Is Reliance Not Walking the Talk on Contract Farming?
Reliance Industries Limited (RIL) made the headlines on January 4, 2021 following a public statement assuring farmers that it has not indulged in contract farming or purchase of agricultural land and has “absolutely no plans to do so.”
However, the two-page long statement seems flimsy after considering past activities of the company under Corporate Social Responsibility (CSR) schemes. The company’s flagship programmes such as the Bharat India Jodo (BIJ) scheme and plans to engage in biodiesel production while engaging farmers have especially been criticised by experts and media channels for its ‘self-promoting’ attitude.
RIL introduces the scheme on its website using flattering catch-phrases such as “enriching lives of marginalised communities” and “enhances livelihood opportunities,” promises to work with grassroot organisations and technical resource agencies to “create a knowledge and resource platform for collaborative large-scale impact.”
Yet, agricultural scientist A. Prasad Rao voiced concerns about details of the 2010 initiative in a Frontline article published in 2013. He pointed out that while the programme takes care of all expenses from land tilling to input supply and technology for the first three years, it also binds peasants with contracts.
Rao said that farmers unknowingly agree to conditions stipulated in the English-language contract, including a clause that stipulates agreement details should not be revealed to anyone until the expiry of the three-year period. Another clause enables a member of the village Farmers’ Association to become a member of the farm producers’ company. Moreover, any dispute can only be settled at the headquarters of Reliance Foundation (Mumbai), effectively keeping farmers from legal help.
Similarly, during a legal analysis of the three farm laws – the Farmers (Empowerment and Protection) Agreement on Price Assurance & Farm Services Act, the Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Act and the Essential Commodities (Amendment) Act – SabrangIndia observed that the contract farming Act puts similar legal restrictions of farmers.
The BIJ programme also claims to encourage ecological sustainability through resource conservation, use of cleaner technologies and promotion of biodiversity. At the same time, RIL also employed thousands of farmers to invest in jatropha plantation, a water-intensive crop if used for commercial purposes, said DownToEarth in 2015. The report worried about possible drinking water shortage and encroachment on pastoral lands and animal habitats if plans continued.
A social worker based in Bilaspur (Chhattisgarh), Ashok Pradhan, told DownToEarth that large corporations would use the jatropha-hype created by the government to grab vast stretches of forest and pastoral land. He also mentioned that the state government promised 200,000 hectares to some of the largest private sector companies such as Reliance.
The article said the rush for land would only victimise poor farmers, fighting to protect their land from rich Haryana and Punjab farmers eyeing the lucrative bio-diesel business.
Earlier in 2008, Livemint stated that RLS has “alliances” with farmers in Andhra Pradesh, Maharashtra, Madhya Pradesh and Gujarat, to build clusters of 100,000 acres for 100,000-tonne biofuel extraction plants. RIL also signed agreements with 1,200 farmers for one- and two-year-old jatropha plantation on 2,200 acres of wasteland in Nizamabad, Andhra Pradesh.
When SabrangIndia approached farmer leader Hannan Mollah regarding the company’s statement he said, “Reliance has thousands of acres of land under its ownership. This land has not fallen from heaven but has been taken from farmers. We are sure that they will continue to do so in future.”
Earlier, the All India Kisan Sangharsh Coordination Committee (AIKSCC) rejected RIL’s statement as a “ploy to serve business interests.”
Incidentally, Reliance, the biggest mango producer in the country, also owns 600 acres of land at Jamnagar, Gujarat.
Regardless, the statement says that the company does not own agricultural land and even goes so far as to say that it helped farmers gain significant profits by creating technology-enabled supply chains.
In response, Mollah said, “Compared to farmers’ benefit, retail chain owners have much more to benefit since they are ones who determine the quality of products and the middlemen who carry out the business. This narrative of companies losing out for farmers is completely false. Reliance has always believed in advertisement. That is what this statement is. It is an advertisement created for the benefit of Reliance.”
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Why Farmers are Anti-Adani
Vallari Sanzgiri & Deborah Grey
The fact the Adani group operates silos for the Food Corporation of India (FCI) has been a key cause of concern for protesting farmers. But before fanning the flames of conspiracy theories, it is important to delve into exactly what the Adani-FCI deal entails.
According to Adani Agri Logistics Ltd (AALL)’s own website, “Adani Agri Logistics Limited (AALL) has signed an exclusive service agreement with the Food Corporation of India. The project has been implemented at a total cost of nearly Rs. 700 crores.”
AALL explains further, “The key feature of the project is that the entire handling of the food grains, right from receiving at Base Depots, cleaning and drying as well as storage and transportation to field depots is carried out in bulk form, thus minimizing the losses. These units are notified procurement centers of FCI, where farmers deliver their produce directly in bulk form.”
