ARECA NUT AUCTIONING (Sale Yard)
A safe and satisfactory place to sell and stock
As mentioned in the bylaws of the society most important and primary objective of TSS is to provide a transparent and pro - farmer marketing platform for the produce grown by the members of the society. Any person growing areca nut, pepper and cardamom can join TSS as a nominal member to sell his produce. He has to just bring his KYC papers such as Land RTC, Adharcard, Voter ID /Ration Card or Pan card to open his account and start selling his produce however small or big it may be. The society charges only weighment hamali charges to the grower and collects all other charges including its own commission of 2% from the traders. This system has resulted over the years into a very successful system of agri produce auctioning and has resulted in substantially reducing the dependency of farmers on private commission agents (Mandis) and has gradually brought most of the farmers in to co- operative field. TSS with its successful business model in areca nut has given birth to many of similar marketing co-operatives in Uttar Kannada district (Taluka marketing societies –TMS Sirsi, TMS Siddapur, TMS Yellapur) and also in various areca growing areas of Karnataka such as MAMCOS Shimogga, TUMCOS Chennagiri, APSCOS Sagar, DAMCOS Davangere, RAMCOS Badravati etc… This has resulted in healthy competition among co-operatives and customers choices. It has a unique system of linking credit with marketing through primary co-operative societies where in PACs collect betel nut bags on behalf of their members and bring it for auction and TSS in turn will cater to the financial requirements of the members of the PACs through PAC.
The auction is conducted in all 6 days of the week throughout the year and has a capacity of about 1500 max/day. This system has started from day one of establishment of the society.
The activity commences with the member or producer bringing his produce to sell here on a market day. He has to mention his name or account number and enter the number of bags brought for sale with the help of office Staff. In case of a member from PACs, his unique code number in that PACs needs to be mentioned. The same is also duplicated in "arrivals register" kept for the purpose. For further action , members need to inform either through phone or in person the date, variety and number of bags to be released for sales. The same is mentioned in a separate register to cross check later. The presence of members is expected on the date of sale to verify rate, quality and weighment.
Rough weights of each bags are done and mentioned in weighment register of arrivals by keeping -2 ( two k.g. minus) in electronic weighing scale as tare against weight of gunny bags and accounting for weather and temperature variations. A computerized rough weight slip is generated with the assistance of weighments and one copy is given to member (kacha patti). The same will serve as base to measure the final weight of commodity put for sales.
If the produce of a member is of the same quality, then the entire quantity will be poured on the ground as single heap and if the produce is of different varieties, then they are to be poured in different heaps. After that, from first heap up to the last heap, the lot numbers will be assigned to differentiate varieties. There are different methods followed with the passage of time for assigning lot numbers. The first method where heaps were numbered as A1 to A 50 and B1 to B 50 and so on. While in the second method each heaps were named as 1, 2, 3, 4, 5 etc., from the first one to till the last one. The present method were heaps are assigned numbers from A1 to A 150 and B1 to B 150 and so on. This procedure of pouring the produces on the ground while selling for display is called Chaka. (Putting in the form of lots). The number given to each heap is called lot number. The details of members name, areca nut variety, number of bags, and lot number of each heaps will be entered in the tender register and then the same will be entered in the computer. The gunny bags pertaining to each heap will be kept along with the respective heaps.
APMC licensed traders can attend for tender by simply putting an application to the society along with their trade license registration, Tax number given by competent authorities along with basic KYC details. The trader can buy in the auction to the extent of 4 times the amount he has kept with the society as deposit. The merchants willing to buy produces by participating in the tender system shall fulfill certain norms and conditions framed by the society. The purchase should be regular in nature. The printed tender forms are supplied to quote rates and a trader can quote his rate to desired variety and heaps. later, they are entered in computer for sorting and declaration. All these functions are carried over in the morning session and declaration take place in mid noon. The invention of computers and advancement in the technology has sidelined the past method of declaring tender by keeping tender forms of all traders over a table, searching highest rate quoted, announcing and recording the same over registers. e-Rems tender rate entry software adopted helps in declaring the rates quoted to each lots with few finger strokes and merchant in Mumbai can access the same through web in fewer seconds. The lots are declared finally to the traders quoting highest rate to heaps. Declared rates are displayed through television, the same can be viewed by farmers and traders simultaneously.
TSS also participates in tender system and buys areca nut, pepper and cardamom for the sake of growers and to prevent the private traders from taking a undue advantage of any adverse market conditions ,this acts as market intervention program by the society in the interest of growers and ensures steady market conditions and helps farmers to ready their harvested produce for selling at a leisure pace.The society grades the produce bought from auction and sells at a premium in the market in its own brand name throughout India.Here in the auction process the trader has no right to cancel his bid rate ,He has an option to increase it after the tender process is over but the farmers-seller has the optioned to cancel the sale if he feels the rate is not satisfactory or if he intends to wait for better price in the future. In such cases the cancellation charges need to be borne by the seller.
FINAL WEIGHT MEASUREMENT PROCEDURE
In the afternoon session final weight measurement work will be done after posting declared results to office computers. If there is no reply from farmers side regarding rate and cancellation, this implies commodities can be sold. Then the traders will bring sufficient number of gunny bags engraved their firm name over it to fill in the commodities. Final weight measurement is done by keeping one kilogram minus to adjust gunny bags weight on the electronic scale. All bags are filled 50 kg evenly and is called as Nade and last bag comprising weight below 50 kg is kore. The weight details of each such lot are written on the register and entered in computer to prepare sale bill (vikri patti). Final weight is cross verified with rough weight before preparing final sale bill. If it is found correct, then the same will be printed and posted to members account. The sale proceeds of members of PACs are credited to respective PACS accounts maintained with us. The sale yard will be cleaned and made ready for next day sales immediately after completion of final weight and lifting of bags. A separate wing is maintained to keep empty gunny bags belonging to farmers after sale in the systematic manner in a traceable way which will facilitate the farmer to come and collect those gunny bags on a later date convenient to him.
PURCHASERS BILL CREATION
On the same evening purchasers invoices are created after confirmation of bags and weight. This bill comprises of the price for the commodity along with total amount commensurate with number of bags auctioned, the society commission, market cess, GST and other incidental charges that they required to pay. The purchasers have two options here – they can either take custody of the commodity purchased by paying the entire amount of the invoice within 3 days without incurring any additional charges or they can give the custody of the commodity purchased to the society and pay the entire amount at the time of releasing the goods at a later date with predetermined interest. A separate go-down is maintained along with a separate space for each merchant’s stock till the payment is received. This system ensures the trader a collateral free commodity financing by just keeping the commodity purchased as collateral and this very business model has emerged as single biggest success point in the 95 year history of this society and this business model till today has relevance in the areca nut trade. However,the farmer is paid on the same day irrespective of the payment arrangement of the trader and the entire amount of the sale proceeds is deposited in to farmer’s account maintained with the institution.