Recently PM has launched a common e-platform NAM. How will it prove to be a turning point for the farmers? Do you think it will address the problems India faces due to lack of a common market? What are the lessons that can be learnt from Karnataka model in this regard?
BASIC CRUX OF THE QUESTION
• How the lack of common markets impact the agricultural marketing in India.
• It is about the linkage of e-platform NAM with the concept of common markets.
• The link between a common market and a farmer and how E-NAM can solve the issue.
• The success of Karnataka model and the main points which led to this model succeed.
• Introduction: Briefly explain about e-NAM and how it helps farmers
• Body text: Explain it with the farmer centric angle with Karnataka model answer and the benefits of Karnataka Model body is expected.
• Conclusion: Conclude the answer with how the integrated/national level market benefits the farmers.
e-NAM trading mechanism has been launched recently to integrate 585 regulated wholesale markets or agriculture produce market committees (APMCs) under one electronic platform by 2018. It will allow farmers to sell their produce anywhere in the country and create a common market for selling of crops, network existing APMC and other market yards to create a unified national market and provide a single window service for all APMC related information and services.
Prior to this, India had been facing various problems due to lack of a common market. The lack of a national common agricultural market and an un-integrated and distortion ridden agricultural market has led to some of the most striking problems in agriculture growth. Presently, markets in agricultural products were regulated under the Agricultural Produce Market Committee (APMC) Act enacted by respective State Government and which posed a large number of problems before farmers such as levying of high fees, multiple licences and selling of crops in distress. The farmers had even to suffer due to presence of a large number of middlemen. All these led to loss for the farmers. However, with the launch of a common market these issues are going to be resolved. The e- NAM will prove to be turning point for farmers in following ways:
• It will keep a check on the price differentials that exist across the country, by curbing the tendency to hoard, which will control the level of food inflation.
• The enhanced degree of competiveness achieved through better participation of traders in the National Agricultural Market will help farmers realise better prices.
• The integrated system of distribution enabled by better infrastructure will help farmer fetch a premium through better quality and minimisation of post-harvest losses.
• It will create a transparent system and the farmers choice of selling their crops will be widened as previously they had to depend on a few buyers. So, NAM would essentially be a common electronic platform allowing farmers to sell their crops to buyers anywhere in the country.
• The buyers or the agents can log into the platform and source from any mandi in India connected to NAM. They don’t need to be physically present or depend on intermediaries with trading licenses in those mandis. So, it will reduce the multiple licensing and heavy fees they had to pay earlier.
• The larger market obtained as a result of better inter-linkages and free movement of commodity between States will help in developing industry linkages, create greater industrial capacity to produce goods and encouraging private players to participate in creating modern infrastructure mainly storage, market, agri-business, processing and transport.
Karnataka was the first state to launch a unifying agricultural market called the Rashtriya Electronic Market Scheme (ReMS) in 2014 as a joint venture of Karnataka Government and NCDEX Spot Exchange Limited. The important achievements of this scheme are:
• It offers automated auction and post auction process, facilitate warehouse-based sale of produce and commodity funding to benefit all stakeholders, secondary market development and capacity building for stakeholders.
• It has enabled the state to create a common licensing system, increased competition, easy and fast trading, better price discovery, etc. This can be implemented at the national level to prevent multiple licensing systems.
• It allows participating in auctioning at all APMCs in the State with a single license thus reducing the need to get multiple licenses for multiple mandis.
• It has resulted in better price discovery and has enabled the traders to participate in online auctions.
• The platform facilitates users to track the integrated markets of specific commodities. Overall, it has created a positive momentum which whose experience can be used at the national level to make NAM a turning point for the farmers.