Context: COVID-19 has given a boost to e-NAM, the national digital platform for agricultural trade, with the number of connected mandis, or wholesale markets, up 65% since the lockdown, according to Agriculture Ministry data.
- It is giving farmers and traders another option at a time when transport disruptions and social distancing requirements have made physical mandi trade more difficult.
About the National Agricultural Market (e-NAM)
- It is a pan-India electronic trading portal which networks the almost 7,000 existing mandis run by Agricultural Produce Market Committees (APMC) to create a unified national market for agricultural commodities, with a promise to promote real-time price discovery based on actual supply and demand.
- It was launched in April 2016.
Performance of e-NAM:
- At the end of March 2020, there were only 585 mandis connected to e-NAM, even as the nation went into lockdown due to the COVID-19 pandemic and hundreds of mandis shut their physical gates.
- As of May 9, 150 commodities with produce collectively worth more than ₹1 lakh crore had been traded on the e-NAM platform, although 236 mandis have actually participated in inter-mandi trade across 12 States.
- However, an encouraging sign is the more than 1,000 FPOs which are registered on the platform, providing access to their members.
Recent govt. Initiatives:
- The Union Agriculture Ministry’s Model Agricultural Produce and Livestock Marketing (APLM) Act seeks to expand farmers’ marketing choices — by allowing private markets (as against only APMCs), permitting direct bulk purchases from the farmgate
- declaring warehouses or cold storages as deemed markets and
- demolishing the existing concept of a “market area”.
- The Centre introduced some important new features in April:
- A trading module allowing Farmer Producer Organisations (FPOs) to trade produce directly from their collection centres without bringing it to mandis
- A warehouse-based trading module and a logistics module offering users trackable transport facilities through aggregators with access to 11 lakh trucks.
Challenges: Progress of e-NAM has been slow, because of the following factors:
- APMC flaws: APMCs technically have multiple buyers, but the system of open auctions for determining prices through transparent bidding is non-existent in practice.
- In most APMCs, buyers have to route all purchases through licenced agent.
- These middlemen charge commission for their “services” — many times, both from the buyer and seller. The agent is also often a moneylender, supplying seeds, fertilisers and pesticides to farmers on credit.
- They, then, are forced to sell through him and settle their dues in perpetuity.
- Currently, an APMC’s purview extends to the entire tehsil and villages in that sub-district, with any trade undertaken in this so-called market area liable for payment of mandi fee.
- The Model APLM Act recognises only the market yard, i.e the area within the boundary walls where actual trade in the mandi takes place.
- Many States did not amend their APMC Acts: The state's opposition is primarily due to the delineation of “market area”, which has a bearing on the earnings of APMCs.
- There is also fear that it might lead to traders moving out, to save on mandi fees levied on transactions within the market yard. This would eventually affect the functioning of APMCs, which is definitely not in farmer interest.
- Individual licencing system: Much of trading in e-NAM is still being done by traders within the same mandis. The reason is the individual licencing system adopted by each APMC.
- The user base remains at a nascent stage, with 1.66 crore farmers, 1.3 lakh traders and 71,911 commission agents registered on the platform. There are more than 13 crore farmers in India.
- Most farmers were not part of the cooperatives that would help aggregate the bulk quantity of produce needed to interest online buyers and most mandis did not possess the infrastructure to make the most of the platform.
- Promote FPOs in marketing: Producer organisations/companies should be encouraged to take up direct marketing of their members’ produce to large buyers and processors.
- Besides, they can be given mandi to trade in APMCs. There are some FPOs that do such trading; it has been found to result in more competition and better prices at APMCs.
- Common licence valid across all e-NAM APMCs: This can be issued with a rider that the trader will deposit upfront the margin money/funds in any APMC where he wishes to undertake physical buying on any given day.
- An e-wallet or plug-and-play facility of this kind will multiply the number of buyers and meet the e-NAM’s primary objective of promoting better price discovery.
- A Farmer Producer Organisation (PO) is a legal entity formed by primary producers, viz. farmers, milk producers, fishermen, weavers, rural artisans, craftsmen.
- An FPO can be a producer company, a cooperative society or any other legal form which provides for sharing of profits/benefits among the members.
- FPOs help in collectivization of such small, marginal and landless farmers in order to give them the collective strength to deal with such issues.
- Members of the FPO will manage their activities together in the organization to get better access to technology, input, finance and market for faster enhancement of their income.
Image Source: Zee Business