Why e-NAM's a dud in market-rigid states

The only change the electronic-National Agriculture Market (e-NAM) has made so far is that trading, which was done manually earlier, is now performed electronically, says S P Gangwar, secretary of the Chandausi Krishi Utpadan Mandi Samiti in Uttar Pradesh's Moradabad district. Other than this, he says, nothing much has changed on the ground because of the portal.

Gangwar, who has for the past several months been overseeing the installation of the e-NAM portal and setting up of labs, said that unless traders, commission agents and wholesalers from other parts of Uttar Pradesh were allowed to participate in the portal, the concept of having a common pan-India e-market for farm products would remain on paper.
 

From Uttar Pradesh, 66 mandis have joined the e-NAM portal in the past six months. However, in the absence of a pan-state licence, traders and commission agents from areas outside the mandis' jurisdiction are not able to participate in trading. "The mandi tax of 2.5 per cent has not been waived off, while buyers from even nearby areas like Lakhimpur Kheri or Pilibhit cannot participate in the e-NAM of Chandausi Mandi," Gangwar told Business Standard.

So far, 50-60 traders and 150 traders and commission agents have registered on the e-NAM portal from Chandausi.

Jyoti Yadav, secretary of the Chaubepur Mandi near Kanpur, also said that in the absence of interstate licence - known as Form 38 in UP - the full potential of e-NAM could not be realised. Launched with much fanfare, Prime Minister Narendra Modi's ambitious scheme of developing a pan-India electronic common market has remained a non-starter in states where trading licences and mandi taxes have not been eased.

Parvesh Sharma, managing director of Small Farmers' Agri-Business Consortium, and former agriculture secretary Siraz Hussain in a recent article in The Indian Express suggested that one way to revive the e-NAM concept would be to route all paddy procurement of the Food Corporation of India through e-NAM in states where it has been allowed. However, how far that would help in solving the fundamental problems associated with e-NAM remains to be seen. Since the launch of e-NAM on April 14, 2016, the government claims 153,992 tonnes of produce worth Rs 421 crore have been transacted on e-NAM.

As many as 160,229 farmers, 46,688 traders and 25,970 commission agents have been registered on it, with 69 agricultural and horticultural commodities notified for trading.

The Centre claims that in line with e-NAM, 17 states and one Union Territory have modified their respective Agricultural Produce Marketing Committee (APMC) Acts, while another three have consented to do the same in the near future.

"In Chaubepur, the e-NAM was installed on September 30 and till date only two or three vouchers have been issued. But, we're hopeful that with paddy procurement season starting in the next few weeks, the volumes would grow. However, better price realisation would have happened, if traders and buyers from Allahabad would have been allowed to participate in the portal," Yadav said.

However, in states where traders and commission agents have licence to buy and sell from different mandis within the state, the situation is different.

For instance, the Haryana government amended the mandi licence Act and started granting four types of licences to traders and commission agents.

The first licence is issued by mandi committee; the second for district level trade; the third category is zonal licence, and finally interstate licence for traders.

"Those traders who want to avail interstate licence have to apply to the chief administrator of mandis and markets after which they can trade anywhere within the state," said Devender Dhull, secretary of Rohtak Krishi Upaj Mandi Samiti.

He said till date, around 1,200 farmers from neighbouring villages are registered on e-NAM, while almost all the traders and commission agents have become part of the same.

The mandi conducts trades in cotton, bajra and paddy through the electronic platform.

In Simdega and Lohardaga mandis in Jharkhand, most trades are done locally and there, too, interstate purchase and selling are prohibited.

However, the state has stopped levying any mandi tax, which is why the selling cost has come down for the farmers.

"We have just received the first tranche of the grant of Rs 30 lakh and are awaiting the rest as we would want to set up a testing lab at the earliest," said Abhay Kumar, secretary of Lohardaga Mandi. Being a tribal area, tamarind, mahua and paddy are currently being traded through the electronic platform.

FAQs

What is e-NAM?

e-NAM is a pan-India electronic trading portal, which connects the existing APMC mandis to create a unified national market for agricultural commodities.

How does it work?

In most places, farmers and traders are registered on the e-NAM portal through a unique login ID. Once logged in, they put out their produce to invite bids. Once a bid is agreed, the transaction is locked.

What has been the progress so far?

According to the Centre, 250 mandis in 10 states have joined e-NAM since April 14, while another 399 mandis are in the pipeline. As many as 153,993 tonnes of agriculture produce worth Rs 421 crore have been transacted through the platform. So far, 160,229 farmers, 46,628 traders and 25,970 commission agents have registered on the e-NAM portal. The Centre plans to join 585 mandis on e-NAM by March 2018.

What is the status of mandatory APMC reforms for e-NAM?

So far, 17 states and one Union Territory have partially or fully modified their APMC Acts, while three states and one Union Territory have agreed to do so.

What are the major bottlenecks?

Reluctance on the part of states to give a common intrastate trading licence, the absence of big farming states such as Punjab and Maharashtra, and the poor pace of APMC reforms are the major bottlenecks. India has around 7,000 mandis. In the first phase, e-NAM targets not even 10 per cent of the same.