This document discusses the implementation of e-tendering for agricultural commodities in India, specifically in Karnataka state. It outlines the objectives of e-tendering such as ensuring competitive prices and transparency. The main features of e-tendering systems are described as being locally supported, online, and incorporating business rules. The process of e-tendering is explained step-by-step from farmer lot entry to payment. Several studies on the impact of e-tendering are summarized, finding benefits such as reduced marketing costs, faster transactions, and increased prices for farmers. However, some constraints of e-tendering are also noted such as the need for awareness programs and infrastructure improvements.

1. 1

2. “Implementation of e-tendering
for agricultural commodities”
2

3. Introduction
Objectives of e-tendering
Main features of e-tendering
Process of e-tendering
Advantages of e-tendering
Research studies
Conclusion

4. INTRODUCTION

5. Short comings of the earlier agricultural marketing
system in India
• Heavy sale of agriculture commodities at village level immediately
after the harvest
• Absence of on-farm grading of produce
• Poor packaging
• Insufficient marketing infrastructure
• Long marketing channels
• Existence of various malpractices
• Non-transparent price discovery mechanism
• Lack of market information system
• Low marketable surplus

6. Regulated Markets
• Karanjia Cotton Market in 1886
• Berar Cotton and Grain Market Act, 1897
• The Bombay Cotton Market Act, 1927
• Hyderabad Agriculture Market Act, 1930
• Agricultural Produce Market Act, 1939 (Bombay, Mysore and
Punjab)
• Karnataka Agricultural Produce Marketing (Regulation and
Development) Act, 1966 and Rules 1968
• Karnataka State Agricultural Marketing Board, 1972
• 1st regulated market in Karnataka : Bailahongal market (1936)

7. Source: Report of Agricultural Marketing, Reforms Committee 2013
Co-operation Department, Government of Karnataka

8. Problems identified with respect to regulated markets
• Prohibiting direct sale outside the market yard
• Lesser number of markets leading considerable higher
area to be served by each market
• Long distance to be covered by farmers to take their
produce to the market
• Poor infrastructure facilities in the markets
• No regular election of the members of the APMCs

9.  Expert Committee (2001) and Inter-ministerial Task Force
(2002) set up by the Ministry of Agriculture recommended the
necessity of reforms in agricultural marketing in the country.
 The Ministry of Agriculture, GOI prepared and circulated a
Model Act called Agricultural Produce Marketing (Regulation
and Development) Act, 2003 to all states and UTs,.
Recommendation committees

10. Source: Report of Agricultural Marketing, Reforms Committee 2013
Co-operation Department, Government of Karnataka

11. Source: Report of Agricultural Marketing, Reforms Committee 2013
Co-operation Department, Government of Karnataka

12. Implementation of e-tendering
 India: Karnataka state in the year 2006-07.
 Karnataka : Mysuru regulated market in the year 2006-07 for
Paddy
 1st phase: 18 APMCs (2008-09) at a cost of Rs. 777.00 lakhs and
2nd phase: 24 APMCs (2009-10) at a total cost of Rs.883 lakhs.
 Regulated markets under e-tendering in Karnataka at present: 146
 Total commodities under e-tendering : 92

13. E-tendering means carrying out traditional tendering activities in
an electronic form, using the internet.
 “An internet based process wherein the traders inspect the
commodity personally, bid the price electronically and direct cash
payment will be done”.
This enables firms to be more efficient as paper-based
transactions are reduced or eliminated, facilitating for a more
speedy exchange of information.
Meaning of e-tendering

14. 1. To ensure competitive price for the farmers’ produce
2. To bring transparency in the sale transaction
3. To complete the process of sale in a shorter possible time
4. To reduce the marketing cost and increase efficiency in the
operation of sale procedures
5. To help quick generation of market reports and timely
dissemination of market information
Objectives of e-tendering

15. • Local language support
• Online and user friendly system
• Incorporated with business rules
• Workflow based system
• Transparent
• Role based access
• Time effective
Features of e-tender system

