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)