National Agricultural Market

The National Agricultural Market (NAM) platform mooted by the government to integrate agricultural mandis across the country in order to provide better price discovery and wider market access to farmers..

Objective of NAM:
a) A national e-market platform for transparent sale transactions and price discovery initially in regulated markets. Willing States to accordingly enact suitable provisions in their APMC Act for promotion of e-trading by their State Agricultural Marketing Board/APMC. ; b) 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 ; c) One license for a trader valid across all markets in the State ; d) Harmonization of quality standards of agricultural produce and provision for assaying (quality testing) infrastructure in every market to enable informed bidding by buyers. Common tradable parameters have so far been developed for 25 commodities ; e) Single point levy of market fees, i.e on the first wholesale purchase from the farmer ; f) Provision of Soil Testing Laboratories in/ or near the selected mandi to facilitate visiting farmers to access this facility in the mandi itself. M/s. Nagarjuna Fertilizers and Chemicals Ltd. is the Strategic Partner (SP) who is responsible for development, operation and maintenance of the platform. The broad role of the Strategic Partner is comprehensive and includes writing of the software, customizing it to meet the specific requirements of the mandis in the States willing to integrate with NAM and running the platform

Analysis:
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 . 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.
But with farmers, it may not be as simple. Most farmers do not take their crop to the mandis; they sell off to the local arhatiya or produce aggregator even before that. Even the ones who take would offer a trolley load or two at most — hardly enough to excite distant buyers bidding online. To that extent, the possibilities for better price discovery through a widened universe of buyers, both local and online, are quite limited for them.
But by making Farmers aware regarding national agriculture market, there will be an increases in the choice of farmer after he brings in his produce to a mandi. Local traders can bid for the produce, as also traders on the electronic platform sitting in other states. The farmer may choose to accept either the local offer or online. In either case, the transaction will be on the books of the local mandi and they will continue to earn the transaction fee. With more mandis coming onto the NAM platform, the volume of business will significantly increase, as there will be greater competition for specific produce, resulting in higher transaction fees for a mandi. Gradual integration of all major mandis into NAM e-platform would ensure common procedures for issue of licences, levy of fee and movement of produce. Over 5-7 years, government expects significant benefits through higher returns to farmers, lower transaction costs for buyers, and stable prices and availability to consumers. NAM will also facilitate the emergence of integrated value chains in major agricultural commodities across the country and help promote scientific storage and movement of agri goods.
FCI can also also use NAM route for food grain procurement which will beneficial for both as huge quantities procured by FCI could make the NAM platform a viable system, while FCI benefits from its electronic transaction processing activities.
NAM will also helps in ironing out the unwanted intermediaries involved in the process.
 

By: Vishal