The Unified National Agriculture Market (UNAM), proposed by Finance Minister Arun Jaitley in the Union Budget for 2015-16, may take time to evolve nationally, but Karnataka is already leading this silent movement with the online integration of many APMCs in the southern state.

Looking at the success of this first-ever farm market integration in the country, many states are set to replicate the ‘Karnataka model’. “States such as Rajasthan, Madhya Pradesh, Odisha, Uttar Pradesh, Telangana, Gujarat, and Tamil Nadu have approached us to study this model and replicate,” said Manoj Rajan, Managing Director, Rashtriya e-Market Services Pvt Ltd (ReMS).

ReMS was set up in February 2014 as a joint venture (50:50) company by the Karnataka Government and NCDEX Spot Exchange Ltd for implementing the State’s new agricultural marketing policy to bring in efficiency and transparency in the agricultural marketing system for efficient price discovery to benefit farmers and other market participants.

This was done following recommendations of a high-level committee constituted in 2013 to explore means to improve the agricultural marketing system, identify the interventions required in the sector, and suggest necessary reforms. The committee also studied the nation-wide electronic trading of commodities.

Pioneering the move was Karnataka Chief Minister Siddaramaiah, who launched the unified platform for online commodity trade, a virtual market for agricultural produce, in February 2014. He said it would be a step to empower farmers. Licensed traders could bid online from anywhere in India and farmers would have the right to accept or reject the price. This led to “scientific” price discovery by the farmers themselves, breaking the hold of middlemen.

Until March 2015, about a third of 155 APMCs in Karnataka, were thus integrated under the Unified Market Platform (UMP) whose turnover was Rs 5,000 crore in 32 commodities traded online. In all, 31,000 traders and 17,000 commission agents have so far been registered on the platform. “ReMS is not replacing APMCs but only making the mandis more efficient and transparent in their functioning,” Rajan said.

Just how an online trading platform could benefit farmers is visible at the Tiptur APMC in Tumkur district of Karnataka. The total cultivated area under coconut plantation in Tiptur taluk is 28,000 hectares. Tiptur, 140 km from Bangalore, is mainly a one-commodity market (copra) whose farmers earned 53 per cent more for 30 per cent less arrivals between 2013-14 and 2014-15. Similarly, green gram prices increased by 40 per cent in the Gadag market. In all, 35 commodities are now traded on this state-wide UMP.

At Tiptur APMC, nearly 10,000 farmers have registered for online auctions. They are not charged a registration fee. Nearly 170 traders are also registered with a nominal fee. Their facilitator, ReMS, charges a 1.5 per cent transaction fee.

In 2013-14, Karnataka registered a turnover of Rs 31,000 crore in agricultural commodities, 92 of which were notified. With increased integration of these markets for online trading, the State Government is setting up 25 huge facilities across Karnataka to evaluate agricultural produce for true price discovery by giving physical and financial information to farmers. “The Karnataka project is not just about integration or computerisation of agricultural markets but about re-designing and restructuring in a comprehensive and all-encompassing manner, giving access to all stakeholders.”

How does a UMP function?

Unlike other APMCs, those part of the UMP in Karnataka present a different picture.

As soon as a farmer enters APMC, he gets an entry pass and a unique lot number. His product is weighed and exposed on a platform, ready for sale. This is followed by bidding across the lots available.

After the bid finalisation, an SMS is sent to the farmer concerned and the highest bidder wins the lot.

This is followed by post-auction activity envisaging issuance of sale bill, payment the same day, delivery of the lot, and e-permitting.

Thus, the farmer is virtually free after putting on the mat his products by 2 pm on the particular trading day. By 3 pm, he can be seen watching a TV set in the market courtyard, not a movie or a cricket match but tracking the screen for the price of their produce. The screens flash results of an online auction of their produce. The bids are made at Tiptur by buyers, mostly traders and millers, for ball copra and dried coconut.

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