Reliance Retail Ltd has closed a deal for the procurement of 1,000 quintals of Sona Masoori paddy from the farmers of Sindhanur taluk in Raichur district in the first major trade between a big corporate company and farmers since the enactment of the amended APMC Act in Karnataka.
Agents registered with Reliance signed an agreement with Swasthya Farmers Generating Company about a fortnight ago (SFPC). The firm has now entered into paddy procurement and sales, although SFPC primarily trades in oil; approximately 1,100 paddy farmers have registered with it. Reliance Retail stipulated that less than 16 percent humidity in the crop should be present.
In addition, the company offers Rs 1,950 per quintal of Sona Masoori, which is Rs 82 above the minimum support price (MSP) set by the government for the grain (Rs 1,868).
For any Rs 100 trade, the understanding between SFPC and the farmers entitles the former to a 1.5 percent fee. Farmers are expected to bear the cost of the sacks used to load the crop and transport it to the Sindhanur warehouse.
SFPC Managing Director Mallikarjun Valkaldinni said that a third party will test the quality of the paddy that is currently stored in the warehouse. Once the quality is considered to be acceptable, the crop will be procured by Reliance's agents.
There are actually 500 paddy quintals stored in the warehouse. Now we expect the purchase to go through at any moment. Reliance will pass the money to SFPC electronically after they have procured the crop and we will credit the money directly to the farmers' accounts, he added.
Vehicles used for transporting paddy will be monitored using GPS to ensure that the crops are not tampered with at any point, he said. Not everybody is, however, enthusiastic about the development. Karnataka President Rajya Raitha Sangha and Hasiru Sense Chamarasa Malipatil said that by providing more than the MSP initially, corporate companies would draw farmers, which would deal a serious blow to the APMC mandis. But later, multinational corporations would continue to manipulate producers. We must be careful of strategies like that,' he said.
