May 2005

EKVI (e-Krishi Vipanan)

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Regulated agricultural markets or ‘mandis’ in Madhya Pradesh, India are set to revolution-ise the very system of agricultural marketing. Gone are the days when a farmer used to come to the mandi and was forced to sell his crop even when he knew that the crop was not being valued correctly. Now a farmer is empowered with the information that enables him to make informed decisions as to when and where to sell. In other words, now he can decide on the mandi where he wants to sell his crop, even demand more prices in the same mandi, or refuse to sell at all if not given the right price. All this has been made possible by the unique initiative called e-Agricultural marketing or e-Krishi Vipanan (EKVI), which arms the farmer with the information of prevalent rates in mandis. And this is just the beginning. The project has a sweep of benefits for all stakeholders – farmers, traders, mandis, and the government.

The EKVI Project involves automation of the Mandi Board Head Office, seven regional offices, 229 mandis and their associated sub-market yards and Inter-state border check posts i.e. ‘nakas’ across Madhya Pradesh in India. The data generated at mandis with regard to agricultural produce, sale, etc. is captured ‘online’ through Smart Card terminals, transferred to computers in mandis, and transmitted on a communication network to the associated Regional Office and Head Office via VSAT. This information is then accessible at specified nakas (and a few other points) for verification of documents on a 24/ 7 basis. The system workflow is clearer from Figure 1.

In the state of Madhya Pradesh, the agricultural marketing framework is unique and consists of two distinct sets of measures:

1. Development and regulation of primary markets i.e. mandis
2. Regulation of markets through a series of legal instruments.

Both these functions are so performed by the activity centre i.e. mandi, that they are complimentary to each other, ensuring on the one hand fulfilment of the provision and objectives of the Madhya Pradesh Krishi Upaj Mandi Act, 1972, and instilling faith of the farmers in the system for getting fair returns for their produce. This necessitates efficient, transparent and diligent working of the mandi office so as to facilitate prompt availability of information, reports, analysis to the users and seekers, and to empower the farmers with the latest information on the rates, arrivals, etc. in neighbouring state/ national mandis. In terms of pure service value, this also means prompt calculations of arrivals and actual sales, various taxes payable by the traders on the actual purchase made by them, reconciliation of bank accounts, issuing and reconciliation of transit permits issued, etc. is made available.

To augment agricultural marketing in the state so as to ensure that transactions are transparent, prompt, farmer and trader friendly, the Mandi Board desired to computerise mandi activities through the networking of mandis and the Mandi Board, to eventually achieve true e-Agricultural Marketing in Madhya Pradesh. With most activities being complex, and with huge volumes, it was not possible to have total transparency and be effective without automation of the activities. This, it was felt, would not only improve the effectiveness of trading in the mandis but would benefit the farmers, traders and the government in collection, processing, analyses and dissemination of information, policy making and revenue collections.

The processes and procedures followed in mandis are primarily dependent on paper-based receipts and other documents. In ‘season time’ when the volume of transactions is high, the task of reconciliation of the paper documents becomes an enormous task for the mandi employees. This situation is further made difficult, as all the registered traders are required to deposit their statement of purchases, as per the mandi laws. During the pilot project and in the initial roll out of the project there had been substantial increase in the collections of mandi fees going to the government. The rates of various produces in the neighbouring mandis and the National mandis are displayed in the mandi display system through the information collected (again from different mandis) by the project itself and through scanning of available information with sources such as the National Commodity Exchange (NCDEX), among others.

All of this is helping the farmers to reach at conscious informed decisions to sell their produce. The system is also helping in quick issue of transit permits (for transportation of agricultural produce) and its reconciliation at various Interstate check-posts (nakas), thus ensuring that the agricultural produce is not transported without a valid permit. All financial transactions are reconciled with banks on a day-to-day basis. The entire essential ‘management information’ is made available to the management of the mandis, regional offices and HO of the Mandi Board periodically as specified. The implementation of this project has been helpful in integrating other private initiatives like ‘e-Chaupal’ by ITC as well.

The infrastructure so developed would eventually lead to ‘grainless mandis’ – as similar projects would obviate the need for movement of produce from the farmer’s premises to the mandis.”

Figure-1 EKVI System Workflow

Strategy Adopted

With Business Process Outsourcing (BPO) being the most accepted approach for fast track projects in order to conserve public resources and get the best technical support in the ever-changing technology scenario, EKVI is being rolled out by the vendor on a Build, Own and Operate (BOO) basis. The Madhya Pradesh Agency for Promotion of Information Technology (MAP_IT), which conducted the study, was retained as consultant to the project to give continuity to the ideas developed during the study in their capacity as catalyst and facilitator for the project. MAP_IT recommended, taking into consideration the complexity of the system, the appropriateness of the project to be executed on a BOO basis. The Mandi Board accepted this.

