Flawed ef­fort

The Union gov­ern­ment's na­tional elec­tronic agri­cul­tural mar­ket por­tal is a non-starter


The Union gov­ern­ment's e-NAM scheme, which in­tended to bring trans­parency to farm trans­ac­tions, is fail­ing

THE RE­CENT ex­pose of cor­rup­tion in man­dis (agri­cul­tural whole­sale mar­kets) by In­dia To­day news chan­nel is a grim re­minder of the ru­ral dis­tress across In­dia. In April last year, the Na­tional Demo­cratic Al­liance gov­ern­ment launched the elec­tronic na­tional agri­cul­tural mar­ket or e-nam, a por­tal which would link 585 man­dis by March 2018 and cre­ate a trad­ing fo­rum to en­cour­age trans­parency in trans­ac­tions and al­low farm­ers to com­mand com­pet­i­tive prices. e-nam would chal­lenge trade car­tels who con­trol prices and charge large com­mis­sion fees. Th­ese car­tels came into be­ing through the mis­use of the Agriculture Pro­duce Mar­ket Com­mit­tees Act, 2016, (apmc).

An in­ter­nal re­view by the Min­istry of Agriculture and Farm­ers Wel­fare ad­mits that e-nam has not been suc­cess­ful. The re­view re­veals that bro­kers are in­ten­tion­ally not trad­ing through the e-nam plat­form as it would af­fect their profit mar­gins. Short­age of com­puter ter­mi­nals at the en­try gates, lack of trained per­son­nel and slow in­ter­net speed are some of the ma­jor im­ped­i­ments of e-nam.

In fact, a closer look at e-nam shows that it is primed only to ben­e­fit the buy­ers, not farm­ers. De­spite the plat­form be­ing touted as a mech­a­nism to en­cour­age in­ter-state trade, there are no spec­i­fi­ca­tions as to how farm­ers can ac­cess mul­ti­ple mar­kets to ob­tain the best price for their pro­duce. In con­trast, buy­ers are at an ad­van­tage as they ac­cess mar­ket in­for­ma­tion from mul­ti­ple states, and ac­cord­ingly, make the low­est bids.

Even the amend­ments to the apmc Act are bi­ased to­wards the buy­ers. The amend­ments re­quire that there should be a sin­gle li­cence that would be valid across the state and a sin­gle point levy of mar­ket fee. But nei­ther a li­cence nor a mar­ket fee was a re­quire­ment for farm­ers to trade at a lo­cal mar­ket ear­lier, thus cre­at­ing new li­a­bil­i­ties for farm­ers.

With­out iron­ing out the dis­crep­an­cies in e-nam or push­ing for the ef­fec­tive im­ple­men­ta­tion of the new model law—Agri­cul­tural Pro­duce and Live­stock Mar­ket­ing (Pro­mo­tion and Fa­cil­i­tat­ing) Act (aplm), 2017—the Union gov­ern­ment has taken a de­ci­sion which could add fuel to the ex­ist­ing cri­sis. Last week, the Depart­ment of In­dus­trial Pol­icy and Pro­mo­tion (dipp) ap­proved US e-com­merce gi­ant Ama­zon’s pro­posal to in­vest about US $500 mil­lion in the food re­tail business in In­dia. Sim­i­lar in­vest­ment pro­pos­als to the tune of US $195 mil­lion by com­pa­nies such as Gro­fers and Big Bas­ket are be­ing con­sid­ered by dipp.

Here, we must take into ac­count the re­cent con­tro­ver­sial ac­qui­si­tion of Whole Foods Mar­ket Inc, an Amer­i­can supermarket chain com­mit­ted to or­ganic pro­duce, by Ama­zon for US $14 bil­lion. While Whole Foods has put ef­forts in “re­gional sourc­ing”, bank­ing on smallscale food pro­duc­ers, Ama­zon is fo­cused only on ef­fi­ciency to gain com­mer­cial suc­cess. Crit­ics of this merger have cau­tioned that Ama­zon may seek to lower the price of Whole Foods pro­duce by de­mand­ing con­ces­sions from small farm­ers.

It would not be far-fetched to draw a par­al­lel between the con­cerns raised af­ter the ac­qui­si­tion of Whole Foods and the plau­si­ble ad­verse im­pacts on Indian farm­ers ow­ing to Ama­zon’s foray in food re­tail business. In fact, the US Congress has called for a hearing to ad­dress the threats emerg­ing from the Ama­zon-Whole Foods deal on small busi­nesses.

There­fore, the Min­istry of Food Pro­cess­ing In­dus­tries needs to eval­u­ate if the ap­proval granted to Ama­zon is in the best in­ter­est of farm­ers and whether there are enough safe­guards to pro­tect farm­ers from preda­tory prac­tices. The gov­ern­ment needs to also launch a cam­paign to elim­i­nate bro­kers and cor­rupt of­fi­cials in the sys­tem. Mea­sures such as ex­pand­ing the net­work of apmc man­dis and link­ing them to a net­work of ware­houses would aid modernisation. More im­por­tantly, the gov­ern­ment needs to over­haul the in­fras­truc­ture fa­cil­i­ties such as cold stor­age and ware­houses to ease the food sup­ply chain and help small farm­ers get a fair price and profit for their pro­duce through di­rect pro­cure­ment.

(The writer works with the Ra­jiv Gandhi In­sti­tute for Con­tem­po­rary Stud­ies, New Delhi.

Th­ese are her per­sonal views)


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