5 e-NAM

Brief Synopsis

Hello Friends. In our last interaction we discussed about the concept of Vikaspedia. I am sure by now you all might have visited the portal of Vikaspedia and obtained huge number of details that are available there. And over a period of time, you can add content as well as you can be the beneficiaries of the concept of Vikaspedia. In this interaction we will be taking up the issue of e-National Agricultural Market. This is a virtual marketing place, that has been created by the Union Ministry of Agriculture. And it is giving an opportunity for a primary producer or a farmer to be a trader also.

Earlier there were a number of restrictions for a farmer to become a trader. So because of that he was not getting the remunerative price for his produce. So the government thought, so if we translate this farmer into a trader, so that he can directly market the produce that he has. So that he can realize the benefits of the marketing channels, what otherwise the traders are really harnessing, the profits. So keeping these things in view, the Govt of India launched the e-NAM.

e-NAM

• It is basically an electronic trading portal. Which seeks to network the existing Agricultural Produce Marketing Committees(APMC) and other market yards, to create a unified national market for agricultural commodities. So basically there is a beautiful marketing network that is throughout the country, so wherein there are number of APMC’s that are working. So now all these things, APMC’s are being connected electronically, so that they can exchange the price, they can exchange the commodities. Their arrival and at what price they are being sold etc etc are being exchanged electronically, so that it gives an opportunity for the farmer to trade his produce. Basically the National Agricultural Market is a virtual market. But it has a physical market at the backend.

We cannot think of the National Agricultural Market, without this backend support, because you are there into trade of physical good.

• The National Agricultural Market is an effort to create a national network of existing mandis, which are already existing. But now there is only an effort to link them electronically, which can be accessed online. It seeks to enable buyers situated outside the State, to participate in trading at a local level. So earlier there were also restrictions that the farmer of one State cannot enter into another State for the purpose of trading, for the purpose of selling his produce. But now with this, so the entire country is acting as a particular village.

Vision
The vision of e-NAM is to promote uniformity in agricultural marketing by

• Streamlining the procedure across the integrated market. So earlier there used to be a policy for each State, for each region. But now the entire country has the same policy for trading as well as marketing of agricultural produce.
• Removing information asymmetry between buyers as well as sellers. So some of the buyers were having huge amount of information and some were not. And some of the sellers were having appropriate information, many were not. So this information asymmetry was removed, because all are having equal access to this information contents.
• Then promoting the real time price discovery based on the actual demand and supply. So what exactly is the demand in the market and accordingly how the price is behaving is determined by this particular effort. So this is what is the vision.

Mission
The mission includes,

• The integration of APMC’s across the country to a common online market platform to facilitate pan-India trade in agricultural commodities. Providing better price discovery through transparent auction process, based on quality of produce along with the timely online payment.

So if you look into this mission, there are 3 or 4 important issues. So now you can trade your produce pan India, it means it is your geographical area of marketing of your agricultural produce is not limited to the State which you belong to, which was the earlier case. The second one is, you can discover the best possible price for your produce based on its quality. And the process of auctioning is transparent, because everyone is bidding online and everyone can know who is bidding what price. So that is how the transparent bidding, sorry the auction process is already there, is being provided. Then the quality of the produce is also visible, because the bidder is asking for a quality, the trader is asking to explain his commodity with the qualities.

And ultimately when it comes to the payment, farmers are the real losers. Many times they used to wait for months for getting the payments from these government channels or the government offices because of the procedures and number of things. But once the payment has been made online, it has become easy as well as timely.

Stakeholders

The stakeholders of this e-NAM include,

• The farmers, who are the primary producers
• And they themselves are translating themselves into the traders when they harvest the product.
• APMC is basically a marketing place wherein the farmers are the members
• The Farmer Producer Organization(FPO), because the marketable surplus of each and every farmer is not much, looking into the Indian situations. The small holdings. So that is why farmers are organizing themselves into farmer producer organizations, so that they have a bulk production, they have a bulk commodity to sell in the market.
• As well as the Mandi board which are supported by the State as well as Central Govt.

Need for NAM

The need for NAM arises because of

• The APMC regulated market yards limit the scope of trading in agricultural commodities as per the previous norms, but now they are being opened up.
• So even within the State there are transaction costs on moving the produce from one market to another area. So that was the traditional system. The earlier system that was having. But NAM is going to overcome all these problems.
• Then multiple licenses are necessary to trade in different markets in the same State. So each and every trader was having a license to engage into the trading of agricultural commodities in one market. If you want to enter into another market, so then he has to have another license. So this multiple licensing also came to an end with the introduction of this National Agricultural Marketing System.

