India is an agricultural country and one third population depends on the agricultural sector directly or indirectly. Agriculture remains as the mainstay of the Indian economy since times immemorial. Indian agriculture has a large contribution to the national gross domestic product (GDP).
Agricultural marketing is mainly the buying and selling of agricultural products. In earlier days when the village economy was more or less self-sufficient the marketing of agricultural products presented no difficulty as the farmer sold his produce to the consumer on a cash or barter basis.
Today’s agricultural marketing has to undergo a series of exchanges or transfers from one person to another before it reaches the consumer. There are three marketing functions involved in this, i.e., assembling, preparation for consumption and distribution.
In India, there are several central government organisations, who are involved in agricultural marketing like, Commission of Agricultural Costs and Prices, Food Corporation of India, Cotton Corporation of India, Jute Corporation of India, etc. There are also specialised marketing bodies for rubber, tea, coffee, tobacco, spices and vegetables.
National Agriculture Market (NAM)
National Agriculture Market (NAM) is a pan-India electronic trading portal which networks the existing APMC mandis to create a unified national market for agricultural commodities.
Launched on 14th April 2016, the NAM Portal provides a single window service for all APMC related information and services. This includes commodity arrivals & prices, buy & sell trade offers, provision to respond to trade offers, among other services. While material flow (agriculture produce) continue to happen through mandis, an online market reduces transaction costs and information asymmetry.
Better market linkage, provided under e-NAM, has integrated 1,000 markets across 18 States and 3 Union Territories. So far, more than 1.69 crore farmers & 1.55 Lakh traders have registered on e-NAM platform. Mandis are on-boarded to the e-NAM platform based on proposals received from respective states, with an appropriate Detailed Project Report (DPR). The three essential reforms the states must carry out for consideration are: (i) e-trading, (ii) single point levy of market fee (iii) unified single trading license for the state. Government of India provides certain assistance to the states, such as free access to e-NAM platform, financial assistance for computer hardware, internet facility and assaying equipment, mandi analyst for each e-NAM mandi for a year and training to stakeholders in mandis being integrated.
Agriculture marketing is administered by the States as per their agri-marketing regulations, under which, the State is divided into several market areas, each of which is administered by a separate Agricultural Produce Marketing Committee (APMC) which imposes its own marketing regulation (including fees). This fragmentation of markets, even within the State, hinders free flow of agri commodities from one market area to another and multiple handling of agri-produce and multiple levels of mandi charges ends up escalating the prices for the consumers without commensurate benefit to the farmer.
NAM addresses these challenges by creating a unified market through online trading platform, both, at State and National level and promotes uniformity, streamlining of procedures across the integrated markets, removes information asymmetry between buyers and sellers and promotes real time price discovery, based on actual demand and supply, promotes transparency in auction process, and access to a nationwide market for the farmer, with prices commensurate with quality of his produce and online payment and availability of better quality produce and at more reasonable prices to the consumer.
Objectives of NAM
- A national e-market platform for transparent sale transactions and price discovery initially in regulated markets.
- Liberal licensing of traders / buyers and commission agents by State authorities without any pre-condition of physical presence or possession of shop /premises in the market yard.
- One license for a trader valid across all markets in the State.
- Harmonisation of quality standards of agricultural produce and provision for assaying (quality testing) infrastructure in every market to enable informed bidding by buyers.
- Single point levy of market fees, i.e on the first wholesale purchase from the farmer.
- Provision of Soil Testing Laboratories in/ or near the selected mandi to facilitate visiting farmers to access this facility in the mandi itself.