The West Bengal government’s inability to amend a decades-old Act that governs the marketing of agricultural produce has forced Tata Chemicals Ltd to look at other states to open a planned distribution centre and a chain of wholesale stores.
Tata Chemicals had planned a “pilot” distribution centre in Kolkata which would procure fresh produce from farmers and sell it through a network of wholesale stores to retailers and institutions.
It plans a similar centre at Ludhiana in Punjab, and the chain of wholesale stores in that city should open for business early next year, said Guy Goves, CEO of Khet-Se Agriproduce India Pvt. Lt d, a 50:50 joint venture of Tata Chemicals and Ireland’s Total Produce Plc.
“Now we are examining other cities” in other states to replace Kolkata, said Goves. Homi Khusrokhan, managing director of Tata Chemicals, said the company might consider Hyderabad or another southern city for the project.
The West Bengal government has been pushing to amend the Agricultural Produce Marketing (APMC) Act, to allow private sector firms to procure farm produce directly from farmers rather than buying from a government procurement agency. However, the Forward Bloc, a partner of the Left Front that rules West Bengal, and which controls the agricultural marketing department, has opposed this move.
Khet-Se plans to open 20 distribution centres and dozens of wholesale stores and grow its business to Rs1,000 crore by revenues in the next five years. It will go to almost every state where companies such as Tata Chemicals are allowed to procure fresh produce directly from the farmers, Goves said. Several states, including Punjab and Andhra Pradesh and Madhya Pradesh, have amended the APMC Act.
Tata Chemicals’ decision comes at a time when protests against organized retail are growing across the country. Small store owners, political parties and activists believe that the entry of large companies into retail will hurt the millions of kirana (or fresh produce and grocery) stores that dot the country.
Several state governments, including West Bengal, have either barred large companies from setting up retail chains or asked them not? to? deal ?in fresh produce.
Last month, Uttar Pradesh asked Reliance Retail and RPG to close their stores till a panel studied the impact of big retail on small store owners. The Centre has commissioned a New Delhi think tank for a similar survey.
Sanchita Das in Kolkata contributed to this story.