e-NAM: Changing the way farmers sell their produce

By Times Of India on 26 Sep 2017 | read
HYDERABAD/NEW DELHI: It was a usual trading day at Suryapet agriculture 'mandi', some 137 km from Hyderabad, where hundreds of farmers from nearby villages had assembled with their produce — mostly old stock of green gram and paddy — to sell it at the best possible rate. Ramachandraiah of Yarrapad village was one of them who had come with three bags of green gram (180 kg) at 8.30 am and stood in queue for a little over an hour to get a computerised entry receipt with details of his produce, including the lot code.

A person from the assaying lab lifted a sample of his produce by 10 am. The quality test result of the assigned lot was entered into the integrated online system by 11 am. It was now time for the traders to bid for the produce online by 12.30pm.

There were 12 bidders for Ramachandraiah's lot. The highest bid was declared at 12.45 pm and the farmer could see the result on computer or mobile app. He was happy to sell his green gram to the trader who quoted the maximum price. It could then take him another four hours to get his payment after his formal acceptance, final weighing of his produce and generation of sale agreement. It took him nearly seven hours to sell his produce and get paid.

"It was not the case before introduction of National Agriculture Market (e-NAM) online platform. I had to even spend the night here during the open auction days to sell my produce and wait nearly 10-15 days to get payment. I can now get the best price as my commission agent has to go by the highest bid," Ramachandraiah said.

Many other farmers at Suryapet and Nizamabad (170 km from Hyderabad) had shared similar experiences and narrated how the online system would eventually loosen the grip of middlemen and moneylenders over them — a key to reduce agrarian distress.

Though it's still a long way to go before e-NAM takes the shape of inter-mandi trade within a state and inter-state trading, a beginning in this direction has been made in many states including Telangana, Chhattisgarh, Himachal Pradesh, Rajasthan and Madhya Pradesh.

Visits to several 'mandis' in Telangana and other states gives a sense of how online trade, at least within a 'mandi', has ensured transparency as farmers don't need to depend on commission agents to do behind-the-scene bargaining. A non-online (previous) system is fraught with manipulative auction/bidding practices through cartel of traders and commission agents which may end up harming farmers' interests.

"It's (e-NAM) a revolution which is happening slowly and silently," said C Partha Sarathi, agriculture production commissioner and secretary in the government of Telangana which has made headway on bringing sale and purchase of agricultural commodities on online platform despite strong opposition from traders and commission agents.

The e-NAM is not a parallel marketing structure. It's a device to create a national network of physical mandis which can be accessed online. It seeks to leverage the physical infrastructure of mandis through an online trading portal, enabling buyers even outside the state to participate in trading.

"I can't say about better price (at this juncture) but transparency is certainly achieved," said Partha Sarathi who took the lead in implementing e-NAM in Telangana where 44 mandis have already switched to online trading. He emphasised that transparency would break the trader-commission agent nexus and pave the way for farmers to get better price for their produce.

Though implementation of e-NAM has some teething problems due to resistance to change the 70-year-old commission agent-backed system, many states are trying to overcome it by making farmers and traders aware of the benefits of online bidding. Himachal Pradesh and Uttarakhand have reduced user/market fee for online traders while Rajasthan has instituted an award to encourage them.

The e-NAM, launched on April 14 last year, is envisaged as a win-win solution for all stakeholders. It promises more options for sale at the nearest mandi for farmers whereas it offers the opportunity to access a larger national market for secondary trading to local traders.

Bulk buyers, processors and exporters will also benefit from participating directly in trading at the mandi level through the e-NAM platform as it would reduce their intermediation costs.

"The gradual integration of all the major mandis in the state on e-NAM will ensure common procedures for issue of licenses, levy of fee and movement of produce. In the near future we can expect significant benefits through higher returns to farmers, lower transaction costs to buyers and stable prices and availability to consumers", said an official after the agriculture ministry review the progress of e-NAM here on last Wednesday.

Total 585 markets are targeted to be integrated in first phase with e-NAM by March 2018. So far, 455 'mandis' across 13 states have been integrated. The states (integrated mandis) are: Himachal Pradesh (19 mandis), Haryana (54), Rajasthan (25), Gujarat (40), Maharashtra (45), Madhya Pradesh (58), Chhattisgarh (14), Andhra Pradesh (22), Telangana (44), Jharkhand (19), Odissa(10), Uttarakhand(5) and Uttar Pradesh (100).