NAM and APMC

• The Department of Agriculture & Cooperation formulated a Central Sector scheme for Promotion of National Agriculture Market through Agri-Tech Infrastructure Fund (ATIF) through provision of the common e-platform.
• NAM is an online platform with a physical market or mandi at the backend. NAM is not a parallel marketing structure but rather an instrument to create a national network of physical mandis which can be accessed online.
• It seeks to leverage the physical infrastructure of mandis through an online trading portal, enabling buyers situated even outside the state to participate in trading at the local level

• An Agricultural Produce Market Committee is a marketing board established by state governments of India
• One main function of which is basically to provide a platform for farmers to sell their produce
• In simple terms, the APMC (Agricultural Produce Market Committees) is a relic of the past that forces the farmers to sell their produce only to middlemen approved by the government in authorized Mandis (markets). Thus, if you are a vegetable producer and I’m a supermarket, I cannot directly buy from you. Both of us need to go through a broker. This increases prices for the end buyer and unnecessarily adds redtape.

• Fragmentation of State into multiple market areas, each administered by separate APMC
• Separate licences for each mandi are required for trading in different market areas within a state. This means that we have limited the first point of sale for the farmer. He has to come to the local mandi – which could be both good and bad depending upon how it is governed
• Licensing barriers leading to conditions of monopoly
• Opaque process for price discovery
• Similar initiative Rashtriya electronics Market Scheme (ReMS) of Karnataka government has failed to achieve desired results.

• National Agriculture Market is going to implemented by the Department of Agriculture & Cooperation through Small Farmers Agribusiness Consortium (SFAC).
• NAM is not replacing the mandis. NAM is an online platform with a physical market or mandi at the backend enabling buyers situated even outside the state to participate in trading at the local level.
• It seeks to leverage the physical infrastructure of mandis through an online trading portal, enabling buyers situated even outside the state to participate in trading at the local level.
• This e-platform aims to provide more options to farmers to sell their produce and is part of implementation of the roadmap for doubling income of the farmers by 2022

• NAM is currently being launched in 21 mandis and it will offer trade in –

  • chana,
  • castor seed,
  • paddy,
  • wheat,
  • maize,
  • onion,
  • mustard and tamarind

1. Transparency: electronic auction platform to be installed in earmarked APMCs can bring transparency in the price discovery process, and unified market platform might lead to real time, broad-based price dissemination
2. Reduce Price Anomaly: creation of NAM could reduce pricing anomaly at the wholesale and primary rural markets through a network of electronic spot regulated markets
3. Financial literacy: of farmers will increase

4. NAM will address:
   • • Fragmentation of state into multiple market areas.
     • Poor quality of infrastructure and low use of technology.
     • In the traditional mandi system, farmers generally procured very less price for their crops as they had to pass through various intermediaries at the physical marketplace. This not only adds costs but also handling costs.
     • In addition, the famer has to face obstacles in form of multiple tax levies and licenses and weak logistics and infrastructure in India

 

Cons of NAM:

1. Fruits and vegetables, where there often are prices fluctuations, are yet to be included in the NAM platform
2. Country’s two biggest mandis—Azadpur (Delhi) and Vashi (Mumbai)—have not yet agreed to come on board
3. NAM does not say anything on interstate taxes and levies.
4. Commission agents fear unification will affect them adversely as farmers can enter details of commodities in the e-platform and sell to the highest bidder without any mediation from the agents. This is a very potent impediment against forward movement of reforms

• e-National Agriculture Market (NAM) is a pan-India e-trading platform. It is designed to create a unified national market for agricultural commodities
• Farmers can showcase their produce online from their nearest market and traders can quote price from anywhere
• It will result in increased numbers of traders and greater competition. It will also ensure open price discovery and better returns to farmers.

• Idea is moving at a slow pace due to lukewarm response from states and lack of necessary groundwork
• Many states are not showing any desire to create an alternative avenue for farmers where they can discover the true value of their produce

1. “The creation of the National Agricultural Market in India is a welcome move against the backdrop of the agricultural produce marketing committee reforms, 2013 and APMC Model Act 2003.” Discuss. (200 Words)