The Essential Commodities Act will have an adverse impact on the future expansion and growth of the company?s promising ?e-Choupal? network across the country, ITC chairman YC Deveshwar has said. Given the frequent changes under this Act, the company could not procure farm products at a good price.
?It is a problem for us and will have a major say in e-Choupal?s growth,? Deveshwar said.
?We are not only involved in trading farm produce, but also looking after farmers. Apart from being well networked with farmers, we buy and sell on their behalf. If we cannot buy farm produce at good price due to storage problems (not allowed to store more under EMA), then it will have a say on e-choupal?s growth,? Deveshwar told the media on the sidelines of launching the e-Choupal network at Sivaganga in Tamil Nadu, the Lok Sabha constituency of finance minister P Chidambaram.
The network was launched by P Chidambaram on Saturday.
Based on the APMC Act in different states, the company had gone on expanding the network to improve the lives and earnings of farmers.
?We are part of the supply chain and actual users of farm produce. To buy at good prices we need to store. But due to the Essential Commodities Act, we cannot store the same. It is an unusual circumstance and has put us in a problem,? he said.
?We are not speculators. Don?t club us with other traders who speculate. We are part of creating value and productivity. The e-Choupal network has enabled farmers to produce 50% more and earn good prices. So, we should be exempted from the Act and the APMC Act need to be liberalised further,? he said.
Responding to queries, he said, ?All businesses are created for long-term and to grow and we are looking at long term growth only. We continue to create new markets for our products, particularly in the FMCG area and be there as a major competitor.?
To a specific question on the Q1 results, he said, ?Though we need to look at price increases, this should not be seen as a price trigger. We don?t want to be seen as responsible for a price accelerator effect but at the same time we need to hike prices for survival.?
The company is looking at entering wood-based industry, which has huge potential in India. It is also planning to enter coffee in a big way and currently experimenting on this area. ?Ours is an emerging economy and we need to be there. We want to be a differentiator in every business where we enter,? he said.