Reliance buys paddy from Karnataka farmer producer company

In what could probably be the first major deal between a corporate and farmers’ collective after agri-marketing reforms were introduced, Reliance Retail Ltd is buying about 1,000 tonnes of paddy from Swastya Farmer Producer Company Ltd based in Sindhanur in Karnataka’s Raichur district.

“We have been enrolled as a vendor with Reliance Retail and have agreed to supply 1,000 tonnes of Sona Masuri 5204 variety initially as this is a new experience for us. Last week, we supplied 100 tonnes and are expecting purchase order for another 200 tonnes soon,” said CEO of Swastya FPC, Umakant Sharma. Swastya FPC is promoted by NABARD and has about 1,100 registered farmer members. It processes edible oilseeds such as groundnut and sunflower and also runs small rice milling units, Sharma said.

Mallikarjun Valkamdinni, managing director, Swastya FPC, said Reliance has paid ₹1,950 per quintal for the paddy, which is higher than the prevailing market price. “This will benefit the farmers to some extent as prices have been trending low this year,” he said.

On Saturday, the modal price for Sona Masuri at the Raichur APMC market was ₹1,501 per quintal. The maximum price was ₹2,050 and minimum price was ₹1,298 per quintal.

Sona Masuri is a fine paddy variety and does not come under the purview of the minimum support price (MSP). The Centre has announced an MSP of ₹1,868 per quintal for common paddy and ₹1,888 for the Grade A paddy.

“This is just a beginning. There could be many more such deals and more corporates would enter the market as the government has given them the opportunity through reforms,” said Chamras Malipatil, President of Karnataka Rajya Raitha Sangha and Hasiru Sene. “The local traders and millers may get affected by this as they would be unable to compete with large corporates. Once the local traders get affected, the large corporates may dictate the terms and prices for farmers. It may take 3-4 years to witness such a trend,” Malipatil said.

Reliance reiterated that it neither buys foodgrains directly from the farmers nor has it entered into long-term procurement contracts. “We fully share and support the aspiration of Indian farmers to get a fair and profitable price on a predictable basis for what they produce with exemplary hard work, innovation and dedication. This transaction is not a contract or corporate farming. In this case, the supplier, Swastya Farmer Producer Company, has agreed to supply the material in line with our stated policy,” an RIL spokesperson said.