Reliance's rice deal to pay Karnataka farmers more than MSP

This would be the first instance of a corporate entity stepping into the scene after the Karnataka cabinet passed the controversial APMC Bill in December last year

Reliance Retail Limited, a subsidiary of Reliance Industries Limited, has inked a deal with farmers from Sindhanur taluk in Karnataka's Raichur district for the purchase of 1,000 quintals of Sona Masoori rice, according to a report in The Times of India.

The deal, signed between Reliance Retail Limited and Swasthya Farmers Producing Company (SFPC) in the state, would be the first instance of a corporate entity stepping into the scene after the Karnataka cabinet passed the controversial APMC Bill in December last year. About 1,100 paddy farmers have registered with the SFPC so far.

The Karnataka Agriculture Produce Marketing (Regulation and Development) (Amendment) Bill, 2020 or the APMC amendment Bill curtails the powers of local Agricultural Produce Marketing Committees (APMC) and allows private individuals to start agricultural trading, if they hold a permanent account number (PAN).

As per the report, Reliance is offering Rs 1,950 per quintal, Rs 82 more than the minimum support price (MSP) set for the crop.

While the cost of packing and transporting the crop to the Sindhanur warehouse would be borne by the farmers, the SFPC would be deducting a 1.5 per cent commission for the transaction of every Rs 100, said the report.

“Once the quality is found to be satisfactory, Reliance’s agents will procure the crop. Currently, there are 500 quintals of paddy stored in the warehouse. We are expecting the purchase to go through anytime now," SFPC managing director Mallikarjun Valkaldinni told the publication.

"Once they have procured the crop, Reliance will transfer the money to SFPC online and we will credit the money directly to the farmers," Valkaldinni added.

(With inputs from PTI)