16. Process of e-tender system
Farmer lot wise entry and lot ID creation
Unloading at commission agent shop
Commission agent inventory update
Sampling/heap
E-bidding based on unique lot ID
SMS about highest price quoted and bidder name to farmers
Farmer option to accept or reject the best price
Final e-weighment of lot
Generation of sale receipt
Payment from buyer/commission agent
Generation of farmer receipt
Exit process

17. Schematic representation of e-tendering

18. Issue of gate pass to farmers - Electronic Tender System of Sale

19. Display of produce offered for sale

20. Traders offering their tender rates through computer provided
in the APMCs

21. Display of tender rates on the computer and display boards

23. Manual V/s E-Tender System
Manual Tendering System
• Lengthy process
• Expensive
• Paper based process
• Restricted mobility
• Prone to human errors
• Physical security
• Wastage of space to store
bids
E - Tendering System
• Shorter process
• Economical one
• Computer based process
• Open to all
• Automated and accurate
process
• Foolproof security
• Lifelong storage on CD

24. • Gate Operators – The gate operators will enter the details of the
commodities which are coming to the market and generate the LOT
SLIP. They will also enter the details of outgoing commodities.
• Traders – Using this system, the traders will quote the price of the
commodities displayed in the market. Once the tender is declared,
they will generate the tender declaration slip.
• Commission Agents – The Commission agents will enter the
weight and sale bill details to close the cycle of transactions and
generate the various reports. They can also cancel/refuse the
transaction based on the request of the farmers.
Users and their Roles

25. • APMC Staff – The staff of the APMC will enter the receipt,
reconciliation, license, gate entry, etc and generate the various
reports required.
• Super Administrator – The officer, identified at the APMC as
super administrator, will manage the user accounts, declare the
tenders, set the cut-off times, etc.
Cont…

26. Advantages of e-tender system
 Reduction in book keeping and reporting system
Transparent
 Competitive price for the produce
 Reduction in manpower requirements
 Faster tender declaration
 Saves time
 Fast service

27. Cont…
Accurate weighment
 Scientific storage facility
 Availability of market information
 Free quality testing facility
 Easy monitoring of traders and commission agents activities
 Assured quality produce

28. •Lack of proper local market yard facilities.
•Lack of modern warehousing and storage facilities.
•Lack of awareness about market news and intelligence.
•Lack of latest technical knowledge.
•Lack of knowledge about quality parameters and standards of the
produce.
•Irregularity in electric supply.
•Lack of training on new methods.
Constraints of e-tender system

29. Advancement in marketing system
E-trading system: “An internet based process wherein the
complete tendering process; from advertising to receiving
and submitting tender-related information are done
online”.
Warehouse based marketing system: “The process of
offering the commodities for sale by keeping the
commodities in warehouse only”.

30. Research Studies

31. Study-1
A study on use of electronics and communication
technologies (ECTs) in agricultural marketing in NEK
region
Joshi et al. (2015)

32. •The study was carried out in two districts, Raichur and
Gulbarga APMCs in North Eastern Karnataka.
• Random sampling procedure was followed in
selecting the farmer respondents.
• Total 120 farmers were preferred from 4 markets
consisted of 30 farmers in each market.
Methodology

33. Table 1. Awareness on electronics used in markets (%)
Particulars Reformed markets Traditional markets
Raichur Gulbarga Sindhanur Gangavati
Electronic
balance
100.00 100.00 100.00 100.00
E-tender 100.00 100.00 80.00 73.33
Electronic
display
20.00 26.67 13.33 16.67
T V Display 100.00 100.00 100.00 100.00
Public
address
system
100.00 100.00 100.00 100.00
E-payment 6.67 16.67 - -
(n=120)

34. Table 2. Effect of use of electronics on farmers
Particulars Reformed markets Traditional markets
Raichur Gulbarga Sindhanur Gangavati
Reduction in
Unauthorized
Deductions (%)
100.00 100.00 100.00 100.00
Saving in market time
(hrs)
1.00 1.00 2.00 2.00
Disputes Nil Nil Nil Nil
Price mechanism No effect No effect No effect No effect
Marketing cost No effect No effect No effect No effect
Weighment standardized standardized standardized standardized
(n=120)

