Reliance Retail Limited has signed an agreement to purchase 1000 quintals of rice from farmers in Sindhanur taluk in Raichur district of Karnataka.
As per reports, the Ambani-owned corporate entity has struck a deal with Swasthya Farmers Producing Company (SFPC), which has 1100 registered paddy farmers. Reliance has placed an order for Sona Masoori rice from the company and emphasized that the crop should have less than 16% moisture in it. At the same time, Reliance is offering to pay ₹1,950 per quintal of rice i.e. ₹82 higher than the Minimum Support Price (MSP) offered by the government.
For every transaction of ₹100, the farmers would pay 1.5% as commission to the SFPC. Moreover, the farmers also need to pay for the sack used in packaging and transportation of crops to the warehouse in Sindhanur. Although SPFC initially traded in oil, the company has now begun procurement and sale of rice. The deal is hailed as the first major transaction between farmers and a private company (Reliance), following the enactment of the historic farm laws.
Transparency in payment, crop quality to be tested by third parties
While speaking about the new agreement, MD of SFPC Mallikarjun Valkaldinni informed that the quality of rice will be tested by third parties. He also added that around 500 quintals of Sona Masoori rice are already stocked at warehouses.
Highlighting the transparency in the process, he informed, “We are expecting the purchase to go through anytime now. Once they have procured the crop, Reliance will transfer the money to SFPC online and we will credit the money directly to the farmers’ accounts.” At the same time, GPS trackers would be used to ensure that crops are not adulterated or tampered with during transportation or at any stage.
Does the new farm laws concern MSPs?
As stated above, currently the provision of MSPs does not have any legal backing. The three new farm laws passed by the Modi government also do not have any provision for MSP. Legally, there is no law that puts an obligation on the government to purchase farm produce at MSPs from farmers. There are also no laws that put the onus on private players to buy at MSP.
However, based on rumours that the Modi government will repeal MSPs, the farmers from Punjab have now descended on the streets asking for the rollback of the three laws. Farmers are upset with the three farm bills because none of them mentions anything about MSP.
Even though Prime Minister Narendra Modi and his government have categorically stated that the MSP system will remain, the protesting farmers are in no mood to relent. In fact, the three farm bills that have been introduced by the government concerns with the reform of APMCs and introduction of contract farming and have nothing to do with MSP.