The Centre is in favour of creating a separate segment within the existing electronic National Agriculture Market (e-NAM) portal to record purchases done under the Minimum Support Price (MSP) mechanism segregated from online bidding.
Though in principle, officials said it is opposed to the whole practice given that selling of agriculture produce at pre-determined MSP through the e-NAM portal belies the entire concept of price discovery through open competitive bidding and superficially jacks up the quantum of total transactions. It might, however, be entirely unavoidable as it also ensures transparency in payment to farmers.
The matter came to light after some states showed a huge jump in transactions made through the e-NAM portal after they started showing purchases done under MSP operations through the platform.
In a programme review conducted by the Union Agriculture Minister Radha Mohan Singh along with the state officials on Wednesday, emphasis was laid on the prohibition of physical trading of commodities in any form in mandis (local markets) that have installed the e-NAM software.
It was also noted in the review that a majority of transactions done through the e-NAM portal so far were based on single bids, which again goes against the very logic of a proper price discovery framework.
The states were also directed to totally discontinue the practice of 'one-to-one trade' under which the seller brings his or her produce to a pre-fixed buyer, who then buys as per the fixed rate without any competitive mechanism either online or through the outcry method.
Since the official launch of the e-NAM portal on September 15 2017, a total of 455 local markets across 13 states have been brought under the e-NAM platform. A total of 11.7 million tonnes of commodities with a net worth of around Rs 28,000 crore have been traded through the platform.
Meanwhile, Radha Mohan Singh, in his address to the participating states, urged state officials to spread awareness about e-trading among farmers.
He said that some states were encouraging farmers to participate by incentivising online trade.
He also spoke about meeting the basic requirements of laboratories located in mandis to boost their trading capacities.