Keep grains off retail, Buddha tells Reliance

KOLKATA: “Don’t touch foodgrains.” This is rule no: 1 for the Mukesh Ambani-owned Reliance Group which has ambitious plans to spread its retail footprint across West Bengal. The state government has also spelt out categorically that Reliance’s retail initiative should in no way unsettle the lives of small shopkeepers and vendors.

Even as West Bengal chief minister Buddhadeb Bhattacharjee tries to persuade his more difficult cabinet colleagues and other constituents of the ruling Left Front, the rules of the game are being laid down for Reliance’s entry into West Bengal.
“We have told Reliance not to touch foodgrains. However, we don’t want to stop them. How can we? Spencers, Pantaloons, all have set up shops. Why should we stop Reliance?” Mr Bhattacharjee told ET on Thursday.

The Reliance Group had originally sought around 1,700 acres from the state government to run their businesses. Later, they scaled down their demand to 1,000 acres. Their plan is to roll out a state-wide agri-retail chain that will comprise 5 distribution-cum-procurement hubs and 80-odd rural business hubs. Such outlets are supposed to come up in different districts like East Midnapore, Malda, Howrah, Burdwan and Darjeeling. Reliance Retail has since submitted a scaled-down plan.

to the government, though the CM did not divulge any details. The rural business hubs would have competed directly with the state agricultural marketing board’s own procurement centres. This led to opposition from the Forward Block which controls the agriculture ministry as well as the state marketing board. It is not clear if Reliance Retail’s latest plan will start off with a lower number of rural business hubs than the 80 originally envisaged.

However, the chief minister, who has been grappling with a tricky political situation ever since Singur and Nandigram came under media glare, was clear that foodgrains should be out of the ambit of Reliance Retail in West Bengal. Depleting foodgrain stocks, import of foodgrains, direct procurement of grains by MNCs and large Indian companies allegedly contributing to the central government’s reduced offtake, and the recent controversies surrounding the futures trading in wheat are believed to have contributed to the decision.

Big retail players would not only pay a higher price than what is offered by Food Corporation of India and other state procurement agencies to buy grains directly from farmers; once their retail touches a critical mass, in all likelihood they would enter into forward agreements either with farmers or through commodity exchanges to take advantage of the price situation. They may also export in a big way. While this may eventually benefit farmers, the hue and cry over futures trading in essential commodities, has turned the state sceptical. The chief minister says that exports will impact self-sufficiency in foodgrains.

Mr Bhattacharjee also felt that neither the government nor any of the Left Front partners did not have the capacity to prevent the Reliance venture. “No one can stop them from doing business in West Bengal. Once they move court, they will get the permission to run the business,” the chief minister said.