Commodity Analysis

eNAM: Sowing seeds for future

Rajalakshmi Nirmal | Updated on September 09, 2018 Published on September 09, 2018

It may still have many missing links, but the national agri market is slowly transforming the way India trades in agri produce

Since its launch in April 2016, many States have joined the electronic national agriculture market (eNAM) platform by reforming their APMC (Agricultural Produce Market Committee) Act and taking a hard stance with arhityas (commission agents) who had been resisting e-auctioning and online payment. But at the ground level, have things changed for the farmer?

Yes, eNAM is ushering in change, though in a small way.

At Adoni, Guntur and Kurnool mandis in Andhra Pradesh, Nizamabad in Telangana, Charkhi Dadri in Haryana, and many more mandis across the country, farmers today are drawing the benefits of better price discovery.

From a system of undercover auctions in some mandis to open-outcry auction in others, auctions have now become automated.

Gone are the days of trade cartels pre-fixing the price for farmers’ produce.

The benefit has also come from computerised weighing with weighing machines linked to the eNAM portal through Bluetooth. Earlier, commission agents used to falsify weight calculations.

While there were many hiccups at the beginning — including poor internet connectivity, glitches in software and delays in online payments — many of these have been addressed by the Small Farmers Agribusiness Consortium (SFAC, an autonomous entity promoted by the Agriculture Ministry), the implementing agency for eNAM.

Nagarjuna Fertilizers and Chemicals, the company that won the bid to design, develop and maintain the application and the portal, also had two tough years resolving the tangled agri-marketing chain.

BusinessLine caught up with State and Central government officials, SFAC, mandi board officials, farmers and arhityasto understand the changes brought about by eNAM.

There are still many missing links in eNAM, but the transformation made in the mind set of many farmers and traders who now trade online, as a result of eNAM, is itself a commendable feat.

What it has achieved

The biggest achievement of eNAM is automated bidding. Every trader, after inspection of a lot, logs on to the eNAM portal (through mobile app or website), and places his bid. The system then discovers the highest bid for every lot and declares the winners.

A trader cannot revise or cancel his bid once placed. SMS alerts are sent to the farmers’ mobile phones as soon as the winners’ list is announced.

Today, online auctioning is being carried out smoothly in eNAM mandis across the country, even in States such as Andhra Pradesh and Telangana where volumes are relatively high.

“During the initial days of eNAM, there were glitches in the system, but we worked closely with the National Informatics Centre and sorted it out, and now that is history,” said Dushyant K Tyagi, Chief Business Officer, Nagarjuna Fertilizer and Chemicals.

“Over the past year, our focus has been enhancing the system as per requests from States and strengthening the portal by adding new features,” he added.

Vijay Vujjini, Chief Technology Advisor and Architect of the platform, said: “The eNAM platform can now be scaled to handle more traffic and work with less downtime. It also has a backup system.” Vijay was also involved in creating some of the core systems of UIDAI (Unique Identification Authority of India - Aadhaar).

Computerised weighing is another success of eNAM. Farmers used to earlier lose 2-3 kg from every lot they brought in because of wrong reading or cheating by agents. But now, many eNAM mandis have electronic weighing with the machine integrated with eNAM.

Thanks to eNAM, agri commodities now have standardised quality parameters. Till two years ago, no one talked about assaying of agri produce.

But today, there is a lot of awareness.

The Directorate of Marketing and Inspection (under the Department of Agriculture Cooperation and Farmers Welfare) has published the quality specifications for all commodities traded on eNAM, and how to check them.

An incomplete party

Inputs received from different mandis in the North, Central and Western parts of the country show that trading is not yet done 100 per cent online in all eNAM mandis.

In some mandis in Madhya Pradesh, Rajasthan and Gujarat, farmers have the option to sell their produce through normal auctions.

A farmer from Botad, Gujarat, told BusinessLine: “Many of us do not want to go through eNAM because it’s a long process and takes time. During off-season, it’s okay; but during peak season, we prefer to sell via normal auction itself as that’s faster.”

The powers that be need to brainstorm on how to reduce the process time in eNAM.

At some mandis in Bundi, Bikaner and Kota in Rajasthan, stakeholders said that small farmers still preferred to take their produce through the normal auction route because — one, they do not understand technology, and two, they fear they may get a lower price if their produce is not of good quality.

SFAC and Nagarjuna Fertilizers, for their part, have been running awareness programmes.

The training modules are designed in the local language and explained with audio-visual content to farmers and traders.

So far, about 1,170 training and awareness camps have been conducted across 16 States and two union territories.

While training programmes focus on familiarising farmers with the platform, what is equally critical is sensitising them on the benefits the platform will bring with better price discovery.

States’ lethargy

Giving a farmer the right price for his produce is still a distant dream for eNAM.

This, though, can’t be entirely blamed on the Centre or the implementing agency. It is the States, here, that have failed.

While seven States have demonstrated smooth inter-mandi transactions on eNAM, none have yet done inter-State trade.

For that to become a reality, States need to issue unified licence to traders, using which traders could buy commodities from any farmer from any part of the country.

Since assaying of the commodities is necessary for inter-mandi/-State trade to become a reality, the Centre is offering ₹70 lakh to each mandi to get the machinery in place. It also provides information on the machines needed and where to source them from.

Quality-testing machines from CDAC (Centre for Development of Advanced Computing), Nebulaa and FOSS have been piloted in a few mandis, said Prasanta Kumar Swain, Joint Secretary, Ministry of Agriculture Cooperation and Farmers Welfare. It is up to the States now to take it forward.

Checking with mandi officials and farmers across States, BusinessLinefound that most mandis still have only very basic machines for assaying commodities.

If the advanced AI machines of the companies mentioned above reach the market, they may answer many of the current problems.

Payment solution

Besides the hardships in selling, farmers have been pained by troubles in payment, too.

Till now, the farmer’s worry was taking back home safe the cash got from the commission agent (who in turn was paid by the trader after 15-20 days). With eNAM, this concern has been addressed with the trader now transferring the amount to the farmer’s account directly, in most of the mandis.

But the need to pay the farmer in T (trade)+2 days through an online mode has created fresh troubles for the trader — a reason why many traders have been resisting eNAM.

Nagarjuna Fertilizers is now contemplating a few ways to solve this problem. One is bill discounting, where the end-buyer issues a purchase bill to the trader and the trader pledges this with a bank and raises money for an interest of 1-2 per cent for 15-30 days.

He uses this money to settle the transaction with the farmer and repays the bank when he sells the the stock to the buyer and receives payment. The other option is getting traders a credit limit from banks. The credit limit will be based on the trade history of the individual trader.

‘Give it time’

When asked on what he thinks of eNAM, Ashok Dalwai, Chairman, Committee on Doubling Farmers’ Income, said: “I think we have been holding eNAM to accountability too soon. We have had APMCs since 1950s and ’60s, and even today, we don’t have uniformly efficient APMCs across the country. If it has taken such a long time for APMCs, we should not be expecting eNAM to be the best within two years.”

“eNAM can set up a national agriculture market only in a phased manner — first, replacing physical auction with e-auction, then facilitating inter-mandi trade, and later inter-State trade. If someone from Delhi wants to buy from a farmer in Tamil Nadu, it is practically not possible today because the State may not allow outsiders. We don’t have a national marketing act; we only have a state marketing act. So there are policy constraints which we need to be addressed.”

Published on September 09, 2018

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