One State – One Market The Karnataka Model

Unified Market Platform
online agriculture marketing
eNAM
The Government developed a comprehensive roadmap for market reforms that included
technology upgrades
an electronic auction platform
a unified trader license
quality certification
effective information dissemination
transparent post-auction processes
market integration etc

1. By Sneha S. Manerikar Sr. Msc (Ag.) ADPM/17/2582 Dept. of Agril . Economics 2 One State – One Market The Karnataka Model Course Teacher Dr. J. M. Talathi Head Dept. of Agril . Economics Masters Seminar on

2. ADVISORY COMMITTEE ● Research Guide ● Dr. S.R.Torane Professor(CAS), Deputy Directorate of Research(AE), Dr.B.S.K.K.V ., Dapoli . ● MEMBERS ● Dr. D. B. Malave Assistant Professor, Department of Agricultural Economics, College of Agriculture, Dapoli Dr. P. A. Sawant Associate Dean, College of Horticulture, Mulde Tal: Kudal Dist : Sindhudurg Dr. J. S. Dhekale Professor (CAS) Department of Agricultural Economics, College of Agriculture, Dapoli Dr. J. M. Talathi Head, Department of Agricultural Economics, Dr. B. S. K. K. V, Dapoli

3. 4 INTRODUCTION Agricultural marketing scenario in the country and the state has undergone a sea change since independence. Karnataka has a long history of regulated markets, even before many other states conceived the idea . F resh thinking on the economic philosophy adopted by governments in the country makes it necessary to recalibrate and adopt a policy for agricultural marketing in the state. This forward looking has provided an impetus for growth of the agrarian sector.

4. Fragmented Markets Information Asymmetry No Financial Linkages Indifference to Quality Low Transparency Opaque Bidding Process Issues and challenges in primary agricultural markets

5. 6 T he Government developed a comprehensive roadmap for market reforms that included technology upgrades an electronic auction platform a unified trader license quality certification effective information dissemination transparent post-auction processes market integration etc..

6. A Public Private Partnership A joint venture with the Government of Karnataka and the National Commodity and Derivative Spot Exchange (NCDEX). This has been recognized as the “Karnataka Model” by the Government of India It offers a complete technological approach for modernizing primary agricultural markets in the state through its Unified Market Platform (UMP ) 7

7. UMP has following functional modules Electronic Auction Platform Material accounting Trade fulfillment Fund management Document management Unified License for traders Computerization of Market Process Online Payments Assaying E-Permit-Anytime Anywhere 8

8. Farmer with Produce to the APMC APMC Gate Entry Unique lot Number given Assaying- Produce exposed on the platform- Ready for sale Bidding across on UMP BID FINALIZATION Highest bidder wins lot SMS to farmer Post auction activity Electronic Weighing Sale bill Payment Delivery E-permit MARKET PROCESS

9. 10 Replicability and Adaptability

10. Increase Competition Transparency Improved Market Access Alternate markets . Market Automation Farmer Empowerment UNIFIED MARKET PLATFORM

11. 12 Dissemination : Reaching the beneficiary Farmer to Farmer Awareness Programme : to deploy farmers to educate co-farmers Cluster Village concept was used Training material: High quality awareness videos Animated videos Documentaries Posters

12. 13 Farmer to Farmer Awareness Programme

13. Case Studies on Impact of e-market in Karnataka

14. 15 Case study 01 Impact of e-markets in Karnataka, India Objective: To understand impact of e-market on prices and arrivals, transparency, competition, collusion, timeliness and universal participation Sample: 16 e-markets and 16 non-e-markets where groundnut was regularly traded were selected for the study Data: Month wise price data were collected from AGMARKNET for period 2007 to 2015 Tabular analysis: Two year points one before e-market (triennium average for 2007, 2008 and 2009) and after e-market (for year 2015) were compared (Reddy, A. A. 2016)

15. 16

16. 17

17. 18

18. 19 Figure 3: Market arrivals (1000 tons) in e-market and non e-markets

19. 20 Case study 02 Unified Market Platform (UMP) trade practices of Copra and Turmeric – An institutional analysis of APMC’s in Karnataka Objective: To examine functional aspect of UMP To analyse the perception of market functionaries on UMP trade Sample: Two APMC’s with UMP trade namely Tiptur for copra and Chamarajanagara for turmeric Data: Year wise price data were collected from ReMS for period 2010 to 2016 ( Dileep Kumar et al . 2018)

20. 21 Table 1: Transaction of Copra and Turmeric through UMP trade Market Commodity Total arrivals (tonnes) UMP Trade Quantity (tonnes) Value (Million Rupees ) Tiptur Copra 2112.14 1715.55 (81.22 %) 154.41 Arasikere Copra 1125.32 923.76 (82.09 %) 83.14 Chamarajanagara Turmeric 650.31 244.25 (37.55 %) 162.36 (As on Dec, 2015)

21. 22 Table 2: Influence of UMP Trade on APMC market arrivals of copra in Karnataka (% to total market arrivals) Year Tiptur Arasikere Tumkuru Other APMC’s Total 2010 58.58 3.74 0.00 37.88 100 2011 58.83 17.30 0.78 23.09 100 2012 43.95 9,03 0.83 46.19 100 2013 58.6 4.04 0.42 36.94 100 2014 82.83 2.97 0.97 13.23 100 2015 65.56 10.42 1.61 22.41 100 2016 71.83 7.47 2.70 18.00 100

