MUMBAI -- India's leading conglomerate Reliance Industries, run by billionaire Mukesh Ambani, has become the latest target of monthslong protests by farmers against the country's new agriculture laws, which they fear may leave them at the mercy of large companies that might be looking to enter the agribusiness sector.
The petrochemical-to-digital group on Monday approached the Punjab and Haryana High Court, pleading government intervention in stopping "miscreants" from damaging its telecom towers in the northern states after vandals allegedly damaged more than 1,500 of 9,000 telecom towers in the region of Reliance Jio Infocomm, the group's telecoms arm.
"These acts of violence have endangered the lives of thousands of its employees and caused damage and disruption to the vital communications infrastructure, sales and service outlets run by its subsidiaries in the two states," Reliance said in a statement.
Since October, different farmers' unions have staged multiple protests against big corporations and boycotts of their services. Some have thrown away their Jio SIM cards, while marches have been organized at shopping malls run by Reliance Retail, the group's retail arm. Adani Group's silo projects in the Punjab cities of Moga and Sangrur have been affected, as have petrol pumps run by Essar Group and Walmart stores.
The PHD Chamber of Commerce and Industry, a New Delhi-based trade group, in late December estimated economic losses from the farmer protests at 700 billion rupees ($9.6 billion) in the October to December quarter, due to disruptions in supply chains and daily economic activity.
Farmers still account for half of India's 1.3 billion population, making serious conflict with them highly risky, even for large companies. Reliance said in its statement that there were five "irrefutable facts" that rendered the farmers' campaign against it baseless.
It said that no group companies had done "any 'corporate' or 'contract' farming in the past, and have absolutely no plans to enter this business." Reliance Retail "has never entered into long-term procurement contracts to gain unfair advantage over farmers or sought that its suppliers buy from farmers at less than remunerative prices, nor will it ever do so."
Reliance also stressed that it had never purchased agricultural land and had no plans to do so in the future, adding: "As customers of their services, we believe in building a strong and equal partnership with Indian farmers on the basis of shared prosperity, inclusive development and an equitable New India."
The three new agriculture bills, aimed at liberalizing the sector, allow farmers to sell their products at competitive rates to private players anywhere in the country, instead of just at government-regulated wholesale markets, or mandis as they are commonly called, where they receive a minimum support price. The MSP is a benchmark fixed by the government and designed to protect farmers from sharp price falls in times of bumper harvests.
However, farmers fear the new laws, which were passed by the Indian parliament in September, will lead to the dismantling of mandis and the MSP, leaving them at the mercy of private players who may reduce prices below the designated floor. This is despite government assurances that the traditional markets and MSP will continue, and that growers will be free to choose which mandi or buyers to sell to.
Fears directed against Reliance, in particular, seem to stem from the company's often aggressive strategy to build fierce competition and wipe out a market, which was seen in the case of its launch of Jio in September 2016. The telecom operator entered the market with virtually free calls and in just three years climbed to the top.
On its way, several telecom companies had to exit the market, leaving only two other private players -- Bharti Airtel and Vodafone Idea.
Yogendra Yadav, founder of the Jai Kisan Andolan farmers' movement, condemned the acts of vandalism but stood by the view that the farm bills were in favor of big corporate houses. The organization called for a "voluntary boycott" of goods and services from the companies of Mukesh Ambani and another billionaire Gautam Adani.
"At no stage have we called for damage of any property. In fact, we have gone out of our way to issue statements requesting people not to damage property," Yadav, who is also the founder of political party Swaraj India, told Nikkei Asia on Tuesday.
He added that the organization believed that this was the beginning of the corporatization of agriculture, of which Ambani and Adani would be the biggest beneficiaries. "Because big companies have the advantage of volume, they can squeeze farmers more than others," he said.
Vivekananda Subbaraman, an analyst with Ambit Capital, believes that Reliance has been very clear about its role in the agriculture sector. "[Reliance Retail] buys produce from the spot market. But I think that is their extent of interest in the sector," he said, adding that fears regarding Reliance Retail were "unfounded," as the company's share in the overall food and grocery segment is still small.
Reliance Retail sells food and grocery through the Reliance Fresh brand. It also retails consumer electronics and fashion and lifestyle items. Groceries are sold through 797 dedicated stores among its 11,785 stores across India.
By Reliance Industries' own estimates, the organized food and grocery market -- in which Reliance Retail is the biggest player -- contributed just $21 billion in sales to the country's overall $545 billion food and grocery market for the fiscal year ended March 2020. The total market is expected to grow at a compounded annual growth rate of 9% over the next five years to reach a value of $850 billion.