Gaining heft

E-NAM needs key executive and legislative changes

The record business transacted through the electronic National Agricultural Market (e-NAM) during April-January 2021-22 is a clear indication of the growing relevance of this non-conventional mode of agricultural marketing and its acceptance by the farmers. This pan-Indian digital market, launched in 2016, is emerging steadily as a reliable, transparent, fair, and low-cost alternative to the monopolistic and middlemen-dominated mandis operated by agricultural produce marketing committees (APMCs). Significantly, much of the increase in the e-NAM’s trade volumes has occurred after the repealing of the three agricultural laws, one of which was meant primarily to undercut the hegemony of the APMCs by allowing out-of-mandi transactions of farm goods. About 1,000 markets in over 20 states and Union Territories have been linked to the e-NAM portal and the network seems set to expand further.

However, regardless of its merits and rapid strides, this all-India digital market has a long way to go to grow to its true potential. The data concerning expansion in the e-NAM network and its turnover cannot, indeed, be taken at its face value. In reality, online trading is taking place only in 570-odd markets of the 1,000 linked to the e-NAM. Many big agricultural markets, including Delhi’s Azadpur mandi, one of the largest in Asia, are yet to be connected to it. Besides, just three states — Rajasthan, Haryana, and Andhra Pradesh — account for over 70 per cent of the transactions. What is worse, the bulk of the trading consists of the deals within the same mandis (intra-mandi trade) or between the mandis of the same district. Inter-mandi and, more importantly, inter-state trade are minimal though that is what the e-NAM is chiefly meant for.

The reasons for the limited sway of the e-NAM are several. For one, some of the basic prerequisites for the success of online trading are yet to be fulfilled. The notable among these include a single trading licence valid throughout the state and, preferably, across the states as well; uniform market levies payable at a single point; and amending the state APMC Acts to make specific provisions for inter-state trading in farm commodities. Besides, there are issues concerning the quality, grading, packaging, storage, and transportation of the commodities. Buyers are usually wary of the claims made by sellers about the quality of their produce, which, in the case of farm products, is also prone to deterioration during transit.

To overcome the legal hurdles in inter-state marketing in farm produce, the Ashok Dalwai committee on doubling farmers’ income had counselled that agricultural marketing should be shifted from the State List to the Concurrent List of the Constitution. This would allow the Centre a greater say in agricultural marketing, which, unlike agriculture, is not dependent on local agro-ecological conditions to be under the complete control of the states. But this would require amending the Constitution and the consent of the states, which may not be forthcoming readily because market levies constitute an important source of their revenue. It would, therefore, be better to pay as much attention to consolidating the existing network of the e-NAM as to its expansion. Otherwise, the objective of presenting the e-NAM as a superior substitute for the APMC markets would not be fully served.