Executing the project on a BOO basis has meant that barring the software, the intellectual property right of which would be of the Mandi Board, all activities from hardware deployment, networking, maintenance and upgradation of hardware/software, disaster management,   manpower for running the system, generation of reports, analysis, outsourcing the service, etc would be the vendor’s responsibility. The returns i.e. user charges for the vendor from the project is in terms of a certain percentage of the mandi fees collected, and is sufficient for theviability and sustainability of the project. After a comprehensive selection process the Consortium consisting of SQL Star International Ltd, New Delhi, Zoom Developers, Bombay, and iSmart International, Bombay, was chosen as the vendor for the project.

“Madhya Pradesh State Agricultural Marketing Board (also known as Mandi Board)   is a corporate body established under the provisions of M.P. Krishi Upaj Mandi Adhiniyam 1972 and is a three-tier organisation The regulated markets are in the nature of physical and institutional infrastructure at the first contact point for farmers to encash their farm produce and marketable surpluses. The organisational structure, network spread and business volume of the Mandi Board comprises 229 Mandis, 231 Sub-Mandis, 7 Regional offices having 6 million Farmers with 70,000 licensed traders. Normal annual arrivals are in the order of 12.5 million tons valued at INR 150 billion.”

Features of the System

In addition to mandi transactions, the system covers a host of other mandi activities viz.  financial accounting, payroll and establishment, engineering, MIS at all levels, elections in the mandis, and naka operations. The EKVI system follows the distributed computing model, wherein the data in the mandi is captured and stored locally. The EKVI software is developed in Hindi with an option of English and also is smart card and web-enabled for both i.e. text and graphics browsers with utmost security and back-up measures. The Hindi version is also run in the Windows environment. The software is versatile for future upgradation, compatible to present and future hardware, user–friendly with security measures complimented with firewalls etc. The software is developed in Visual Basic and is SQL server based. The software for smart card is developed in CARDOS. VSAT is used for connectivity for receiving and transferring of data, reports etc. from the market yard of the mandi with a leased line backup. In case of sub-market yards communication transfer is either through the LAN, leased line or   VSAT. This project is also resilient for disaster management and backups with an independent server located outside (near Delhi).

Lessons Learnt

1. Public–Private participation on a BOO basis in IT is a reality. The user charges concept is a sustainable model and works out without huge investment from the government. The BOO model in IT also creates employment opportunities for locals in their own state near their homes which also helps the vendor to get human resources at reasonable rates.
2. ICT can be deployed effectively even in villages for the benefit of stakeholders. The VSAT-based communication network being established in 400 locations all over the state can be used for educating the farmers on new techniques of farming, use of fertilizers, weather forecast, issue of disaster warnings to any part of the state to help bring quick responses to the victims of disasters.

Benefits to the Farmers

• Availability of latest information on rates, arrivals etc. in various
state mandis.
• Choice to decide when and where to sell
• Facilitate contract farming
• Sell the produce from doorstep through e-trading
• Reduction in losses due to transportation & handling


Benefits to the Traders

• Transparent procedures

• Single window disposal
• Reconciliation of daily sales, accounts, transit permit
• Availability of rates in various mandis would help in offering better rates to farmers
• Transportation losses reduced due to e-agricultural marketing


Benefits to the mandis

• Instant reconciliation of accounts, transit permits, receivables and
payables.
• Effective monitoring of activities
• Facilitates implementation of contract farming
• Ensures transparency in operations

Benefits to the Government

• Speedy collection, analysis and dissemination of information

• Improved tax revenue collection by collation of valuable data.
• Instantaneous access even to remote locations through VSAT connectivity.


Present and future


The EKVI project is now in the process of roll
out – initially in 63 Class ‘A’ and ‘B’ mandis in Phase-I. This has been made possible after the successful completion of the Pilot Project in one of the largest mandis at Indore that has varied agricultural produce with large volumes of trade, one associated regional office, one associated naka, and a Mandi Board Head Office. All other mandis would be covered in Phase-II and Phase-III, subsequently.

The importance of the agricultural sector,and the competitiveness induced through such a market-led IT-based models is envisaged to trigger a cycle of higher productivity leading to higher rural incomes and better farmer risk management – thereby making the sector capable of meeting future market requirements. The infrastructure so developed would eventually lead to ‘grainless mandis’ – as similar projects would obviate the need for movement of produce from the farmer’s premises to the mandis. It would also pave the way for farmers to arrive at well-informed decisions based on the trends in national and international markets.

The project can easily be replicated in all states of India where Hindi is used as the official  language (including educationally and economically backward states), especially since the  project is run on a BOO basis and no initial expenditure is required to be made by the  exchequer. In other states in India and abroad where Hindi is not predominantly used, the  software would require interface change. The software also has an English interface, which  allows the project to be replicated immediately. Needless to say, implementation has to be carefully monitored and guided, and the success of Public-Private Partnerships, as in this case,  should be considered as a useful model for implementing similar projects elsewhere.

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