Deepika kandi - UR21021

Siddharth Durvasula - UR21054

eNam and Government intervention

1. Introduction:

Over the past 60 years, India has achieved considerable strides toward accomplishing its
objectives of accelerating agricultural expansion, enhancing food security, and decreasing rural
poverty. The development of agricultural performance has been greatly aided by policy support,
technical innovations and production strategies, public infrastructure investment, research and
extension for crops, livestock, and fisheries, and institutional improvements. Due to the
enormous success of these initiatives, by the middle of the 1970s, India was producing nearly all
of its own food grains and had made significant improvements in the production of milk and
sugar. Agriculture marketing, however, did not get the necessary and sufficient attention.
According to the National Farmers Commission's (2004) suggestion, farmers should have access
to a controlled market within a 5-kilometre radius. However, the average area of India currently
covered by a regulated market is 487.40 square kilometres. There are also a finite number of
marketplaces for particular commodities that have the necessary infrastructure. Policymakers
have mainly ignored the development of effective markets and supply networks, as well as post-
harvest management. Additionally, the current agricultural marketing system is ineffective and
suffers from a mismatch between prices paid by consumers and those earned by producers,
fragmented marketing channels, subpar infrastructure, and policy distortions.

2. Agriculture Marketing in India:

The agriculture industry and other industries are connected by the marketing of agricultural
products. An effective marketing strategy aids in the control of output, the improvement of farm
incomes, the expansion of markets, the development of the agro-based economy, and the
enhancement of national income through value addition and employment creation. The country's
current agriculture marketing scheme is the result of years of government intervention. The
system has undergone a number of changes over the past 60 years as a result of the increased
marketed surplus, rise in urbanisation and income levels, which has changed the pattern of
demand for marketing services, growth in connections with distant and foreign markets, and
changes in the form and intensity of government interventions. The Union Government has
occasionally intervened in agricultural marketing to improve the nation's system by
recommending various improvements. However, over time, these markets have developed into
monopolistic and restrictive, and as a result, they have not only failed to accomplish their
fundamental goals because the restrictive provisions of Acts have prevented a seamless
integration of farmers and consumers and the development of an effective supply chain. Poor

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competition, market fragmentation, inefficiency, the existence of too many middlemen, and
frequent price manipulations define agricultural markets. Additionally, there aren't enough
APMC markets and their infrastructure isn't up to par. Farmers also have limited access to
markets and receive low pay and high intermediation costs, have to physically transport their
produce to mandis, pay high market fees and charges, have to obtain multiple trading licences,
pay market fees at multiple points, and go through opaque or semi-transparent procedures. To
address these issues, some state governments have started reforming the agriculture marketing
industry. The Central Government encourages the development of an adequate number of
markets with modern infrastructure, increased private sector participation and the development
of other marketing channels like direct marketing and contract farming, etc., in order to keep up
with the changing production pattern and growing marketable surplus. In order to provide a
sufficient legal framework and policy environment to support such advancements, the Central
Government is actively working with the States to reform their marketing laws. The Central
Government's goal for marketing reform centres on seven crucial areas. However, several States
merely implemented selective, partial reforms, undercutting the goal of establishing a unified
trading environment across the nation. Direct marketing, contract farming, the private market,
organised retail, producers' organisations, cooperatives in marketing, food processing, etc. have
all grown over time in several States, though.

The e-NAM envisions a uniform national market for agricultural commodities with frictionless
mobility across state lines and seeks to integrate all of the nation's agricultural marketplaces.
This is intended to provide a solution to the marketing problems faced by all parties involved.
For all APMC-related information and services, such as commodity arrivals, prices, bids, and
offers, the eNAM portal offers a one-window service. Real-time price discovery, transparency in
the agriculture marketing system, reduced transaction costs for buyers and sellers, real-time
information on prices, market arrivals, etc., bidding on quality parameters of commodities,
online bidding for more transparency, online payment system to reduce payment risk and ensure
timely payments to farmers, cleaning, sorting, and other benefits are just a few of the anticipated
advantages of e-NAM. The Small Farmers' Agribusiness Consortium (SFAC) has been chosen to
serve as the NAM's lead agency in collaboration with a strategic partner that will be in charge of
creating, managing, and maintaining the NAM's proposed e-marketing platform. Common
tradable characteristics for 90 commodities have been developed in order to simplify the
assaying of commodities for trading on NAM. Although eNAM is a virtual market, a physical
market exists behind the scenes. The actual material flow will take place physically through the
market while one-time registration of farmers/sellers, lot details at the entry gate, weighment,
quality assaying, auctions/trade transactions, payment by buyers to sellers, and other agencies
involved in the chain of the transaction will all take place online on e-NAM. All agricultural
commodities chosen for trading on e-NAM will arrive in full and only be transacted online.

