goes. An electronic registry, which provides transparency and tracking of commodities in every single warehouse in the country will go a long way in giving comfort to the banks and this can be the single biggest game changer for the industry. This is in line with the development in the Indian capital market which has witnessed several initiatives that have helped in bringing transparency to the trade and building confidence among the participants.”
Anil Chaudhary, managing director and chief executive officer, National Bulk Housing Corporation (NBHC), stated, “Agriculture is crucial in India as over half population derives its livelihood from agriculture but they are among the poorest. India runs one of the largest farm produce support programme in the world but the majority of the farmers, the small and marginal ones realise only 35% of the value they produce. Most of the money goes into the hands of intermediaries. Attracting institutional finance from banks is a must in this scenario.”
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