Inter-state trade of farm products in mandis (wholesale markets) through the e-NAM (electronically linked national agriculture market) is gathering pace.
But it calls for agri-reforms on part of the states, for the platform to function as intended.
What are the recent developments with e-NAM?
Under the eNAM, launched in 2016, agri-trading was initially allowed within a mandi and later inter-mandi within a state was permitted.
So far, 10 states are offering inter-mandi trade within their states.
Now, inter-state trading via e-NAM mandis has started, and 8 states are now offering this via 21 e-NAM platforms so far.
Rajasthan is the first state to start inter-state trade with more than one state, establishing trade link with Gujarat, Maharashtra and Madhya Pradesh through e-NAM.
Over 14 commodities like vegetables, pulses, cereals, oilseeds, spices among others have been traded in a short span of time, and volume is also picking up.
Inter-state trade on e-NAM aims to remove barriers of movement of agriculture produce and to increase income through appropriate monetisation of farmers' produce.
The details on logistic providers are also being provided on the e-NAM portal to traders from outside the state, to facilitate transportation after trading.
Why is it welcome?
585 mandis operated by Agricultural Produce Marketing Committees (APMCs) in 16 states and 2 Union Territories have been linked with e-NAM.
But the platform has been used so far only to transact business within the same mandis or, in some cases, between the mandis of the same states.
This had denied the farmers the opportunity to earn a higher income by selling their produce at the best prices available anywhere in the country which was the prime objective of e-NAM.
So the inter-state trade through the e-NAM platform can go a long way in addressing these concerns.
What are the shortfalls to be addressed?
The pre-requisites for the success of e-NAM were clearly spelt out in the proposal for establishing a common agricultural market for the country.
But most of these are yet to be fulfilled by the states by suitably amending their agri-marketing laws.
Licensing - The foremost among the pre-conditions is a single trading licence valid throughout the country.
Only a handful of states have agreed to recognise the trading licences issued by other states.
In many cases, the trading licences are merely mandi-specific.
As a result, even within the states, online inter-mandi transactions are permitted only in 10 states.
Levy - Single-point payment of mandi charges by harmonising the marketing levies of all the states is needed.
Most states are unwilling to alter market levies because that would entail loss of revenue.
Quality - There is no uniformity in the quality standards of farm goods in different states.
Also, only fewmandis have put in place appropriate sorting, grading and assaying (quality testing) facilities that would enable informed bidding by buyers.
There is also lack of proper warehouses for the safe upkeep of the sold items.
Mechanism - e-NAM mandates the business to be conducted only through the APMC markets’ electronic platforms.
These markets are known for their inefficiencies and malpractices, which may tend to creep into e-marketing as well.
Besides, the APMC mandis are dominated by middlemen who could manipulate even online trading in the absence of an effective market regulator.
The APMC monopoly over the marketing of all the agricultural produce needs to end to ensure fair price discovery.
Online trading through the e-NAM platform should also be permitted from any public or private sector market that meets the necessary conditions.
