Cooperative commodities exchange: A global vision for farmer empowerment

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Cooperative commodities exchange: A global vision for farmer empowerment

Saturday, 25 January 2025 | Binod Anand

Cooperative commodities exchange: A global vision for farmer empowerment

This initiative leverages technology, blockchain and India’s PACS network to empower farmers with fair pricing, sustainability and direct market access

The agricultural sector is the backbone of many economies, particularly in India, where nearly 60 per cent of the population depends on farming for their livelihood. Yet, smallholder farmers often remain at the mercy of intermediaries, fluctuating market prices and unequal access to global markets.

To address these challenges and promote equity, sustainability and growth, a bold initiative is proposed: the establishment of a Global Farmer-Centric Cooperative Commodities Exchange (GFCCE). This platform, rooted in the cooperative model, aims to empower farmers by ensuring fair pricing, direct market access, and sustainable practices.This ambitious project resonates with the global agenda of the World Cooperation Economic Forum to foster inclusive economic growth and social equity. Empowering Farmers Through Technology

APEX Integration at the heart of this initiative lies technology—a powerful enabler that can bridge the gap between farmers and markets. The GFCCE will leverage the Government of India’s support to develop a robust and accessible digital platform integrated with blockchain technology to ensure transparency and reduce pilferage in the supply chain. Blockchain will create a tamper-proof record of transactions, from production to storage and distribution, enhancing trust and accountability.

The project will adopt a PACS-to-APEX (Primary Agricultural Cooperative Societies to Apex-level organisations) approach, leveraging India’s extensive network of over 95,000 PACS. These societies will act as the foundational nodes, aggregating produce from farmers at the village level. The commodities will then be funnelled through district and state-level federations, culminating at the national apex organisation, which will oversee operations, ensure fair pricing and manage exports. To address storage issues, a network of modern warehouses will be constructed and integrated with blockchain systems. These warehouses, equipped with real-time inventory tracking, temperature controls and pest management systems, will be strategically located across key agricultural regions.

Blockchain connectivity across warehouses will enable seamless tracking of stored produce, ensuring reduced wastage and pilferage. Farmers will also receive warehouse receipts, which can be used as collateral for loans, providing them with immediate financial support.

This interconnected system will not only provide farmers with better access to markets but also ensure that the supply chain is efficient, transparent and secure. It will serve as the backbone for procurement planning and play a vital role in stabilising food prices.

Impact on Food Inflation

The GFCCE’s blockchain-enabled supply chain and warehouse network will revolutionise procurement planning and control food inflation. With real-time data on production, storage, and distribution, government agencies will have accurate insights into commodity availability and demand patterns.

This data-driven approach will enable timely procurement decisions, ensuring that food stocks are adequately replenished and distributed.

By reducing post-harvest losses and pilferage, the initiative will improve the efficiency of the Public Distribution System (PDS), preventing artificial shortages that often lead to price spikes. Additionally, the transparent pricing mechanism of the exchange will curb hoarding and speculation.

This system will also facilitate targeted interventions during periods of surplus or deficit. For instance, in the case of bumper harvests, surplus stocks can be stored efficiently and exported strategically to global markets, preventing a price crash domestically.

(The writer was a member of the high level MSP committee, Ministry of Agriculture; views are personal)

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