Ministry/Department : Department of Agriculture & Cooperation, Ministry of Agriculture & Farmers Welfare
What is NAM?
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.
Why do we need it?
Because APMC’s have balkanized Indian agricultural marketing landscape and thus NAM is the step in direction of a unified national agricultural market.
What are APMCs?
- 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.
Cons of APMCs:
- 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.
What will NAM do?
- 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 –
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- chana,
- castor seed,
- paddy,
- wheat,
- maize,
- onion,
- mustard and tamarind
Benefits of NAM:
- 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
- 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
- Financial literacy: of farmers will increase
Cons of NAM:
- Fruits and vegetables, where there often are prices fluctuations, are yet to be included in the NAM platform
- Country’s two biggest mandis—Azadpur (Delhi) and Vashi (Mumbai)—have not yet agreed to come on board
- NAM does not say anything on interstate taxes and levies.
- 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
What is eNAM?
- 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.