NATIONAL AGRICULTURAL

(CO-OPERATIVE MARKETING)
FEDERATION OF INDIA LTD.

NAFED – THE FARMERS CO-

OPERATIVE.

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 INDEX
Sr.No Name of the topics
Page no.
.
Acknowledgment.
1
4
Introduction.
2 5

3 Objectives. 6-9

4 Internal Trade of NAFED during 2006-07 10

5 Warehousing Receipt Based Finance. 11

6 Government operations of NAFED. 12 – 13

7 International trade of NAFED. 14

Industrial trade of NAFED 15 – 17

8

Consumer Marketing of NAFED 18 -19

9

10 Future Trading of NAFED 20

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INTRODUCTION:

National Agricultural Cooperative Marketing

Federation of India Ltd.(NAFED) was established on
the auspicious day of Gandhi Jayanti on 2nd October
1958. NAFED is registered under the Multi State Co-
operative Societies Act. NAFED was setup with the
object to promote Co-operative marketing of
Agricultural Produce to benefit the farmers.
Agricultural farmers are the main members of
NAFED, who have the authority to say in the form of
members of the General Body in the working of
NAFED.
It is an apex cooperative marketing body
playing a key role in the cooperative movement.
NAFED has a unique place in the agriculture sector of
India being a 'farmer friendly' organization dealing in
a wide range of agricultural commodities like
Foodgrains, Pulses, Oilseeds, Spices, Horticulture
produce, Cotton, Tea, Jute & Jute Goods, Poultry
products, Chemical & Bio-fertilizers.
NAFED functions through its Headquarters
at New Delhi and four Regional Offices located at
Delhi, Chennai, Calcutta and Mumbai which are
supported by 24 Branch Offices, 8 Sub-Offices and
18 Industrial Units/Agro Service Centres /Godowns
/Shops spread all over India.

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 OBJECTIVES:

The objectives of the NAFED shall be to organise,

promote and develop marketing, processing and
storage of agricultural, horticultural and forest
produce, distribution of agricultural machinery,
implements and other inputs, undertake inter-State,
import and export trade, wholesale or retail as the
case may be and to act and assist for technical
advice in agricultural production for the promotion
and the working of its members and cooperative
marketing, processing and supply societies in India.
In furtherance of these objectives, the NAFED may
undertake one or more of the following activities :
1. To facilitate, coordinate and promote the
marketing and trading activities of the cooperative
institutions in agricultural and other commodities,
articles and goods;

2. To undertake or promote on its own or on behalf

of its member Institutions or the Government or
Government Organisations, Inter-State and
international trade and commerce and undertake,
wherever necessary, sale, purchase, import, export
and distribution of agricultural commodities,
horticultural and forest produce, other articles and

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goods from various sources for pursuing its business
activities and to act as the agency for canalisation of
export and import and interstate trade of agricultural
and other commodities or articles under any scheme
formulated by the Government of India or other
Government agencies and to facilitate these
activities, wherever necessary, to open
branches/sub-offices and appoint agents at any
place within the country or abroad;

3. To undertake purchase, sale and supply of

agricultural products, marketing and processing
requisites, such as manure, seeds, fertiliser,
agricultural implements and machinery, packing
machinery, construction requisites, processing
machinery for agricultural commodities, forest
produce, dairy, wool and other animal products;

4. To act as warehouseman under the Warehousing

Act and own and construct its own godowns and cold
storages;

5. To act as agent of any Government agency or

cooperative institution, for the purchase, sale,
storage and distribution of agricultural, horticultural,
forest and animal husbandry
produce, wool, agricultural requisites and other
consumer goods;

6. To act as insurance agent and to undertake all

such work which is incidental to the same;

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 7. To organise consultancy work in various fields for
the benefit of the cooperative institutions in general
and for its members in particular;

8. To undertake manufacture of agricultural

machinery and implements, processing, packing, etc.
and other production requisites and consumer
articles by setting up manufacturing units either
directly or in collaboration or as a joint venture with
any other agency, including import and distribution
of spare-parts and components to up-keep of the
machinery/implements;
9. To set up storage units for storing various
commodities and goods, by itself or in collaboration
with any other agency in India or abroad;

10. To maintain transport units of its own or in

collaboration with any other organisation in India or
abroad for movement of goods on land, sea, air etc.;

11. To collaborate with any international agency or a

foreign body for development of cooperative
marketing, processing and other activities for mutual
advantage in India or abroad;

12. To undertake marketing research and

dissemination of market intelligence;

13. To subscribe to the share capital of other

cooperative institutions as well as other public, joint
and private sector enterprises if and when
considered necessary for fulfilling the objectives of
NAFED.

