Trade volumes have no doubt picked up on the electronic National Agriculture Market (e-NAM) since it was launched in April 2016 to catalyse the digital transformation of mandi or marketplace operations for the sale of agricultural commodities. The aim was to create a transparent online competitive bidding system to enable farmers to secure remunerative prices for their produce. While the market access of farmers has improved, e-NAM’s stated objective of a unified national market for agricultural produce—facilitated by inter-state and inter-mandi trade to enable efficient price discovery—is still a work in progress. Inter-state trade in agricultural produce kicked off six years ago with the first transaction in tomatoes between a trader in Bareilly in Uttar Pradesh and a farmer in Haldwani in Uttarakhand. But since then, it has not really taken off. Last fiscal, inter-state trade on e-NAM declined on year by 50% to Rs 21 crore. In the first quarter of this fiscal, it plummeted on year by 62% to Rs 2.92 crore. This amounts to 0.01% of the overall turnover on e-NAM. The volumes of inter-mandi trade, too, are negligible.
Steady progress in mandi integration
Nevertheless, e-NAM that is largely driven by sales within the wholesale markets of states has made progress and covers a growing number of commodities like apples, saffron, ragi (finger millets), jeera (cumin seeds), chana (gram), soya bean, copra, and silk cocoons. The e-NAM platform currently allows online trading in 231 agricultural, horticultural, and other commodities notified by the various state governments. Private entities providing services such as transportation, assaying, weather forecasting, and fintech are also being integrated into the platform to enable more farmers to sell their produce to buyers of their choice. At present, 1,522 mandis in 27 states and Union Territories are integrated with e-NAM. Around 17.9 million farmers, 4,518 farmer producer organisations, 0.27 million traders, 0.12 million commission agents, and other stakeholders are registered with e-NAM. The platform thus has reached critical mass to improve farmer incomes. Overall turnover on this digital platform hit Rs 80, 262 crore last fiscal and is up by 4.2 % on year to Rs 19, 784 crore in the first quarter of this fiscal.
State-level barriers
The question naturally is, what is constraining progress towards one nation, one market to fulfill the real promise of e-NAM? Obviously, the various states must relax norms including allowing traders from outside to buy and sell commodities. Union minister of agriculture and farmers’ welfare Shivraj Chouhan responded to a question in Parliament in February saying that agricultural marketing is a state subject that is regulated by the agricultural produce market committee (APMC). For online inter-state trade, enabling provisions to recognise the trading licences of other states is required. A few states like Gujarat, Uttar Pradesh, Jharkhand, and those in the northeastern region have such provisions. The APMC Acts of Tamil Nadu, Chhattisgarh, and Andhra Pradesh do not prohibit the inter-state trade. Other states do not have such enabling provisions. Logistics also remains a major hurdle for inter-state and inter-mandi trade. In this regard, the government has decided to upgrade the e-NAM platform to facilitate the onboarding of logistic service providers to ensure faster agri-trade across state borders. To improve e-NAM, a national integrated dispute resolution mechanism also needs to be evolved to tackle cases where the quality of goods delivered varies from what is shown and bid for on the platform.