AGRICULTURAL MARKETING DEPARTMENT

I. National Agricultural Market(NAM):-

·        NAM is envisaged as pan-India electronic trading portal, which seeks to network the existing AMCs and other market yards as a part of unified national market for agricultural commodities. NAM is a “virtual” market, but it has a physical market (Market) at the back end.

·        NAM is not a parallel marketing structure but rather a device to create an national network of physical mandis, which can be accessed online. It seeks to leverage the physical infrastructure of the mandis through an online trading portal, enabling buyers situated even outside the state to participate in trading at the local level.

II. Purpose of NAM

·        Current APMC regulated market yards limit the scope of trading in agricultural commodities at the first point of sale (i..e when farmers offer produce after the harvest) in the local mandi, typically at the level of taluka/tahsil or at best the district.

·        Even one state is not a unified agricultural market and there are transaction costs on moving produce from one market area to another within the same state. Multiple licenses are necessary to trade in different market areas in the same state.

·        All this has led to a highly fragmented and high cost agricultural economy, which prevents economics of scale and seamless movement of agri goods across district and state borders.

·        NAM seeks to address and reverse this process of fragmentation of markers, ultimately lowering intermediation costs, wastage and prices for the final consumer. It builds on the strength of the local mandi and allows it to offer the produce at the national level.

III. Operation of NAM

·        The NAM electronic trading platform will be created with an investment by the Govt. of India (through the ministry of Agriculture). It will offer a “plug-in” to any market yard existing in a state (whether regulated or private). The special software to be developed for NAM will be offered to each mandi which agrees to join the national network free of cost and necessary customization will be undertaken to conform to the regulations of each state Mandi Act.

IV. Pre-Requisites for NAM

There are three basic criteria for a state to propose mandis for “Plug-In” to NAM

·        The state APMC Act must have a specific provision for electronic trading

·        The state APMC act must provide for issue of licenses to any one in India to trade through the NAM in the local mandies.

·        There must be one single license for each state to facilitate trading in all the mandies of that state and a single point levy of transaction fee.

The department of Agricultural Marketing has proposed for amendments to the Markets act in tune with NAM to avoid complications and problems in implementation. A bill was passed and publication of Gazette is under process.

V. Benefits of NAM

•      NAM is envisaged as a win-win solution for all stakeholders.

•      For the farmers, NAM promises more options for sale at his nearest mandi.

•      For the local trader in the mandi, NAM offers the opportunity to access a larger national market for secondary trading.

•      Bulk buyers, processors, exporters etc. benefit from being able to participate directly in trading at the local mandi level through the NAM platform, thereby reducing their intermediation costs.

VI. No. of Agril. Market Committees Selected –

Forty Four(44) Agril. Market Committees are selected for implementation of NAM in Telangana State (List Enclosed at                   Annexure – I).

VII. Names of the Pilot Agril. Market Committees - 

Five(5) Agril. Market Committees (AMCs) are selected for pilot launch on 14^th April’16.

1.     Agril. Market Committee, Nizamabad

2.     Agril. Market Committee, Warangal

3.     Agril. Market Committee, Badepally

4.     Agril. Market Committee, Hyderabad(Malakpet Yard)

5.     Agril. Market Committee, Thirmalgiri

VIII. Software :-

 The Government of India has selected M/s Nagarjuna Fertilizers and Chemical Limited (NFCL) as Strategic partner to design, develop, test, Implement and maintain the Software for NAM.

IX. Steps taken so far:-

·        The Government of India has approved the Proposals of NAM for 44 Market Yards in Telangana state as per the proposals submitted by the Department and Govt. of India has released Rs. 12.195 Cr. for Procurement of Hardware.

·        Special Officers appointed for each Pilot AMC to monitor the arrangements required for launching of NAM.

·        Necessary arrangements have been made in the AMCs  by establishing Online tender halls with dedicated network(leased lines), Entry and Exist gates with installation of required number of Desktops/Hand Held machines to launch the NAM.

·        Orientation is conducted to the staff on NAM

·        Awareness camps of meetings have been conducted for commission agents/traders/purchasers.

·        Arrangements were made for wide publicity on NAM through Press and Electronic media.

X.  Process Invloved for NAM:-

·        Gate Entry

·        LOT ID Generation

·        Unloading of the lot

·        Assaying (Lab)

·        Display of the lot

·        E-tendering

·        Price discovery

·        Acceptance by the farmer

·        Post sale weighing

·        Generation of Post sale documents

·        Online Payment

Detailed Process is enclosed at Annexure III.

ANNEXURE I

LIST OF AGRIL. MARKET COMMITTEES SELECTED FOR NAM IMPLEMENTATION

Annexure III

PROCESS FLOW

·        Gate entry – Entering all particulars of the commodity at the time of entry into the AMC and generation of a unique Lot ID number through the system.

·        Unloading of the lot – Concerned commission agents unload the lot in their premises.   This automatically updates the inventory position of the goods with the commission agent.  

·        Assaying:- Assaying the lots in labs provided in Market yards

·        Display of the lot – The lot is displayed for inspection by buyers.  Such display is a typical requirement when the lot is not sampled and tested.  Testing of the lot would eliminate physical display; however, as testing is at the instance of the farmer, it may not be feasible to completely do away with display.

·        Price discovery – Auctioning of the produce through the electronic platform.  if necessary changes can also be made for more competition. 

·        Acceptance by the farmer – Details of the winning bid to be communicated to the farmer through SMS.  He is given the opportunity to reject the bid.  Once accepted, complete the sale process and winner details to be communicated to all the market participants by way of SMS, display mechanism, etc.

·        Post sale weighing – Weighing of sold lots to determine the total sale consideration.  Though weighing would continue as at present, the department should commence procurement of electronic weighing machines, with the capability of automatically transmitting weight details of the lot to the auction platform.  Alternatively, other means of integrating weighing and the platform may be explored.

·        Generation of post-sale documents – System Based Documents (Takpatti, invoice, etc.) to be given to the farmer, commission agents, traders, etc., evidencing trade details.  The formats of these documents to be standardized across all markets.

·        Generation of monthly details – The system to provide consolidate monthly details to commission agents, traders, etc., to assist them in arriving at the commission earned, cess payable, etc.

·        Filing of returns – Electronic filing of returns, thereby eliminating the manual process.  Ease of reconciliation of returns with market data. 

·        Online payment of cess – Doing away with manual collection of cess.  Payment directly to the bank account of the AMC and automatic reconciliation of cess collection.

·        Issue of permits –   Reforming the process of issue of permits and introducing e permits.   Permits to be generated by commission agents/traders for stock in their accounts after payment of market fee.  Generation of permits to be through secured means (like use of pre-printed stationary, bar codes, etc.) and provide alerts to market authorities.  Various aspects like full payment of market cess for generation of permits, enabling secretaries of AMCs to have overriding power to disallow specific commission agents from generating permits, permits to be generated not to exceed the available stock, measures to prevent reuse of permits, online verification of permits or through SMS etc., have to reckoned. 

·        Recording of exit of commodity – Every exit of commodity to be recorded.

·        Reconciliation of quantities – Reconciliation of quantity entering the AMC, the quantity sold, the quantity moving out of the AMC, the quantity with the commission agent and cross verification with the particulars submitted by the commission agent.