What is eNAM?
National Agriculture Market (NAM) is an electronic trading portal that networks the existing APMC mandis all over India in order to create a unified national market for agricultural commodities.
NAM portal extends a single window service for all APMC related information and services. This includes buy & sell trade offers, provision to respond to trade offers, and commodity arrivals & prices. While online market reduces transaction costs and information asymmetry, the flow of agricultural produce will continue to happen through mandis.
Administration of agriculture marketing is carried on by the respective states as per their agri-marketing regulations. Every State is further divided into several market areas. These separate areas formed will be administered by a separate Agricultural Produce Marketing Committee (APMC) which imposes its own marketing regulation.
This fragmentation of markets even within the State level, hinders free flow of agri-commodities between different markets.
Multiple handling of agri-produce and multiple levels of mandi charges result in escalated prices for the consumers without equivalent benefit to the farmer
These challenges are addressed by NAM by creating a unified market through online trading platform both for State and National level. This approach,
Promotes uniformity and streamlining of procedures across the integrated markets
Promotes real time price discovery based on actual demand and supply
Removes information asymmetry between buyers and sellers
Promotes transparency in auction process
Promotes access to a nationwide market for the farmer along with prices commensurate with quality of his produce
Promotes online payment and availability of better quality produce at reasonable prices to the consumer.
- To establish a national e-market platform for transparent sale transactions and price discovery initially in regulated markets. To make sure that willing States enact suitable provisions in their APMC Act for promotion of e-trading by their State Agricultural Marketing Board/APMC.
- Liberal licensing of traders / buyers and commission agents by State authorities without any pre-condition of physical presence or possession of shop /premises in the market yard.
- To provide one license for a trader valid across all markets in the State.
- Harmonization of quality standards of agricultural produce and provision for assaying (quality testing) infrastructure in every market to enable informed bidding by buyers.
- Single point levy of market fees, i.e on the first wholesale purchase from the farmer.
- Extend provision of Soil Testing Laboratories near the selected mandi to facilitate visiting farmers to access this facility in the mandi itself.
National Agriculture Market is beneficial to every stakeholder involved in the process.
Mandis
There are a lot of benefits to the Mandis in the National Agriculture Markets. They are,
- A reduction in book keeping and reporting system as they are now generated automatically.
- Better monitoring and regulation of traders and commission agents.
- Completely transparent system eliminating scope of intentional/un-intentional manipulation of tendering / auctioning process.
- By means of accounting all the transactions that are taking place in the market, market fee collection is improved.
- As tendering/auctioning process takes place through the system, manpower requirement is reduced.
- Analysis and forecasting of the arrivals and prices.
- Availability of the activities of each APMC on the government website directly.
Farmers
- NAM provides improved and increased options for selling produce and making competitive returns.
Traders
- NAM provides access to larger national markets for secondary trading.
Buyers, Processors & Exporters
- NAM will enable direct participation in the local mandi trade, reducing intermediate costs.
In order to facilitate both — unification of market and online trading, it is necessary for the States to undertake reforms prior to seeking assistance under the scheme in respect of
(i) A single license to be valid across the State
(ii) Single point levy of market fee
(iii) Provision for electronic auction as a mode for price discovery.
Only the States/Union Territories that have completed these 3 pre-requisites will be eligible for assistance under the scheme. The States must ensure that the reforms are carried out both in letter and spirit through appropriate and unambiguous provisions in the APMC Acts and rules. Besides the State Marketing Boards/APMCs must enable the promotion of the e-auction platform. The States will need to ensure that the mandis that are integrated with NAM makes provision for requisite online connectivity, hardware and assaying equipment.
The NAM electronic trading platform has been created with an investment by the Government of India (through the Ministry of Agriculture & Farmers’ Welfare). It offers a “plug-in” to any market yard existing in a State (whether regulated or private). The special software developed for NAM is available to each mandi which agrees to join the national network free of cost with necessary customization to conform to the regulations of each State Mandi Act.
The national level platform has been developed by the Ministry of Agriculture & Farmers’ Welfare, which will also bear the maintenance costs. As stated above, the integration costs for local mandis and customization of software, training etc. will also be paid for by the Ministry of Agriculture & Farmers’ Welfare as a one-time grant at the time of accepting the mandi in the national network.
Thereafter, the running costs of the software at the local level, staff costs for quality check etc. will be met from the transaction fee to be generated through the sale of produce. The intention is to avoid any upfront investment by the mandi when it integrates into NAM, and also enable it to support the running cost through additional generation of revenue.
Ministry of Agriculture & Farmers’ Welfare, Govt. of India has appointed Small Farmers’ Agribusiness Consortium (SFAC) as the Lead Implementing Agency of NAM. SFAC will operate and maintain the NAM platform with the help of a Strategic partner selected for the purpose.
NAM is envisaged as a win-win solution for all stakeholders.
For the farmers, NAM promises more options for sale at his nearest mandi.
For the local trader in the mandi, NAM offers the opportunity to access a larger national market for secondary trading.
Bulk buyers, processors, exporters etc. benefit from being able to participate directly in trading at the local mandi level through the NAM platform, thereby reducing their inter-mediation costs.
The gradual integration of all the major mandis in the States into NAM will ensure common procedures for issue of licenses, levy of fee and movement of produce.
In the near future we can expect significant benefits through higher returns to farmers, lower transaction costs to buyers and stable prices and availability to consumers.
The NAM will also facilitate the emergence of integrated value chains in major agricultural commodities across the country and help to promote scientific storage and movement of agri-commodities.
There are several arguments that rise up complaining the working of eNAM. But FarmGuide feels that this approach has the capability to bring in a revolution in the Indian market places provided the government takes prime care with the implementation.
Mandis have completely shifted to online auctions in Suryapet, Telangana. Not only in Telangana, farmers in Dausa district of Rajasthan, which shifted to online auction in February 2017, are benefiting from the eNAM service. So far, 72.12 lakh farmers, 53,130 commission agents and over 1 lakh traders are registered on the eNAM platform from 14 states.
The 14 states include Andhra Pradesh, Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Jharkhand, Madhya Pradesh, Maharashtra, Odisha, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh and Uttarakhand.
Originally published at blog.farmguide.in by Bharath Varma AVS on February 2, 2018.
