Reliance Retail to pay above MSP in Karnataka rice deal

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Reliance Retail Ltd has closed a deal for the purchase of 1,000 quintals of Sona Masoori paddy from the farmers of Sindhanur taluk in Raichur district as the first large transaction between a big corporate entity and farmers since the promulgation of the amended APMC Act in Karnataka takes place.

Around a fortnight ago, brokers registered with Reliance signed an agreement with Swasthya Farmers Producing Company (SFPC) which has newly ventured into procurement and sale of paddy and have 1,100 paddy farmers registered with it. Reliance Retail specified that there needs to be less than 16% moisture in the crop and is providing Rs 1,950 per quintal of Sona Masoori, which happens to be Rs 82 greater than the minimal support price (MSP) for the crop set by the federal government (Rs 1,868).

The farmers have to bear the bills of the sacks used to pack the crop and also the transportation  of the crop to the warehouse in Sindhanur while SFPC will charge only 1.5% fee for each Rs 100 transaction.
“Once the quality is found to be satisfactory, Reliance’s agents will procure the crop. Currently, there are 500 quintals of paddy stored in the warehouse. We are expecting the purchase to go through anytime now. Once they have procured the crop, Reliance will transfer the money to SFPC online and we will credit the money directly to the farmers’ accounts,” said Mallikarjun Valkaldinni, managing director of SFPC.

Furthermore, the vehicles used for the transportation of paddy will be tracked using GPS in order to ensure that the crops are not tampered with at any stage.