Date: 03/10/2022

Relevance: GS-2: Government policies and interventions for development.

Key Phrases: Food and agriculture marketing, electronic National Agriculture Market (eNAM), Platform of Platforms (PoP), Digital access, Trading, Transportation, Platform of Service Providers, FPOs, Agriculture Produce Marketing Committees, Warehouse-receipt.

Why in News?

• eNAM platform of platforms success will depend on diverse actors participation and willingness to pay for services.

Context:

• 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) on July 14, 2022, as a mobile application in 12 languages.

What is Platform of Platforms under e-NAM?

• The Platform of Platforms under e-NAM intends to promote trade & marketing of agricultural produce wherein farmers will be facilitated to sell the produce outside their state borders.
• This will increase farmers’ digital access to multiple markets, buyers and service providers and bring transparency in business transactions with the aim of improving price search mechanism and quality commensurate price realisation.
• So far, 41 service providers from different platforms are covered under POP that facilitate various value chain services like trading, quality checks, warehousing, fintech, market information, transportation etc.
• The platform creates a digital ecosystem for farmers who will benefit from the expertise of different platforms in different segments of the agricultural value chain.

How Platform of Platforms under e-NAM would help marketing of Agri Produces?

• e-NAM integrates the platform of Service Providers as the “Platform of Platforms” this includes;
  • Composite Service Providers (Service Providers who provide holistic services for the trading of agricultural produce including quality analysis, trading, payment systems and logistics)
  • Logistics Service Provider
  • Quality Assurance Service Provider
  • Cleaning, Grading, Sorting & Packaging Service Provider,
  • Warehousing Facility Service Provider, Agricultural Input Service Provider,
  • Technology Enabled Finance & Insurance Service Provider,
  • Information Dissemination Portal (Advisory Services, crop forecasting, weather updates, capacity building for farmers etc.)
• The chain also consists of other services such as e-commerce, international agri-business platforms, barter, private market platforms etc.
• The inclusion of various service providers has dual benefits, i.e.
  • It adds to the value of the e-NAM platform;
  • It gives the users of the platform options to avail enlisted services from different service providers.
• The platform also enables farmers, FPOs, traders and other stakeholders to access a wide variety of goods and services across the agricultural value chain through a single window while giving more options to the stakeholders.

Step needed to spread eNAM-PoP services:

• Valuable architecture:
  • 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. The coupling of software solutions and Application Programming Interfaces (APIs) can be added to the platform architecture.
• Access to market:
  • 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. For example, Aryadhan, a fin-tech services provider, would extend trade finance options and offer real-time payments to FPOs. 
  • 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.
• Stakeholders’ incentive
  • 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.
  • 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.

Way Forward:

• 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 BL

Mains Question:

Q. How can the Digital India program help farmers to improve farm productivity and income? What step has the government taken in this regard? UPSC 2015.