DISTORTIONS CREEP INTO GOVT’S FLAGSHIP e-NAM PLATFORM
Data on manual trades being fed in, agricultural produce market committees lack assaying capabilities
As the Centre plans to widen e-NAM, an electronic trading platform, in more states, an expert panel on integrating commodity spot and futures markets has found that data of trading done manually is being fed into the electronic platform after the auction is completed in many mandis. This is in violation of the concept of transparency and fair price discovery. The panel said the details being fed manually into the e-auction platform included information about buyers, sellers, sellers’ addresses, commodity names, quantities and auction rates.
As the Centre looks to widen the electronic trading platform of e-NAM in more states, a highpowered panel of experts on integrating commodity spot and futures markets has found that data of trading done manually is being fed into the electronic platform after the auction is completed in many mandis (APMCs).
“In APMCs, strictly speaking, online auction of commodities on the eNAM platform is not taking place and the data of manual trading is being recorded in the system after the auction is done offline,” the panel said, listing out the operational limitations and challenges of e-NAM.
The committee was chaired by Niti Aayog member Ramesh Chand. The panel was set up by the finance ministry a year ago. Its report was submitted to the government in February. The report has been considered by the Union finance ministry’s department of economic affairs and is now in the public domain for comments.
The panel said details being fed manually into the e-auction platform included details about buyer, seller, seller’s address, commodity name, quantity and auction rate.
That apart, the panel found that many agricultural produce market committees (APMCs) do not have operational assaying labs for grading commodities prior to putting them up for online auction.
“Though some of the labs do have some basic instruments like moisture meter and weighing machine, this is a major deficiency noticed in the majority of APMCs thereby affecting the prospect of introducing an online trading platform in APMCs,” the panel’s report said.
APMCs need to be equipped with basic assaying equipment, including automatic analysers for both physical as well as chemical quality, it said.
Also, few mandis were pushing commodities with large arrival volumes out of e-auctions due to time constraints. The panel also found significant variation in the arrival data of AGMARKNET and eNAM. This is so because AGMARKNET data records actual transaction data, while eNAM records the data captured at the APMC gate.
E-NAM is one of pet projects of the Narendra Modi government which plans to integrate 585 mandis through a national electronic platform by March 31, 2018. Till December 2017, around 470 markets were integrated with the e-NAM platform. Till a few months ago, 16.69 million tonnes were traded on the platform valued at ~422.65 billion.
The panel also said that in order to operate the eNAM at its full potential and to pass on the intended benefits to farmers, the government should ensure that each APMC must have appropriate storage facilities to provide cost-effective warehousing to farmers so as to avert distress sales.
A buyer, irrespective of his location, should participate in any market of his choice and an institution to support inter- mandi trade and movement of produce, including a dispute resolution mechanism, should be established, it added.
“Auctions should take place simultaneously on one common electronic platform in all APMC markets, as well as in private markets, as and when they come to be established,” the panel’s report said.