It has facilities to handle price fluctuation and loss possibilities, said Dr T N Venkata Reddy, the head of the Agricultural Marketing and Business Development Department in the University of Agricultural Sciences, Bangalore.
He delivered a special talk during a district-level awareness workshop organised by Nabard at Lead Bank hall.
“There are three types of market systems. Manufacturers, broker, trader, stockist, retailer and consumer are the stakeholders here. There are immediate markets, future markets and computer network based immediate market transaction systems.
In the immediate transaction system, the trading process ends immediately since direct transfer of goods takes place. Future markets are speculative markets in which the goods exchanged are futures on the occurrence of certain events. The future market was made legal when Vajpayee was the Prime Minister,” Reddy explained.
The immediate market is limited to a specific area. There will be no competition, witness and proof. But, there will be agreements on the clarity of classification, price and quantity in the future market.
NCDEX, MCX and NMEC organisations supervise this kind of system. It is a kind of gambling too. Since, it may cause price hike, the government has kept certain agricultural commodities like rice, wheat etc out of the future market, he noted.
The computer network based immediate transaction market system not only regulates the brokers between the manufacturer and the consumer but also provides for price search and risk management. Since there is scope for competition, it works as barometer also. At present, 10-15 per cent of trading is going on in this system, which will cover the entire market in another decade, Venkata Reddy analysed.
Nabard AGM Dr Divakar Hegde said the prediction market witnessed significant growth after 2003. People have no clear knowledge about the logical economy and the future market system.
Due to this, deserving people are remaining away from the business.
The workshop has been organised to create awareness in different sectors of the society regarding the new market system, he said.
Progressive farmer H R Chandre Gowda inaugurated the workshop.