Farmers in Karnataka sell their paddy to Reliance Retail above Minimum Support Price

Nearly 1,000 farmers in Karnataka have signed an agreement to sell their paddy directly to Reliance Retail, through an agro-based company in the northern area of Sindhanur, above the minimum support price (MSP), an official said on Sunday. 

‘An agreement to sell about 1,000 tonnes of their paddy (Sona Masoori rice variety) to Reliance Retail at Rs 1,950 per quintal (100 kg), which is Rs 100 above the MSP of Rs 1,850 per quintal, was signed on January 6 on behalf of 1,100 farmers who are shareholders of our firm,’ Swasthya Farmers Production Company (SFPC) Managing Director V. Mallikarjun told IANS on the phone. 

In the southern province, Sindhanur in Raichur district is 420km away from Bengaluru. 

According to Mallikarjunun, the agreement was signed under the newly amended Karnataka Agricultural Marketing Committee Act 2020, which allows farmers to sell their products directly to everyone, including beyond APMC yards, and beyond MSP. 

On January 1, with the approval of State Governor Vajubhai Vala, Karnataka notified the KAPMC Act, which limits the powers of the APMCs and omits punitive provisions to help farmers sell their goods directly to someone who pays more than the MSP, set by the state government, even outside the APMC yards (mandis). 

After the agreement was signed, Reliance Retail, which has taken a warehouse from the state-run Food Corporation of India (FCI) on lease in the area, has supplied about 100 tonnes to farmers until Saturday, said Mallikarjun. 

The left 900 tonnes will be shipped to the Reliance Retail warehouse at the rate of 100 tonnes per day over the next 9-10 days. 

Though farmers earn Rs 100 more per quintal than the MSP, Mallikarjun noted that they have to bear the expense of sacks, paddy transport and loading/unloading charges from their fields where they have recently harvested at the warehouse. 

The two-year-old business (SFPC) has been promoted by the state-owned Nabard (National Bank for Agriculture and Rural Growth), a leading financial institution for agricultural development, to help farmers not only ensure higher food production, but also increase their investment returns. 

‘After Reliance Retail makes the exchange with us, we will directly credit the selling proceeds of the paddy to the farmers' bank accounts.’ Mallikarjun added that a third party would test the moisture content in the paddy, which should be 16 percent for good quality. 

Under the Direct Purchasing Centre License issued by the State Cooperation Department, corporations can procure farm produce across the state. 

There are about 160 APMCs in Karnataka across the state on which about 60,000 traders and intermediaries depend for livelihoods. 

Founded in January 2019 with Rs 10-lakh approved capital and Rs 10,000 paid-up capital, in the agricultural lands of farmers, many of whom are its shareholders, SFPC grows a variety of crops, including rice, wheat, jowhar, and millets.