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— K.V. Poornachandra Kumar

A view of a hyper market by Reliance Retail (file photo).

Bindu D. Menon

New Delhi, Aug. 24 The farm-to-fork initiative of Reliance Retail seems to have hit a roadblock with the Punjab Government terminating its agreement following non-compliance with terms of the memorandum of understanding.

The Punjab Cabinet on Saturday terminated the MoU for setting up agricultural mega projects in the State, as “the company had not complied with the terms of the memorandum of understanding”.

The MoU was inked in August 2006 with the then Congress Government led by Captain Amarinder Singh. The Akali Dal and the BJP, now governing the State, had opposed the project then.

The MoU proposed the setting up of 52 rural hubs and 250 sub-hubs across 18 districts of Punjab to facilitate cultivation and retail of fresh vegetables. The objective of the MoU was to build farm infrastructure and deliver the produce to the end consumer.

According to the agreement, Reliance was to make an initial investment of Rs 500 crore, which was to be scaled up to Rs 3,000 crore later. Reliance has committed to set up infrastructure, cold storage, logistics and signing agreements with farmers for agricultural and retail projects. The State Government, in turn, had even agreed to allot over 1,000 acres to Reliance Industries at a concessional rate.

Reliance had to target fruits and vegetables procurement to an area of over 300,000 acres and to grow over 200,000 tonnes of horticultural produce with a wider mix. It was also targeting milk and grain procurement.

Asked if the MoU termination could put the struggling industry in a limbo, Mr Arvind Singhal, Chairman, Technopak said, “Fresh fruits and vegetable retailing industry is highly fragmented. We believe that partnering with a large corporate house could have helped scale up necessary infrastructure and brought consolidation. However, the industry will still sustain hitherto slowly. What is needed is the political will.”

When contacted Reliance Retail official spokesperson told Business Line, “Our MoU with the Punjab Government was still in its initial phase only and the same will have no impact as we have continued to expand our operations in Punjab and other parts of North India as per our plans.”

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