20/11/2020 - Agriculture

KEY POINTS

A trading habit

·       Online trading platforms are creating a unified countrywide market for agricultural produce, which is the avowed purpose of recent central legislation.

·       The Government of India has notified an Ordinance namely “The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020” to promote freedom of choice of trade with farmers while promoting barrier-free inter-state and intra-state trade in farmers produce. 

·       This digital initiative of Government of India provides a single window service for all APMC related information and services, including commodity arrivals, quality assaying, competitive bid offers and electronic payment settlement directly into farmers’ accounts.

·       The Government has implemented National Agriculture Market (e-NAM) scheme, an online virtual trading platform, to provide farmers with opportunity to directly sell their produce at remunerative prices through competitive online bidding system.

·       So far, 1000 wholesale regulated markets across 18 States and 3 Union Territories (UTs) have been integrated with e-NAM platform. Tradable parameters for 175 commodities have been promoted for trade in e-NAM platform.

Concerns

·       Fruits and vegetables which have a short shelf-life don’t lend themselves to elaborate quality checks.

·       Quality, which falls short will show up as a discount to the invoiced price paid by the buyer. Consistent deficiencies will affect a supplier’s ranking. If a buyer defaults or delays payment, it will show up in their ranking too. Suppliers will avoid buyers with low ranks and vice-versa. 

·       The risk of payment defaults is a real danger in remote trades. At the regulated mandis, commission agents are held responsible and can lose their license for defaults.

·       Buyers on e-NAM are at a disadvantage as it is a network of regulated markets. They have to pay charges and fees which can be as high as 8.5% in Punjab mandis on wheat and common rice.

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