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14. To arrange for the training of employees of
marketing/processing/supply cooperative societies;

15. To maintain common cadres/pools of

managerial/technical personnel required by the
marketing/processing/supply cooperative societies;

16. To establish processing units for processing of

agricultural, horticultural and forest produce and
wool;
17. To undertake grading, packing and
standardisation of agricultural produce and other
articles;

18. To acquire, take on lease or hire, lands,

buildings, fixtures and vehicles and to sell, give on
lease or hire them for the business of NAFED.

19. To advance loans to its members and other

cooperative institutions on the security of goods or
otherwise;

20. To guarantee loans or advances or give

undertakings to any Society or Company in which the
Federation has a shareholding or financial
involvement as a promoter to be able to assist its
development or expansion or for starting any
industrial undertaking by such societies/companies;

21. To guarantee loans or advances or give

undertakings on behalf of any such society or
company as mentioned above to any financing
institutions:

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22. To do all such things or undertake such other
business or activities as may be incidental or
conducive to the attainment of any or all of the
above objects.

INTERNAL TRADE OF NAFED

DURING 2006-07:

Domestic Operations :-

Domestic operations of NAFED mainly comprise of

outright business, joint venture business with
member federation/societies, agency & consignment
business and implementation of price support
scheme/market intervention scheme of the
government of india. NAFED helps farmers by
procuring their produce like foodgrains, pulses,
oilseeds, spices, cotton, tribal produce, jute & jute
products. Eggs, Fresh Fruits & Vegetables throught
the established cooperative network all over the
country with active involvement marketing societies
at mandi level. NAFED also provides marketing
assistance to the farmers by arranging disposal of
their produce on consignment basis at terminal

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markets to enable them fetch best possible price for
their produce.

NAFED at the behest of Govt. of India also serves the

consumers' interests through supply of various
essential items, such as, onions, potatoes, eggs etc.
during scarce marketing situation or when the prices
of such commodities rise abnormally.

Warehousing Receipt Based

Finance :-

In order to attract Farmers for utilizing storage

capacity of Nafed, a scheme of providing finance
against storage of their produce in Nafed
warehouces has been introduced. For Making this
scheme farmers friendly, Nafed and HDFC Bank have
signed a Memorandum of agreement on 01 Feb
2005. The scheme envisaged Providing finance to
farmers through Nafed and its member cooperatives
against pledge of their stocks. WRF will make cash
available to the farmers at the time of their need so
that they take care of their crop.
Broad roles of Nafed and associated cooperatives
would be:

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1. To promote scheme
2. Documentation and security of documents
3. Loan disbursal
4. Market intelligence
5. Disposal of stock in the event of default

For implementation, a joint team with representation

from Nafed and HDFC Bank which will identify the
commodity, Location, Cooperative society and where
house so as to design the promotional campaign and
finally launched

Govt. Operations of Nafed

Price Support Scheme (PSS)

NAFED continued to be the nodal agency of the

Government of India for procurement of identified
oilseeds, pulses and cotton under Price Support
Scheme (PSS). NAFED commences the procurement
directly from the farmers through its cooperative
network at mandi level when the prices of prescribed
quality stock rule at or below the Minimum Support
Price (MSP) fixed by the government.

The prices of Mustard seed, sunflower seed,

safflower seed, seasamum seed, soyabean,
groundnut pods and copra ruled below the
respective Minimum Support Prices (MSPs) fixed bye
the Government of India for the relevant marketing
season. In the case of mustard seed, NAFED madea
record procurement of 22.05 lakh MTs valuing Rs.
4420.30 crores, out of which a quantity of 19.13 lakh

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MTs valuing Rs. 3413.45 crores mustard seed was
procured under Price Support Scheme (PSS) during
the year 2006-2007. NAFED also procured a quantity
of 49323 MTs of sofflower seed valued at Rs. 79.05
crores, 3835 MTs of sunflower seed valued at Rs.
6.01 crores, 377 MTs seasamum seed valuing at Rs.
0.60 crores, 20941 MTs copra valuing Rs. 79.02
crores and 117 MTs groundnut pods valuing Rs. 0.22
crores under PSS upto 31st March, 2007.

