Exporting The Golden Bean-Case

This document is authorized for use only in Indian Institute of Management Rohtak's PG; Business and Government Systems
course by Prof Venkatesha Murthy from Jul 4, 2018 to Sep 14, 2018.
Indian Institute of Management

Ahmedabad IIMA/ CMA0814
Exporting the Golden Bean
In October of 2013, ABC, an agro-business company based in a city in Europe, was

considering importing organic soybean from India (see Exhibit 1 for key figures of ABC).
However, the India operations manager of ABC, Mr Daniel Johnson, was unfamiliar with
the organic production practices and procurement options in the Indian scenario.
Daniel observed that Central India was a huge producer of soybean. Hence, he decided to
source soybean from a City in Central India (hereafter referred as CCI) and send it to Europe
for further processing. He now wanted to know:
Who were the organic soybean producers in India?

What was the certification procedure for organic goods in India?
What was the price of procurement from farmers?
What were the options for procuring organic soybean? and
What costs were involved in logistics and transportation?
Daniel wanted to decide on the best approach for procurement of organic soybean and
transporting it from CCI to Mumbai port and further to Europe after getting this
information,.
Organic Farming
The term ‘organic farming’ or ‘the farm as organism’ was first coined by Lord Northbourne
in 1939 to describe a holistic, ecologically-balanced approach to farming, in contrast to
‘chemical farming’, which depended on ‘imported fertility’ and could not be self- sufficient
or an organic whole.
The USDA defined organic farming as “A production system which avoids or largely
excludes the use of synthetic compounded fertiliser, pesticides, growth regulators and
livestock feed additives. To the maximum extent possible, organic farming system relies on
crop rotation, crop residues, animal manures, legumes, green manures of farm organic
waste and aspects of biological pest control to maintain soil productivity and health, to
supply plant nutrients and to control insects, weeds and other pests.” (Singh, 2009)
The International Federation of Organic Agriculture Movement (IFOAM) defines organic

