After hyped launch, e-NAM still a work-in-progress a year later

As farmers in Madhya Pradesh struggle to find buyers for their bumper crop, an electronic National Agriculture Market (e-NAM), the Union government move that was designed to help them in that very task, is still a work-in-progress.

The e-NAM is envisaged as a pan-India electronic trading portal which networks the existing APMC (Agricultural Produce Marketing Committee) wholesale markets (mandis) to create a unified national market. While material flow continues to happen through mandis, the online market was aimed at reducing transaction costs and information asymmetry, enabling better price discovery.

The prime minister launched it amid much fanfare in April 2016, with the target of reaching 400 large mandis by the first year and 585 by March 2018. Initially, 25 commodities were to be available for trade. Small Farmers’ Agribusiness Consortium, a body under the agriculture ministry, is the implementing agency, with technical support from Nagarjuna Fertiliser and Chemicals.

Over a year later, while the network was short of the initial targets as of March, even in the mandis that have enrolled, facilities have not reached optimal levels.
 

In Madhya Pradesh, for instance, the Bharatiya Janata Party (BJP)-ruled state is one of a dozen that have joined the e-NAM platform. According to the e-NAM portal, of the 250 mandis registered across the country, 21 are in MP. While Bhopal’s Karond mandi is the biggest in the state, with the highest number of commodities listed for trade, Mandsaur (listed in the portal as Mandsore),  centre of the ongoing farmer protests, is also one of the mandis registered. The portal says the commodities traded in Mandsaur are chana, coriander, soya-yellow, masoor chana dal, chana-dollar and channa desi.

Participants in the commodity markets say the reform would take time. Ashish Bajaj, one of the empanelled consultants of SFAC in MP, says not much has happened in terms of eNAM or e-Mandis in the state. “Hamari area mein kuch nahi hua (Nothing has happened). It is still in the registration stage,” he said over telephone.
 

Shiv Kumar Goel, immediate past president, Commodity Participants Association of India, said: “It is a massive reform that will take time. State-level people also need to be involved.”

Agriculture marketing is administered by states, under own regulations. A state is divided into several market areas, each of which is administered by a, APMC with own regulations, including fees. This fragmentation of markets even within a state hinders free flow of commodities from one area to another. The multiple handling of produce and multiple levels of mandi charges result in escalating of prices for consumers, without commensurate benefit to the farmer.

It is here that the NAM portal is supposed to come in, providing a single-window service for all APMC-related information and services.

One state which has made considerable progress is Karnataka. Where 157 mandis use e-trading, e-permits, e-payments, and scientific grading and assaying services. A recent report by the NITI Aayog on “Doubling Farmers Income” has said the Unified Market Platform (UMP) in Karnataka has benefited farmers, who saw an average realisation increase of 38 per cent in 2015-16 over 2013-14. Copra, black gram, tur and Bengal gram were commodities showing the highest such rise.

The UMP in Karnataka is an initiative of Rashtriya e-Market Services, a joint venture between NCDEX e-Markets Ltd and the state. A similar public-private partnership is under progress in Andhra Pradesh.

As the game-changing move takes time to become fully functional, procuring agencies such as the central government’s Nafed say they’re doing their bit to limit the damage. Ashok Thakur, director of Nafed, said: “We did procurement of around ~5,500 crore in 2016-17. By doing this cashless, we prevented leakage and the money has gone directly to the farmers.”

A BJP functionary, who has headed its cooperatives cell, he said procurers like Nafed face huge issues in storage. “After procuring, we have to take the produce sometimes up to 500 km. The country needs 44,000 godowns; it has only 7,700. This is where e-mandis and projects like e-NAM come into the picture.”

Thakur feels long-term moves such as eNAM, aimed at filling the infrastructure gaps that arose over six decades, would need education of farmers and training. “These can’t be expected to get ready in a crisis situation, which needs more immediate relief.”

Goel added that this year the government had put focus on integration of spot markets with derivatives market. “That would bring in more players. As it gets implemented over the next two to three years, it would be a game-changer.

Benefits to stakeholders

Farmers

NAM promises more options for selling produce and making competitive returns

Traders

NAM to provide access to larger national market for secondary trading

Buyers, Processors & Exporters
 

* NAM to enable direct participation in the local mandi trade, reducing intermediation cost

Advantages of eNAM

* A reduction in book keeping and reporting system (reports were previously prepared viz. daily minimum, maximum and modal prices and arrivals of commodities) that are now generated automatically

* Better monitoring and regulation of traders and commission agents (CA’s).

* Completely transparent system that eliminates any scope of intentional/un-intentional manipulation of tendering / auctioning process

* Improvement in the market fee collection by means of accounting all the transactions that are taking place in the market

* Reduction in manpower requirements as tendering/auctioning process takes place through the system

* Analysis and forecasting of the arrivals and prices

* Availability of the activities of each APMC on the website directly

Source:  enam.gov.in