Written by Vasudha Mishra
India is a Union of States as per our Constitution. Agriculture being a state subject, state governments have enacted agricultural produce market committee (APMC) legislations for regulating trade in their own territories. The APMC laws were originally intended for safeguarding farmers against exploitation by unscrupulous traders and ensuring transparent price discovery of agri-produce. Farmers, then, had limited knowledge of domestic and international prices or demand and supply forecasts for their crops. Nor did they really produce based on the quality preferred by consumers. The APMC market levied a cess and provided basic infrastructure for farmers to sell their produce to the highest bidders among the traders licensed to do business in that particular mandi. The APMC acted as a guarantor for the farmer not to be shortchanged by fly-by-night operators.
Over time, however, the APMC laws became outdated. The physical boundaries of the mandis became cast in stone, so much so that they practically existed in isolation. The produce sold in one mandi, when traded again in another mandi even within the same state, was levied market fee afresh. Moreover, a trader wanting to buy or sell in more than one mandi needed to apply for separate licences in each of them. Also, with no mechanisms to vouch for the quality of produce, the trader or his trusted representative had to be physically present in every auction transaction. The farmer was, then, under compulsion to sell to whosoever was willing to buy. There was no relationship of prices with quality either. In the absence of proper grading facilities, only “fair average quality” produce ended up getting traded.
The Government of India, in 2002, circulated a model APMC Act. Some of its provisions were incorporated by a few states in their respective laws. In 2017, a more comprehensive Agriculture Produce and Livestock Marketing Act was prepared, which the Centre has again relentlessly being pursuing the states to adopt. But the most revolutionary initiative has been the National Agriculture Market (e-NAM), the pan-India electronic trading portal launched on April 14, 2016, with the vision of creating ‘One Nation One Market’ for farm produce.
States seeking Central assistance under e-NAM were required to carry out at least three reforms in their APMC Acts: (1) Issuing a single unified trading licence for all mandis in the state, (2) implementing a single point levy of market fee, and (3) providing for e-auction/e-trading as a mode of price discovery.
Today, 585 mandis in 320 districts across 16 states and two Union Territories have been integrated into this virtual marketplace, with physical markets at the backend. Almost 1.66 crore farmers and 1.97 lakh traders and commission agents are registered on the e-NAM platform, which had recorded Rs 86,572 crore worth of transactions till December 9. Assaying of produce, to enable farmers to realise prices commensurate with quality, is also on the rise. Since inception, nearly 64 lakh lots traded on e-NAM have been assayed. Between 2016-17 and 2018-19, the average number of bids placed per trading lot has gone up from 2.1 to 3.9. During the peak harvest season, the Adoni mandi in Andhra Pradesh connected to e-NAM received 34 bids per lot of cotton, while this stood at 24 bids for paddy and 27 for turmeric at the APMCs of Suryapet and Nizamabad, respectively, in Telangana. More number of bids is an indicator of expansion of the universe of buyers for farmers post e-NAM.
The e-NAM software has been continuously upgraded and is now enabled for making online payment to farmers. Such payments totalled Rs 238.32 crore in 2018-19, amounting to Rs 504 crore from the time the scheme was conceived till November 2019. The platform has also seen a pick-up in inter-mandi trade both within and, more recently, between states.
Farmers can now access round-the-clock commodity price information on their e-NAM mobile app, apart from an advance lot registration facility to reduce waiting time at the mandi. They can further view bids being placed for their produce, along with quality assaying parameters, on mobiles. Farmers are also receiving SMS alerts for the final bid price, apart from payments made by traders into their bank accounts. The e-NAM platform already enables them to sell their produce directly or through commission agents. Traders, likewise, can buy from more than one market with the same licence and quote bids even without being physically present in the particular mandi. The shopping cart feature in E-NAM is also allowing selection of preferred lots for bidding, thereby reducing searching time. They are, moreover, being encouraged to make e-payments through automatic discounts. Many states — including Uttarakhand, Telangana, Andhra Pradesh, Madhya Pradesh and Chhattisgarh — are incentivising both farmers and traders to undertake transactions through e-NAM by way of exemptions/rebate of market fees.
The coming months would see initiatives that are likely to further revolutionise agricultural produce trading through e-NAM connected mandis. That includes warehouse-based trading modules. Andhra Pradesh has designated 23 warehouses as “deemed markets”, while Telangana has done the same in respect of 14. More than 850 Farmer Producer Organisations (FPOs) have come on board the e-NAM platform, paving the way for aggregation of produce to enable cost savings as well as better price realisations. The FPOs are also being enabled to upload produce for selling from their own premises, even as the first farmgate-level transactions through e-NAM have taken place from Solan in Himachal Pradesh. In addition, new features relating to assaying have been incorporated, such as 360 degree image-capturing of commodity heaps through e-NAM mobile app and uploading of 2D images of laboratory-cum-equipment, for building trader confidence.
On the anvil are also plans to integrate 415 new mandis with e-NAM (taking the total to 1,000), inter-operability with other e-trading platforms (such as Rashtriya e-Market Services in Karnataka) and setting up an institutional mechanism for inter-state trade licensing and dispute settlement.
With all these measures, e-NAM would be fully able to achieve the vision of “One Nation One Market” for Indian farmers. e-NAM has the potential to be their true “inam (reward)”.
The writer is Special Secretary in the Department of Agriculture, Cooperation & Farmers Welfare, Government of India