eNAMalongwaytogo

RajalakshmiNirmal

TheelectronicNationalAgricultureMarketisasoundideabutimplementationisatanascentstage

FarmersinTelanganastagedaprotestlastMonday,demandingdiscontinuationoftheelectronicnationalagriculture
market(eNAM)platformandrestorationofthepreviousplatformprovidedbyNCDEXeMarkets.
Itfollowedthefailureofthesoftwaretoaccommodatetheheavyvolumesofthepeakseasonarrivals,beginningwith
maizeandsoyabean.

TheAgricultureProduceMarketingCommittee(APMC)inNizamabad,whichwasusingtheeplatformprovidedby
NCDEXeMarketsunderthemandimodernisationprogramme,recentlymovedtoeNAMaftertheStatesorder.
ButonOctober15,1andsubsequentlyonOctober17,thenewsystemfailedastheservercouldnothandlethehigh
volumes.About15,000plusbagsofmaizeand7,000plusbagsofsoyabeanarrivedatthemandionthatday.
EvenastheCentreisgladthatithaslinkedover250marketsundereNAMsinceitslaunchinAprilandtargets
covering585marketsbyMarch2018,therearemanymissinglinksinthenewsystemwhich,unlessfixed,mayseeit
fail.
Therearetoday2,477regulatedagriculturemarkets(orAPMCs)and4,843subyardsregulatedbytherespective
APMCs.Ofthese,only250havebeenenrolledundereNAMand150oftheseundertheeplatformofNCDEXe
Markets(inJVwithRashtriyaeMarketServices).
SinceApril2016,whentheCentreintroducedeNAM,only17StatesandoneUnionTerritoryhavemodifiedtheir
APMCtobringinemandisandonly10ofthesehavesomeoftheirmandisenrolledforeNAM.
StatesincludingPunjab,MaharashtraandTamilNadu,whicharekeyproducersofpulsesandgrains,arestilloutofe
NAM(intheexistingform,thestateAPMCActsrestrictfarmersfromsellingtheirproduceoutsidetheAPMCintheir
district).
Also,evenmandisthathaveenrolledforeNAMarenownotentirelyanonlinemarket.ThewaytheeNAMmandis
functionisdifferentfromwhatwasoriginallyenvisionedbytheCentre.Muchofthetradethathappensthroughthis
platformindifferentStatesislargelytheMSPprocurementbythegovernment,saymarketparticipants.Thefarmeris
stillonlyapricetaker.
Howitwasenvisioned
TheframeworktheCentreenvisagedforeNAMwasonewheretherewouldbeacommonnationalmarketfor
agriculturalcommodities.Thismarketwouldenablefarmerstoreachouttobuyersacrossthecountry.ATwitterpost
fromtheAgricultureMinistryenvisionedtheframeworkthus:Whenafarmerentersthemandi,hewillberegistered
andassignedacommissionagent.Then,thefarmerwillleavehisproducewiththequalitycontrollaboratorywhichwill
doassayingandfixthepriceforthecommodity.Thebidisthenloadedontothewebsiteandbuyersfromacrossthe
countrygettoseeit.InterestedbuyersthenmakethepaymentforthelottheyselectedthroughNEFTtoeNAMwhich
will,inturn,transferittothefarmerafterdeductingatransactionfee.
Thefarmergetstheinvoicefromthecommissionagentandleavesthemandiandthebuyerpicksupthecommodity
fromwhereveritisbyhisownmeans.Thissoundsgood.Butthen,thereisnoelaborationonmanycriticalaspects:If