agriculture as “ a production system that sustains the health of soils, ecosystems and people.
It relies on ecological processes, biodiversity and cycles adapted to local conditions, rather
than the use of inputs with adverse effects. Organic Agriculture combines tradition,
innovation and science to benefit the shared environment and promote fair relationships
and a good quality of life for all involved." In India, the regulatory body for organic
production, National Programme for Organic Production (NPOP) defines organic
production as “a system of farm design and management to create an eco-system, which can
This document is authorized for use only in Indian Institute of Management Rohtak's PG; Business and Government Systems course by Prof Venkatesha Murthy from Jul 4, 2018 to Sep 14, 2018.
2 of 15 IIMA/CMA0814
achieve sustainable productivity without the use of artificial external inputs such as
chemical fertilizers and pesticides.”(Agricultural Marketing Information Network)
The Food Safety & Standards Authority of India (FSSAI) defines organic food as “crops or
livestock that are grown on the farm without the application of synthetic fertilizers or
pesticides, and without using genetically modified organisms.” Organic production strictly
banned the use of Genetically Modified Organisms (GMOs) in all farming procedures.
A GMO is an organism whose genetic material has been altered using genetic
engineering techniques. An organic farmer was not allowed to plant GMO seeds or provide
cattle with GMO feed. The farmers and processors needed to show that they were not using
GMOs and that they were protecting their products from contact with GMOs right from
farm to table.
India is bestowed with lot of potential to produce all varieties of organic products due to its
varied agro-climatic regions. The crops under organic production in India were sugarcane,
cotton, Basmati rice, pulses, tea, spices, coffee, oil seeds, and fruits.
Organic Labelling
Products which were made from the organic method of farming could claim so through
labels, making it easier for consumers to shop. The labels and their meaning, as allowed by
FSSAI were
"100% Organic
Foods that are labelled as 100% organic must contain all organically grown ingredients
except for added water and salt.
Organic
Foods that are labelled as organic need to contain at least 95% organic ingredients, except
for added water and salt, plus they must not contain sulfites added as a preservative.
Sulfites have been known to provoke allergies and asthma in some people. Up to 5% of
the ingredients may non-organically produced.
Made with Organic Ingredients
Product labels that claim ‘Made with Organic Ingredients’ need to contain at least 70%
organic ingredients, except for added water and salt. They must not contain added
sulfites, and up to 30% of the ingredients may be non-organically produced.
Food products made with less than 70% organic ingredients may state which ingredients
are organic, but they cannot claim to be organic food products.”
SOYBEAN
Soybean, a cream-colored oval bean, belonged to the legume family and was native to
China. Soybean plants may reach one metre height. Seeds were borne in hairy pods, which
grew in clusters of three to five; each pod contained two or three seeds, which resembled
peas. The plant was classified as an oilseed rather than a pulse by the UN Food and
Agricultural Organization.
Soybean was gaining popularity on account of its unique characteristics and adaptability to
varied agro-climatic conditions. The bulk of the harvest was used for oil extraction and a
small quantity for human consumption. After extraction of oil, the fat-free soybean meal was
used as a significant and cheap source of protein for animal feed.
Cultivation
Soybean was known to grow in various types of soils and climates. In India, it was grown as
a Kharif crop i.e. sown in monsoon season (June-July) and harvested at the end of it
(September-October). Peak arrivals were generally in October-November (refer Exhibit 2 for
harvesting cycle).
The time of planting was a very important consideration in soybean. In India, soybean could
be planted from third week of June to first fortnight of July.
Uses
Soybean, being the richest, cheapest, and easiest source of best quality proteins and fats, had
a multiplicity of uses as food and industrial products.
Indian and western dishes such as bread, chapati (a type of Indian bread), milk,
sweets, pastries etc
Manufacturing vanaspati ghee(butter made from vegetable oils)and several other
industrial products.
Fodder; forage could be made into hay, silage etc.
Builds up the soil fertility by fixing atmospheric nitrogen through the root nodules
Soybean in India
Commercial production of soybean began in India in 1971-72. Soybean was widely used in
India as an oilseed, ranking next only to groundnut in terms of oilseed production.
India ranked fifth in the world in the production of Soybean following USA, Brazil,
Argentina, and China during the year 2007-08 (Refer Exhibit 3 for world-wide data and
Exhibit 4 for production in India). Within the country, soybean cultivation was largely done
in the states of Madhya Pradesh (also called as ‘Soybean Bowl of India’), Maharashtra,
Rajasthan, Andhra Pradesh, Karnataka, Chhattisgarh, and Gujarat.
As per the second estimate of soybean crop survey carried out by Soybean Processors
Association of India (SOPA), the production in India had been 122.345 lakh metric tons in
the month of October 2013. (Refer Exhibit 5 for detailed state-wise production in India)
The market price of conventional soybean in India varied daily. In 2013, the price varied in
the range Rs. 31,000 to Rs. 41,000 per tonne. (Refer Exhibit 6a for variations in spot price and
Exhibit 6b for futures price for the months of Nov 2013 – Jan 2014)
Organic Soybean in India
Organic soybean was not separately tracked in India and hence exact figures about the
acreage, yield, and production were not available. The statistical data available from various
sources was in reference to soybean in general (i.e. organic and conventional).
In terms of market price, organic soybean enjoyed at least a 10 per cent premium over the
conventional soybean and was available in the range of Rs. 38,000 – Rs. 42,000 per ton.
The average yield of organic soybean was six quintals per acre, almost same as conventional
soybean. However, organic soybean seeds were denser than conventional soybean
(Approximately, 100 grains of organic soybean = 120 grains of conventional soybean).
Organic Certification in India
The certification of a previously conventional farm took a minimum of three years involving
three stages of certification (denoted as C1,C2, and C3). From the fourth year onwards, the
farm would be termed as organically certified (OC). (Refer Exhibit 7 for certification
requirements).
The farmers could apply for individual certification if the size of farm was sufficiently large.
Farmers who had small land holdings could apply in a group (minimum of 25 to a
maximum of 500 farmers) to share the certification charges.
Certifiers mostly charged fees based on the number of person-days involved, plus fees for
issue of certification. Different fees were applied for small farmers, large farmers, processors
and traders.The certificate seeker also had to bear the cost of travel and accommodation for
the inspector of the certifying agency. (Refer Exhibit 8 for Biocert India certification charges
and Exhibit 9 for a List of Certification Agencies).
Procurement Options
Purchasing in Mandi (Mandi: Indian word for market)
The Mandi Act (also known as APMC Act), controlled at State level in India, was established
with the objective of protecting farmers from exploitation by intermediaries, ensured better
prices, and timely payments.
In CCI, the Mandi Act required that every person who desired to operate in the market area
should apply to the market committee for a licence to do business in the mandi. Soybean
should be sold in the market yard/yards specified for such produce or at such other place as
provided in the Mandi Act bye-laws (see Exhibit 11 for salient features of Mandi Act).
Most of the mandis had market infrastructure setup where traders and other marketing
agents were provided stalls and shops for purchase of agriculture produce from farmers.
Farmers could sell/auction their produce to agents or traders under supervision of mandi
committee.
The price of organic soybean was driven by supply-demand characteristics and hence varied
daily. Purchasing from mandi also invited a 2.2 per cent mandi tax on the selling price.
There were hardly any testing facilities in the mandi to verify authenticity of organic crop.
Purchasing directly from the Farmers
The APMC act had been amended in some of the Indian States to allow direct marketing
through contract farming or to setup markets in Private/Coop Sectors. As of February 29,
2008, the reform had been made to allow partial contract farming and direct marketing in
Madhya Pradesh. As many as eight licenses for direct marketing had already been issued in
the state. It was a result of this initiative that ITC Limited was able to roll out its well-known
e-Choupal, a platform to link directly with rural farmers via the Internet for procurement of
agricultural products.
Contract Farming
Contract farming was a system for the production and supply of agricultural and
horticultural produce by farmers/primary producers under advance contracts which bound
the farmer to deliver an agricultural commodity of a particular type at a specified time,
price, and quantity to the buyer. The key agreement terms included pre-agreed price,
quality or acreage (minimum/ maximum), place of delivery and time.
The contracts could be of three types:
Procurement contracts: only sale and purchase contracts were specified

