e-NAM-electronic National Agriculture Market

TOPIC: e-technology in the aid of farmers

e-NAM
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Why e-NAM?

  • Agriculture marketing is administered by the States as per their agri-marketing regulations, under which, the State is divided into several market areas, each of which is administered by a separate Agricultural Produce Marketing Committee (APMC) which imposes its own marketing regulation (including fees).

    This fragmentation of markets, even within the State, hinders free flow of agri commodities from one market area to another and multiple handling of agri-produce and multiple levels of mandi charges ends up escalating the prices for the consumers without commensurate benefit to the farmer.

    NAM addresses these challenges by creating a unified market through online trading platform, both, at State and National level.

    What is e-NAM?

  • e-NAM or the electronic National Agriculture Market scheme was launched in April 2016.
  • It is an e-trading platform which will operate through an online portal and is being linked to the mandis of the States.
  • The government had linked 21 mandis in 8 states to the e-NAM.
  • By September 2016, 200 mandis will be linked and by March 2018, 585 mandis will be linked.
  • The GoI is providing a grant of Rs. 30 lacs to the proposed agriculture mandis of the States.
  • Farmers will be provided ‘farmer helpline services round the clock’ for obtaining information related to the portal.
  • The government has allocated Rs.200 crore for the scheme to be spent over the next three years ( 2015-16 to 2017-18)

Reforms Needed

  • At present the farmers sell out their products through the Mandis or Bazar Committees which levy a number of duties on their products
  • For integration with e-NAM, states are required to complete certain prerequisite reforms in their respective Agriculture Produce Marketing (Regulation) Acts. {APMC Act}
  1. A single license to be valid across the state.
  2. Single point levy of market fee.
  3. Provision for electronic auction as a mode for price discovery.
  • These reforms will facilitate the way to convert the whole state to one market.

Benefits of the scheme

For Farmers

  1. Enhanced market access by way of allowing remote online bidding for their agricultural produce.
  2. Removal of information asymmetry between buyers and sellers.
  3. It will give him access to a greater number of buyers both within and outside the State.
  4. It will also increase his access to markets through warehouse based sales and thus obviate the need to transport his produce to the mandi.
  5. Real- time price discovery based on actual demand- supply gap through transparent online auction.
  6. Online payment directly to farmer’s accounts.
  7. It promotes uniformity and streamline procedures across the integrated markets.
  8. It will promote reform of the agricultural marketing sector and free flow of agricultural commodities across the country.
  9. It will also help to promote scientific storage of agricultural produce.

For consumers-

  1.  availability of better quality produce and at more reasonable prices to the consumers.
  2. Bulk buyers, processors and exporters will benefit from being able to participate directly in trading at the local mandi level through the e-NAM platform, thereby reducing their intermediation costs.

For local traders-

  1. It offers the opportunity to access a larger national market for secondary trading.

Simultaneously a provision has been made for soil testing laboratories nearby selected mandis which will facilitate the farmers in soil testing.

 Will the APMC mandis lose out business due to NAM?

  • No.
  • NAM increases the choice of the farmer when he brings his produce to the mandi for sale.
  • Local traders can bid for the produce, as also traders on the electronic platform sitting in other States.
  • The farmer may chose to accept either the local offer or the online offer.
  • In either case the transaction will be on the books of the local mandi and they will continue to earn the transaction fee.
  • In fact, the volume of business will significantly increase as there will be greater competition for specific produce, resulting in higher transaction fees for the mandi.

 

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