Karnataka farmers to sell rice to Reliance Retail, unions warn of predatory pricing

Bengaluru, 11 Jan 2021 [Fik/News Sources]: More than a thousand paddy farmers in Karnataka’s Raichur have agreed to sell their produce directly to Reliance Retail at a rate marginally higher than the minimum support price (MSP) through an intermediary company. This comes within months of Karnataka amending the state Agricultural Marketing Committee (KAPMC) Act, which allows farmers to directly sell their produce even outside APMC yards.

"On behalf of 1,100 farmers, who are our company's shareholders, an agreement has been signed on January 6 to sell about 1,000 tonne of their paddy (Sona Masoori rice variety) to Reliance Retail at Rs 1,950 per quintal (100 kg), which is Rs 100 above the MSP of Rs 1,850 per quintal," Swasthya Farmers Producing Company (SFPC) Managing Director V Mallikarjun told IANS.

"Since the agreement was signed, the farmers, until Saturday, have delivered about 100 tonne to Reliance Retail, which has taken a warehouse of the state-run Food Corporation of India (FCI) on lease in the town," he added. The balance 900 tonne will be delivered to Reliance Retail warehouse over the next 9-10 days at the rate of Rs 100 tonne per day.

"Though the farmers are getting Rs 100 more per quintal than the MSP, they have to bear the cost of sacks (gunny bags), transport and loading/unloading charges of the paddy at the warehouse from their fields where they harvested recently," Mallikarjun said.

He added, “We will credit the sale proceeds of the paddy to the farmers' bank accounts directly after Reliance Retail makes the transaction with us. A third party will assess the moisture content in the paddy, which should be 16% for good quality."

Karnataka, on January 1, notified the KAPMC Act, which restricts powers of the APMCs and allows farmers to sell their produce directly even outside the APMC yards to anyone who pays more than the MSP, fixed by the state government.

While fetching a higher price than the MSP will come as a relief to farmers, farmer unions have warned of predatory pricing by corporations and spoken in favour of the government guaranteeing the MSP.

Sachin Meega of Kisan-Khet Mazdoor Congress expressed apprehensions over the development. He said, “It is no doubt that the corporates will offer better prices than the MSP for the first 12-18 months but when the APMC system collapses, they will not give farmers even the MSP. This is what has happened with Jio sim cards.”

He added that this with the three new laws that have been passed by the Union Government, over which farmers from multiple states are protesting in the national capital, will leave farmers at the mercy of big companies.

Citing the special dispute resolution framework in the  Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 (union govt law), he said now farmers can’t even contest the company’s claims in a civil court. This he said will leave smaller farmers at greater misery he said stating that they may not have the financial powers to approach the High Court or the Supreme Court.a

(With IANS inputs)