Farmers doubt Punjab claims on Reliance deal

Despite opposition from various quarters, the Punjab government today signed a memorandum of understanding with Reliance Retail Ltd to execute the agri business project.

The corporate player, according to the MoU, will invest Rs 500 crore in the farm-to-fork project and the state government, in lieu of the investment, will provide about 600 acres at different prices (as the land is scattered at different locations) and offer fee concessions on the purchase of food and vegetables, infrastructure cess and the rural development fund.

The MoU was signed by G S Cheema, financial commissioner (development), Punjab, and A Shankar, president (corporate affairs) Reliance Industries Ltd. Punjab is the first state to give official approval for the project and the company plans to replicate the same in more states across India. Reliance Retail Ltd has proposed setting up 52 rural hubs in the first phase.

According to Reliance officials, about 1,100 acre of land was under different stages of acquisition in Punjab. However, farmers in the state have expressed apprehensions about the government's claims that the project would generate about 100,000 jobs and a massive infrastructure for the rural development.

According to the general secretary (national) of the Bhartiya Kisan Union, Rajewal Balbir Singh, the plight of farmers in Punjab was like "a burnt child that dreads the fire".

"Pepsi made a similar commitment about 10 years ago, when they entered Punjab for the cultivation of crops for their food-processing units in Hajoora and Channo. But the farmers faced harassment," Rajewal Balbir Singh said.

He also gave the instance of Mahindra and Mahindra entering into contract farming of Basmati rice in Patiala two years ago. The farmers paid a membership fee of Rs 500 and service charges of Rs 300 to private players and were later left to fend for themselves.

The farming community in the state is apprehensive that this would break up the existing marketing structure and they would become dependent on the private investors.

In Punjab, 72% of the land holdings are of less than two hectares and so such projects would not be viable, says a farmer from Phagwara.