NAFED is looking to substantially expand its non-government business to ensure that the cooperative remains financially resilient and capable of facing any future crisis, Managing Director Deepak Agarwal said at the 69th Annual General Body Meeting of the National Agricultural Cooperative Marketing Federation at Bharat Mandapam, New Delhi.
Agarwal made it clear that NAFED’s transformation was not merely about improving profits or posting better financial numbers, but about preparing the organisation to become “future ready”. The thrust, he indicated, would be on building a business model strong enough to sustain NAFED even when government-supported activities face challenges.
“NAFED has to increase non-government business to such an extent that its survival is ensured, no matter how big the challenge,” the MD said, indirectly pointing to the difficulties the organisation had faced in the past in some business arrangements and the need for greater financial self-reliance.
He said NAFED was changing its approach while reinforcing its longstanding philosophy of taking the produce “from Kisan to Kitchen”. Alongside its traditional procurement responsibilities, the federation is increasingly looking at business opportunities involving private companies, institutional buyers and other commercial channels.
In procurement, NAFED is giving priority to its members, while direct procurement has been undertaken in four pulses. The federation has already recorded business worth around Rs 653 crore through this initiative.
Agarwal also highlighted changes in the farmer payment system. While Direct Benefit Transfer was earlier used for transferring payments, the e-Samridhi system now uses Aadhaar-seeded bank accounts. This, he said, helps address errors in account numbers and makes payments more reliable. Farmers no longer need to register afresh every year, as their biometric details have already been captured and Aadhaar can be used for identification.
The merger of the NAFED and NCCF portals is another step aimed at simplifying access for farmers.
NAFED is also expanding its institutional and commercial footprint. It has got active in states like Assam, Chattisgarh. The federation has begun supplying rice to the armed forces, in addition to pulses supplied earlier. Several NAFED products have been empanelled in CSD canteens, which have around 1,200 outlets. The federation is also working with the railways, HPCL and several private companies.
The federation is handholding more than 1,200 Farmer Producer Organisations and helping them establish business linkages. Products such as honey are among those being sourced through these networks.
Technology is emerging as another major pillar of NAFED’s transformation. The federation has introduced an ERP system, with the objective of making its offices largely paperless within the next three to four months. Account reconciliation is also expected to become faster. Godowns are being geo-tagged, while the e-Samridhi portal is being integrated into the wider digital framework.
NAFED is also examining ways to monetise its properties and has plans to enter into joint ventures with member cooperatives for activities including construction and utilisation of godowns.
Agarwal pointed to the federation’s growing retail business as an indication of the changing trajectory. Retail business, which stood at Rs 42 crore last year, has already crossed Rs 48 crore in just six months of the current financial year. He expressed confidence that it could cross Rs 100 crore by the year-end.
To professionalise its workforce, NAFED has also introduced performance-linked incentives. Agarwal said 50 percent of the fixed ex-gratia budget has been earmarked for incentives, with a provision linked to one percent of profits.
The message from the AGM was clear: NAFED’s future will depend not only on government-backed operations, but increasingly on its ability to build a diversified, commercially sustainable and professionally managed business base.
