Food and agriculture marketing in emerging economies is experiencing a wave of being promoted on digital platforms. India is no exception to this. The Ministry of Agriculture and Farmer Welfare launched the electronic National Agriculture Market (eNAM)–Platform of Platforms (PoP) as a mobile application in 12 languages.
What is the ‘Platform of Platform’?
The PoP dashboard includes a score of services: trading, assaying, transportation, warehousing, financial services, agri-advisory/ extension services, market information, assaying, institutional buying and selling, and agricultural inputs services.
Background –
- eNAM came into existence in April 2016 and has integrated about 1,260-odd APMCs that account for only 17.21 per cent of the total 7,320 APMCs including 4,843 sub-market yards.
- In 2016, 585-odd APMCs were combined with the eNAM portal, and the Agricultural Technology Infrastructure Fund channelized ₹200 crore to set up the required infrastructure in these APMCs for e-auctioning of produce, and disseminate a fair price to physical market participants.
- While it has benefitted about 1.73 crore farmers and 2.25 lakh traders through its six-year journey, its outreach is skewed to a few States. eNAM has effectuated a single-point levy of market fees and a unified licensing system for traders and commission agents.
How did e-NAM help?
The agriculture marketplace has observed a staged development, say eNAM 1.0 as a portal to eNAM 2.0 for promoting warehouse-receipt (eNWR) trading and direct marketing of farmer produce (through the APLM Act, 2017) and eNAM 3.0 by unveiling the PoP app-based module. However, it has yet to gain considerable traction in the agricultural trade by integrating the remaining number of APMCs.
Concerns –
A few issues concerning the discourse on the political economy of agriculture, corporatisation of food systems, and the power of vertical integration have emerged that call for a debate and discussion.
Way forward –
- First, eNAM-PoP would provide a value architecture to the diverse agri-food value chain actors. The architecture should perform four functions: discovery, matching, transaction, and evaluation elements. In other words, PoP should be a dynamic, interactive, and strategic fit with the Agricultural Market Information Systems. Transaction data and their security registry could be maintained using a blockchain-enabled Distributed Ledger Technology, while transactions can be enabled through a smart contract embedded in PoP.
- Second, PoP can enable farmers to access the new or missing markets, compare prices of several commodities, and sell the assayed and certified produce to traders and bulk buyers through the PoP mobile app. Farmer collectives or FPOs can access the location of warehouses or market yards given the proximity and contact the empanelled service providers of eNAM PoP and avail of such services.
- Third, upstream and downstream marketplace models seem to have harnessed the untapped potential of agricultural markets. However, they are yet to be time-tested platform business models in the agriculture field. The strategic management group of eNAM can draw some lessons from unveiled marketplace models and improvise the PoP roll-out and upscaling. The agency problem, economic viability, and sustainability of the eNAM-PoP need to be explored.
- Fourth, stakeholders’ incentive design is necessary to sustain and scale up eNAM-PoP. A robust governance mechanism must be aligned with the PoP design and its roll-out to improve coordination between users and those complementing the platform and reduce the power asymmetry between stakeholders – directly and indirectly associated with the platform.
- Fifth, the Ministry of Agriculture and Farmer Welfare, Small Farmers’ Agri-business Consortium, and the empanelled strategic management group and those complementing the platform need to chart the scaling strategy for PoP – considering the network loop, data loop, and capital loop.
Conclusion –
While the rising regulatory complexity, risks, and regulatory arbitrage in agriculture can arrest the magnitude of scaling, the success of PoP would depend on diverse actors’ participation and willingness to pay for services that should favourably compare with the offerings of platform capitalists.
Source – The Hindu Business Line
QUESTION – The e-NAM ‘platform of platforms’ can be a game-changer in market linkages but there are concerns which need to be addressed to get the scaling right. Discuss in brief.
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