How electronic national agriculture market(e-NAM) is different from existing agricultural marketing? What are the pre-requisites for states to implement e-NAM?
Electronic national agriculture market(e-NAM) is a trading portal to create a unified national market for agricultural commodities. A single window service is provided by integrating the existing Agriculture Produce Market Committee (APMC) markets.
In India, Currently, there are 2,477 principal regulated primary agricultural markets(Economic Survey 2014-15). These markets are governed by APMC Acts and have own marketing regulations. The variation in marketing regulations hinders the free flow of agricultural products. Due to different rules and multiple levies of mandi fees states are fragmented into different markets, therefore there is need of multiple licenses for trading in different APMCs. Due to fragmentation, there is information asymmetry leading to an opaque process of price discovery.
With eNAM there will be a national platform to enable farmers to showcase product through nearby markets and facilitate traders from anywhere to quote a price. This will ensure transparent sale transactions, along with licensing process has also been streamlined & one single license for a trader will be valid across all the markets in that particular state. Also, the quality standards and infrastructure for quality testing have been harmonized.
In order to carry out reforms the states must undertake the following reforms:
- There should be a provision for electronic auction for price discovery.
- There should be a single license to be valid across the state.
- Single point levy of market fee.
Only states/UTs who fulfill these three prerequisites will be eligible for assistance under this scheme.eNAM can be a game changer for farmers if it is implemented in letter and spirit. This will help in getting the right price for farmers product, which is essential to improve their income level.
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