The prices of various pulses during the year 2006-

2007 remained quite firm and, therefore, no
procurement of pulses under PSS was necessitated.
Furthermore, the prices of cotton (F-414/H-777/J-34
and H-4) also reled firm against their respective
MSPs and, therefore, there was no procurement of
cotton by NAFED under PSS.

In addition, NAFED also procured 290925 MTs paddy

of the value of Rs. 178.36 crores as one of the
agencies of the State Governments of Orissa and
West Bengal under the decentralized scheme and
80,394 MTs paddy valuing Rs. 51.62 crores as an
agency of FCI in the States of Uttar Pradesh and
Bihar during the 2006-2007.

Market Intervention Scheme (MIS)

Market Intervention Scheme (MIS) is an ad-hoc
scheme. Agricultural commodities generally of
perishable in nature and which are not covered
under the Price Support Scheme are eligible for
coverage under the MIS. The main objective of MIS is
to prevent the farmers from making distress sale of
their produce particularly when the rates fall below

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the uneconomic level. The underlying objective of
the Scheme is to stabilize the prices at reasonable
level to sustain the production.
NAFED is the Nodal agency of the Government of
India for implementation of MIS. So far, it has been
asked by the Government to implement MIS in
Onion, Potato, Ginger, Kinnow, Malta, Naspati, Apple,
Black pepper, Red chilies, Coriander seed, Eggs and
Oil palm bunches in different years. During 2005-06
no procurement was necessitated under MIS.

International Trade of Nafed

Exports
During 2006-2007, the total export of agricultural
commodities handled by NAFED was of the order of
Rs. 520.55 crores. Onion remained the key
commodity in the export basket of NAFED;
contributing to the extent of Rs. 484.86 crores in the
total exports of NAFED. During the year, a record
quantity of 11.61 lakh MTs onion was exported from
the country as compared to 7.78 lakh MTs onion
exported during the previous year. Out of the total
export of 11.61 lakhs MTs from the country, NAFED
exported a quantity of 4.75 lakhs MTs onion through
its associate shippers and 8317 MTs directly.

NAFED has been regularly exporting potatoes. A

quantity of 442 MTs of potato valuing Rs. 0.90 crores
was exported by NAFED during the year 2006-2007.
Persistent efforts are being made to further increase
the export of potatoes to countries like Singapore,
Malaysia, Srilanka etc.

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A quantity of 16350 MTs Rice valued at Rs. 17.26
crores was exported to Somalia, Maputo, Sri Lanka,
Durban (South Africa) and Russia.

Apart from the above, NAFED also exported red

chillies, turmeric, and groundnut kernels in outright
account.

Industrial Activities of Nafed:

NAFED Created infrastructure for production of agri-inputs,
warehousing, grading and packing of agricultural
commodities in the large interest of the farmers. Details of
various industrial activities undertaken by NAFED are given
as under.

NAFED Bio-Fertilizers

NAFED Bio-fertilizer, Indore continued manufacturedifferent

bio-fertilizers including Rhizobium, Aztobactor and PSB/PSM.
NAFED bio-fertilizers are very popular amongst farmers
despite the advent of several brands in bio-fertilizers from
the private sector. The bio-fertilizer PSB/PSM enhances the
effectiveness of expensive chemical fertilizers namely Single
Super Phosphate and DAP.

The other bio-fertilizer manufacturing unit was set up by

NAFED at Bharatput in Rajasthan in the year 2001. Apart
from manufacturing regular bio-fertilizer products namely,
Rhizobium, Aztobactor and PSB/PSM, it also focuses
attention in manufacturing Acetobactor, Trichoderma and
Composting Culture.

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The NBF products are marketed through branches/centres at
Jaipur, Lucknow, Pune, Hyderabad, Bhopal, Sagar and Ujjain
to facilitate proper and timely distribution to the farmers in
different parts of the country. The NAFED Bio-Fertilizers have
also started the marketing of Liquid Bio-Fertilizers to the
farming community by out-sourcing the products.

In recognition of the performance of NAFED Bio-Fertilizers

units, National Productivity Council had given NAFED the
First Prize in the Category of Bio-Fertilizers Producers Sector.
During the year 2006-2007, the total turnover of NBF Units
was of the order of Rs. 2.10 crores.

Cold Storage and Godown at Delhi

During the year 2006 - 07, NAFED Cold Storage located at

Lawrence Road, Delhi generated a surplus of Rs . 34.17
lakhs and godown a surplus of Rs . 34.32 laks.

