International Journal of Scientific Research and Management (IJSRM)

||Volume||5||Issue||07||Pages||5810-5815||2017||
Website: www.ijsrm.in ISSN (e): 2321-3418
Index Copernicus value (2015): 57.47 DOI: 10.18535/ijsrm/v5i7.04

National Agriculture Market: The Game Changer for Indian Farming

Community
*J.P. Yadav, **Abhishek Sharma
Professor and Head, Department of EAFM, University of Rajasthan, Jaipur
Junior Research Fellow (UGC), Department of EAFM, University of Rajasthan, Jaipur

Abstract
With nearly 56 per cent of the population depending upon agriculture sector for their livelihood, the
unification of markets both at State and National level is essential. Thus, last year Prime Minister launched
National Agriculture Market portal (eNAM) on April 15, 2016, to connect e-mandies in several States. eNAM
is an online inter-connectivity of e-mandies, aimed at marshalling the much needed agriculture marketing
reforms to enable farmers to get better price of their produce The Government’s decision of creating this e-
platform for farmers will remove inter-state barriers in moving farm produce and can be a game changer
provided the requirements are fulfilled by states. These two most important requirements include amendment
of the State Agricultural Produce Marketing Committee Act (APMC) Acts and physical logistic support to
farmers which would enable them to move their crops, e-NAM has the potential to transform Indian
agriculture from traditional to an entrepreneurial and a profit making venture.

Keywords: NAM, APMC,

Introduction levels on sustainable basis, it recognizes the need
The Government realizes the importance of for creating a competitive market structure in the
agricultural sector for the growth and country that will generate marketing efficiency.
development of the Indian economy. With nearly Only when the market is integrated over time and
56 percent of its population continuing to depend space, can market efficiency be realized. This
upon agriculture for their livelihood, the critical year’s Union Budget has increased rural credit to
role of the sector cannot be repudiated. Rs 10 lakhs crores for the next fiscal (2017-18)
Agriculture sector is highly vulnerable to the with the aim at doubling the income of the farmers
uncertainties of nature that impact the crop in the next five years.
enterprise at its production. Further, the sector is Integration of agriculture markets across the
also exposed to the current weaknesses of the country through e-platform is seen as an important
agriculture marketing system. The annual income measure for overcoming the challenges posed by
of a farmer depends upon both yield and the price the present agri-marketing system namely –
that his produce fetches. Government has rolled fragmentation of State into multiple market areas,
out a large number of programs to improve yield each administered by separate APMC

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 DOI: 10.18535/ijsrm/v5i7.04

(Agricultural Product Marketing Committee), agri-produce and multiple levels of mandi charges
multiple levy of mandi fees, requirement for ends up escalating the prices for the consumers
multiple license for trading in different APMCs, without commensurate benefit to the farmer.
licensing barriers leading to conditions of NAM addresses these challenges by creating a
monopoly, poor quality of infrastructure and low unified market through online trading platform,
use of technology, information dissymmetry, both, at State and National level and promotes
confound process for price discovery, high level uniformity, streamlining of procedures across the
of market charges, movement controls, etc. The integrated markets, removes information
need to unify the markets both at State and asymmetry between buyers and sellers and
National level is, therefore, clearly the promotes real time price discover, based on actual
requirement of time, in order to provide better process, and access to a nationwide market for the
price to farmers, improve supply chain, reduce farmer, with prices compatible with quality of his
wastages and create a unified national market. produce and online payment and availability of
better quality produce at more reasonable prices to
National Agriculture Market (NAM) is a pan-
the consumer.
India electronic trading portal which networks the
existing APMC mandis to create a unified national Small Farmer’s Agribusiness Consortium (SFAC)
market for agricultural commodities. NAM Portal is the lead promoter of NAM, SFAC is a
provides a single window service for all APMC registered body of Department of Agriculture,
related information and services. This includes Cooperation and Farmers’ Welfare (DAC&FW)
commodity arrival & prices, buy & sell trade under Ministry of Agriculture and Farmer
offers, among other services. While material flow Welfare. SFAC through open tender selects a
(agriculture produce) continue to happen through Strategic Partner (SP) to develop, operate and
mandis, an online market reduces transaction costs maintain the NAM e-platform. SFAC implements
and information asymmetry. Agriculture NAM with the technical support of SP and
marketing is administered by the States as per budgetary grant support from DAC&FW.
their agri-marketing regulations, under which, the DAC&FW meets the expenses on software and its
State is divided into several market areas, each of customization for the States and is providing it for
which is administered by a separate Agricultural free. DAC&FW is also giving a grant as one time
Produce Marketing Committee (APMC) which fixed cost up to Rs. 30 lakhs per Mandi (other
imposes its own marketing regulation (including than to the private mandis) for installation of the
fees). This fragmentation of markets, even within e-market platform. Around 6500 APMCs operate
the State, hinders free flow of agri-commodities throughout the country of which 585 district level
from one market area to another and multiple mandis in States/UTs desirous of joining are
handling of agri-produce and multiple handling of planned to be linked by NAMN. The Cabinet

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 DOI: 10.18535/ijsrm/v5i7.04

