Bengal cabinet okays scheme to open up back-end retail to private players

Officials suggest an amendment to APMC act likely to be taken up soon to accommodate new scheme

Clearing the decks to open up state's back-end retail sector to private players, West Bengal government has decided to come up with a scheme allowing companies to procure farms directly from farmers.

West Bengal state cabinet yesterday has approved the scheme called -- Brihat Krishak Bazar Yojana, which would allow private developers to set up terminal markets under the Agriculture Produce Marketing Committee (APMC) Act. Officials suggested, an amendment to the APMC act likely to be taken up soon to accommodate the new scheme. Unless there has been specific exemption, the current APMC Act mandates that the companies procure from the mandis.

A move in this direction would formally allow major retail players including Reliance, Metro Cash & Carry, Aditya Birla-More. In fact, Reliance's retail arm had a big expansion plan of its agri-retail business in Bengal with an estimated investment of Rs 4500 crore, which could not materialise as the Mukesh Ambani-led firm faced problems in securing licence under the Agriculture Produce Marketing Committee (APMC) Act. Left Front government had given Reliance Fresh nod to set up distribution-cum-processing centres, but the Bhuddhadeb Bhattacharjee government has to backtracked due to opposition from its ally Forward Bloc.

According to the Mamata Banerjee- government scheme developers, who would be investing in procurement terminals for farm produce like cold storage, warehouses and processing plants, would be selected by competitive bidding process. The government will grant a licence to procure, store and process agricultural produce.

Beside, while the state government is opposed to contract farming as suggested in the Centre's model act, the state is planning to introduce its own version of the agricultural reform, namely "partnership farming", which the government claim would ensure certain safeguards for farmers.

According to sources, while the Centre's model allows an agreement between private players and farmers, in the "partnership farming" there would be tripartite agreement involving the state authority.