Online payments in ReMS

Abstract

Rashtriya e Marketing Services has started an initiative to offer better price for farmers produce by online bidding. Agriculture produce market committee (APMC) handles bidding and facilitates sale of grains brought in by farmers to the market. Online bidding by traders ensures high prices for farmers. The challenge is to ensure that payments are made to farmers in full, and timely. Currently, traders do not have enough money to pay for the produce immediately. So commission agents pays to the farmers on behalf of traders. There may be incidents of cheating in this case as these payments are not documented anywhere. There is a need to bring online payment system in place so that it is handled. But there are many constraints like availability of bank accounts, credit facility for traders, commission agent margins, same day payment technology etc which makes it difficult. Online payment can start with involvement of commission agent, wherein he pays on farmers behalf to the bank. The bank then makes online payment directly to farmers’ accounts. The financing of traders’ credit can also be done by Letter of credit or credit limit provided by APMC pooled account. Extending credit to farmers once his produce are sold in APMC market is also a good idea. Other options like Paytm, staggered payments were not as convenient as above suggested methods. A detailed awareness and training campaign is required to communicate the advantages of online payment to all stakeholders.