Commodity Procurement Solution

Need

Need

Most commodity markets exhibit few common characteristics. Firstly, the supply side may be highly fragmented with low economies of scale, lower bargaining power and expose to high uncertainties. The demand side may be broadly characterised by large market makers or brokers who benefit from information asymmetry and chisel away large value of the transactions. Governments in many developed and developing countries step in to support the marginal players on the supply side, whether fisherman or farmers by supplying them with required inputs, advice and markets.

Many government departments and groups may be working to enable supply side efficiencies by improving both technical and allocative efficiencies, but seldom in single coordinated fashion. The banks or other financial institutions may be investing in resources (for example, NABARD in India offers term and input loans), state level departments may be allocating their budgets for market making & other activities (for example, Fisheries departments which provide loans, instruments and support for fishermen, Commerce & industries ministry may be creating market places and export zones), and district level administrations may be creating markets for demand side effectiveness (Fisheries yard or APMC or Raithu Bazaars to bring customers closer to the producers). There is no single integrated solution which connects the complete cycle right from producer beneficiary receiving loans under a specific grant, investment pooling of others to increase bargaining power and better prices for their inputs, dynamic market place where the price discovery is open and transparent, and, same day payments to the fishermen accounts directly. The result, despite several million spent through multiple schemes the reach is minimal, market information is hazy, collusion is not controlled and marginal players such as farmers or fishermen continue to be disadvantaged. Indiscrete allocation of funds, low accountability of the fund flow, lack of right targeting of beneficiary, lack of transparency in the allocations and effects thereof and opportunism for leakage is a concern for all governments. Hence, there is an immediate requirement of a centralised and an automated process.

Our commodity solution provides a wider market for the state or federal department concerned to procure and a better opportunity to sell and realise value. We automate the complete process and provide end to end solution under one roof. Our indent to pay solutions completely automates the requisition process, eProcurement suite provides wider market, better quality, and competitive price for the fishery commodities. Our commodity solution enables complete financial tracking. The department can track the activities and transactions of the beneficiary. The beneficiary can track his account wise transactions through smart card thus increasing the transparency in the process.

Solution

Commodity Procurement Solution

Our solution is an integrated procurement solution that has several modules capturing:

  • funds received for the activity from federal and state level agencies,
  • allocations made to different groups (say fisherman or beneficiary identified based on certain income or other criterion),
  •  collate the inputs required by the beneficiary (inputs such as nets, or diesel engines or fertilizers or feeds) so that volume discounts can be obtained,
  •  Distribution of the inputs to different beneficiary
  • a market place where the produce is brought,  products are graded based on measurable quality
  • an auction engine that transparently coordinate the price discovery for all the goods
  • Payment engine that distributes the payments for each beneficiary directly through smartcard or Social security card.

Our commodity procurement solutions is ideally suited for fisheries, tobacco, rubber, horticulture, coffee, cotton, sugar, spices, cocoa etc. wherever State and Federal bodies are involved, grower/producer cooperative or Self-help groups participate and supply & market information asymmetry exists.

Benefits

Benefits

  • Integrated production to payments process mapping
  • Increased market efficiencies on both supply side & demand side
  • Significant cost savings for producers in inputs and other purchase because of pooling of requirements and standardization
  • Improved market efficiency, transparent price discovery and reduce collusion.
  • Producer  access to higher network of buyers
  • Elimination of intermediaries providing direct access to markets and cost savings
  • Regular updates on stock receipts, prices in market places and beneficiary payments processed
  • Tracking all Financial Transactions for both – Departments and Fishermen
  • Enabling Market place to Buy and Sell
  • Information on real market price for specific commodities
  • Significant reduction in risks associated with farmer commodity and reduction in the wastage
  • Regular and centralised market information enabling informed decisions
  • track the flow of funds, keeping intact the financial interest of the stakeholders involved
  • Automation, Collation of centralised information to government agencies to bring transparency, proper distribution of subsidiaries.