Calcutta, Sept. 11: The Mamata Banerjee government is set to sweeten the package for private players showing interest in setting up markets to procure farm products.
Such investors are expected to be allowed to set up retail chains to sell the items directly to consumers.
Although an official announcement has yet to be made, sources in the state secretariat said the government would oblige if the investors seek a licence to enter the retail business in farm produce.
The licence, officials said, will be used as a carrot to attract established retail players in setting up Brihat Krishak Bazars or mega farm markets, the scheme announced by the government two days ago to streamline the supply chain.
“Farmers will get fair price for their produce if the intermediaries are removed…. The consumers will also benefit as multiple price mark-ups at various stages between the farm and the retail market can be avoided,” said an official.
The chief minister has always been vocal about the role of intermediaries pushing up prices. Sources in Writers’ said the idea behind the Brihat Krishak Bazar scheme was to reduce the influence of intermediaries, known as phore, on the supply chain of farm produce.
The retail carrot, sources said, was an afterthought as the chief minister realised that she would have to attract big players in setting up the markets.
Preliminary reactions from established retailers suggest the Bengal government is striking a chord. “This is a good step. The terminal markets will consolidate supply while front-end agri-retail consolidates demand. We may also look at it,” said Kishore Biyani, CEO of the Future Group, which operates Food Bazaar.
He added that it would be a “win-win-win” for the farmer, the investor and the consumer.
Retail sources said the permission to engage in retail business would mean political patronage for the companies on the ground to run full-scale agri-retail business in Bengal.
Markets under the Brihat Krishak Bazar scheme will be different from the collection centres retail players have set up in some states to procure produce for their exclusive consumption.
Under the Bengal scheme, companies will have to invest in infrastructure and also sell the produce to all, including competitors if they turn up as buyers.
Retailers appear to be willing to explore the terminal market opportunity in Bengal because of the ground reality.
At present, some companies do have agricultural produce marketing licences to sell fruits and vegetables through organised retail in Bengal. But the percentage of agri-products in the total merchandise is minuscule because of limited procurement and lack of political patronage.
A case in point is the hurdle Reliance Fresh ran into in Bengal because of opposition from the Forward Bloc when the Left was in power.
Mamata had opposed FDI in retail though Congress leaders tried to convince her of the benefits to farmers. Sources said she had now found a domestic solution to address the agrarian question.
“She feels that big domestic players can change the agriculture scenario if they are allowed to enter the agri-business segment…. Her success in the panchayat polls has given her the confidence to drive this project,” said a source.
According to him, the government is aware that the decision may face resistance. Some Left-leaning economists had expressed fears that the farmers would be at the mercy of big corporations that might monopolise the markets.
“But the farmers will sell their produce at the block level markets to be set up by the state government. So, the interest of the farmers will be protected as there will be many buyers at the block level,” said an official.