Detailing where the project currently stands in terms of scope, AALL says, “AALL handles 5,75,000 MT of food grain for FCI in the states of Punjab, Haryana, Tamil Nadu, Karnataka, Maharashtra and West Bengal. Another 3,00,000 MT of food grain is handled for Govt. of Madhya Pradesh. Additionally, AALL has expanded its footprints in Bihar, UP, Punjab, Haryana, Maharashtra & Gujarat with upcoming capacity of 400000 MT.”
Fears pertaining to hoarding and export
Because AALL stores food grains in such a large amount at its facilities, and there has been a dilution of laws pertaining to bulk storage, farmers groups fear that Adani could hold on to the stored grains and prevent their sale, thus causing an artificial scarcity to bump up prices.
“The presence of Adani silos cannot be seen as a single issue. These actions are being carried out to finish off the FCI and the PDS system as per the suggestions of the Santhanam Commission report. First they will make go-downs. Then the FCI will shift all food grains to Adani storehouses. Then finally Adani will take over FCI responsibilities as well. This is all as per Privatisation plans and this is why the Essential Commodities Act was amended. The government does not want the responsibility to supply food to people. So it is trying to withdraw their role and bring in privatisation instead,” says senior farm leader and All India Kisan Sabha (AIKS) general secretary Hannan Mollah.
He further explains, “They are part of a package to abolish the FCI, the PDS system and hoarding restrictions in Essential Commodities Act. Moreover, hoarding restrictions helped keep an account of the quantity of food stores. Now, how will the government know who stores how much food?”
Bharatiya Kisan Union leader Dakaunda Jagmohan Singh says, “There is no need for private company silos. There are central government and FCI storage houses near railways but they do not repair them.” He added, “The hidden agenda is that until they purchase the produce they will take rent from the FCI.”
There are also concerns, that since Adani has its own transportation apparatus such as dedicated trains and railway tracks that serve the silos where the grains are stored, as well as access to ports, the company could easily take the food grains out of the silos and export them to foreign countries, instead of releasing the grains in the domestic market.
“We are not just fearful, we are sure this will happen,” says DJ Singh. “Earlier during the 2017 WTO meeting at Bali, then Commerce Minister Kamal Nath chaired a meeting that had agendas similar to recent ordinances. The Modi-government went ahead and passed all these laws as per the WTO agenda without consulting farmers. Already in the Green Revolution belt of India including Punjab, Haryana and other states, they have increased prices on imported commodities like pesticides and fertilisers. Now that they have usurped all inputs they are now trying to cheaply procure and benefit from the output,” he explains.
“Already, we have heard that the company is preparing 4000 compartments and 400 engines to prepare their own goods trains. Therefore, MoUs and rent levied on the FCI or whoever else, will be as per Adani’s wishes. That is why, in the beginning when we were blocking trains we allowed certain goods trains to go but did not allow Adani’s goods trains to pass,” adds DJ Singh.
Then there are fears that Adani group’s closeness to the ruling regime, allegedly grants them special privileges.
“‘Closeness’ is an understatement. 15-20 years ago, who was Adani but a simple trader. Now, with the help of Modi he has become a big man. That is why we call it crony capitalism – these are profits made using political affiliations,” says Mollah. “The same thing happened during the Australia coal mining incident. Modi went to speak for the company. As for the company’s claim of acquiring the project through an open tender process, this is all manipulation. The company knows what it’s doing and makes such claims to fool common people,” he adds.
Adani’s response
In light of these concerns, the Adani group has issued two sets of statements of clarification, the first on December 8, 2020 and the second on January 3, 2021.
According to its latest statement, “Firstly, our website clearly states that we invested Rs 700 crores to build our Silo Grain Storage infrastructure. This project was envisaged by GOI under the National Policy on Bulk Handling, Storage and Transportation in 2000.” The group has clarified that it has been in business with the FCI since 2005 and that it won the contract through a government supervised, competitive and transparent bidding process.
The statement further said, “Apart from the Adani Group, there are over 10 more companies that are working with FCI in this field.”
The group also shot down allegations of special favours from the ruling government saying, “For the record, Adani Agri Logistics Ltd (AALL) was established in 2005, much earlier than the ruling government came into power. The Adani groups legacy stands testament to working towards national goals with multiple governments over the past three decades.”
Some of the fears about hoarding and sale as artificially inflated prices began when Loktantra TV aired a video story making the claims. However, the Adani group has shot down all these claims dubbing them as “blatant lies and misrepresentation of facts”.
The group issued a statement on December 8, 2020 clarifying, “The Company has no role in deciding the volume of storage as well as pricing of grains as it is only a service/infrastructure provider for the FCI, while the FCI controls the procurement and movement of the food grains for the Public Distribution System.” The group further reiterated, “We do not own any food grains procured from farmers, and are in no way connected to the pricing of grains.”
On the subject of railway lines, the group said, “These railway lines are very much a part of the tender requirements floated by the FCI under the PPP (Public Private Partnership) project, whereby railway lines facilitate movement of grains from silo units to their distribution centers across India.”
(Courtesy: SabrangIndia)
