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.
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.
Agriculture marketing:-
- 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:-
- 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.
- 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.
- Common tradable parameters have so far been developed for 25 commodities.
- 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.
- 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.
Benefits for the Mandis:-
- A reduction in book keeping and reporting system (reports were previously prepared viz. daily minimum, maximum and modal prices and arrivals of commodities) which are now generated automatically
- Better monitoring and regulation of traders and commission agents (CA’s).
- Completely transparent system which eliminates any scope of intentional/un-intentional manipulation of tendering / auctioning process.
- Improvement in the market fee collection by means of accounting all the transactions that are taking place in the market.
- Reduction in manpower requirements as tendering / auctioning process takes place through the system.
- Analysis and forecasting of the arrivals and prices.
- Availability of the activities of each APMC on the website directly.
Farmers
- NAM promises more options for selling produce and making competitive returns.
Traders
- NAM will provide access to larger national market for secondary trading.
Buyers, Processers & Exporters
- NAM will enable direct participation in the local mandi trade, reducing intermediation cost.
What is the National Agriculture Market (NAM) ?
- NAM is envisaged as a pan-India electronic trading portal which seeks to network the existing APMC and other market yards to create a unified national market for agricultural commodities.
- NAM is a “virtual” market but it has a physical market (mandi) at the back end.
2. What is the difference between NAM and the existing mandi system?
- NAM is not a parallel marketing structure but rather a device to create a national network of physical mandis which can be accessed online.
- It seeks to leverage the physical infrastructure of the mandis through an online trading portal, enabling buyers situated even outside the State to participate in trading at the local level.
3. Why is NAM necessary?
- It is necessary to create NAM to facilitate the emergence of a common national market for agricultural commodities.
- Current APMC regulated market yards limit the scope of trading in agricultural commodities at the first point of sale (i.e. when farmers offer produce after the harvest) in the local mandi, typically at the level of Taluka / Tahsil or at best the district.
- Even one State is not a unified agricultural market and there are transaction costs on moving produce from one market area to another within the same State.
- Multiple licences are necessary to trade in different market areas in the same State. All this has led to a highly fragmented and high-cost agricultural economy, which prevents economies of scale and seamless movement of agri goods across district and State borders.
- NAM seeks to address and reverse this process of fragmentation of markets, ultimately lowering intermediation costs, wastage and prices for the final consumer. It builds on the strength of the local mandi and allows it to offer its produce at the national level.
4. How will NAM operate?
- The NAM electronic trading platform has been created with an investment by the Government of India (through the Ministry of Agriculture & Farmers’ Welfare).
- It offers a “plug-in” to any market yard existing in a State (whether regulated or private).
- The special software developed for NAM is available to each mandi which agrees to join the national network free of cost with necessary customization to conform to the regulations of each State Mandi Act.
5. Are there any conditions for joining NAM?
- States interested to integrate their mandis with NAM are required to carry out following reforms in their APMC Act.
- a) Specific provision for electronic trading .
- b) Single trading licenses valid for trading in all mandis of the State.
- c) Single point levy of transaction fee.
6. Will the APMC mandis lose out business due to NAM?
- No. NAM basically increases the choice of the farmer when he brings his produce to the mandi for sale. Local traders can bid for the produce, as also traders on the electronic platform sitting in other States.
- The farmer may chose to accept either the local offer or the online offer. In either case the transaction will be on the books of the local mandi and they will continue to earn the transaction fee.
- In fact, the volume of business will significantly increase as there will be greater competition for specific produce, resulting in higher transaction fees for the mandi.
7. Who will bear the costs of NAM?
- The national level platform has been developed by the Ministry of Agriculture & Farmers’ Welfare, which will also bear the maintenance costs.
- As stated above, the integration costs for local mandis and customization of software, training etc. will also be paid for by the Ministry of Agriculture & Farmers’ Welfare as a one-time grant at the time of accepting the mandi in the national network.
- Thereafter, the running costs of the software at the local level, staff costs for quality check etc. will be met from the transaction fee to be generated through the sale of produce.
- The intention is to avoid any upfront investment by the mandi when it integrates into NAM, and also enable it to support the running cost through additional generation of revenue.
8. Who will actually operate the NAM platform?
- Ministry of Agriculture & Farmers’ Welfare, Govt. of India has appointed Small Farmers’ Agribusiness Consortium (SFAC) as the Lead Implementing Agency of NAM.
- SFAC will operate and maintain the NAM platform with the help of a Strategic partner selected for the purpose.
9. What are the likely benefits of NAM?
- NAM is envisaged as a win-win solution for all stakeholders.
- For the farmers, NAM promises more options for sale at his nearest mandi.
- For the local trader in the mandi, NAM offers the opportunity to access a larger national market for secondary trading.
- Bulk buyers, processors, exporters etc. benefit from being able to participate directly in trading at the local mandi level through the NAM platform, thereby reducing their intermediation costs.
- The gradual integration of all the major mandis in the States into NAM will ensure common procedures for issue of licenses, levy of fee and movement of produce.
- In the near future we can expect significant benefits through higher returns to farmers, lower transaction costs to buyers and stable prices and availability to consumers.
- The NAM will also facilitate the emergence of integrated value chains in major agricultural commodities across the country and help to promote scientific storage and movement of agri commodities.
10. Current Status
- So far, Ministry of Agriculture, Cooperation & Farmers’ Welfare, GOI has accorded in principle approval to the proposals of 12 States /UTs for integration of 365 mandis with e-NAM namely Himachal Pradesh (19 mandis) Haryana (54 mandis), Chandigarh (1) mandi, Rajasthan (25 mandis), Gujarat (40 mandis), Maharashtra (30 mandis), Madhya Pradesh (50 mandis), Chhattisgarh (5 mandis), Andhra Pradesh(12 mandis), Telangana (44 mandis), Jharkhand (19 mandis), and Uttar Pradesh (66 mandis).
11. How soon will NAM be functional?
- Pilot trading of 24 Commodities namely Apples, Potato Onion, Green Peas, Mahua Flower, Arhar whole (Red Gram), Moong Whole (green gram), Masoor whole (lentil), Urad whole (black gram), Wheat, Maize, Chana whole, Bajra, Barley, Jowar, Paddy, Castor Seed, Mustard Seed, Soya bean, Ground nut, Cotton, Cumin, Red Chillies and Turmeric has been launched on 14th April, 2016 in 21 mandis across 8 States.
- Another 02 mandis namely Ambala and Shahabad of Haryana has been integrated with e-NAM on 1st June 2016. Based on this, first 200 mandis in the country will be integrated with NAM by September 2016.
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