Big guns eye integrated terminal markets project

NEW DELHI: Around 100 companies, including Reliance, L&T, Tata Chemicals and ITC, have joined the integrated terminal markets project in the horticulture, meat and poultry sector. The EoIs were invited for the initial phase which proposes to set up eight modern and integrated terminal markets countrywide within six months. The government will cough up only Rs 150 crore as equity.

Though the agriculture ministry envisages up to 49% equity participation, several companies are willing to invest even if there is no government equity involved. “The Centre’s participation will boost the confidence in the sector. What’s really driving the private sector enthusiasm is the estimated wastage in the fruit and vegetable sector of about 30%.

That works out to about Rs 20,000 crore annually. Private players don’t need any mark ups over this. Just playing on this will make for optimum price discovery and quality produce. After all, agriculture is the largest private sector enterprise in this country, but it is extensively regulated,” says Kalyan Chakravarthy, V-P, development and knowledge banking division, Yes Bank.

In either case, he argues, these terminal markets are expected to be run completely by the private sector. Charkravarthy says government equity will be diluted completely by the private sector over a period of time. Several companies showing interest are new to the sector.

According to Anurag Bhagnagar, DG, NIAM, “The present marketing system deters farmers from getting remunerative prices through a transparent price discovery mechanism and also fails to meet growing consumer demand for graded and standardised food. The modern terminal market would offer a wide range of facilities all under one roof like grading and sorting line, electronic auctioning, quality testing laboratories, cold storage and most importantly, banking facilities.“ Terminal markets are envisaged as one-stop B2B shops offering logistical solutions and multiple choices.

The markets identified for the first phase include Mumbai, Nasik, Nagpur, Chandigarh, Bhopal and Patna, with Nasik attracting the highest private sector response. Although Haryana is the only state among these where the requisite APMC Act has not been suitably amended, Rai could be first terminal market in horticulture to take off. Patna, with a huge potential for vegetables, has also invited good response despite a ‘political uncertainty’ factor.