After Reliance, Metro's plans may hit APMC roadblock

It's not just Reliance Retail, Metro Cash and Carry India's plans in West Bengal may also run awry if the state Agriculture Marketing Board has its way.

Metro is yet to apply for the Agricultural Produce Market Committee (APMC) licence issued by the Board. The Board is known to be against companies whose business plan includes doing away with the intermediaries in the procurement to supply chain. The state agricultural marketing board is controlled by the Forward Bloc, a Left Front ally.

Naren Chatterjee, chairman, West Bengal State Marketing Board said, "I have heard that they will sell directly to the trade then what will happen to the people in the chain, they will become jobless. We will not allow any one who disturbs the chain."

The board has turned down Reliance Retail's revised proposal for West Bengal. Chatterjee said the board has verbally communicated to the company that it would not be possible to grant the licence.

However, Reliance Retail sources claim that the company had not submitted any revised proposal.

According to the board, Reliance Retail's venture, which includes a gamut of formats including terminal markets, would render at least one crore small traders jobless. "We will have a Nandigram in every block if that happens," said Chatterjee.

While the Marketing Board's main concern is that the intermediaries in the chain are not disturbed, the companies want the exact opposite.

Metro's spokesperson said that if the same good is handled by different people, then there are costs associated at each level and wastage. "Our aim is that producers should get more money and consumers should get the produce for less."

He added, "We have been given assurances from the West Bengal government that we will be allowed to procure agriculture produce directly from farmers in the state."

He added this will allow Metro to source directly from farmers thereby building direct supply chains, reducing wastage levels and providing better quality products at lower prices to professional customers such as kirana stores, small restaurants and businesses.

He further said the government will issue Metro the APMC licence required to do the same our the company's center in Kolkata is ready for operation.

Apart from the APMC licence for which Metro is yet to make an application, the wholesale chain's first site had run into a legal suit, which has delayed the launch.

Naren Chatterjee said, according to the APMC Act, licences were required not just for marketing but also procurement. Difference licences would have to be obtained for subject items in each of the regulator market committees.Not just vegetables and staples, dairy products and poultry also come under the purview of the Act.

As per the memorandum of understanding signed with the West Bengal government, Reliance Retails plans include at least two food and vegetable terminal markets, apart from the rural business hubs in the block headquarters of each of the districts.