35. Study-2
IT Application in Agricultural Marketing Service
Delivery-Electronic Tender System in Regulated
Markets
Chengappa et al. (2012)

36. •The study was undertaken in the state of Karnataka that
pioneered implementation of the e-tender system.
•The sample size is 160 farmers, 80 traders, 8 officials and
8 representatives of service providers located in the
regulated markets.
Methodology

37. Regulated
markets
Awareness
on e-tender
Computer
knowledge
Dependency for bidding
Self Hired
assistant
Service
provider
Chitradurga 100 60 0 100 0
Byadagi 100 100 40 60 0
Gadag 100 60 0 70 30
Hubli 100 100 80 20 0
Bidar 30 0 0 0 100
Raichur 100 60 60 30 10
Arasikere 100 60 10 70 20
Mysore 100 50 50 30 20
Overall 91.25 61.25 30 47.50 22.50
(per cent) n=80

38. Regulated markets Price manipulation in
manual tender system
Increase in price in
e-tender system
Chitradurga 30 100
Byadagi 60 100
Gadag 50 100
Hubli 60 100
Bidar 30 0
Raichur 30 100
Arsikere 20 100
Mysore 20 100
Overall 37.5 87.5
n=256 (per cent)

39. Study-3
Impact assessment of e-tendering of agricultural
commodities in Karnataka
Shalendra (2012-13)

40. Methodology
• Four markets were selected for the study i.e., Tiptur,
Mysore, Hubli and Gulbarga.
• Total number of sample is 164.

41. Market/ Component Gulbarga Hubli Mysore Tiptur Over all
Implementation of
e-tendering system
75 68 76 82 75
Computerized entry at
the mandi gate
67 53 71 76 67
Computerized entry at
the gate is mandatory
61 38 62 60 55
(per cent) n=95

42. Market/ Items Gulbarga Hubli Mysore Tiptur Over all
More transparency in
operation
77 76 90 73 80
Better price realization 89 88 76 77 83
Less time required for
completing
the transaction
95 65 76 64 76
Faster payment of sale
proceeds
89 88 86 93 89
More competition 78 70 76 73 75
Better standing of farmers 62 71 57 67 64
Sufficient Awareness
Programme
78 74 72 87 77
(per cent) n=95

43. District Accept Reject Indifferent
Gulbarga 67 0 33
Hubli 61 11 28
Mysore 55 27 18
Tiptur 89 0 11
Over all 70 9 20
(per cent) n=65

44. Study-4
Marketing of pulses in N-spot e-auction and spot
market e-tendering system- A case study of
Gulbarga market
Reddy et al. (2013)

45. Methodology
• The study was conducted in Gulbarga district.
• Farmers were selected randomly.
• Total number of sample is 60.

46. Sl.No. Particulars of marketing cost Sale of produce through (Rs/quintal)
APMC N-spot Exchange
1 Transportation 41.55 40.00
2 Weighing 10.60 3.50
3 Loading 6.00 5.00
4 Unloading 6.00 5.00
5 Commission charges 74.00 _
6 Cleaning and grading 4.40 5.00
7 Assay charges _ 3.50
8 Trading charges 5.00 _
9 Soot (Deductions) 71.50 _
10 Miscellaneous 31.85 37.58
11 Storage cost 15.00 14.50
12 Total marketing cost 265.90 114.08

47. Sl.No. Constraints No. of
respondents
Percentage
1 Requirement of minimum lot size of 100
quintals
60 100.00
2 Lack of coordination among farmers 54 90.00
3 Non availability of good quality seeds/Poor
quality produce grown
44 73.33
4 Lack of awareness regarding NSPOT prices 37 61.67
5 Lack of warehouse facility 51 85.00
6 Pre harvest contracts with commission agents 49 81.67
7 Not enough produce 45 75.00
8 Complicated procedure for selling produce 51 85.00
9 Grade standards are high and complicated
procedure
34 56.67
n=60

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