Resource providing contracts: some of the inputs were provided by the buyer and the
pre-agreed price of sale was mentioned
Production management contracts: Buyer supplied and managed all the inputs on the
firm and the farmer was just a supplier of land and labour
In CCI, the legislation required the contract farming sponsor to register himself with the
Market Committee. A written agreement had to be recorded between producer and buyer of
produce of contract farming. The buyer had to submit an application for registration of the
written agreement of contract farming to the market committee.
For effective contracting, ABC would need to gain the knowledge of local markets, policies,
and legal requirements and also setup a testing mechanism to ensure that quality standards
were met by the farmers.
Purchasing from Agri-Business Companies
In CCI, many companies practiced contract farming with tribal farmers wherein they paid
for the organic certification of these small farmers and in return were entitled to the organic
produce from them. ABC could purchase the crop from such companies who were well-
versed with the local market and who ensured that organic practices were being followed by
the farmers. However, it would have to pay a higher price than mandi or contract-based
price as the agriculture company would apply its own charges and profit margins.
Transport and Logistics
The soybean produce harvested from farms had to be cleaned and packed before
transporting. Generally, the movement of goods was done by packing the seed in
polypropylene bags and then stuffing it in containers or local trucks.
The containers varied in size, commonly used ones being 20 ft container and 40 ft container.
Transport of soybean from CCI to the Mumbai port could be done through any one of the
bulk moving techniques – Factory stuffing, Dock stuffing or Port stuffing.
Factory Stuffing
Large quantities of soybean required proper segregation, testing, and packaging to be done
in a factory. These goods were stuffed into the containers or trucks at factory premises to be
sent to the shipping port. The movement happened through containers via rail, trailer trucks
or local trucks.
The container, required for stuffing the soybean, was moved from a designated inland
container depot (ICD) to the factory. If a container was not available at the depot, the buyer
had to incur additional charges known as repositioning charges to move the container from
another depot to the designated depot. Once the container was available at the ICD, then it
was moved to the factory premises for loading.
There were four ICDs in and around CCI from where containers were arranged, two of
which supported rail transport (CONCOR) and remaining two were for road transport.
The labour cost for stuffing the containers was estimated to be Rs.400 per 20 ft container.
Post loading, the container was sent to the ICD for clearances. The cost components by road
or rail, till this stage were:
Description Rate Unit

Rail freight (by CONCOR) 39,500 per 20 ft. container (or 20 MT)
Road freight (by trailer truck) 42,000 per 20 ft. container (or 20 MT)
Round Trip Service 50,000 per container
Mandi Tax 2.2% Sales price
VAT 5%
Once the goods were cleared for shipment it was sent to the shipping terminal for further
clearance and checking. The Mumbai Port had three terminals or gates at which ships were
loaded - Jawaharlal Nehru Port Trust (JNPT), Nhava Sheva International Container
Terminal (NSICT), and Gateway Terminal India (GTI). Given below are the handling
charges of each terminal:
Terminal Handling Charges (THC) + Service Tax on THC at 12.36% (per 20 ft container)
Terminals THC at Mumbai (without service tax) THC at CCI (without service tax)
1 JNPT 4,250 5,750
2 NSICT 4,700 6,200
3 GTI 5,540 7,040
Other cost components included:
Description Rate Unit

