National Agriculture Market: Status and Challenges
Authors: Arti1, Chandan Kumar Rai2 and Sanjeev kumar2
1Ph.D. Research Scholar, Dairy Economics Statistics and Management, ICAR-NDRI Karnal
2Ph.D. Research Scholar, Dairy Extension, ICAR-NDRI Karnal

National Agriculture Market (NAM) is a pan-India electronic trading portal that connects the existing APMC mandis to create a uniform national market platform for agricultural commodities. It provides all the information and services through a single window system. This online platform contains information about commodity arrivals and prices. This also includes buy and sell trade offers and provision to respond to trade offers among other services. This online system reduces the transaction cost and provides uniform inform related to prices. Agriculture marketing is administered by the states as per the marketing regulations, based on which state is divided into several market areas. These markets are administered by the Agriculture marketing is administered by a separate Agricultural Produce Marketing Committee (APMC) which imposes its own marketing regulation (including fees). This fragmentation of markets, even within the State, hinders free flow of agri commodities from one market area to another and multiple handling of agri-produce and multiple levels of mandi charges ends up escalating the prices for the consumers without commensurate benefit to the farmer. NAM solves the various problems by creating a unified market through online trading platform, both at State and National level. It promotes the uniformity, integrates different markets, removes the information asymmetry among different markets and promotes real time price discovery based on actual demand and supply. It promotes transparency in auction process and provides national market for the farmer. This online payment provides more transparency, quality and more reasonable prices to the consumers.

Objective of e NAM:

  • A national e-market platform for transparent sale transactions and price discovery initially in regulated markets. Willing States to accordingly enact suitable provisions in their APMC Act for promotion of e-trading by their State Agricultural Marketing Board/APMC.
  • Liberal licensing of traders / buyers and commission agents by State authorities without any pre-condition of physical presence or possession of shop /premises in the market yard.
  • One license for a trader valid across all markets in the State.
  • Harmonization of quality standards of agricultural produce and provision for assaying (quality testing) infrastructure in every market to enable informed bidding by buyers. Common tradable parameters have so far been developed for 69 commodities.
  • Single point levy of market fees, i.e on the first wholesale purchase from the farmer.
  • Provision of Soil Testing Laboratories in/ or near the selected mandi to facilitate visiting farmers to access this facility in the mandi itself. M/s. Nagarjuna Fertilizers and Chemicals Ltd. is the Strategic Partner (SP) who is responsible for development, operation and maintenance of the platform. The broad role of the Strategic Partner is comprehensive and includes writing of the software, customizing it to meet the specific requirements of the mandis in the States willing to integrate with NAM and running the platform.
Why is NAM necessary?

It is necessary to create NAM to facilitate the emergence of common national market for agricultural commodities. Current APMC regulated market yards limit the scope of trading in agricultural commodities at the first point of sale (i.e. when farmers offer produce after the harvest) in the local mandi, typically at the level of Taluka / Tahsil or at best the district. Even one State is not a unified agricultural market and there are transaction costs on moving produce from one market area to another within the same State. Multiple licences are necessary to trade in different market areas in the same State. All this has led to a highly fragmented and high-cost agricultural economy, which prevents economies of scale and seamless movement of agri goods across district and State borders. NAM seeks to address and reverse this process of fragmentation of markets, ultimately lowering intermediation costs, wastage and prices for the final consumer. It builds on the strength of the local mandi and allows it to offer its produce at the national level.

Conditions for joining e-NAM:

States interested to integrate their mandis with NAM are required to carry out following reforms in their APMC Act.

a) Specific provision for electronic trading.

b) Single trading licenses for all the mandis of the state.

c) Single point levy of transaction fee.

Key stakeholders in e-Nam:

Farmers, Traders and Buyers Processor and Exporters are key stakeholders in e-Nam.

Farmers: NAM provides more options for selling produce and making competitive returns.

Traders: NAM will provide access to larger national market for secondary trading.

Buyer, Processor and Exporters: NAM will enable direct participation in local mandi trade, reducing intermediation cost

Mandis Enrolled:

455 mandis across 13 states are connected on e-NAM platform as on 31 st July 2017. Uttar Pradesh has maximum mandis connected to the online platform.

Commodities approved:

There are about 69 agricultural commodities approved in online transaction on e-NAM. Different commodities have different quality parameters given to tth

B enefits of e-NAM:

It provides solution to various stakeholders.

For the farmers : NAM assures more options for sale at his nearest mandi.

For the local trader : NAM offers the opportunity to access a larger national market for secondary trading.

For Bulk buyers, processors, exporters : This platform helps the stakeholders to directly participate in trading at local mandi by reducing intermediation costs.

The integration of all the different mandis in the States into NAM will ensure common procedures for issue of licenses, levy of fee and movement of produce. This will provide significant benefits through higher returns to farmers, lower transaction costs to buyers and stable prices and availability to consumers. The NAM will also assist the emergence of integrated value chains in major agricultural commodities across the country and help to encourage scientific storage and movement of agri-commodities.

Status of buyers, sellers and major commodities transaction:

Till now the status of buyers, sellers and commodities are given below:

Buyers: 95135

Commission Agent: 50287

Seller: 4990957

Major commodities which are transacted in e NAM are Wheat, Chillies, Paddy, Cotton, Potato, Caster Seed, Maize, Ground Nut, Mustard, Guar Seed.

Main target of the e-NAM is to cover 585 markets by May, 2018.





About Author / Additional Info:
I am PhD research scholar (Agricultural Economics) at ICAR-NDRI, KARNAL , INDIA