To boost inter-mandi and inter-state trade in agricultural commodities, a
high-level Expert Committee set up by the Ministry of Agriculture &
Farmers Welfare has recommended creation of specialized Market Yard
of National Importance (MNI) which could complement e-NAM
(electronic National Agriculture Market). It has proposed creation of
MNIs for selected commodities in six states.
According to the committee, “MNI could be construed as a specialized
extension of e-NAM”.
At the outset, it is important to understand what is e-NAM? What is it
that e-NAM hasn’t been able to achieve? How can MNI make up and fill
the void?
Launched in April 2016, e-NAM is an online trading platform for
agriculture produce aiming to help farmers, traders, and buyers with
online trading and getting a better price by smooth marketing. Small
Farmers Agribusiness Consortium (SFAC) is the lead agency for
implementing e-NAM under the aegis of MoA&FW.
For decades, ‘smooth marketing’ of agriculture produce and ‘better
price’ for farmers has been alien to the Indian agricultural landscape.
This is because agriculture marketing is carried out under the respective
state laws viz. APMC (Agricultural Produce Market Committee) Act
which have widely varying provisions. This hampers free movement of
the agri-produce between different states.
For administration of marketing, every state is further divided into
several market areas. Farmers in a given area can sell their agri-produce
only at the designated APMC Mandi. Each mandi has its own market
regulations. This leads to fragmentation of markets thus hindering the
free flow of agri-produce even within the state.
At the mandi, a cartel of licensed traders and commission agents (known
as artiyas in local parlance, their job is to facilitate transactions between
farmer and the buyer) rules the roost. They make sure that the farmer
doesn’t get a fair price. At local markets also, this very cartel forces the
more vulnerable farmers (read: small and marginal farmers) to sell
their crops at throwaway prices.
Besides, multiple handling of agri-produce and multiple levels of mandi
charges/fees lead to increase in price to the consumers even as the
farmers receive a low price.
How does e-NAM address these problems?
e-NAM seeks to create a unified market via online trading platform both
at the state and at the national level. A pre-requisite for this is that
farmers irrespective of their location within the state should be able to
sell their agri-produce on the platform. This would require that the
designated APMC mandi where a farmer is required to sell – as per the
extant regulations – doesn’t object to such transgression.
The other fundamental requirement is that a trader intending to make
purchase on the e-NAM platform need not have to take license from all
mandis in the state (‘all states’ in case cross-border movement is
involved). In other words, the agricultural marketing law of the state
should provide for a single trading licence that is valid for the entire
state (pan-India license for cross-border movement). The law should
also have a provision for ‘single-window’ levy of fees.
The states also need to make necessary amendment in their laws to
provide for electronic trading in agri – produce. The APMCs should take
steps to set up an e-auction platform.
With the above pre-requisites in place, e-NAM should help farmers in
getting a better price from sale vis-à-vis what they get from selling at the
mandi. This is because unlike the mandi, where they are coerced to sell
to a few licensed traders, on e-NAM, they get multiple options as a large
number of buyers from different markets can bid (in a transparent
manner) which enhances former’s negotiating power.
Moreover, the platform provides them a variety of services and
information including commodity arrivals, prices, buy & sell offers, e-
payment directly into farmers’ account, infrastructure for quality testing
etc all through a ‘single window’. All this helps in reducing cost and
better realization for the farmers.
For states used to controlling almost everything when it comes to
marketing of agri-produce, it was a bit too much to give the desired
relaxations. So, what is the outcome?
Since launch, so far, 1361 mandis of 23 states and 4 UTs have been
integrated to the e-NAM platform. This is just about 19.5 percent of
6,946 regulated wholesale APMC mandis (as on March 2018).
The farmers registered on e-NAM portal are 17.5 million which is
around 12.5 percent of the total 140 million.
As for agri-business transacted on the portal, this was Rs 74,000 crore
during 2022-23. This comes to 12.3 percent of the total value of annual
trade in agricultural commodities (excluding dairy and meat products) of
Rs 600,000 crore.
During the last seven years thus, e-NAM has embraced just about 12
percent of the farmers and value of trade. At this pace, it would take
more than 50 years to get all farmers and all of the agri-commodity
transactions integrated into the platform. The idea of MNI is merely a
specialized extension of e-NAM. It won’t make any material difference
to the situation on the ground.
The crux of the problem has to do with continued stranglehold of the
states on APMCs. In fact, for almost everything that stakeholders need
to do for transacting business on e-NAM be it pan-state/India license for
traders, unshackling farmers, fees and so on, they need to take
permission from the state authorities. To cap it all, extant laws don’t
permit private entities engage in agri-marketing.
Even for warehouses, cold storages and Farmers Producers
Organizations (FPOs) and other similar institutions to be allowed to act
as a platform for agricultural marketing by getting ‘deemed’ marketing
yard status, prior approval of the political brass in the state is necessary.
And, that isn’t easy to get.
The Expert Committee has urged states to initiate a series of measures,
which include “recognizing traders license of other states, declaring
warehouses and cold storages as market yards, prompt system for
dispute settlement and allowing hassle free movement of the produce”.
Thus, even the committee recognizes that for the specialized MNI
to work, states should loosen the strings.
The big question is: when the states haven’t loosened the strings to let e-
NAM work, there is little hope that they would do it for specialized
MNIs to take off in a big way.
For giving the intended boost to e-NAM and in the larger interest of
helping farmers especially the more vulnerable small and marginal
farmers fetch a good price, it is necessary to develop agri-markets other
than APMC mandi in a big way. A Model Agricultural Produce and
Livestock Marketing (Promotion and Facilitation) Law passed by Modi
Government in 2017 gave more options to farmers for selling besides a
‘single pan-State license’ for traders buying from anywhere in the State.
But, this was ignored by the states.
In September 2020, the Union government enacted three central farm
laws which allowed it to regulate inter-State trade and intra-State trade
and enable purchase of specified farm commodities directly from
farmers anywhere in the country. The laws legitimized sales on all non-
APMC platforms such as private traders, processors, aggregators,
exporters and so on. But, these had to be withdrawn following
farmers’ protests.
Today, agri-markets remain as shackled as ever. With this major speed
breaker, whether it is e-NAM or MNI or any other innovative step can
only yield incremental benefit.
Published in The Pioneer on August 3, 2023