Bill of lading (BOL) 2,000 per invoice
Surveyor cost 1,200 per 20 ft. container
Silica Gel cost 500 per 20 ft. container
Custom House Agent (CHA) expenses 1,800 per 20 ft. container
Ocean freight (between Mumbai port and USD 700-800 per 20 ft. container
Belgium) USD 1,200-1,300 per 40 ft. container
Dock Stuffing
Here the container was stuffed at the ICD premises and the goods was shipped to the port
through local trucks or rails. The goods movement was from factory to dock (goods shed in
case of trains) and then to freight station at Mumbai Port and later to the port for shipping.
The upper weight limit for a ten- wheeler truck, used for local transportation till goods shed
or till port was 16 metric tonne. A 42-wagon BCN rake (Bogie covered 8-wheeler wagon)was
used for rail movement from goods shed to container freight station.
The cost incurred at each stage was similar to factory docking
Description Price (in Rs.)

Unit
Rail Road
Local transportation (factory to good shed) 3,450 0 metric tonne
Labour costs 400 0 per 20 ft. container
Freight 26,000 32,000 per 20 ft. container
Handling expenses 8,000 8,000 per 20 ft. container
CHA expense 1,800 1,800 per 20 ft. container
Surveyor 600 600 per 20 ft. container
THC 5,540 5,540 per 20 ft. container
Admin cost 100 100 per 20 ft. container
Spillage cost (assumed to be 0.2% of shipped
250 250 per 20 ft. container
material)
Ocean freight ( in USD)
700-800 700-800 per 20 ft. container
Ocean freight between Mumbai port and Europe
1,200-1,300 1,200-1,300 per 40 ft. container
Note: The THC used above for cost calculation was the GTI THC cost quoted above.
Port Stuffing
Here the stuffing occurred at the port premises. The cost incurred would be the local
transportation cost and the port charges at Mumbai. The documents required for port
clearance are given in Exhibit 10
Terminal Handling Charges + Service tax on THC at 12.36% of TH charges

Terminals THC at Mumbai (without service tax) Unit
JNPT 4,250 per 20 ft. container
NSICT 4,700 per 20 ft. container
GTI 5,540 per 20 ft. container
Description Price (in Rs.) Unit

Local Transportation on road to the port 32,000 per 20 ft. container
CHA expense 1,800 per 20 ft. container
Surveyor 600 per 20 ft. container
THC 5,540 per 20 ft. container
Admin cost 100 per 20 ft. container

Spillage cost 250 per 20 ft. container
USD 700-800 per 20 ft. container
Ocean freight
USD 1,200-1,300 per 40 ft. container
The Decision Problem
Daniel had to decide the best method for procuring organic soybean from CCI and the most
efficient way for transporting it to Mumbai port for exporting it to Europe.
EXHIBIT 1
ABC – Key Figures of 2013
Famers – 15,000
Employees – 5000
Turnover – 5 billion Euros
Source: Company website
EXHIBIT 2
Soybean Planting Cycle
Country Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
USA
Brazil
Argentina
China
India
Planting Flowering Harvesting

Source: Commodity profile – Soybean, Icex
EXHIBIT 3
Overview of Soybean in the World
Of the 220 million tonnes of beans produced in 2007-08, the United States contributed 33%, Brazil
28%, Argentina 21%, China 6% and the rest 12% is produced in India, Paraguay, Canada and others.
The following table provides a projected list of the major soybean producing/exporting/importing
countries or regions in the World for the last three years. Taking the year 2013/14 as reference, Brazil
is projected to be the largest World producer of soybeans, followed by the United States, Argentina,
China and Paraguay.
Major Country Soybean Production Soybean Exports Soybean Imports

