Top firms' agro plans get uncertain

The ghost of Hyderabad businessman Beni is still haunting the Uttaranchal government as far as the agriculture sector is concerned.

Even as a Cabinet sub-committee cleared the Agriculture Produce Marketing Committee (APMC) Act, the government is still in a dilemma whether to put the draft Bill before the cabinet and also table it in the assembly.

Highly-placed sources said it was very unlikely that the draft Bill related to the APMC Act would be passed.

"The ball is now in Chief Minister N D Tiwari's court," an official source told Business Standard.

But the government's dillydallying on the APMC issue stems from the fact that Beni, a businessman from Hyderabad, is wanted by the Uttaranchal police after he allegedly duped farmers of lakhs of rupees. "The Beni factor is very crucial and is still haunting the government," said the source.

Nevertheless, the government's reluctance in this regard has blocked top-notch companies like Reliance, ITC and the National Dairy Development Board from entering the agriculture sector directly in the state. These companies are ready to invest Rs 400 crore in Uttaranchal through different proposals, according to an official of the agriculture department.

Both Reliance and ITC have evinced interest in contract farming in the state, for which the government has to pass the APMC Bill.

Of the two, ITC is slated to get their bulk purchase licences from the state government for an estimated 25,000 tonnes of wheat procurement.

Reliance Agro is likely to put up its proposal details for procuring both foodgrain and horticultural produce soon. The produce, thus procured, is expected to bolster close to 3,000 retail outlets the company has proposed for the country as a whole.

It is expected to pave the way for the legitimate establishment of private (farmer/consumer) mandis once the assembly passes a draft APMC Act.

The bulk purchase licences will allow the corporate houses to buy directly from farmers in the run-up to the setting up of private mandis in the state.

The APMC Act contains provisions for setting up private mandis, enabling contract farming, and the constitution of a regulatory authority to ensure a level playing field between the government-controlled and private mandis.

Private mandis would mean cutting out extra cess such as the mandi cess and other charges, reducing final costs for consumers and buyers and allowing better gains for farmers.

In effect, the new APMC Act's nod to farmer/consumer mandis would mean a direct purchase of commodities at market-defined prices by trading and corporate houses from farmers, either through individual purchase contracts or from farmer/consumer markets.

Currently, there are very few private markets in the country since, under the APMC Act, only states are permitted to set up markets.

According to the draft APMC Act, the agriculture minister is ex officio chairman of the apex private mandis. But in the current scenario, the government is not in a mood to relieve the present chairman of the Mandi Parishad.