Nafed intiative: Scores of e-kisan mandis being set up; Pune gets the first one

The e-Kisan mandi platform would not compete with but complement the physical markets.

If the electronic National Agricultural Market (eNAM) hasn’t over the last four years of its existence transformed the markets for farm goods and aided the farmers to reach the right buyers in a big way, the blame should be assigned to lack of logistic support in transporting the commodities from one state to another. eNAM has been reliant on the APMC mandis for physical infrastructure.

Now that inter-state sales are easier and more legitimate under a new central law (Ordinance), multi-state cooperative Nafed has developed a new model of e-Kisan mandis, where this lacuna is sought to be addressed.

The country’s first e-kisan mandi became operational in Pune last week. Nafed’s arm Federation of Farmer Producer Organisations and Aggregators (FIFA) entered into a 51:49% joint venture with Maharashtra Farmers Producer Company (Maha FPC), the umbrella organisation of the state’s farmer producer companies for the venture.

The idea is to roll out 100-odd such facilities over the next six to nine months across the country; each one is expected to report a turnover of Rs 100-150 crore annually.

According to the plan, the FPCs or other farmer groups will run the facility on Nafed-owned lands. Nafed managing director Sanjeev Kumar Chadha told FE: “Unlike e-NAM, which focuses on APMCs, the e-kisan mandis will seek to bring farmers, agri-producers, traders and small buyers on a common platform for trading agricultural commodities. An online electronic market will not work unless it is accompanied by proper physical infrastructure. Physical sorting and grading facilities will be established to help farmers get access to an efficient price discovery mechanism.” While the next two e-kisan mandis will come up in Mumbai and Nashik, the initiative would then be expanded to Madhya Pradesh, Karnataka, Gujarat and Jharkhand, he added.

Under the model, the FPCs, which will run the e-kisan mandis, will charge 1-1.5% of the total turnover as service charge and the proceeds thereof will be used to meet operational expenses (salaries, electricity and water bills and local taxes, etc). Nafed would invest in setting up warehouses and cold storage at the e-kisan hubs in addition to providing drying, sorting and grading facilities. “This means that farmers no longer have to sell in distress and can get their agri-produce dried, cleaned and graded. They can also keep perishables in cold storage and bring it out when prices are more remunerative,” Chadha said.

The e-Kisan mandi platform would not compete with but complement the physical markets. It would operate in a hub-and-spoke model, in which the Nafed-owned land will operate as a hub for the FPCs in the area; FPCs will collect the orders from the online platform and provide the service.

There will be facilities for the electronic auction, product display and retail counter, value addition infrastructure for cleaning, grading, packaging, etc, and warehousing facilities for the FPCs at physical market place.

As for the Pune facility, around 30 FPCs in Pune district are part of the effort. The traders or retail market chains will be registered on the mandi for making online purchases from farmers.

The e-kisan mandis will deal with high value perishables and non-perishable consumer durables. FPCs have started registration as suppliers and institutional buyers, wholesalers/retailers/direct consumers has been targeted as prospective buyers.

Mahesh Thorat, MD, MahaFPC, said bulk orders will be delivered directly by FPCs at their end, while smaller orders will be delivered through MahaFPC hub. Yogesh Thorat, managing director of MahaFPC, said the Pune e-mandi is aimed at allowing FPCs to tap into retail grocery shops in and around the city for the supply of specific commodities.

The turnover of trade on e-NAM increased 74% on year to Rs 30,845 crore during FY20. The volume went up 44% to 77.13 lakh tonne during the period. This is still a tiny share of the overall agri trade in the country.