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Prior to requesting assistance under the scheme, each State must implement reforms in the areas
of
1. A single licence that is valid throughout the State,
2. A single point levy of market fee, and
3. The provision for electronic auction as a mode for price discovery in order to facilitate
both the unification of markets and online trading.
The only States/UTs that qualify for assistance under the scheme are those that have finished
these three requirements. The APMC Acts and rules must have suitable and clear measures that
will guarantee that the reforms are carried out in both law and spirit. Additionally, the State
Marketing Boards/APMCs must let the e-auction platform be promoted. The States must make
sure the mandis that are integrated with eNAM have the necessary hardware, online connectivity,
and assaying tools.

2.1 Traditional Process:

Gate Entry:
● Farmers that bring their produce to the mandi may enter the mandi for a modest entrance
charge.

Quality assaying:
● The farmers arrive at a commission agent (CA) shop or an auction platform.
● Before the auction, traders and CAs physically inspect each lot to perform quality
assaying.

Traditional Auction:
● Each lot is visited by a group of dealers, CAs, and mandi authorities who conduct the
auction one by one.
● At the time of the auction, only the price is set, and the mandi official creates a slip for it.

Payment and settlement:

● At the traders' shop, the final weighing is completed, and a slip is produced to record the
final payments.
● Payments are made to the farmer in cash, checks, or accounts.
● Before removing the produce from the mandi, the trader pays the mandi and other fees.

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2.2 eNAM:

Lot-generation:
● Registration of farmers is done at the entry gate of the mandi if not done earlier
● The eNAM portal requires the entry of personal information as well as KYC, land,
commodity, bank, and commission agent (CA) details.
● Commodity and vehicle is weighed and noted. This information is updated on eNAM
either automatically or manually
● A lot number is generated

Quality Assaying:
● Farmers deliver their goods to CA shops or auction sites.
● In a lab at the mandi, a sample from each lot is obtained and tested for quality in
accordance with the quality criteria established by eNAM. The results are then recorded
and uploaded on the eNAM portal in relation to the lot numbers.

E-auction:
● The mandi officials submit a bid via the eNAM portal for a certain time window.
● Through their login IDs, registered traders place bids on a certain commodity.
● Trading continues until the auction's conclusion. A sale agreement is created when the
highest bidder on a lot completes the transaction.

Payment & settlements:

● The trader either deposits the money online or offline, along with the commission and
mandi fee, to the eNAM escrow account.
● Direct deposits are made into the farmers' accounts.
● Once all payments have been made and realised, the commodity associated with that lot
leaves the mandi.

3. Challenges to the eNAM process:

● Lack of knowledge about the eNAM system

● Lack of infrastructure and a difficult registration process
● Lack of a distinctive identity
● Inadequate infrastructure, i.e. a lack of tools, personnel, and working areas for quality
assurance
● Complete lack of confidence on the part of traders or customers. Managing peaks in
arrivals or large numbers
● Incompatibility between manual and automated processes
● IT system is in its infancy. The lack of crucial information throughout the auctioning
procedure makes the traders distrustful.

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 ● The traditional approach is far quicker than an online auction. merchants' high
opportunity costs
● Inability to trust technology. Cash payments are necessary for farmers to cover urgent
needs. Farmers' informal loans from commission agents are difficult to repay because of
digital payments.

4. eNam Portal

This scheme aims to streamline operations across interconnected marketplaces, reduce

information asymmetry between buyers and sellers, and foster real-time price discovery based
on actual demand and supply. It also seeks to integrate APMCs across the country with a shared
online market platform to allow pan-India trading in agricultural commodities and better price
discovery through a transparent auction procedure based on product quality and prompt online
payment. The National Agriculture Market (eNAM) is a pan-India electronic trading system that
connects the existing APMC mandis to form an integrated national agricultural commodities
market. Under the Ministry of Agriculture and Farmers' Welfare of the Government of India, the
Small Farmers Agribusiness Consortium (SFAC) is the principal agency for implementing
eNAM. To facilitate pan-India commerce in agricultural commodities, it integrates markets
initially at the state level and then throughout the country through a shared online market
platform. It streamlines marketing/transaction procedures and makes them similar across all
marketplaces in order to increase market efficiency. It also supports improved marketing options
for farmers/sellers through online access to additional buyers/markets, the elimination of an
information system between farmer and trader, better and absolute price discovery based on the
correct demand and supply of agri-commodities, transparency in the auction process, prices
commensurate with the quality of produce, online payment, and other factors that help to
improve marketing efficiency. Furthermore, it provides quality assurance transducing methods
to encourage informed bidding by purchasers.