/ Region 2013/14 2012/13 2011/12 2013/14 2012/13 2011/12 2013/14 2012/13 2011/12
mmt mmt mmt mmt mmt mmt mmt mmt mmt
World 287.69 268.27 239.16 109.33 99.85 92.27 105.33 95.28 93.43
United States 89.51 82.56 84.19 41.10 35.91 37.15 0.82 0.98 0.44
Total Foreign 198.19 185.71 154.97 68.23 63.94 55.12 104.52 94.30 92.99
Major
156.42 143.67 113.37 61.84 58.04 49.86 0.17 0.42 0.15
Exporters
Argentina 54.00 49.30 40.10 8.00 7.74 7.37 0 0 0
Brazil 90.00 82.00 66.50 45.00 41.90 36.32 0.15 0.40 0.13
Paraguay 9.30 9.37 4.04 5.80 5.50 3.57 0.02 0.02 0.02
Major
14.83 15.49 17.04 0.34 0.39 0.36 93.62 84.28 83.48
Importers
China 12.20 13.05 14.49 0.23 0.27 0.28 69.00 59.87 59.23
European
Union - 28 1.13 1.00 1.22 0.08 0.09 0.06 12.30 12.51 12.07
Countries
Japan 0.21 0.22 0.22 0 0 0 2.86 2.87 2.76
Mexico 0.28 0.25 0.21 0 0 0 3.65 3.35 3.61
Source: Department of Agricultural Economics
EXHIBIT 4
Soybean – Area, Production and Yield Figures from 1989 to 2008 for India
EXHIBIT 5
State-Wise Estimate of Area, Yield & Production of Soybean, 2013
Source: The Soybean Processors Association of India (SOPA)
EXHIBIT 6a
Spot Price of Conventional Soybean in CCI
Spot Price(Rs.)
4400
4200
4000
3800
3600
3400
3200
3000
2800
2600
May 23 2013
May 11 2013
Apr 29 2013
Apr 15 2013
Nov 21 2013
Oct 26 2013
Oct 14 2013
Oct 1 2013
Jul 31 2013
Jul 19 2013
Jul 9 2013
Apr 3 2013
Dec 3 2013
Nov 8 2013
Sep 19 2013
Sep 6 2013
Aug 27 2013
Aug 13 2013
Jun 27 2013
Jun 17 2013
Jun 4 2013
Mar 20 2013
Mar 8 2013
Feb 26 2013
Feb 14 2013
Feb 2 2013
Jan 21 2013
Jan 9 2013
Source: National Commodity and Derivatives Exchange Ltd.

EXHIBIT 6b
Futures Price of Conventional Soybean in CCI
Futures Price of Soybean (INR)
4300
4200
4100
4000
3900
3800
3700
3600
3500
3400
3300
3200
Source: National Commodity and Derivatives Exchange Ltd.
EXHIBIT 7
Certification Requirements
For first-time certification, the soil must meet some basic requirements which includes being free from
use of prohibited substances for a number of years .A conventional farm must adhere to organic
standards for this period, often, 3 years (known as being in transition). A farm already growing without
chemicals may be certified without this delay.
Other requirements which need to be met while applying for the certification are:
Avoidance of synthetic chemical inputs (e.g. fertilizer, pesticides, antibiotics, food additives,
etc.) and genetically modified organisms
Use of farmland that has been free from chemicals for at least three years
Keeping detailed written production and sales records (audit trail)
Maintaining strict physical separation of organic products from non-certified products
Undergoing periodic on-site inspections
Source: Certification and Inspection Systems in Organic Farming in India

(http://ncof.dacnet.nic.in/Training_manuals/Training_manuals_in_English/Cert_and_Inspection_manual.pdf)
EXHIBIT 8
Certification Charges by Biocert India
Source: http://www.apeda.gov.in/apedawebsite/organic/NewTariff/Biocert_tariff.pdf
Certification charges of various agencies: http://www.apeda.gov.in/apedawebsite/organic/price.htm
EXHIBIT 9
List of APEDA Accredited Certifying Agencies
1 M/S BUREAU VARITAS CERTIFICATION INDIA PVT.LTD.

