e-NAM: Transforming the Agriculture Marketing Digitally

Table of Contents

• Introduction
• Understanding e-NAM
• Need for e-NAM
• Objectives of e-NAM
• Features of e-NAM
• Benefits of e-NAM
• Impact of e-NAM on Indian Agriculture
• Conclusion

Introduction

In India, agriculture is a significant contributor to the economy, employing around millions of people and accounting for 18% of the country's GDP. With the commercialisation of agriculture in India, the production and distribution of agriculture products have become a crowning priority.

Agricultural marketing is the buying and selling of agri products. In earlier days marketing of agriculture products did not present too much problem as what was produced was sold to consumer on barter or cash. Today, the marketing of agriculture products has to undergo a series of exchanges and transfers before reaching the final consumer. However, it has been plagued by inefficiencies, lack of transparency, and limited access to market information.

In 2016, the government launched the National Agriculture Market (e-NAM) initiative to transform agriculture marketing digitally, facilitating online trading of agricultural products and offering better price discovery mechanisms. It is one of the top 10 agriculture schemes of government of India.

Understanding e-NAM

e-NAM stands for electronic National Agriculture Market. It is an ambitious initiative launched by the Government of India as part of its commitment to agricultural reforms. It is a digital platform that connects agricultural produce buyers and sellers, streamlining the marketing process and facilitating transparent and efficient trade. The primary objective of e-NAM is to create a single, unified market for agricultural commodities, transcending geographical boundaries and providing farmers with access to a wider range of buyers.

Need for e-NAM

Prior to e-NAM, farmers were often at the mercy of intermediaries who controlled the marketing process. This led to unfair pricing, delayed payments, and limited market access for farmers. The traditional mandi system also lacked transparency, making it difficult for farmers to know the true market value of their produce.

e-NAM was envisioned as a solution to these problems. By creating a digital marketplace, e-NAM would eliminate the need for intermediaries and provide farmers with direct access to a wider range of buyers. It would lead to more competitive pricing, faster payments, and better market access for farmers.

Objectives of e-NAM

The objectives of e-NAM in India are as follows:

• To develop a unified national market for agricultural produce by integrating existing APMC (Agricultural Produce Market Committee) markets across the country.
• Establishment of soil testing laboratories within or near the selected mandi to enable visiting farmers to conveniently utilise this facility directly at the market.
• Standardisation of quality criteria for agricultural produce and the establishment of quality testing infrastructure in every market to empower buyers to make well-informed bids.
• A single trader's license that is applicable and valid for all markets within the state.
• State authorities should grant licenses to traders, buyers, and commission agents without imposing any prerequisite of physical presence or the ownership of a shop or premises within the market yard.
• To enhance transparency in the trading process by providing real-time information on prices, arrivals, and other market-related data to farmers and traders.
• To enable better price discovery for farmers by allowing them to access market information and make informed selling decisions.
• To reduce the involvement of intermediaries and commission agents in the marketing process, thereby ensuring that a higher share of the final price reaches the farmers.

Features of e-NAM

• Online Trading: e-NAM is a digital platform that connects various agricultural markets or mandis across the country through a single, unified online platform. Here, farmers can register and upload their produce for sale, and traders and buyers can access the platform to buy directly from the farmers or other traders.
• Price Discovery: e-NAM provides real-time information on prices, demand, and supply of various commodities listed on the platform. The platform offers better price discovery mechanisms for farmers and traders, allowing them to sell and buy at fair market prices.
• Quality Assurance: As part of the platform, e-NAM offers quality assessment and certification services for various agricultural commodities. This helps in standardising the quality of produce and increasing consumer confidence in the product's authenticity.
• Transparent Bidding: The platform allows for open and competitive bidding on listed commodities, enhancing transparency and enabling buyers to bid fairly for the produce.
• Reduced Intermediary Costs: e-NAM eliminates intermediaries, such as traders and commission agents, who sometimes charge high commissions and fees to farmers. This can result in better prices for farmers and lower costs for buyers.

Benefits of e-NAM

• Ease of access and convenience: e-NAM provides a convenient online platform for farmers and traders to sell and buy agricultural commodities from the comfort of their homes or offices. It reduces the need for travelling and expenses.
• Increased market access: e-NAM connects farmers with buyers across the country, opening new markets and increasing their market reach.
• Fair prices and price discovery: By providing real-time information on supply and demand, e-NAM ensures that farmers receive fair prices for their produce. This encourages farmers to invest in high-quality inputs, leading to better yields and higher incomes.
• Standardised quality: e-NAM helps ensure the quality of produce through quality assessment and certification, enhancing consumer confidence in the product and reducing the incidence of fraud and adulteration.
• Transparency and reduction in corruption: e-NAM improves transparency in agricultural markets and eliminates intermediaries, reducing the incidence of corruption and malpractices.

Impact of e-NAM on Indian Agriculture

Since its launch, e-NAM has made significant strides in transforming agricultural marketing in India. As of Dec 2022, the e-NAM platform has connected 1260 mandis across 22 states and three union territories. The platform has registered over 2.39 lakh traders and 1.74 crore farmers. The e-NAM platform has registered a total trade of 69 million metric tonnes valued at Rs. 2.42 lakh crore.

e-NAM has helped empower small and marginal farmers, who often have limited access to markets and face difficulties getting fair prices for their produce. Farmers can fetch better prices for their produce by enabling direct selling to buyers without having to go through intermediaries.

e-NAM has also helped in reducing the price gap between markets, with mandi prices becoming more in sync with each other. The platform has reduced the cost of intermediation, resulting in lower marketing costs for farmers.

Conclusion

e-NAM is a groundbreaking initiative by the Indian Government to transform agricultural marketing digitally. By providing an online platform for selling and buying agricultural commodities, e-NAM offers fair market prices, increased market access and transparency. e-NAM encourages farmers to invest in high-quality inputs, leading to better yields and higher incomes. By reducing intermediation costs and improving transparency, e-NAM aims to enhance the lives of farmers and achieve a more sustainable agriculture sector in India.