The Maharashtra State Warehousing Corporation or better known as the MSWC had undertaken a pilot project which was based on the use of blockchain technology that resulted in the farmers benefiting from being able to access their commodity funds a lot faster than they previously used to. This season, there are discussions going on to upscale the project for broader usability.
Blockchain is a decentralised ledger technology that can store data across different servers in the same network and in a completely decentralised manner. This data can be viewed almost in real time by any person who has access to the particular community on that blockchain. Currently, the system in Maharashtra is as such that if the farmers need to access their loans against the commodities they want to keep as collaterals, it usually takes around seven days for the loans to get approval from the government. But experts have suggested that by using the technology of blockchain in this space, they can actually reduce this span of getting approval to a minimum of 24 hours.
Commodity finance are basically loans that are given out to the farmers who require them, in exchange for their agricultural produce. Accredited warehouses give out warehouse receipts to the farmers for using the warehouses in order to store their produce. The farmers need to produce these warehouse receipts if they are willing to avail a loan. The whole concept is aimed at making sure that the poor farmers can get better prices for the labour of their produce instead of selling their hard produce in exchange for distress sales at bare minimum prices.
Deepak Taware who is a senior Bureaucrat and also the head of the Maharashtra State Warehousing Corporation or the MSWC, mentioned that the concept of producing warehouse receipts has been promoted and supported by both the state and the Central Government. He stated that during the initial period of the harvest season, most of the farmers are generally in dire need of money and in case of emergencies, they usually sell out their produce in exchange for really less sum of money. He mentioned that the prices for the produce keep going down because the supply exceeds the demand in the market. He is of the opinion that if the farmers can stagger their sales instead of selling off their entire produce in one instance alone, then they would actually be able to make some profit that way. The use of warehouse receipts acn actually help these farmers in that direction.
However, according to the experts the entire procedure of commodity finance is extremely convoluted and on top of that, really time consuming. The receipts are generated only after the farmers bring their produce to the warehouses. The farmers then have to take the physical copy of the receipts to the bank, where the officials will be issuing the loans only after they have verified and checked the stock. But unfortunately, this entire process takes around an estimated seven to fifteen days, which actually defeats the whole purpose of this entire initiative, and that is exactly the reason why they are thinking of implementing blockchain technology because it would drastically improve the time span.
In order to implement this scheme, the MSWC has forged a special agreement with the MSC or the Maharashtra State Cooperative Bank. They are using a technology developed by a startup named WHRRL Technologies, MSWC has been able to link around 203 warehouses and now they can issue these warehouse receipts almost immediately. This incredible platform can also be accessed by the Cooperative Bank and the whole process of transaction can be completed within a given time frame of only 24 hours. As a result, the banks can find out in real time when these receipts are issued by the warehouses and immediately inform the farmers to upsell their scheme of commodity finance.
According to the reports, more than 185 farmers were able to participate in this pilot initiative by the government during the fiscal year of 2020-21 and the total amount of loan that has been given out till now stands at an estimated Rs. 3.63 crore. During the present fiscal, it has been reported that around 423 farmers have already availed the warehouse receipts and a total of around Rs. 9.75crore has been given out as loan till now.
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The Maharashtra State Warehousing Company or higher often called the MSWC had undertaken a pilot mission which was based mostly on using blockchain expertise that resulted within the farmers benefiting from with the ability to entry their commodity funds so much sooner than they beforehand used to. This season, there are discussions occurring to upscale the mission for broader usability.
Blockchain is a decentralised ledger expertise that may retailer knowledge throughout completely different servers in the identical community and in a totally decentralised method. This knowledge will be seen nearly in actual time by any one that has entry to the actual group on that blockchain. At the moment, the system in Maharashtra is as such that if the farmers must entry their loans towards the commodities they wish to maintain as collaterals, it often takes round seven days for the loans to get approval from the federal government. However consultants have prompt that through the use of the expertise of blockchain on this area, they’ll truly cut back this span of getting approval to a minimal of 24 hours.
Commodity finance are mainly loans which can be given out to the farmers who require them, in trade for his or her agricultural produce. Accredited warehouses give out warehouse receipts to the farmers for utilizing the warehouses in an effort to retailer their produce. The farmers want to provide these warehouse receipts if they’re keen to avail a mortgage. The entire idea is geared toward ensuring that the poor farmers can get higher costs for the labour of their produce as a substitute of promoting their exhausting produce in trade for misery gross sales at naked minimal costs.
Deepak Taware who’s a senior Bureaucrat and in addition the top of the Maharashtra State Warehousing Company or the MSWC, talked about that the idea of manufacturing warehouse receipts has been promoted and supported by each the state and the Central Authorities. He said that through the preliminary interval of the harvest season, many of the farmers are usually in dire want of cash and in case of emergencies, they often promote out their produce in trade for actually much less sum of cash. He talked about that the costs for the produce maintain happening as a result of the availability exceeds the demand out there. He’s of the opinion that if the farmers can stagger their gross sales as a substitute of promoting off their complete produce in a single occasion alone, then they might truly be capable of make some revenue that manner. The usage of warehouse receipts acn truly assist these farmers in that route.
Nonetheless, in accordance with the consultants the complete process of commodity finance is extraordinarily convoluted and on prime of that, actually time consuming. The receipts are generated solely after the farmers deliver their produce to the warehouses. The farmers then must take the bodily copy of the receipts to the financial institution, the place the officers shall be issuing the loans solely after they’ve verified and checked the inventory. However sadly, this whole course of takes round an estimated seven to fifteen days, which truly defeats the entire goal of this whole initiative, and that’s precisely the explanation why they’re considering of implementing blockchain expertise as a result of it might drastically enhance the time span.
With the intention to implement this scheme, the MSWC has solid a particular settlement with the MSC or the Maharashtra State Cooperative Financial institution. They’re utilizing a expertise developed by a startup named WHRRL Applied sciences, MSWC has been capable of hyperlink round 203 warehouses and now they’ll concern these warehouse receipts nearly instantly. This unimaginable platform can be accessed by the Cooperative Financial institution and the entire means of transaction will be accomplished inside a given time-frame of solely 24 hours. In consequence, the banks can discover out in actual time when these receipts are issued by the warehouses and instantly inform the farmers to upsell their scheme of commodity finance.
In response to the stories, greater than 185 farmers have been capable of take part on this pilot initiative by the federal government through the fiscal yr of 2020-21 and the overall quantity of mortgage that has been given out until now stands at an estimated Rs. 3.63 crore. Through the current fiscal, it has been reported that round 423 farmers have already availed the warehouse receipts and a complete of round Rs. 9.75crore has been given out as mortgage until now.
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Studying Blockchain is straightforward now, all because of reputed on-line programs and coaching classes. Blockchain Council is one such group that gives on-line coaching and certification applications to aspiring trainees to render them desired competencies in order that they’ve a profitable profession within the Blockchain area. Protecting the rising calls for of blockchain professionals in thoughts, Blockchain Council certifications are diversified to fulfill every aspirant’s discrete wants. They’ve a number of coaching and programs on Blokchain that present world-class information and help.
To get prompt updates about Blockchain Know-how and to study extra about on-line Blockchain Certifications, take a look at Blockchain Council.