Monday, March 2, 2020

Wicked problems and e-NAM

Shoumitro Chatterjee and Mekhala Krishnamurthy have a very good article in Seminar on the challenges of the implementation of the electronic National Agriculture Market (eNAM). 

eNAM is a great paradox. The vast majority of opinion makers think it is some simple plug-and-play low-hanging fruit in agriculture. Deregulate and let farmers trade their products freely. Create the enabling environment and we will have a national marketplace, an Amazon for Indian agriculture produce! Even the more perceptive ones don't realise the enormity of the challenge. In reality it is a very wicked problem, a strong reminder case study of why technology and process re-engineering interventions alone cannot make much dent on persistent development challenges.  

Consider an illustrative list challenges.
  1. The barter nature of farm gate trade - farmer being yoked to the current buyer for various difficult to overcome reasons (buyer/broker offers other services which farmer needs but are not available from elsewhere)
  2. Small farmers do not access the physical mandis in any case and sells their harvest at farm gate
  3. The need to simplify the process at the mandi itself - so that farmer does not need to wait more than now, does not experience more uncertainty than now, buyers are not similarly hassled, and so on.
  4. Limited post-harvest management at the farm gate means that there will have to be full-fledged assay at the mandi to be able to do a credible digital transaction - creation of awareness and capabilities to do a credible basic assay at farm gate, so that the mandi assay is simpler/easier
  5. Credibility of the assay standards and its compliance - awareness and confidence creation among the sellers, and more importantly, the distant online buyers
  6. The inherent limitations of a (physically centralised, in so far as farmers have to come to the mandi and get their produce assayed) digital mandi-based process in handling large transaction volumes when sales are usually concentrated into a few days in the immediate post-harvest aftermath
  7. The widespread practice of instalments-based part payments or recovery for the downstream inputs by buyers based on mutual trust (inherently localising transactions)
  8. The sanctity of an eNAM contract, in terms of the farmer delivering the tested grade and trader honouring on the payment, and mechanism to ensure compliance
It is exactly the sort of stuff that demand extremely high state capacity in both design and implementation. The authors have done a nice diagnosis. The challenge is how to go about solving the problem - or a practical design and implementation plan for an eNAM? Is there a framework to think about a comprehensive policy proposal that can then get parcelled out to different stakeholders/agencies to attend and then be monitored closely over a period of say, 5-8 years?

What is it that can be done on each and by whom and in which sequence? Given that each will take time, what is the best strategy for each challenge so that we can have a gradual process of full adoption of e-NAM? How can traditional agriculture extension system be reformed to address these new challenges? How can private sector eco-system for the associated set of services be catalysed?

No easy answers here. It is clear that this requires responses at three levels of governments - Government of India and State governments for broad policy changes; district administration for engagement with the mandis and making them work; and agricultural extension services to create awareness, change behaviours, nurture capacity etc.

In simple words, these are the domain of implementation, at the district and below, and all of them will require painstaking and long-draw action, filled with uncertainties. These are the sort of activities which defy a neat end-to-end plan. There will be partial and general equilibrium factors on which state and central governments will have to act pre-emptively as well as respond to emergent challenges. They demand initiation of a minimum viable product and then active engagement to spot both emergent problems and opportunities, and address them swiftly. In some of these cases, private providers (say, App providers, if APIs are made available) will be able to offer some services and they will require enabling conditions.

Update 1 (18.05.2020)

Ashok Gulati is excited by the Agriculture marketing side reforms announced by the Finance Minister,
They relate to amending the Essential Commodities Act (ECA) of 1955, bringing a Central legislation to allow farmers to sell their produce to anyone, outside the APMC mandi yard, and having barrier-free inter-state trade, and creating a legal framework for contract farming — the buyer can assure a price to the farmer at the time of sowing.

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