22. 23 Table 3: Influence of UMP Trade on arrivals of turmeric in APMC’s of Karnataka (% to total market arrivals) Year Gundlupet Kollegala C R Nagar Bengaluru Other APMC’s 2010 70.77 5.44 0.70 16.76 6.33 2011 76.18 6.99 2.20 9.47 4.16 2012 44.98 8.25 12.43 5.66 28.68 2013 34.07 16.15 25.31 14.36 10.11 2014 28.26 7.40 56.38 4.84 3.12 2015 18.18 18.49 21.63 5.52 36.18 2016 23.38 7.69 23.43 2.71 42.79

23. 24 Table 4: UMP trade benefits perceived by Stake holders Advantages Traders (n=20) Commission agents (n=20) Farmers (n=60) Increased competition 14 (70.00) 8 (40.00) 18 (30.00) Transparency in tender declaration 16 (80.00) 10 (50.00) 34 (56.66) Timely price information 13 (65.00) 9 (45.00) 24 (40.00) Easier process 5 (25.00) 6 (30.00) 15 (25.00) UMP has increased revenue 8 (40.00) 6 (30.00) 41 (68.33)

24. 25 Table 5: Perception of traders and commission agents on performance of UMP trade Particulars Traders Commission agents Copra (n=10) Turmeric (n=10) Total (n=20) Copra (n=10) Turmeric (n=10) Total (n=20) Necessary information is available for UMP 5 (50) 8 (80) 13 (65) 3 (30) 8 (80) 11 (55) UMP can handle peak season arrivals 4 (40) 4 (40) 8 (40) 5 (50) 7 (70) 12 (60) Farmers can grade produce properly 4 (40) 5 (50) 9 (45) 4 (40) 10 (100) 14 (70) Software is user friendly 4 (40) 4 (40) 8 (40) 2 (20) 5 (50) 7 (35) UMP increase market competition 4 (40) 4 (40) 8 (40) 4 (40) 8 (80) 12 (60) UMP reduces transaction time 7 (70) 7 (35) 3 (30) 3 (15) Transparency in tender declaration 6 (60) 4 (40) 10 (50) 4 (40) 8 (80) 12 (60) UMP trade is an easy process 1 (10) 7 (70) 8 (40) 1 (10) 6 (60) 7 (35) Alternation in trader and Commission agent link due to UMP 4 (40) 4 (40) 8 (40) 6 (60) 4 (40) 10 (50)

25. 26 Case study : 03 Electronic national agricultural markets : The way forward Objective: To assess the functioning of e-markets in Karnataka from stake holders’ perspectives To assess impact of e-market on prices and arrivals Sample: Three commodities viz. paddy, copra and groundnut were selected For each commodity 15 e-markets and 15 non-e-markets were selected for the study Data: Month wise price data were collected from AGMARKNET for period 2007 to 2015 (Reddy, A. A. 2018)

26. 27

27. 28

28. 29

29. 30

30. 31 Table 6: Opinion of farmers Opinion Percentage of Respondents Advantages   Reduced collusion among traders 57 Inter-locked credit and commodity markets reduced 60 Transparency increased 90 Timely payment 95 Disadvantages Did not understand the process 45 Fear of deduction of loan (principal and interest) by banks 80

31. 32 Table 7: Opinion of traders and commission agent Opinion Percentage of Respondents Advantages Direct money transfer to commission agents 90 Easy to use 80 Less procedural hurdles and paper work 90 Timely account transfers from traders 100 Disadvantages Some traders do not have computers, but facilitated by officers or through internet centers 40 Fear of taxation of traders 45 Slow broadband connectivity 57 Sudden shutdown of the system (partial implementation) 60

32. 33 Conclusions Rashtriya e Market Services (ReMS ) is applauded for revolutionizing the agricultural marketing scenario through the Unified Market Platform (UMP ). ReMS has established high standards and placed the new market structure in a highly competitive marketing environment thereby enhancing the livelihoods of a financially stressed agrarian sector . ReMS , a PPP initiative, has well integrated the expertise of the private sector in the form of information technology.

33. 34 The success of the Karnataka Model in such a short span has inspired the Government of India to establish National Agricultural Markets . The success story of ReMS has created ripples and will revolutionize the agricultural sector in the country, greatly benefitting farmers and other stakeholders in agricultural markets.

34. I Increased Arrivals M Better Prices P Outside Trader Participation A More Bids per Lot C More Share in Consumer Rupee T Empowered Farmers

35. References Reddy, A. A. (2018). Electronic national agricultural markets : The way forward. Current science 115 (5) : 826-837. Kumar, D., Gracy , C. P. and Srikanth M. B. (2018). Unified market platform (UMP) trade practices of copra and turmeric – An institutional analysis of APMCs in Karnataka. Indian Journal of Agril . Marketing . 32 (3): 146-152. Reddy, A. A. ( 2016). Impact of e-markets in Karnataka, India. Indian Journal of Agril . Marketing. 30 (2) : 31-44 Rashtriya e Market Services Pvt Ltd (http://www.remsl.in/)

36. 37 “Status now is not whether you are awake or asleep, it is whether you are online or offline” -Narendra Modi