Food Bazaar keen to buy directly from farmers

Pantaloon India Limited, a venture of the Future Group, is looking at ways for procuring farm products for its food retail chain, Food Bazaar, through contract farming in West Bengal.

According to Arvind Chaudhary, CEO, food business, Pantaloon India Limited, this would reduce the cost of farm products in its outlets by around 20 per cent.

"We would not only like to procure Pineapples through contract farming in the state for local consumption, but also for the rest of the country," said Chaudhary.

"For potatoes, we would like to initiate contract farming for local consumption only," he added.

He said the company was willing to procure exotic fruits and vegetables through contract farming in Darjeeling.

He however admitted that the APMC act in West Bengal restricted the amount of direct procurement from the farmers and the company had to pay multiple cess for the procurement.

Currently 20 per cent of agri-products sold in Food Bazaars are procured directly from the farmers.

By next year the Future Group aims to procure nearly 50 per cent of agri-products from farmers.

By the end of this fiscal, the group planned to double the number of its food retail outlets, which would include three hypermarts, said Chaudhary.

Currently, agri-products account for 10 percent of the food articles in the retail outlets.

In the next one or two years the group wanted to take it to 15 per cent, he added.

However, he did not specify the size and investments involved in the stores.

The company is also planning to increase the number of products under its three private food -item brands""Farm and Fresh, Tasty Treat and Premium Harvest.

Currently, the company procures products through a contract farming based structure in Maharashtra and UP.

In case of UP, the company through an agreement with a cluster of farmers procures potatoes on the basis of a pre-determined quantity and quality.

The farmers are paid on the basis on market price.

In Maharashtra, the group purchases Alpalnso mangoes through contract farming on the basis of a joint price discovery mechanism.