assayinghastobedone,whowillappointthequalityofficers?WillitbetheStateortheCentre?Howmuchtimewill
assayingtakeandtillthenwherewillthesecommoditiesbestored?Whowillthenbearthewarehousingcharge?
InmarketswhereeNAMisliveatpresent,itisatanelementarystage.MSMuniya,theSecretaryofMandsoreAPMC
inMadhyaPradesh,says,TwentymandisinMPhavemovedtoeNAM.But,onlygateentryishappening,auctionis
stillonanopenoutcrysystemwearestillintheprocessofunderstandinghowthesystemcanbemadetowork.There
isinternetconnectivityproblem.Now,wemanuallyenterthetransactionsonthesystem,biddingisnotonline.
EnquiriesatafewmoremandisinTelanganaandotherStateswhichareenrolledundereNAMshowthatthesituation
isthesame.Itstartswithagateslipbeingissuedtothefarmerattheentry.Butafterthat,noassayingdone.Traders
manuallyexaminethestockthatcomestothemandiandmakeaquote.And,postcompletionofatrade,thefarmeris
paidcashbythecommissionagentorthetrader.Thereisnosysteminplacetocapturebankdetailsoffarmerssoasto
doadirectbankcredit.
Theinfrastructuresupportneededtomaketheeplatformanationalmarketisnotavailableinmostmandis.The
recentinstanceoftheeNAMsoftwarefailureduringauctionhoursattheNizamabadAPMCshowstheincapacityof
thesystemtoaccommodateheavyvolumes.Asthepeakarrivalsseasonforcrops,includingmaizeandsoyabean,starts
fromnextweek,itisgoingtobeastresstestforthenewsystem.
NCDEXeMarketsoperatesitsplatformonthesamelinesaseNAMbut,withthedifferencethatinthemarketswhere
itoperates,therehasbeentrainingofthevariousparticipantsfromthemandiandthesoftwarehasbeenreworked
withsmalldetailsrightfromthefontsizeanddisplayfromthevariousparticipantsandhasevolvedoveralongperiod
oftime.
TheimplementingagencyforeNAMistheSmallFarmersAgribusinessConsortium(SFAC).Thesoftwareisfrom
NagarjunaFertilisersandChemicals.
Farmershavenosay
TheobjectiveoflaunchingeNAMwastogivefarmersmoresayinfixingtheprice.Butinthecurrentstructure,the
platformdoesntwarrantthat.Thewholeprocessbeginswiththetradersbid,ratherthanfromaskingpriceofthe
farmer.
Thefarmerwillgetthefreedomtosellonlyifhemovesawayfromthecommissionagentsandtraders.
Presently,smallandmarginalfarmersdependonthesemiddlemenfortheirfinancialneedsandpledgetheirproduce
withthemevenbeforetheharvest.

Ram,CEOofSamarthKisan,afarmerproducercompanywhichlinksover6,000farmersinMadhyaPradesh,
highlightsanotherissue.
Forthebenefitsofthenewsystemtoreachthemarginalfarmers,thereshouldbefacilitiesforsorting,gradingand
stockingatthemandis,hesays.
Now,tradersbuytheproducefromthefarmersataverylowprice,thentheydothesortingandgradingandsellitto
thebigcompaniesforgoodmoney
ThemacroproblemistheresistanceshownbytheimplementingagenciesandStates,saysPraveshSharma,formerMD
ofSFAC.
Theexpansionhasnotgonethewayitwasoriginallydesigned.Themainreasonforthatisthereisalotofresistance
fromtheStatesaswellasAPMCcommitteeswhoaresupposedtofacilitatetheexpansionofeNAM.Itisanewconcept
andithastobesoldtopeople.Ithastobeexplainedthroughawarenesscampaignsandfocusedgroupdiscussions,so
thatthereisclarity,inthemindsofthefarmersandtraders,ofthebenefitsthataccruethroughtradingoneNAM.
Idontbelievethatithasbeendonesufficientlyorenthusiastically.EvenwhentheAPMCActwasintroducedinthe
1970s,mostStatesresisteditforseveralyearsandtheydidnotwanttohaveregulatedmarkets.Ittookthegovernment
ofIndiaseveralyearsofpersuasiontogettheStatestopasstheAPMCAct.Now,forthenewmarketreformagain,
thereisresistance,and,Ithinkitwilltakeatleasttwoyearsforthisideatogetembedded.Butthetwoyearshavetobe
spentveryaggressivelysellingtheideaindifferentchannelsthroughdifferentstakeholdersandalsoaddressingtheir
concerns
ThefearoftheAPMCsispointlessastheeNAMstructureincorporatesthemandifeesoftheparticularAPMCintoits
transactioncost,whichwillbepassedontotheAPMCinanycase.So,itistotallyrevenueneutralintermsofthe
APMCsrevenue.
(ThisarticlewaspublishedonOctober22,2016)

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