Then NAM Intends to Reverse the Process

• Fragmentation of markets
• Lowering the intermediation cost
• Wastage and price for the final consumer. Because ultimately the farmer should get all the benefit of all these efforts. So that is what is the basic idea here.
• It builds on the strength of the local mandi, and allows it to offer its produce at the national level

So now the farmer should feel proud because he himself is entering into the trading process, number one, and he can sell his produce at the best possible price and to the intended customer.

The Basic Criteria for a State to Plug into the National Agricultural Market is

1. The State APMC Act must have specific provisions for electronic trading. So now because agriculture being a State subject, the State has to modify its norms, so that they can be part of this NAM (National Agricultural Market)
2. Then the State APMC Act must provide for issue of licenses to anyone in India to trade through the National Agriculture Market in the local Mandis. So this type of modifications are to be brought into the APMC Act in every State, so that they can be part of this National Agricultural Marketing System.
3. Then there must be one single license for each State to facilitate trading in all Mandis of the State. It is not that multiple license, but it should have a single license and a single point levy for transaction fee. The transaction fee also to be charged at once. It is not that multiple fees that you are charging.

So with these modifications a particular State can be a part of the National Agricultural Market.

Then coming to the Benefits of Direct Marketing – NAM.
When we look into the monetary benefits, the farmers are getting

• The higher share in the consumer rupee. Because whatever the consumer pays in Indian context, only 25% is going to the farmer, and 75% to the marketing channel. So now farmer becoming a trader with e-NAM, so he can get the additional benefit in the market.
• Then marketing cost is minimized because the primary producer is involved into this process.
• Then lower transaction cost because of the modification of the APMC Act. Reducing the multiple licenses, reducing the transaction fees etc etc.

Then non-monetary benefits to the farmers include.

• Number one the farmers directly come in contact with the consumers and come to know about the consumer’s requirement also. Earlier, so there was a middleman who was explaining all these things. But now these middlemen are eliminated. Farmers as well as the final consumers, so they are having face to face situation.
• It reduces the post-harvest losses of the produce because there is no time gap in after harvest as well as its sale to the end user.
• Then farmers increase their efficiency by access to the better technologies, because they are becoming part of this electronic mode, obviously they will be beneficiaries.

The Modus Operandi include

• The Small Farmer Agri-Business Consortium(SFAC) is the lead promoter of National Agricultural Marketing. So which is in operation since 1994, SFAC, so which is taking the lead.
• Then it will select the strategic partner through open tender to develop, operate and maintain eNAM platform in a particular State.
• Then Department of Agriculture and Cooperation (DAC) will provide a budgetary grant to begin with.
• Then SFAC will operate National Agricultural Market with the technical support by the committees.

Then the User Friendly NAM. How it has become user friendly?

• Because of the e-NAM app
• Because of the availability of app in the regional languages.
• Because of availability of e-Learning videos
• Because by making use of these videos, you can self learn number of operations, transactions that you can or you are expected to take up in this platform.
• There is space for frequently asked questions(FAQ) wherein you can ask the question and you can get the clarification and you can have the appropriate answers.
• There are manuals for operations
• The AGMARKNET updates are already available
• There is a helpline which you can call all the time. You can get the required information.
• There is a space for registration
• And you have an access to 585 Mandis from 16 States.

So these are some of the features which makes the NAM a user friendly approach.

Conclusion

To conclude we can say that the e-National Agriculture Market

• Is an opportunity for a farmer to become a trader. Earlier he was only the farmer, but now he is translating himself to be a trader.
• Then there is a need for changing the attitude of the farmer, the primary producer. And at the same time the traders as well as the government officials also.
• Then the stakeholders should work collectively. Then only they can generate the appropriate data which is needed for this market. Initial stages that effort has to be holistic in nature, otherwise problems will sustain.
• Then institutions have the responsibility of providing timely and appropriate information, otherwise it is not going to be successful. We have the appropriate information, the timely information, then only you can be an efficient trader.

With this we will be coming to the end of this discussion. And in the next week we will be looking into 5 different institutional arrangements, which are providing the e-mediated extension services. So those efforts include the

1. e-Extension initiatives of Indian Council of Agricultural Research
2. e-Extension initiatives of State Agricultural Universities.
3. e- Extension initiatives of the private organizations.
4. e-Extension initiatives of non-governmental organizations
5. and what are the e- Extension initiatives for the allied sectors of agriculture.

That we will be discussing in the next week.

Thank You.