2 M/S APOF ORGANIC CERTIFICATION AGENCY (AOCA)
3 M/S LACON QUALITY CERTIFICATION PVT. LTD. (LACON) , THIRUVALLA, KERALA
4 M/S NATURAL ORGANIC CERTIFICATION ASSOCIATION (NOCA), PUNE
5 M/S ONECERT ASIA AGRI CERTIFICATION PVT.LIMITED
6 M/S SGS INDIA PVT LTD, GURGAON
7 M/S CONTROL UNION CERTIFICATION
8 M/S IMO CONTROL PRIVATE LIMITED
9 M/S UTTARANCHAL STATE ORGANIC CERTIFICATION AGENCY, DEHRADUN
10 M/S ECOCERT INDIA PVT.LTD. AURANGABAD, MAHARASHTRA.
11 M/S INDOCERT,COCHIN
12 M/S ISCOP
13 M/S FOODCERT INDIA PVT.LTD
14 VEDIC ORGANIC CERTIFICATION AGENCY, HYDERABAD.
15 RAJASTHAN ORGANIC CERTIFICATION AGENCY (ROCA)
16 ADITI ORGANIC CERTIFICATIONS PVT. LTD., BANGALORE.
17 CHHATTISGARH CERTIFICATION SOCIETY, INDIA (CGCERT)
18 TAMIL NADU ORGANIC CERTIFICATION DEPARTMENT (TNOCD)
19 INTERTEK
20 BIOCERT INDIA PVT.LTD.
21 M.P STATE ORGANIC CERTIFICATION AGENCY
22 OSOCA
23 EIA
Source: Agricultural and Processed Food Products Export Development Authority
EXHIBIT 10
Documentation Required for Exports
Organic certification copy in the name of the farmer

Indian interstate commercial goods movement mandate following documents: Four copies of Tax
Invoice (1 original + 3 copies)
The CST & TIN numbers of the consignor and consignee are mandatory on Bill of sale / Tax
invoice
Shipments consigned to individuals who do not have CST & TIN/LST numbers, a declaration from
the consignee that the goods are not for sale and for personal consumption
CST 2 % in case Central Sale is to registered dealer otherwise local sales Tax / VAT rate is
applicable for inter–state sale
H- form -> 5% VAT will be relaxed
Outbound shipments from MP require Declaration form 49 issued by shipper/consignee
Chamber of Commerce certificate
Bill of Lading
Bill of Exchange Control to be submitted to bank to avoid fraud
Pathogenic certificate - certifying fit for human consumption
Source: Compiled from primary research as per interactions with various food grain exporting companies
EXHIBIT 11
Salient Features of the Mandi Act (APMC Act)
The APMC have been made specifically responsible for:

