Five years of e-NaM: Fair price discovery, crop grading remain key issues

A high powered panel has found instances of manual data being fed into the system after the auction has ended

Long before the Modi government embarked on its ambitious plan to create a common agriculture market that would be devoid of barriers, through the three agriculture acts, it started working on a scheme to provide a national electronic market for trading in agriculture commodities that would facilitate smooth inter-state movement in goods.

The electronic National Agriculture Market or e-NaM was conceptualised with the vision of joining mandis where transparent electronic trading can be facilitated. The goods sold through the platform would suffer minimum taxes and levies.

Rationalisation of mandi taxes and unified license for members to trade was one of the prerequisite for mandis to get the e-NaM platform.

During the past five years, data shows that till March 31, 2021 around 1,000 mandis have joined e-NaM platform and over 150,000 traders are registered under e-NaM.

Over 50,000 unified single licenses have been issued under e-NaM which will also allow traders to operate smoothly within mandis, without requiring to apply afresh.

Recently, agriculture minister Narendra Singh Tomar said that soon another 1,000 mandis will joined the E-Nam platform, taking the total number of regulated mandis to 2,000.

According to some estimates, India has around 7,000 regulated mandis and another 20,000 sub-yards that are under some sort of regulation.

Over the last five years, e-NaM has grown by leaps and bounds and several traders, farmers and FPOs have used the platform to buy and sell their farm produce.

The flip side

However, despite best efforts, success of e-NaM has been mired in controversies.

Back in 2018, a few years after the project was launched, a high powered panel of experts on integrating commodity spot and futures markets found that in many mandis (APMCs), data of trading done manually was being fed into the electronic platform of E-NaM after the auction was completed.

This was in complete violation of the concept of transparency and discovery of a fair price.

“In such APMCs strictly speaking, online auction of commodities on e-NaM platform is not taking place and the data of manual trading is being recorded into the system after the auction is done offline,” the panel said listing out the operational limitations and challenges of e-NaM.

It was chaired by Niti Aayog member Ramesh Chand. 

The panel was set up by the finance ministry in 2017 and its report was submitted in February 2018.

The panel said the details being fed manually into the e-auction platform included those about buyer, seller, seller’s address, commodity name, quantity and auction rate.

That apart, the panel also found that many APMCs are lacking in operational assaying lab for grading of the commodities prior to putting them for online auction, while few were pushing out commodities will large arrival volumes from e-auction due to time constraint.

The panel also found significant variation in the arrival data of AGMARKNET and e-NaM, as AGMARKNET data records actual transaction data while e-NaM records the data captured at the arrival gate of the APMC.

“Though some of the labs do have some basic instruments like moisture meter and weighing machine etc., this is a major deficiency noticed in majority of APMCs thereby affecting the prospect of introducing online trading platforms in such APMCs,” the panel’s report said.

APMCs need to be well equipped with the basic assaying equipment including automatic analysers for both physical as well as chemical quality, it said.

The panel also said that in order to operate the e-NaM at its full potential and to pass on the intended benefit to the farmers, the government should ensure that each e-NaM or APMC must have appropriate storage facility to provide cost effective warehousing facilities to the sellers (farmers) so as to avert distress sale, there should be prompt payment to farmers.

Thirdly, a buyer irrespective of his location, should participate in any market of his choice and an institution to support inter-mandi trade and movement of produce, including dispute resolution mechanism should be established.

“Auctions of the produce should take place simultaneously on one common electronic platform in all APMC markets in the country, as well as in the private markets, as and when they come to be established,” the panel’s report said.

Despite all the hiccups, e-NaM has stayed afloat and grown in terms of volume and reach. Several new features that include real-time weather data etc have been added to the platform.

Reports say that companies and FPOs have been using the platform to trade in agriculture commodities.

The new farm acts would have given a fresh lease of life to the ambitious scheme and would have solved a lot of complaints regarding the smooth working of e-NaM and its growth.