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Between wholesale marts and road to FDI

Between wholesale marts and road to FDI
Something unexpected, if not unprecedented, happened on 19 July. Delhi lieutenant-governor Najeeb Jung, in news of late more for animation over the suspended animation of the assembly, issued an order, asking agricultural produce market committee (APMC) mandis in the capital to denotify fruits and vegetables (F&V) from the APMC Act. The L-G asked all concerned to file objections, if any, within 45 days.

Shorn of verbiage, it means once those 45 days are over, and if no plausible objection is raised, farmers need not come or send their products through to such mandis (wholesaler market) – the one at Azadpur in north Delhi being the largest – to sell their produce, as is mandatory now. They can sell them anywhere – lock, stock and barrel.

On the face of it, it should concern few. The move is among many measures taken by the Narendra Modi government to check the burgeoning inflation, which moderated to 8.14 per cent in June from 9.50 per cent in May. The order follows finance minister Arun Jaitley’s announcement in the budget to liberalise farm produce trading by facilitating direct sale and purchase of crops through farmer markets called ‘kisaan haats’.

This has piqued a section presumed to favour the Bharatiya Janata Party (BJP): Delhi’s traders. While the Congress and other parties have always said the BJP, especially Delhi BJP, has strong backing of the trading community and the APMC governing boards, this move has had this section enraged. Having recently backed the BJP for opposing the Manmohan Singh government’s plans to open up the retail sector to foreign direct investment (FDI), the trader lobby is now bracketing the ruling party with its predecessor.

According to them, the L-G’s move to denotify fruits and vegetables from the APMC Act is part of a bigger scheme to get in FDI in multi-brand retail through the backdoor – by making the local traders ineligible from buying the farm produce at the mandis and thereby forcing farmers to eventually sell their produce to big retail chains who own cold storages.

‘This kisaan mandi is a workable model only if you have a strong processing industry. Brazil, Spain and Germany, for instance, have a standardisation process – farmers there sell their crop to the processing industry and sell the minuscule residue crops in small markets near their farms,’ Bhatia said. ‘But we don’t have such standardisation here. Small farmers can sell their small quantities in nearby localities by bringing the produce in their own small vehicles’.

‘But what about big farmers? They can’t sell their crop the same day at the same place. It needs to be traded somewhere.’ Pointing out that N Chandrababu Naidu had experimented with Rahto Bazaar in Hyderabad during his earlier tenure as Andhra Pradesh chief minister and the Sheila Dikshit government had started a kisaan haat on Andheria Modh in south Delhi but both had come a cropper, he said the premises are now rented out to Delhi Tourism Development Corporation. No farmer is interested, he stressed: ‘Kisaan bechega ki ugayega (will the farmer sell or produce)?’ he shot back. ‘Name one Indian industry that does direct selling. Is it practical, possible? The government needs agents to buy even arms and ammunition. But the same fraternity (traders) becomes an evil agent when you talk of selling and buying farm produce!’

He said APMC mandis, too, have kisaan sheds where farmers can come and sell their produce directly without any intermediaries. ‘But how many farmers come and sell there?’ Metha Ram Kriplani, president of the Azadpur chamber, said the wholesale market paid nearly ‘100 crore to the government in the last financial year. He said, ‘If you do away with buying and selling of F&V in these mandis how do you maintain these mandis without the income it earns from trading them? There are 1 lakh sellers and buyers in Azadpur mandi itself; and then we have labourers and other people working in logistics. What happens to them?’ FDI vanguard.

Emphasising that they supply to all parts of Delhi, wholesalers (blamed for widening the gap between wholesale and retail prices to as much as 50 per cent) warned that consumers will also suffer as a result of this denotification order. ‘A farmer would only sell close to his area. If F&V is delisted and trading of these items supply is disrupted, where will the vendors buy from?’ one trader asked.
Kriplani said, ‘Rural areas may have ample supply but how would you ensure supply in urban areas? After all, these crops are not produced here. Where will trading take place? The government has not given any roadmap on this.’ Alleging that the government is deregularising buying and selling of F&V at Delhi mandis to facilitate FDI in multi-brand retail, Kriplani said, ‘This is a ploy to let domestic and foreign (big) retailers to get into trading of these crops as they expand their business to suburban areas. These retailers have deep pockets and will buy 4-5 acres of land outside metropolises, set up cold storages there and monopolise both urban and suburban markets from there. Ultimately the consumers and farmers will suffer.’

If the Delhi L-G’s decision is implemented, farmers would sell their produce as and when it is plucked or sheared. ‘There would be glut in the market (at that point) and there would be no supply for rest of the year. The intermediaries make the produce available throughout the year’.
By arrangement with Governance Now
Seema Sindhu

Seema Sindhu

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