Prime Minister Narendra Modi on Thursday sowed the seeds for a farming revolution, with the launch of e-NAM, an online portal for trading in agriculture produce, which promises to liberate farmers from the clutches of middle-men and realise fair market value for their yields.
“Farmers in India will now call the shots,” Modi said as he launched the National Agriculture Market portal (e-NAM). Terming it a ‘turning point’ for the country’s agriculture, Modi called upon all the States to come on board to help farmers reap the benefits of the trading platform.
The e-NAM marketplace will initially enable farmers in eight States — Uttar Pradesh, Madhya Pradesh, Jharkhand, Himachal Pradesh, Gujarat, Telangana, Rajasthan and Haryana — to sell 25 commodities in 21 wholesale mandis.
The commodities that will initially be sold online include chana (black gram), castor seed, paddy, wheat, maize, turmeric, onion, mustard, mahua flower, tamarind and shelling pea.
“Using this portal, a farmer can decide where his produce will be sold, when it will be sold, and at what price. At the same time, consumers and traders, too, won’t suffer,” Modi said at the launch. The number of wholesale mandis to which farmers will have access through e-NAM would soon increase to 200, said Modi. “Many States have changed their laws. Incorporation of technology is not difficult,” he said.
So far, 14 States have amended their Agriculture Produce Market Committee (APMC) Act to allow e-trading. Among them are Andhra Pradesh, Chhattisgarh, Karnataka, Sikkim, Goa and Mizoram.
Transparency in prices
The idea behind the online market is to provide transparency in pricing by removing the information asymmetry between sellers and buyers and enable farmers to benefit from price discovery.
It will also reduce transaction cost, provide a single licence valid across all markets, help farmers identify the best buyers, enable single-point levy of market fees, and set quality standards.
Additionally, the online market also liberates farmers from dependence on commission agents, who are the traditional link between them and consumers. In some cases, commission agents also double as financiers to farmers, who thus feel obligated to sell their produce through the agent to whom they are indebted.
On the e-platform, farmers can list the items they want to sell on the portal. Local traders, as well as traders in other States, can then bid for the produce. The farmer will be free to choose to accept the offer made locally or by traders in other States. The transaction will be recorded on the books of the local mandi, which will continue to earn the transaction fee.
“Earlier, the farmer never had any choice. Once he took his produce to the mandi, he was completely at the mercy of traders. If the traders decided to drop the price for a particular commodity, the farmer would be forced to sell as he didn’t want to take his produce back to his farm. With online trading, the farmer would have conducted the entire transaction before loading his produce on his tractor or cart,” Modi said.
Traders, too, stand to benefit as they can tap any number of sellers if for some reason they don’t get what they want from their traditional sellers.
The Agriculture Ministry has targeted integrating all 585 regulated markets on the e-NAM platform by March 2018; of these, 200 will be on board by September 2016, 200 more by March 2017, and the other 185 markets by the end date.
Criticising some States, without naming them, for not having laws to protect their farmers, Modi said that farmers were susceptible to exploitation there. Even in States that have laws, they need to make amendments to provide for the new technology that has come in. “I hope States will amend their laws so that they can benefit from online trading. I ask States to give it primacy,” he said.
On a positive note, the Prime Minister added that as soon as news of the benefits enjoyed by farmers in the 21 selected mandis start to come in, the other States would want to become part of the online system so that their farmers, too, could benefit.
The laboratories to be set up at the mandis would scientifically classify the quality of the product being sold and the transparency would help farmers, traders as well as consumers, he added.