What is e-NAM?

The incumbent government launched National Agriculture Market Portal (e-NAM) to connect mandis in several states. This policy aims at improving and providing better prices to the farmers for their production . This policy by some experts is being viewed as revolution  in the history of agriculture reforms in the country.[i]

Under existing mandi system, the farmers get a very low share of the production due to long chain of intercessor and the monopoly of the moneylenders in the mandi . This does not only increases the intermediary margin, but, also increases the handling cost which later becomes a burden for the buyer.

Why e-NAM?

The introduction of e-NAM is a policy based intervention at the market level to create more flexibility and increase participation. It can be seen as a step taken towards the BJP’s mission of doubling the farmers income by 2022, as announced by the PM Modi. Keeping this is mind, the government has allocated rupees 200 crore for the development of this online agriculture market.[ii]

Under present market regime, farmers today have to sell their yield at specific mandis, refraining them from earning a greater price. But, with e-NAM being introduced, farmers will have the freedom to showcase their produce online from the nearest market and traders can quote prices from anywhere. This would result in increase in the number of traders which would give rise to competition and a fair share for the farmers

The introduction of e-NAM would also dilute the monopoly of moneylenders and middlemen and give an edge to the farmers. e-NAM will target to improve the current market conditions by increasing transparency, establishing well regulated markets and enable participation for the entire agricultural chain, from farmer to consumer.

In the current existing system, there exists a lot of licensing, logistics and infrastructure requirement; e-NAM at the same time proposes to provide a single license to traders across the country to increase the participation.

Obstacles in the path

Need to amend Agriculture Produce Marketing Committees (APMC): APMC acts were made to bring transparency and enable the sector to work more efficiently. On the contrary, the acts have laid down restrictions and curtailed the freedom of farmers to trade freely. The central government will have to convince the state governments to amend the existing APMC acts to facilitate and enable the online trading.[iii]

Technological Barriers : The user interface between the technology and the farmers using it can be an issue of concern. Proper training must be imparted to the farmers regarding the usage of the entire online system. The results of this policy will be visible only if the farmers (which are the major beneficiaries under this policy) are able to utilize the technology properly and efficiently. Also, the infrastructure must designed in such a manner that the whole system of online trading remains smooth and easy to operate.

Narrow Approach: Till now 25 commodities have been chosen for online trading , but till the time fruits and vegetables are kept outside the purview of eNAM, the degree of variation in prices would continue and the farmers will end up on the loosing side. A major concern for the government should be to widen the approach.

Conclusion

e-NAM’s success depends on how well the farmers receive benefit from this scheme. A major challenge for the government would be to integrate each and every state  and persuade them to use this policy .No doubt this policy if implemented with all its might, will create a big reform and transform the entire agricultural sector for good.

References:-

[i] Rana Kapoor (July 2, 2015)  National e-mandi, a great idea  For Ref : http://www.thehindubusinessline.com/opinion/national-emandi-a-great-idea/article737963 (accessed on19/10/2016)

[ii] Taken from  INSIGHTS eNAM-National Agriculture Markets  For Ref: http://www.insightsonindia.com/2016/04/15/insights-editorial-enam-national-agriculture-market-need-know/  (accessed on 19/10/2016)

[iii] Taken from   f.post Forget eNAM, to create single agri market Modi must first tackle politically powerful APMCs  For Ref: http://www.firstpost.com/business/to-create-a-single-market-for-farmers-tackle-politically-powerful-apmcs-first-2730490.html (accessed on 19/10/2016)

Author:-

Mritunjay Tripathi (Student Activist, Co-Convenor of Think India. He is a Parliamentary research fellow at Public Policy Research Center. He has also studied at Konrad Adenauer School for Young Politician.)

You may reach author at: mritunjaytripathi8@gmail.com

(with inputs from Rishabh Shrivastava, Founder & EIC of Analysis)