A pan-India market remains elusive for farmers

e-NAM is moving at a slow pace due to lukewarm response from states and lack of necessary groundwork

Sayantan Bera
Updated29 Aug 2016
Only 32&#160;&#8216;mandis&#8217; have been integrated under e-NAM so far. Photo: Mint<br />
Only 32&#160;&#8216;mandis&#8217; have been integrated under e-NAM so far. Photo: Mint

New Delhi: The centre’s promise of improving farm incomes by providing farmers with a wider network of buyers and better prices via an electronic trading platform is moving at a slow pace due to lukewarm response from states and lack of necessary groundwork.

On 14 April, Prime Minister Narendra Modi launched the electronic national agriculture market, or e-NAM, as a key initiative to improve farm incomes, but till 20 August the platform had managed trading turnover of just 166 crore. 

More importantly, electronic trading has been limited to respective mandis (registered markets) within a state—meaning farmers cannot yet access sellers outside the mandi, be it within the state or across the country.

This is in stark contrast to what was promised to small farmers, who currently have a limited choice of selling their produce.

“Farmers are often forced to sell at distress prices in the closest mandi and the e-NAM platform will allow them to sell their produce anywhere in the country,” the prime minister said while launching the initiative in April, adding, “while farmers will earn more, traders will have a wider choice and consumers can expect lower prices.” Modi reiterated this during his Independence Day speech on 15 August.

The trade report of e-NAM between 14 April and 20 August, according to data shared by the Small Farmers’ Agribusiness Consortium (SFAC), the specialized central agency implementing e-NAM, shows that the bulk of the trade was carried out in Telangana ( 108.6 crore), followed by Haryana ( 38.3 crore) and Uttar Pradesh ( 11.9 crore).

Market arrival data from the e-NAM website shows that between 14 April and 22 August, turmeric garnered the largest volume of trade, that too in just one state, Telangana. This means the platform failed to connect farmers and traders to sell bulk commodities like wheat or chana (chickpeas) following the winter harvest.

“States have not adopted the scheme with the spirit with which the centre launched it... they (states) have no genuine desire to create an alternative avenue for farmers where they can discover the true value of their produce. They are more concerned about protecting the mandi traders’ interest,” said Pravesh Sharma, former managing director of SFAC.

Sharma adds that major states like Maharashtra, Punjab and Uttar Pradesh showed little enthusiasm and even states without any regulated mandis such as Bihar have not come forward.

The numbers clearly back this up. So far, 32 mandis in eight states have been integrated with the e-NAM platform but all the 3,639 traders registered in the platform belong to their respective mandis. None are from outside the mandi, be it within the state or outside the state.

“This means farmers cannot access markets outside their immediate neighbourhood,” Sharma said, adding, “the rural commercial capital represented by trader cartels still controls agricultural marketing. You have to go all guns blazing to break that nexus.”

Ashok Gulati, agriculture chair professor at New Delhi-based Indian Council for Research on International Economic Relations and former head of a committee on agricultural marketing set up by the Modi government, said the centre has launched the e-NAM platform without doing the necessary groundwork. 

“When you buy a cellphone from e-commerce websites you know the exact specifications and price, and you have the option to return if the delivered product deviates,” Gulati said, adding, “under e-NAM there is currently no standardized grading and quality checks for farm produce and there is no dispute settlement mechanism.

“If I am trader from Delhi purchasing grains from Telangana what do I do if the delivered product does not meet the specifications? The low volume of trade so far shows that e-NAM will remain a dream concept without these necessary groundwork.”

Gulati adds that the centre further needs to rationalise taxes and (traders’) commissions which vary across states and also clarify how these will shape up under the goods and services tax regime.

There’s more. SFAC, the implementing agency for e-NAM, currently does not have a full-time head.

It is surprising that the government which started the platform as a key step towards doubling farm incomes could not find a replacement since the last managing director retired nine months back.

Vasudha Mishra, the official handling the additional charge of SFAC, denied that e-NAM had failed to live up to its promise. “The April launch was a pilot and the platform will see a bigger launch on 30 September with 200 mandis coming on-board,” she said.

States are in a testing phase trying out one or two commodities and they are sure to expand, she said, adding, “while it is true that states like Punjab are not interested, Uttar Pradesh, Rajasthan, Haryana and Madhya Pradesh will be linking more mandis by September”.

She further said that SFAC is now putting in place a quality testing mechanism and the logistics to get farm produce transported from the farmer to the buyer. “Once these systems are in place, traders from across the country will participate.”

For now there seems to be a disconnect. While the prime minister contends that farmers already have a national market at their disposal, ground realities show e-NAM is still in a pilot phase, far behind what was promised.

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