NAFED warehousing and Processing Industries, Vashi (Navi

Mumbai)

The Unit is utillsed for storage of agricultural commodities. A

part of the NWPI Complex is used as a bonded warehouse by
the Department of Customs. The toal income generated by
this Unit by way of processing charges and rental income
from the warehousing activities during the year 2006-2007
was of the order of Rs. 76.58 lakhs.

The Federation has consutructed a Cold Storage having the

capacity of 3000 MTs at Vashi and during the year 2006-
2007, revenue of the order of Rs. 44.29 laksh was
ganerated.

NAFED Kinnow-Grading-Waxing Plant, MaujGarh, Punjab

This Unit has been set up of enhancing the shelf-life of fruits

particularly Kinnow by grading and waxing for export and
also for internal trade. From the processing work, the

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revenue generation during the year 2006-07 was Rs. 5.34
lakhs.

NAFED pre-cooling and Cold Storage, Pimpalgaon, Nasik

This Unit has been set up for grading, processing and cold
storage facilities for Grapes for exports and dried grapes
(raisins) for domestic trade. The business handled by the
Unit during the year 2006-2007 was of the order of 9.15
lakhs.

NAFED Krishi Yantra Udyog, Bhiwadi, Rajasthan

This Unit has been given on lease and license basis for
undertaking the manufacturing and trading activities of
plastic products. The rental income received during the year
2006-2007 was Rs. 9.51 lakhs.

RAICHIUR co-operative oil Complex, Raichur, Karnataka

The rental income received by way of undertaking

warehousing activities in this Unit during the year 2006-
2007 was Rs. 2.64 lakhs.

Warehouses & Cold Storages

NAFED is providing storage and other infrastructural

facilities to the farmers for storing their agricultural produce
in the States of Delhi (Ujawa & Lawrence Road), Uttar
Pradesh (Bakshi Ka Talab, Lucknow), Madhya Pradesh
(Indore & Ganjbasoda), Rajasthan (Bharatpur & Bhiwadi),

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Gujarat (Morbi), Maharashtra (Pimpalgaon, Lasalgaon &
Vashi - Navi Mumbai), Bihar (Sheikhpura, Beldarichuk &
Bihar Sharif), Tamilnadu (Nagapattium & Madhavaram),
Karnataka (Raichur), Kerala (Gandhinagar & Mattancherry)
where it has constructed storage capacity of 4400 MTs of
onion, 31,900 MTs of general commodity & 9565 MTs. of
Cold Storage.

Consumer Marketing of NAFED:

NAFED continues to serve the consumers in different

parts of the country by making available quality
products at competitive prices. NAFED serves both
institutions and consumers directly and also through
the net-work of distributors. NAFED is presently
catering to over 80 institutions that include hotels,
hospitals, hostels, Para-miltary units etc.

During 2006-2007, Nafed launched mustard oil in

NAFED barand both in 15kgs. tins and also in
consumer packs. The mustard oil is being marketed
in the States of Delhi, U.P. Bihar, West Bengal,

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Orissa, Jharkhand, North-Eastern States and
Chattisgarh. In addition, spices in the brand name of
NAFED in consumers packs ware also launched in the
States of Orissa, West Bengal, Bihar and Jharkhand.

During 2006-2007, various consumer products of the

value of Rs. 59.05 crores were sold as compared to
Rs. 22.39 crores aold during the last year; an
increase of 163%.

Poultry Products
To help the poultry farmers, Nafed handled eggs
valued at Rs. 1.45 crores in outright account during
the year 2006-2007.

Distribution of Onion in Delhi at concessionals Rates

At the behest of the Government of India, NAFED

arranges distribution of onion to the consumers at
subsidized rates whenever the prices show upward
trend in the market through its own retail outlets and
mobile vans. The prices of onion in domestic market
were ruling high in the months of january-March'07.
Nafed on its own distributed onion in delhi during the
said period to the consumers at concessional rate
and stabilised prices at reasonable level to the
benefit of consumers.

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 Futures Trading of NAFED:
The future trading activities had been initially
commenced by our Cochin and Calicut branches with
commodities like pepper, rubber and cardamom.
Subsequently, this business activity was expanded to
most to the branches and almost all the agricultural
commodities including rubber, black pepper,
turmeric, chilly, soyabean, mustard seed, potato,
zeera etc. were traded on commodity exchanges.
Futures trading activity has been taken up by NAFED
for better price discovery and risk management
since agri-business is fraught with risk on account of
frequent market fluctuation.

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