o ensuring complete transparency in pricing system and transactions taking place in market
area
o providing market-led extension services to farmers
o ensuring payment for agricultural produce sold by farmers on the same day
o promoting agricultural processing including activities for value addition in agricultural
produce
o Publicizing data on arrivals and rates of agricultural produce brought into the market area
for sale.
Legal persons, growers and local authorities are permitted to apply for the establishment of new
markets for agricultural produce in any area. Under the existing law, markets are setup at the
initiative of State Governments alone. Consequently, in a market area, more than one market can
be established by private persons, farmers and consumers.
There will be no compulsion on the growers to sell their produce through existing markets
administered by the Agricultural Produce Market Committee (APMC). However, agriculturist who
does not bring his produce to the market area for sale will not be eligible for election to the APMC.
Snippets of the Law
Sale of All notified agricultural produce shall ordinarily be sold in the market yards/ sub market
notified yards or in the private yards of the licence holder, provided that the notified agricultural
agricultural produce may be sold at other places also to a licence holder especially permitted in
produce in this behalf under Section 45 this Act and provided further that it will not be necessary
markets to bring agricultural produce covered under contract farming to the market yard / sub
market yard /private yard and it may be directly sold to contract farming sponsor from
farmers’ fields.
Such notified agricultural produce as may be brought by the licensed / registered
traders from outside the market area or in the market area in the course of commercial
transaction may be brought or sold anywhere in the market area.
The price of the notified agricultural produce, brought for sale into the market yard,
shall be settled by tender bid or open auction or any other transparent system and no
deduction shall be made from the agreed price on any account whatsoever from the
seller.
Weighment or measurement or counting of all the notified agricultural produce so
purchased shall be done by such a person and such system as is provided in the bye-
laws or at any other place specified for the purpose by the Market Committee
Terms and Except in the commercial transaction between two traders, any other person who buys
procedure notified agricultural produce in the market area, shall execute an agreement in
of buying triplicate in such form, as may be prescribed in favour of the seller. One copy of the
and selling agreement shall be kept by the buyer, one copy shall be supplied to the seller and the
remaining copy shall be kept in the record of Market Committee.
The price of the notified agricultural produce brought in the market yard,/sub market
yard / private yard shall be paid on the same day to the seller or be liable to pay fine as
decided by the Market Committee, described in penalty section.
No wholesale transaction of notified agricultural produce shall be entered directly by
licensed/ registered traders with producers of such produce except in the market yard/
sub market yard / private yard or in such place in accordance with the provisions in the
bye-laws, provided that agricultural produce, produced under contract farming, may be
bought directly by contract farming buyer anywhere.
Produces can be obtained from the farmer directly after obtaining the required licenses
Source: Detailed Act: http://mpkrishi.org/krishinet/hindisite/pdfs/MPVolumeII.pdf
APMC amendment and reforms in selected state: (Status of Market Reforms in Agriculture (APMC Act
amendments))
REFERENCES
Agricultural and Processed Food Products Export Development Authority. (2013). Retrieved from
http://www.apeda.gov.in/apedawebsite/miscellaneous/Trade_Notice_Organic_NBR.pdf in
December 2013
Agricultural Marketing Information Network. ( September 2005). Retrieved from
http://agmarknet.nic.in/NPOPStandards(English).pdf in December 2013
Certification and Inspection Systems in Organic Farming in India. (n.d.). Retrieved from
http://ncof.dacnet.nic.in/Training_manuals/Training_manuals_in_English/Cert_and_Inspectio
n_manual.pdf in December 2013
COMMODITY PROFILE – SOYBEAN(ICEX). (n.d.). Retrieved from
http://www.icexindia.com/profiles/soybean_profile.pdf in December 2013
Department of Agricultural Economics. ( February2014). Retrieved from
http://www.agmanager.info/marketing/outlook/newletters/Soybeans.asp in December 2013
Food Safety and Standards Authority of India. (2010). Retrieved from
http://www.fssai.gov.in/Portals/0/Training_Manual/Volume%20I-
%20Intoduction%20to%20Food%20%20and%20Food%20Processing.pdf in December 2013
International Federation of Organic Agricultural Movements. (n.d.). Retrieved from
http://infohub.ifoam.org/en/what-organic/definition-organic-agriculture in December 2013
National Commodity and Derivatives Exchange Ltd. (n.d.). Retrieved from
http://www.ncdex.com/MarketData/SpotPrice.aspx in December 2013
National Commodity and Derivatives Exchange Ltd. (n.d.). Retrieved from
http://www.ncdex.com/MarketData/FuturePrices.aspx in December 2013
Singh, S. (2009). Organic Produce Supply Chains in India: Organisation and Governance. New Delhi:
Allied Publishers Pvt. Ltd.
Status of Market Reforms in Agriculture (APMC Act amendments). (n.d.). Retrieved from
http://agmarknet.nic.in/amrscheme/apmcstatus07.htm in in December 2013
The Soybean Processors Association of India (SOPA). (2013). Retrieved from
http://www.sopa.org/Second%20Estimates%20E.pdf in in December 2013

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Exporting The Golden Bean-Case

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This document is authorized for use only in Indian Institute of Management Rohtak's PG; Business and Government Systems

Indian Institute of Management

Exporting the Golden Bean

In October of 2013, ABC, an agro-business company based in a city in Europe, was

Who were the organic soybean producers in India?

The International Federation of Organic Agriculture Movement (IFOAM) defines organic

Organic Soybean in India

Organic Certification in India

Purchasing in Mandi (Mandi: Indian word for market)

Purchasing directly from the Farmers

The contracts could be of three types:

Procurement contracts: only sale and purchase contracts were specified

Purchasing from Agri-Business Companies

Transport and Logistics

Description Rate Unit

Description Rate Unit

The cost incurred at each stage was similar to factory docking

Description Price (in Rs.)

Terminal Handling Charges + Service tax on THC at 12.36% of TH charges

Description Price (in Rs.) Unit

Admin cost 100 per 20 ft. container

The Decision Problem

Planting Flowering Harvesting

Major Country Soybean Production Soybean Exports Soybean Imports

Source: The Soybean Processors Association of India (SOPA)

Source: National Commodity and Derivatives Exchange Ltd.

Source: National Commodity and Derivatives Exchange Ltd.

Source: Certification and Inspection Systems in Organic Farming in India

1 M/S BUREAU VARITAS CERTIFICATION INDIA PVT.LTD.

Organic certification copy in the name of the farmer

The APMC have been made specifically responsible for:

Snippets of the Law

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