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APMC Act impact: Reliance seals a deal to purchase Rice from Karnataka farmers

APMC Act impact-Reliance sealed a deal to purchase Rice from Karnataka farmers

Reliance Retail Ltd sealed a deal for the purchasing of 1,000 quintals of Sona Masoori rice from the farmers of Sindhanur taluk in Raichur district in the first major transaction between a giant corporate entity and farmers since the implementation of the amended APMC Act in Karnataka.

Fortnight Deal

Agents registered with Reliance signed an agreement with Swasthya Farmers Producing Company (SFPC) about a fortnight ago. While SFPC primarily trades in oil, the company has now ventured into paddy procurement and sales; it has registered close to 1,100 paddy farmers. Reliance Retail has stipulated that the crop should have less than 16 percent humidity. 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 crop (Rs 1,868).

For every Rs 100 transaction, 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 pack the crop and transport it to the Sindhanur warehouse.

Also Read: Reliance Industries has no plans to enter into ‘contract farming’ business

SFPC Managing Director Mallikarjun Valkaldinni has confirmed that a third party will assess the standard of the paddy currently stored in the warehouse. Once the standard is found to be acceptable, the crop is procured by Reliance’s agents. Presently, the warehouse has about 500 quintals of paddy  stored in. Now we expect the purchase to go through at any moment. Reliance will pass the money to SFPC electronically once they have procured the crop and we will credit the money directly to the farmers’ accounts,’ he said.

Exploit Farmers

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 everyone is, however, excited about the progress. Karnataka President for Karnataka Rajya Raitha Sangha and Hasiru Sense Chamarasa Malipatil said that by providing more than the MSP initially, corporate entities would attract farmers, which would deal a serious blow to the APMC mandis. But later, multinational firms would begin to exploit farmers. We must be careful of strategies like that,’ he said.