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INDIA ADDA – Perspectives On India

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Authors

Colin Shah
Colin Shah
Shri P.R. Aqeel Ahmed
Shri P.R. Aqeel Ahmed
Dr. Vidya Yeravdekar
Dr. Vidya Yeravdekar
Alok Kirloskar
Alok Kirloskar
Pragati Khare
Pragati Khare
Devang Mody
Devang Mody
Vinay Kalantri
Vinay Kalantri
Varun Aggarwal
Varun Aggarwal
Erich Nesselhauf
Erich Nesselhauf
Ghanshyam Lal Vyas
Ghanshyam Lal Vyas
Mr Siddhartha Sacheti
Mr Siddhartha Sacheti
Satish Kannan
Satish Kannan

eNAM – India’s nationwide electronic trading portal

eNAM – India’s nationwide electronic trading portal

Introduction
The Indian agricultural marketing was governed by a set of public-owned wholesale markets established during the colonial period. Due to dated regulatory frameworks and restrictions on trading, the system faced a fair share of shortcomings. To unify the market platform, the Union Budget 2014–15 launched the eNAM to link the physical mandis (markets) to an electronic platform. The aim of the scheme is to provide a national market for agriculture.

National Agriculture Market (eNAM) is an electronic platform that networks the already existent Agricultural Produce Market Committee (APMC) mandis to create a unified national market for agricultural commodities. It was launched by the Ministry of Agriculture and Farmers’ Welfare, Government of India in April 2016. As on December 2021, 1.69 crore (17 million) farmers and 1.55 lakh (0.155 million) traders were registered on the eNAM platform. The National Agriculture Market platform is currently present in 18 states and three union territories in India. In total, a 1,000 mandis are covered in the National Agriculture Market platform, as per a report by CCS National Institute of Agricultural Marketing. The state and UT-wise number of mandis covered are shown in the following chart:


Source: eNAM

What is the purpose of eNAM?
The vision of the eNAM platform is to promote uniformity in agricultural commodity markets by streamlining procedures under integrated markets, promoting free trade across states, removing the information cluster between buyers and sellers and promoting real-time price discovery based on actual demand and supply.

The mission is integration of APMCs across the country through a common online platform. This will facilitate trade in agricultural commodities across India.

Objectives of the platform
While the main objective of the Electronic National Agriculture Market scheme (eNAM) is ‘One Nation, One Market,’ other objectives include:

  • Integrate markets initially at the state level and eventually across India
  • Provide a common online platform
  • Make trade, marketing and transaction procedures uniform across all markets
  • Better marketing opportunities for farmers, traders, sellers and buyers
  • Provide information symmetry
  • Give real-time price discovery based on actual demand and supply of agricultural commodities
  • Provide transparency in auction process

Operational management of eNAM
The Small Farmers’ Agribusiness Consortium (SFAC) was appointed by the Ministry of Agriculture and Farmers’ Welfare as the lead implementing agency of eNAM. Accordingly, SFAC carries out all the administrative and management functions with respect to the implementation. The National Agricultural Cooperative Marketing Federation of India (NAFED) conducts minimum support price (MSP) procurement through eNAM to help the farmers get used to the process.

The eNAM platform brings together the entire trading operation across India. That means farmers, traders, sellers, buyers, and exporters can choose to trade on a physical platform, APMC mandis, or trade commodities on the online platform where they can receive real-time data on prices and quality.


Source: eNAM

There are six types of commodities that are traded on the eNAM platform. It provides a virtual platform to farmers and traders for performing commerce and trade activities across India. The types of commodities included are food grains/cereals, oilseeds, fruits, vegetables, spices, etc. A total of 175 commodities come under these.


Source: eNAM

Impact of eNAM on trade
The eNAM platform has gained in popularity and awareness in the last few years in India. As of December 2021, eNAM traded a volume of 4.13 crore MT of bulk commodities and 3.68 crore of coconut and bamboo. The value of these goods traded is around Rs. 1.22 lakh crores (approximately US$ 16.2 billion).

Following is a table that shows growth in trades on the eNAM platform from 2016–17 to 2019–20:


Source: eNAM

The platform provides sellers and farmers transparency in trade through better price discovery. This way, more markets and buyers are made available for trade. Real-time price and arrival information provides insights for a good trade. In addition, sellers and farmers can receive the money directly, giving them a chance to build a better financial profile. The portal can also be accessed through a mobile application available in 11 Indian languages as well as English for easy accessibility and use. Approximately 3.77 million farmers in FY 2020–21, and around 0.88 million farmers in April–June 2021 used the eNAM platform to sell their commodities.

Success stories

  • Girimala Farmers Producer Company Ltd. (GFPCL), an organization formed to serve small and marginal farmers in Gujarat was introduced to the eNAM portal in May 2018. The farmers used to sell at the local markets earlier. By using eNAM, they were able to reduce multi-handling and dependence on intermediaries. They realized a profit of Rs. 200 (approximately US$ 2.7) per quintal higher for Maize commodity.
  • Mahakaushal Progressive Farmers Self Reliant Producer Company Ltd. (MPFSRPCL) is an organization registered in the state of Madhya Pradesh. It serves 3,000 farmers in 29 villages. With use of the eNAM portal, the farmers were able to realize Rs. 70 to 150 (approximately US$ 1 – 2) per quintal more. It helped them to be less dependent on intermediaries.

Future outlook
As the Government of India is pushing more towards digitalization, having electronic modes and platforms will help the country reach its digitally empowered India goal. Although, the actual trade takes place through mandis, having a digital platform reduces the cost of transformation and improves knowledge and awareness of real-time prices of the commodities. Moreover, by removing middlemen, farmers and traders can directly receive payments. Since agriculture is one of the most important sectors in the Indian economy, contributing to about 20% of the country’s Gross value Added (GVA), betterment in operations and consolidating the markets in the form of eNAM will boost trade in the agriculture sector and facilitate farmers for smooth marketing of their produce across India.

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