Private firms to set up mandis in Gujarat

The agriculture sector in Gujarat is poised to witness a sea change as farmers will now have the option of selling their produce directly to private companies.

The state government has given its green signal to eight companies, apart from the National Spot Exchange (NSE), for entering the sector.

While four companies have received in-principle approval to set up private wholesale markets (mandis) for fruits and vegetables, four others have been granted licences to purchase agri commodities directly from the farms. The NSE has received a go-ahead to start e-markets across the sate.

Till now, private players were not allowed to purchase agriculture produce from farmers. Instead they had to source it from the Agriculture Produce Marketing Committees (APMCs).

Last year, the state government amended the APMC Act to bring in the Model Agriculture Act, which allows entry of private companies into the agriculture sector.

The companies that would set up mandis include Gujarat Agro Industries Corporation Ltd (GAIC), Delhi-based Premium Farm Fresh Ltd, Surat Agri Marketing Hub Pvt Ltd and Hyderabad-based Amrathaligushwar Cold Storage Pvt Ltd, sources in the Gujarat State Agriculture Marketing Board (GSAMB) told Business Standard.

These markets would have state-of-the-art grading, sorting and packaging as well as cold storage facilities. As against this, APMCs still lag behind in terms of infrastructure. However, APMCs have realised the threat from the private sector and have started upgrading their infrastructure.

While Farm Fresh plans to set up private wholesale markets at Ahmedabad, Rajkot, Surat and Gandhinagar, GAIC's plans to set up at Ahmedabad, Surat, Vadodara and Jamnagar.

The Hyderabad-based company intends to start its markets at Ahmedabad, Okha, Surat, Sabarkantha and Jamnagar. The company also plans to set up a food park at Jamnagar with an investment of Rs 100 crore. Surat Agri's project would come up at Suart itself.

The companies that have received a common licence for direct marketing, which will enable them to purchase agriculture produce directly from farmers, include Reliance Retail Ltd, Jayant Agro Organics Ltd, Vadodara-based Janani Industries Pvt Ltd and Rangers Private Ltd.

The state government has issued the licences on ad-hoc basis for two years, as the rules and terms of Model Agriculture Act are yet to be framed. The approval so granted would help the companies start their operations.

"The licences would be renewed after two years and by that time, rules of the Model Agriculture Act would be in place," sources added.