Committee on Economic Affairs had approved a The comprehensive role of the strategic
Central Sector Scheme for Promotion of National partner is ample and comprises writing of
Agricultural Market through Agri-Tech the software, modifying it to meet the
Infrastructure Fund (ATIF). The government has specific requirements of the mandis in the
allocated Rs. 200 crore to the ATIF. With this states willing to integrate with NAM and
fund, SFAC will implement NAM for three years running the platform.
from 2015-16 to 2017-18.  There is no State wise allocation under the
Scheme. The scheme is applicable on All-
Intentions of NAM:
India basis. However, desired states would
 A national e-market platform for be required to meet the pre-requisites in
transparent sale, dealings and price terms of carrying out essential agri-
discovery initially in structured markets. marketing reforms.
Wiling states to consequently enact
Benefits of NAM
appropriate provisions in their APMC Act
for promotion of e-trading by their State
Agricultural Marketing Board/APMC.
 Liberal licensing of traders/buyers and
commission mediators by state authorities
without any pre-condition of physical
existence or ownership of premises in the
market yard.
 One license for a trader valid across all
markets in the State.
 Organization of quality standards of  For the farmers, NAM assures more routes
agricultural produce and provision for for sale. It would escalate his access to
assaying (quality testing) infrastructure in markets through warehouse based sales
every market to facilitate informed bidding and thus prevent the need to transport his
by buyers. Common tradable parameters produce to the mandi.
have so far been developed for several  For the indigenous trader in the mandi/
commodities. market, NAM offers the opportunity to
 Single point levy of market fees, i.e. on the access a larger national market for
first wholesale purchase from the farmer. secondary trading.
 Setting up of Soil Testing Labs in/or near  Majority buyers, processors, exporters etc.
the certain mandi to assist visiting farmers benefit from being able to take part
to access this facility in the mandi itself. directly in dealing at the local
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 DOI: 10.18535/ijsrm/v5i7.04

mandi/market level through the NAM are to be integrated with the portal by March,
platform, thereby decreasing their 2018.
Intermediation costs.
Challenges:
 The steady incorporation of all the main
mandis in the States into NAM will ensure  Even if the structure looks simple, for
common ways for issuing licences, tariff farmers, it may not be as simple as
or fee and movement of produce. In a expected. Most of the farmers have
period of 5-7 years, Union Cabinet tradition of vending their produce to a
assumes substantial benefits through local product aggregator then taking their
greater returns to farmers, lesser crops to the mandis.
transaction costs to buyers and stable  Even if some farmers take them to
prices and availability to consumers. mandis, their yield would be insignificant
 The NAM will also facilitate the rise of to motivate distant buyers bidding online.
value chains in major agricultural produces In this circumstance, the probability for
through the country and help to promote better price discovery is quite partial.
scientific storage and movement of agri  Quality differences in commodities at
goods. both the state and national level pose a
challenge. For example, wheat in Punjab
Current Status of NAM:
and Haryana is of medium quality
It primarily targeted at integrating 21 mandis in whereas those from Madhya Pradesh and
eight state; Uttar Pradesh, Gujarat, Telangana, Gujarat are of higher quality.
Rajasthan, Madhya Pradesh, Haryana, Jharkhand  Electronic platforms like NAM would be
and Himachal Pradesh. Launched with a budget a right platform only for trade
allocation of Rs. 200 crore, 25 key agri produces, standardized commodities and for the rest
including wheat, paddy, maize, onion, jowar, it may not be.
bajra, groundnut, patato, soyabean and mustard
The Farmers can still resolve the above mentioned
seed, were chosen for e-trading.
difficulties and obtain benefits if they can find
As per Press Information Bureau, Government of ways to aggregate their produce on their own
India, Ministry of Agriculture, 07-April-2017, so dodging local produce aggregator. In this, the
far, 417 markets from 13 states have been cooperatives and farmer produce organizations
integrated with e-National Agriculture Market (e- can play a assisting role to aggregate
NAM) against the set target of 400 markets by commodities. Improvements are also required
March. And as per the approved e/-NAM covering all facts of agricultural sector such as
Scheme, 585 regulated mandis across the country soil health, traditional farming, irrigation,

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 DOI: 10.18535/ijsrm/v5i7.04

extension services, fertilizers among others to entrepreneurial and a revenue making venture.
make the sector attractive. This will create a large But this will only be possible with auxiliary
number of employment openings; making sure additions in infrastructure, easy credit disbursal
surplus production of all commodities and and vigilant inspection and implementation.
operational functioning of NAM. Reforming
Conclusion
agricultural markets requires sincere efforts and
effective participation of all the stakeholders. Formation of the National Agriculture Market is a
landmark initiative. It would provide the farmers
Responsibility of States for Effective
more option of sale of their produce and increase
Implementation: The states must make sure
the accessibility of market to farmers through
about the restructurings in their APMCs are
warehouse based sale and obviates the need to
carried out both in letter and spirit. To make the
transport the produce to the Mandis. For local
initiative efficacious, the states have to embark on
traders e-NAM would provide an opportunity to
the following reforms:
access the National Market while for bulk and big
 Provision for electronic auction for traders it would provide an opportunity to directly
price discovery. participate in local Mandis and will reduce the
 Provide a single license to be valid intermediation cost. However, it will happen when
across the state. e-Nam become fully operational throughout the
 Provision for a single point levy of country and the eventual goal of 'One Nation One
market fee. Market' for agricultural produce will become a
reality. Briefly, the recent initiatives certainly will
It should also be noted that only those states/ UTs
help in strengthening the rural economy and
which live up to the above three conditions will be
would generate more rural employment. It would
authorized for assistance under this scheme. The
help in increasing productivity and in achieving
Government’s decision to form National
goal of food security and inclusive growth in the
Agriculture Market (NAM) e-platform for farmers
country. Besides, these reforms in agricultural
will eliminate inter-state obstacles in moving farm
market will help India to meet the challenges
produce and can be a game changer provided the
posed by global markets in the era of globalization
conditions are fulfilled by states. These two most
and liberalization.
important conditions include amendment of the
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A Millennium Study, Agricultural Marketing,
crops, e-NAM has the potential to transform
Department of Agricultural and Cooperation,
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 DOI: 10.18535/ijsrm/v5i7.04

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