Online potato auction launched
Farmers across the country can now sell their potatoes online.
Food Corporation of Bhutan (FCB) with Royal Securities Exchange of Bhutan Limited (RSEBL) launched the system at Phuentsholing’s auction yard on Wednesday.
The agriculture department and Dzongkhag administration are also involved with the online auction launch.
With the system in place, the farmers can now quote their prices online and whoever meets the price of the product will get a delivery. The farmers can now sell their potatoes from one place without having to transport their produce to the main auction yard.
General Manager of RSEBL, Pramod Chhetri, said that both the farmers and the bidders can sit at their respective places without having to travel to the auction yard for the deal. “The product will be graded by machine,” he said.
FCB’s Marketing Advisor, Bhim Raj Gurung said the online auction is meant to discover and provide the farmers’ expected prices. “Our farmers will have more advantage fetching better prices,” he said.
Online marketing can be done abroad as well and FCB after grading the potatoes will pack them in a standard bag weighing 51kg each with proper information. FCB will open warehouses in different places after assessing the system’s success.
However, since it could not be done initially, FCB and RSEBL are planning to install smaller grading machines across the potato growing places to grade and sell it online.
Depending on the number of lots and the prices offered by the sellers and the bidders, the price will be determined by the system. Unlike in the open auction where the highest bidder used to get the whole lot, the deal would be hasslefree.
The online auction would also prevent bidders from re-grading like in the open auction, which results in price increment. “The grading machine does the fine grading,” he said.
FCB and RSEBL have come together for a trading solution into commodity platform. Commodity market with a trading technology works similar to the exchange market. Now the two authorities brings along all demand and supply in a single platform with digital electronic trading.
The potato is graded and recorded in the warehouse and the members of the exchange will record the information and auction.
Farmers can quote their minimum price and the traders can come and bid. “Being on a digital platform, both the traders and farmers have the luxury to go anywhere for the trade,” Pramod Chhetri said.
Once the online auction gains popularity, farmers can store their products in warehouses and do not require traveling to the auction yard.
The market will be driven by volume and supply not by traders and farmers. The system will do the market discovery of the price. Also the farmers would not incur losses on the transportation of goods.
On the first day, the best price online was Nu 28 per kilo, Nu 1 more than the open auction price.
Both FCB and RSEBL plan to introduce the system for other cash crops like cardamom, apple and orange, vegetables and even eggs and cordyceps avoiding the middleman. “It will benefit the overall agriculture sector,” Pramod Chhetri said. But before that, FCB and RSEBL need to study its viability.
FCB is also trying to procure smaller grading machines to install in the centers where warehouses are located. The machines will be distributed based on the need, according to Pramod Chhetri. “First we need to streamline and scan the scenario. Once everyone is interested, we will move to other regions,” he said.
Online auctioning would also allow the farmers with lesser product quantity to take part in the auction unlike in the open auction where they merge with the larger quantities to avoid fares to reach the auction yard.
The online price has surpassed the conventional price making both the farmers and traders happy. The system would encourage local traders to take part in the auction as most of the traders currently are Indians.
While FCB will carry out the auctioning processes, RSEBL will be the controlling agent.
FCB has already trained 10 officials for the process of online auctioning. The potato-grading machine was procured at Nu 4.5mn from Haryana. The machine can grade 10 MT of potato per hour.
Initially, Chapcha’s potatoes will be auctioned online and 100 households will be participating in June this year. However, it will be open for other farmers too.