5. Operational Locations

S.N Name of State/UT Mandis registered on e-

o. NAM

1 ANDHRA PRADESH 33

2 CHANDIGARH 1

3 CHHATTISGARH 14

4 GUJARAT 122

5 HARYANA 81

6 HIMACHAL PRADESH 19

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 7 J&K 2

8 JHARKHAND 19

9 KARNATAKA 2

10 KERALA 6

11 MADHYA PRADESH 80

12 MAHARASHTRA 118

13 ODISHA 41

14 PUDUCHERRY 2

15 PUNJAB 37

16 RAJASTHAN 144

17 TAMIL NADU 63

18 TELANGANA 57

19 UTTAR PRADESH 125

20 UTTARAKHAND 16

21 WEST BENGAL 18

Total 1,000

6. Objectives:

1. To understand the awareness about the eNam portal among exporters

2. To study the distribution channel of how exporters are procuring
3. To understand the psyche of the exporters about the involvement of middlemen
4. To understand the exporters' preference for their potential registration on the platform

7. Methodology:

Exporters from states such as Gujarat, Maharashtra, Haryana, Tamil Nadu, West Bengal, Uttar
Pradesh, Assam, Madhya Pradesh and Rajasthan were gathered. The survey was conducted via
telephonic conversation. A sample size of 50 exporters from different states was approached in
order to conduct the survey.

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 8. Result:

8.1 Gujarat
1. Sample size: 8 exporters
2. Only 12.5 per cent of people knew of eNam
3. Majorly buying from farmers from their own contacts and villages and selling to
places such as Dubai
4. Respondents who buy through middlemen have mixed opinions. For one of them,
middlemen are better people to reach as the agent has a wide network of farmers. Also,
transacting becomes easy. On the contrary, some are positive about their removal, even
though they don’t have one in between.
5. Positive response from 87.5 per cent of exporters if assured about the quality and quantity
6. Usually buy from 15- 20 tons per month and fluctuate as per order requirement.

8.2 Assam

1. Sample size: 5 exporters

2. Only 20 per cent of people knew of eNam
3. 20 per cent of the respondents were using eNam but there were no buyers
registered in it.
4. Mixed opinions, a few are buying through middlemen and a few directly from buyers.
5. 40 per cent willing to buy from Government’s side
6. All respondents buy as per requirements

8.3 Haryana
1. Sample size: 5 exporters
2. Only 20 per cent of people knew of eNam
3. The respondents who use eNam don’t find the portal too amusing and ask for more
improvement while trading.
4. 80 per cent buying through middlemen, mixed reviews on agent’s removal
5. There are mixed opinions about purchasing through governments because most of them
have their network settings and don't want to change them.
6. Mostly purchase between 16-20 tons

8.4 Madhya Pradesh

1. Sample size: 5 exporters

2. Only 40 percent of people knew of eNam
3. 60 % buying through middlemen, are skeptical about purchasing through the
government's side because they don’t trust the government

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 4. Although 80 per cent would buy through the portal if assured about the quality and
quantity
5. Mostly purchase as per requirement

8.5 Maharashtra

1. Sample size: 4 exporters

2. 75 per cent don’t know of eNam
3. All of them are buying directly through farmers
4. They like the portal's objective and would like the removal of agents
5. All of them would be considering buying through the portal if assured about the
quality and quantity
6. Buy as per requirement

8.6 Rajasthan
1. Sample size: 10 exporters
2. 60 per cent don’t know of eNam
3. 60 per cent buying from middlemen. 20 per cent used the portal but think it needs
improvement also other farmers and exporters don’t have knowledge about it so no
one registered
4. 80 per cent would buy from government’s side and if quality and quantity assurance is
given
5. Buy mostly 10-16 tons and as per requirements

8.7 Tamil Nadu

1. Sample size: 4 exporters
2. None of the respondents knows of eNam
3. All of the buy directly from farmers
4. 75 per cent would buy from government’s side and 100 per cent would buy if quality
and quantity are assured
5. Buy as per requirement

8.8 Uttar Pradesh

1. Sample size: 5 exporters
2. 20 per cent know of eNam
3. 60 per cent of them buy through middlemen
4. Very interested in buying through the government’s side, as it provides with large pool of
farmers and also better profits can be raised
5. Buys as per requirement

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8.9 West Bengal
1. Sample size: 5 exporters
2. None of the respondents knows of eNam
3. 40 per cent buy through middlemen
4. 60 per cent are not willing to buy through the government's side because middlemen
involvement is important to them as they streamline the process and make it organised
5. But 80 per cent would buy only and only if quality and quantity assurance is given
6. Buying ranging from 10- 30 tons

9. Conclusion

From the study conducted we got the data that only 21.6 per cent of the respondents were aware
of the existence of such a portal among exporters and 7.8 % are using it. This clearly highlights
that the app hasn’t been able to penetrate into the exporter industry. But through the survey, we
got the portal's positive reply where 76.6 % of the respondents would transact through the portal
if the Government assured the exporter of quality and quantity and because it eliminates the
middlemen. It connects the exporters with a wide number of farmers across the country. When
comes to the ground level this app is not doing well. The government has provided the channel
to increase the productivity of the farmers but most of the farmers are not using this as there is a
lack of information on asymmetric.

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