eNAM can boost agriculture

Amid the hoopla over the electronic trading platform eNAM for agri products, launched by Prime Minister Narendra Modi and touted as a "big game changer", commodity watchers and experts say the mechanism has inherent limitations and conflicts are bound to arise between States and the Union Government.

"The basic purpose of eNAM is to ensure transparency in buying and selling of agri-commodities. But this may not happen anytime soon," Binu Alex, Editorial Director of Commodity Online, told this correspondent here. "Most importantly the Agricultural Produce Market Committee (APMC) remains a state subject. So conflicts are bound to happen. First, the government should have centralised APMCs and put a cabinet rank minister to cater to commerce part of agriculture," Alex added.

Others are, however, more optimistic than Ahmedabad-based longtime commodity watcher Alex, and say the National Agriculture Market (eNAM) launched on Thursday will benefit farmers immensely. "This is a big game changer certainly. We are glad eight states have the mandis and some more have already amended their APMC Acts and are ready to come on board. eNAM will actually be an answer to price volatility farmers often face," says B Basavraj of Karnataka Pradesh Gram Growers Association.

The union agriculture ministry says eNAM is an online platform but should not be mistaken as a parallel marketing structure. "It is a tool to create a national network of physical mandis which can be accessed online," explained Agriculture Minister Radha Mohan Singh. eNAM will leverage the physical infrastructure of mandis through an online trading portal, enabling buyers situated even outside the state to participate in trading at the local level.

The mechanism proposes to integrate 585 regulated wholesale markets or APMCs under one electronic platform by 2018. It will allow farmers to sell their produce to highest bidders. It will initially aim at integrating 21 mandis in eight States. According to Nikhil Prasad, a commodity trader at Delhi's Azadpur mandi "more than anything else the biggest challenge will be to bring in uniformity and rationalisation in taxes as agriculture and the marketing thereof is a state subject."

He adds, "Essentially the farmers cannot do away with the procurement agents whom the government wants to cut off from the ecosystem by having a transparent system." In some states, he argues even APMC is only a "political platform of powerful and connected traders". "These traders own large tracts of land themselves. This nexus needs to be knocked off," he says.

Officials in the agriculture ministry say they are aware of some of the challenges, and one issue that needs to be tackled is about the middle-men.
"The government initiative will end the middlemen role and bring transparency in pricing. The government is keen that we should put a benchmark price across the country," a senior official said. Market watchers tend to endorse this. "You don't need to teach the farmers to sell their produce.

They just need information which they are severely short of," says Alex. Officials explain that the response so far is very encouraging as 17 states and union territories have included the provision of single point levy of market fee in their APMC Acts, and 15 other states have made provision of single unified licence to validate trading.

"Things may take some time, but it will happen," the official said. Krish Iyer, President & CEO Walmart India, finds the eNAM initiative forward looking and says his company "will continue to strengthen our direct farm programme to complement government vision to make a difference to the lives of farmers". But there are other challenges too, says Krishnendu Pal, another trader in Ranchi, Jharkhand.

"I welcome the eNam platform. But there are a few questions. When a farmer sells his produce through e-market platform will the government give guarantee to sell his produce at the price he wants, and in case there are no buyers what happens to his produce," he asks. Those questions need to be answered.