After becoming an accredited warehouse of the National Commodity and Derivatives Exchange (NCDEX) last month, the National Bulk Handling Corporation (NBHC) will focus on bringing small farmers, who currently account for about 5 per cent of its total business into its fold in the next fiscal.
“We are currently doing business worth between ₹6,500 and ₹7,500 crore, of this the farmer segment is about 5 per cent. Given the tremendous potential that exists, since currently 50-60 per cent of the crop is held by the farmer himself, we have a target of about 10-12 per cent over the next three years. The process for this will start from the next fiscal,” Vijay Venkataraman, Chief Business Officer, NBHC, told BusinessLine on Wednesday.
Warehouse receipt financing is another thrust area, he said, and will rise significantly with the Government supporting and extending requisite education to farmers. NBHC has cumulatively managed about ₹65,000 crore in assets for 45 banks.
“The representation of farmers in private sector funding is low, we are paying particular attention to that to enable farmers to get seamless financing against their stock. It is also a part of educating farmers about professional storage practices. The market linkage that such services provide has benefits which outweigh the costs,” Venkataraman said.
The High-Level Committee, in its suggestions for reforming the Food Corporation of India (FCI), recommended to the Food Ministry that the presence of more private agencies in storage and distribution of foodgrains would help curb leakages. Such a move, if realised, would certainly benefit players like NBHC and prevent unnecessary wastage, said Venkataraman.
Managing distortion“When you have large interventions like the FCI, it distorts markets and you end up overbuying and then subsidising exports as a balance.
“If storage is moved away from Government agencies, then there will be a strong stimulus for the private sector to improve scales and efficiency and processes more geared towards bulk handling and automation,” he said.
NBHC, bought by the India Value Fund Trustee Company for ₹242 crore from FTIL last April, has a total warehousing capacity of 90,000 tonnes across 1,500 warehouses and expects its procurement operations to touch ₹700-800 crore a year. It currently works with about 40 commodities including cotton, sugar and paddy.