MP starts Babai farm sell-off process

The MP government has started looking for a consultant to privatise the controversial 3,200-acre Babai farm in Hoshangabad district and other 60 agriculture farms it owns. The process will begin next month.

Although the state government has altered its earlier plan to lease it through international competitive bidding, the privatisation process may face a roadblock, government insiders fear. The overhauled privatisation process will allow the state government to offer access to private companies on a "managerial contract basis".

"We will allow companies to manage the farms, wholly or in part. But we will not lease the farm on any condition," said a senior official in the department of agriculture.

The Babai farm, despite its huge area of 3,299.06 acres (horticulture area 530 acres; building and offices area 431 acres; road length 14.50 km; 77 tubewells; 55 pumpsets in working condition, 1,600 Kw powerload; and irrigation infrastructure), is a loss-making entity.

A senior official of manager rank has been suspended recently by the Madhya Pradesh State Agro Industries Development Corporation (MP Agro), the nodal agency which manages the farm, allegedly for manipulating accounts.

"I do not think the government will be able to lease it on any condition, because a lot of vested interests are involved and that is why the government is persisting with the privatisation process," a government insider told Business Standard on condition of anonymity.

Earlier MP Agro had put out 3,108 acres of the farm for lease or sale and had appointed Nabscon, an agency of the National Bank for Agriculture and Rural Development, to assess the value of the farm before floating a global tender for it. The state government had set the floor price of the farm at Rs 44 crore and Nabscon's draft assessment has assessed it at Rs 49 crore approximately.

Now the whole farm will be not be revalued; instead, the new consultant will revaluate the farm "most probably in portions" and accordingly the State Agro Industries Development Corporation will invite private players for fresh bids to manage the farm.

"We are working on the modalities of the whole process," the official in the department of agriculture said.