Covid-19: Centre asks states to notify warehouses as market yards

Warehouse regulator is, according to sources, working on process of registering collection centers of FPOs as warehouse which can be integrated with e-Nam | Photo: Ishita Ayan Dutt
A move to enable farmers to sell directly on the e-Nam (electronic national agriculture mandi) platform is expected to pick up soon, with the Union Government asking states to fulfil certain conditions they agreed upon at the time of allocating subsidy money for joining the platform.

Several other initiatives are also being worked out to help the cultivator sell his produce during the lockdown. One such is allowing farmers to deliver their crops to the collection centres of their organisations, and from there sell on e-Nam. Another is the linking of a network of transport service providers to the e-Nam platform.

All reforms were planned as April, being fourth anniversary of e-Nam.

States get subsidy from Union government when their APMCs (agriculture mandi or Agriculture Produce Marketing Committees) join and link up with the e-Nam platform. For this, states have to agree to fulfil three condtitions, including declaring warehouses registered under the Warehouse Development Regulatory Authority as market yards. Other conditions include adopting the Centre's proposed model APMC Act.

Telangana and Andhra Pradesh have already declared their designated warehouses as deemed market or market yards-mandi. While the former has 14 warehouses, the latter has 23. All these reforms have been announced to ease the burden on farmers during the Covid-19 crisis. They have so far been bringing their produce to the mandis. But with Covid-19, many of these marketplaces have either shut down, or transporters not available to cart the crops.

On the other hand, processors of pulses, oilseed crushing units and flour mills are not getting commodities for further processing due to the lockdown. In view of these, government has reminded states enrolled under e-nam to notify warehouses registered by WDRA as market yards. Some 15 to 16 states have agreed, but have yet not notified any warehouses. According to a source in the government, states will be formally informed about this.

Government has already integrated 585 mandis in 16 States and two Union Territories on the e-NAM portal, which will soon be expanded to cover another 415 mandis, taking the total number to 1,000.

Under the e-Nam platform, farmers can bring crops to the warehouse where grading and assaying will be done and if that warehouse is designated as a market yard, then an electronic receipt issued by it will be integrated with e-Nam and regarded as a freely transferable negotiable instrument (eNWR). This will relieve farmers from delivering the goods they sold, because it is the buyers who will arrange for deliveries. Repositories will keep records of such receipts and all subsequent transfers, the way depositories keep records of securities.

Kedar Deshpande, MD & CEO, NERL, repository set up by the NCDEX along with other investors, said that, "This eNWR- eNAM integration will boost the warehouse based sale and will help farmers to avoid distress sale of their produce. It will also reduce the cost, otherwise incurred on logistics, which is necessary for auctioning of their produce in Mandi.”

Interestingly, getting finance against such warehoused goods before it is sold will be easier and cheaper. Not only that, farmer will have choice to wait for right price to sell as goods will be with the warehouse. If he has to take it to APMC, he has to sell at whatever price offered.

Kedar said that, “NABARD is running a government sponsored scheme to provide finance to small and marginal farmers against electronic negotiable warehouse receipts at 7% per annum .This will further discourage distress sale and will encourage farmers to store their produce in registered warehouses of WDRA for availing finance at a concessional rate."

Another big reform announced by the government along which will really help farmers to avoid coming to mandi. FPOs or farmers producers Organisations can trade (on e-Nam) their produce from their collection centers without bringing the produce to APMC. They can upload the picture of the produce and quality parameters from their premises to help distant bidders to visualise the produce before bidding. FPOs have the option for delivery of produce either from their premises or by bringing to mandi premise after successful bidding. This will not only decongest the mandis but also reduce the logistics cost for the FPOs. For FPOs, requirement of assaying and grading has been dispensed with and photo of commodities at their collection center will be accepted in lieu of that.

Warehouse regulator is, according to sources, working on process of registering collection centers of FPOs as warehouse which can be integrated with e-Nam. There are thousands of FPOs in the country.

Transport facility is not available as of now because of many drivers or transporters not operating in difficulties of lockdown. E-NAM provides a database of individual transporters to the traders. However, “as a quantum response to logistic need by traders, provision has been made for linking large logistic aggregator platforms, which will provide choices to users. Traders would be able to use the link to navigate to the logistics provider’s website and select appropriate services. With these additions, more than 3,75,000 number of trucks from large logistic providers would be added for logistic purpose,” said the government note.

Arnav Datta, of CDSL Commodity Repository said that, “facilities given to FPOs will be a major booster for farmers because it will not only decongest the mandis but also reduce the hassle of FPOs to deal with mandis. This will help FPOs by reducing transaction costs (Transportation) and enhancing their bargaining power. This also facilitates FPOs to avail online payment facility with ease of doing business.”

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