Digital Revolution in Agricultural Trade: e-NAM Witnesses Surge in Inter-State Transactions

Digital Revolution in Agricultural Trade: e-NAM Witnesses Surge in Inter-State Transactions

With an increasing number of states participating in or facilitating agricultural trade through the electronic National Agriculture Market (eNAM), there has been a notable surge in trading activities within states and at the inter-state level. This development primarily involves the digital trade of various agricultural commodities.

Participating States

Farmers in several states, including Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Madhya Pradesh, Rajasthan, Tamil Nadu, Uttar Pradesh, Odisha, Himachal Pradesh, and Jammu and Kashmir, have successfully engaged in trading commodities such as paddy, maize, cotton, cauliflower, onion, and tomato through the farm gate purchase model on e-NAM.

Trade Statistics

While the current volume of farm gate, inter-state, and inter-mandi trade remains a small fraction of the total e-NAM turnover (Rs 63,530 crore in April-January 2023-24, a 4% YoY increase), it signifies a gradual transition towards digital platforms for better price discovery by farmers.

Farm Gate Purchase Model

The adoption of the farm gate purchase model, where farmers can sell commodities without physically transporting them to mandis, has gained traction. This model aims to facilitate timely sales for farmers while reducing costs.

Inter-Mandi and Inter-State Trade

Notably, there has been a remarkable 151% increase in inter-mandi trade on e-NAM, reaching Rs 1299 crore during April-January 2023-24. Furthermore, inter-state trade, which was negligible a year ago, has seen a significant rise.

Ministry’s Recommendations

Government officials are urging other states to adopt the farm gate purchase model. They also recommend relaxing norms, such as allowing traders to operate without bank guarantees and providing a unified license for seamless statewide trade access.

Integration and Participation

Since its launch in April 2016, e-NAM has integrated 1361 mandis across 27 states and Union Territories. It caters to 18 million farmers, with a trading volume of Rs 3 trillion.

Participants on e-NAM

The platform boasts registration from 3405 Farmer Producer Organizations (FPOs), 0.25 million traders, and approximately 0.11 million commission agents.

Commodities and Mandis

e-NAM facilitates online trading in 209 agricultural, horticultural, and other commodities as notified by respective state governments. The platform covers mandis in various states, including Tamil Nadu, Rajasthan, Gujarat, Maharashtra, Uttar Pradesh, and Haryana.

Expansion and Inclusion

With an estimated 7000 mandis in the country, efforts are underway to include more mandis based on recommendations from respective state mandi boards. This aims to broaden the marketplace for agricultural produce on e-NAM.

Encouraging Central Agencies

The agriculture ministry is urging central agencies, such as the Food Corporation of India and farmers’ cooperative NAFED, engaged in procurement and selling of agricultural produce, to utilize the e-NAM platform for improved price discovery.

Multiple Choice Questions (MCQs):

  1. What is the primary purpose of the farm gate purchase model on e-NAM?
    • A) Increase physical transportation of commodities
    • B) Facilitate timely sales for farmers
    • C) Reduce digital trading activities
    • D) None of the above
    Answer: B) Facilitate timely sales for farmers
  2. What has been the percentage increase in inter-mandi trade on e-NAM during April-January 2023-24?
    • A) 50%
    • B) 100%
    • C) 151%
    • D) 200%
    Answer: C) 151%
  3. Which central agencies are being encouraged to use the e-NAM platform for better price discovery?
    • A) National Stock Exchange
    • B) Food Corporation of India
    • C) Reserve Bank of India
    • D) Securities and Exchange Board of India
    Answer: B) Food Corporation of India
  4. How many mandis are estimated to be in the country, and what is the effort to include them on e-NAM based on?
    • A) 5000 mandis, based on farmer recommendations
    • B) 7000 mandis, based on state mandi board recommendations
    • C) 10000 mandis, based on government directives
    • D) 2000 mandis, based on market demand
    Answer: B) 7000 mandis, based on state mandi board recommendations