the recent arrest of four employees of Indian Tobacco Company (itc)'s e-Choupal (rural mart) in Moradabad, Uttar Pradesh (up), brought itc 's grain trade in the town to a standstill for 10 days. Officials in the civil supplies department seized 48,475 one-quintal bags of wheat, alleging a breach of procurement norms governing minimum support price (msp) of wheat. According to them, itc was procuring wheat at Rs 20 below the msp of Rs 640 per quintal, a violation of up 's Agricultural Produce Marketing Committee (apmc) Act.

up was among the first states to allow private companies to directly procure food grains from farmers. It even amended the apmc act on the lines of the model apmc legislation suggested by the Centre in 2003. Moradabad and Bareilly are important wheat producing belts, contributing to about 30 per cent of up's total production. itc and food major Cargill were permitted to procure wheat from farmers at particular locations and not below the msp . But senior officials in the district administration complain that itc neither paid the msp nor bought produce at the stipulated places.

However, local itc officials call the arrests part of a witch-hunt by authorities, under pressure from small traders and commission agents of the mandi system, who have consistently opposed foodgrain procurement by private companies. In Lucknow, Rajnikant Rai, vice-president, international business division in charge of e-Choupals, itc, refused to comment on the arrests. But its a definite setback for the company, whose e-choupal initiative created a market buzz and tried to bring transparency to the central foodgrain procurement system (see Down To Earth,