AKRSPI Client in Gujarat StateAKRSPI learned a great deal of valuable information from this pilot program. Few farmers opted to store their harvest in warehouse facilities provided by NSEL since they could receive better prices by selling immediately in the conventional market. Many of these farmers voiced concern with the small number of buyers participating through NSEL and felt that the program would not benefit them.

Nine farmers opted to store their produce in warehouses for approximately 14 days. Out of these nine farmers, four went ahead to sell their produce in the pilot-sponsored spot exchange with NSEL, while five sold their produce in the conventional market. Both groups received slightly higher than average prices for their product, with little difference between the spot exchange group and the conventional group.

Many factors contributed to the low participation of AKRSPI’s rural farmers in the pilot program. The number of potential buyers secured by NSEL was quite low, resulting in little motivation among them to compete for the commodity and offer prices above current market value.

Additionally, one of the methods commonly used to measure the quality and sales price of groundnut is to measure the oil content. In the traditional market, acceptable oil content can range anywhere from 45%-55%, allowing producers to sell groundnut with higher oil content at higher prices. In the pilot program, NSEL set an oil content standard at 48%, eliminating the possibility that farmers could make more profit with higher quality groundnut.

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Finally, many of the farmers felt uncertain about the benefits of the program and felt that some representatives at NSEL did not sufficiently understand the conventional groundnut market. As a result of this lack of understanding, NSEL was unable to design a particular spot exchange that farmers could readily observe substantial benefits from participation as opposed to operating in their familiar trading environment.

However, even though this particular pilot project experienced challenges, a majority of AKRSPI’s farmers voiced positive feelings about the program. Specifically, farmers appreciated the price discovery aspect of the spot exchange process, feeling that they were better able to negotiate their sales prices with sufficient knowledge of current market prices. Farmers were also very enthusiastic about the technology used for spot exchanges as well as the concept of warehouse receipts. Every farmer participating in AKRSPI’s interviews and focus groups stated that warehouse receipts addressed a crucial need for rural farmers.

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