India

PM to launch National Agriculture Market today

14 Apr 2016 | By Achin Garg

Prime Minister Narendra Modi, on the occasion of 125th anniversary of BR Ambedkar, will launch the National Agriculture Market (NAM).

Under NAM, the government will initially integrate 21 regulated mandis (wholesale markets) across 8 states on 14th April.

"The national e-market platform will allow transparent sale transaction and price discovery of commodities," - Radha Mohan Singh, Union Agriculture Minister said while making the announcement.

In context: The National Agriculture Market

Background Why is NAM required?

Under the Constitution, agricultural marketing is a state subject.

Consequently, various states had established Agriculture Produce Market Committees (PMC) to regulate the sale of agri-produce.

However, this led to the sale getting restricted to the regulated markets and farmers required separate licenses for selling agri-produce in different mandis.

This restricted the buyer base for the farmer and hampered intra and inter-state trade.

About What is NAM?

National Agriculture Market (NAM) is an online trading platform that will allow farmers to sell their crop to any buyer sitting anywhere in the country and vice versa.

It was first announced by the finance minister, Arun Jaitley, during the Budget 2014-15.

The government plans to integrate 585 agricultural mandis across the country into a unified National Agricultural Market by 2018.

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NAM will help increase farm income

The unified National Agriculture Market (NAM) is an important effort by the government to fulfil its aim of doubling farm income by 2022.

2 Jul 2015Govt marks Rs.200 crore for NAM

The government had allocated Rs.200 crores for setting up an online National Agriculture Market.

Rs.200 crore would be used over the next 3 years from 2015-16 to 2017-18 to cover 585 mandis.

250 mandis would be covered in current fiscal, 200 in 2016-17 and 135 in 2017-18.

The allocation would be used for providing software and hardware infrastructure to the states and union territories.

14 Apr 2016PM to launch National Agriculture Market today

Benefits How will NAM help?

The NAM is touted as a major agriculture reform by the Modi government.

For farmers, it will open multiple sale options and help in better price discovery, thus increasing farm income. It will also facilitate warehouse based sale and reduce distress sale by farmers.

By eliminating the middle man, it will not only benefit buyers but also reduce cases of black marketing and hoarding.

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Challenges NAM faces humongous challenges

The economic and living conditions of a majority of farmers in India reduces chances of them using an online platform to sell their modest produce.

There are chances that the middle-man may end up selling on the online platform leaving little for the farmers to gain.

Middle-men have strong political lobbies which can impede states from reforming APMC which is indispensable for NAM's success.

FPOs and cooperatives: A way forward

Promoting farmer produce organisations (FPOs) and cooperatives can help empower farmers by facilitating aggregation of small produce and by strengthening the political voice of farmers for APMC reforms.