After giving a leg-up to the moribund industrial sector in the state through the West Bengal Investment and Industrial Policy 2013, the government of West Bengal has turned its attention to agricultural market in the state, to give the sector a new direction. ‘Bengal Beckons’ is gradually beginning to borne fruit. At that summit with industrialists in Mumbai in August, Chief Minister Mamata Banerjee had promised all help to industrialists, without compromising with the interests of the people of the state.
To give a push to agriculture and agro-based industries, the latest big decision of the West Bengal government is to set up agri-logistics hubs called ‘Krishak Bazars’, or farmers’ markets. The idea is to rope in private sector players in agriculture, just like in industry. The government wants to prove that private players can flourish in the state, and remove the negative perception regarding the issue of land acquisition for industry.
Companies which want to develop the Krishak Bazars would get the same benefits regarding land as those seeking to set up industries in the state. Apparently, the interest shown by Mukesh Ambani at the ‘Bengal Beckons’ summit to invest in this sector has fuelled the state government’s dreams to see this sort of initiative as a highly profitable venture. Through these dedicated markets, both the farmer and the companies running them would get to make profits.
Other top industrialists like Sanjiv Goenka of RP-Sanjiv Goenka Group, Sanjay Budhia of Patton Group, Mahendra Jalan of Keventer are also enthusiastic about the state government’s decision. They are calling it an extremely courageous decision on the part of the Chief Minister given the past history of the state in this regard. Companies like Adani Group, Shree Shubham Logistics Limited (SSLL) and Origo Commodities, which are running successful agri-logistics hubs in other parts of India have also shown a lot of interest in running such state-of-the-art hubs in West Bengal. According to government sources, foreign investors are also welcome to invest in these hubs (quite a few of them have shown a steady interest in investing in the state in recent times).
Their interest stems from the fact of wanting to tap the potential that the state has in terms of its huge agricultural produce. The new agribusiness hubs to be set up would give a viable shape to those plans, keeping the land use policy of the state intact.
To make these hubs a success in the long term, both for the investor and the state, a few pre-conditions have been decided upon.
- The minimum investment required to set up these hubs has been fixed at Rs 150 crore.
- The companies should have a minimum of three years’ experience in the buying, processing and storage of agri-products.
Highlights of the structure of Krishak Bazars
- The Krishak Bazars would run on a hub-and-spoke model
- Each Krishak Bazar would have 15-20 primary agricultural markets or mandis (the ‘spokes’ in the hub-and-spoke model) attached to it
- The company running a hub would get its supplies from these mandis
- It would be responsible for all aspects of the mandis, including those related to land
- The hubs should have warehouses to store 75,000 to 2 lakh metric tonnes of food grains
- Cold storage units to store 1 to 2 lakh metric tonnes of potatoes
- Rice processing units having a capacity of at least 2 lakh metric tonnes
- Units to produce edible oil from rice husks
- Other types of agri-processing units
- Packaging units for the processed and non-processed commodities
- Storage units of up to 1 lakh metric tonnes for animal feed
- Different setups in each hub for selling vegetables and fruits
The initial phase would see such markets established in the districts of Midnapore, Birbhum and those in North Bengal. Each of these hubs, one in each district, would have 15-20 mandis under it, which would supply its requirements. The company which runs a hub would also be responsible for running the mandis under it. This has been done to ensure that a particular hub is able to run independently, without any interference.
The state government is going full swing to make this initiative happen. Till now the state has had a negative image regarding attracting investments. The government’s land use policy and opposition to special economic zones (SEZs) were seen as major roadblocks towards economic development of the state.
According to senior functionaries of chambers of commerce like Associated Chambers of Commerce and Industry of India (ASSOCHAM) and Merchants’ Chamber of Commerce (MCC), this initiative of the state government would have multiple benefits.
- Contractual farmers would get the right price for their produce directly from the companies buying them.
- The scourge of middlemen, who buy at a very low price from farmers and sell at a much higher price, creating little benefit for the farmers and maximum benefit for themselves, would also be removed.
To its credit, the West Bengal government has successfully initiated a new path towards development, while sticking to its stated land policies. This is indeed a major achievement. Few (or no) states have managed to look after the interests of farmers this way while managing to create interest among industrialists.
More such summits are in the offing in Kolkata and Delhi where industrialists are to be formally invited to invest in these Krishak Bazars.