eNAM: Connecting farmers and retailers via Technology

eNAM: Connecting farmers and retailers via Technology

December 14, 2020
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The Government of India has established multiple public wholesale market yards for agricultural markets popularly known as Mandis, as a platform to connect farmers and retailers. These markets are regulated by the Agricultural Produce Markets Committee (APMC) Act. Under this arrangement, the farmer brings the agricultural produce to the physical marketplace (mandi) where it is auctioned and sold to registered traders. These traders later sell the products to wholesalers, retailers or other companies.

There have been multiple problems with this arrangement Farmers sometimes had to travel over 100 kilometres for the mandi and wait for days before the auction. As high as 30% of perishable commodities were reported to be damaged owing to post harvest inefficiencies. Also, in the mandi system famers get very low pay due to the long chain of intermediaries. There is cartelisation of the mandi which adds to costs like intermediaries’ margin and handling costs. Tax levies and licences, logistics and infrastructural limitations are other problems in this framework.

Why eNAM?

To do away with some of the drawbacks and ensure better returns to the farmers, a unified National Agriculture Market (eNAM) was proposed in 2016. Key objectives to introduce eNAM was to establish a more transparent marketing system,  leverage state of the art technology for a well-regulated market, and enable participation and benefits for the entire agri value chain, from farmer to consumer.

Under the eNAM framework, real time auctioning would be carried out along with integrated assaying, weighing, and storage and payment systems. The process is integrated in a way that the payments would be credited directly to farmers’ accounts. This highlights the importance of financial inclusion for small and marginal farmers as catalysed by Prime Minister’s Jan Dhan Yojna.

eNAM as an electronic marketplace has been designed to benefit all stakeholders. While producers no longer are required to carry products to physical markets, traders and exporters can procure quality products in bulk, at one place with transparent financial transactions. Transaction has been further convenient with introduction of eNAM Mobile App which is integrated with payment options like debit card, netbanking, NEFT, RTGS and UPI.

eNAM as of today is  linked with 785 markets in 17 states and 2 union territories, with more than 45 lakh farmer membership. The Government plans to connect over 22,000 Gramin Agriculture Markets and local farmers markets, with this platform. To facilitate better grading and assaying services, the Agriculture Department is looking at collaboration with AGMARK for credible certification.

FocusAgritech’s Outlook: A technology enabled platform like eNAM is crucial to improve farmer’s income with payment of fair prices for the quality product. With higher levels of transparency, more farmers will associate with the platform making the supply chain more competitive at each step and facilitate the vision of doubling farmers’ income.

Companies to Watch: AgriBazaar

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