Electronic National Agricultural Markets: The Way Forward

Abstract

The Model Agricultural Produce Marketing Act (APMC Act), 2003, and recent improvements to it through Model Agricultural Produce and Livestock Marketing (Promotion and Facilitating) Act (APLM), 2017, provide some hope in increasing efficiency in agricultural markets in India. The Model APLM Act advocates increased competition in the marketplace by allowing private markets, farmers’ markets, and electronic-National Agricultural Markets (eNAM). Under eNAM, the Central Government introduced electronic trading in about 400 APMC markets in 2016 and connected them through uniform market platform in line with the e-markets of Karnataka introduced in 2012. This article examines experience of e-markets in Karnataka since 2012, with the intention to suggest improvements to eNAM. Results show that e-markets help increase competition, eliminate collusion among traders resulting in increased farmers’ price and market arrivals. They facilitate competitive bidding and same day payments to farmers. However, there was some resistance from traders and commission agents as they felt that there were no benefits in e-auction compared to physical transactions. In addition, there was fear of taxation of on-line transactions. Aligning interests of all stakeholders, including farmers, traders and commission agents is the biggest hurdle in the implementation of eNAM.

Keywords: E-Markets, Efficiency, Price Discovery, Impact Assessment

JEL Classification: D44, L14, P22