Fact Check

Factcheck – Aam Aadmi Party Claims an Adani Project is Due to New Farm Laws

In a recent debate on ABP News, Sanjay Singh of the Aam Aadmi Party got into a slanging match with anchor Rubika Liyaquat on the issue of a godown being built by an Adani group entity in Panipat, Haryana. Sanjay Singh claimed that the Essential Commodities Act was amended only to benefit Adani group, who will now get to hoard farm produce and make windfall profits. He also mentioned some 100 acre land where this is being done. This was hotly debated by the anchor, who pointed out the incentivization for private sector in farming as part of AAP’s manifesto for the 2017 Punjab state assembly elections, leading to a heated exchange.

This is not the first time that this allegation has surfaced. In the past thirty days, we have been seeing reports being put out by certain people that apparently uphold this claim. The videos claim that Adani group has procured land to store grains and will use a private rail line to do so. The claim is that the government, implying the Modi government, gave them all the necessary clearances just days before the Essential Commodities Act was amended in May 2020 as part of the Aatmanirbhar Bharat initiative.

The claims can essentially be broken down into four primary parts:

  • Claim 1: Essential Commodities Act (ECA) was amended to benefit entrepreneurs via hoarding in the name of warehousing and storage,
  • Claim 2: Adani group was well informed about this measure, thus building this 100 acre warehouse in Panipat. Clearances were granted barely days before the announcement of farm laws.
  • Claim 3: Adani group will be buying the produce of farmers from Punjab and Haryana and store it in this Panipat warehouse, and it will release the grain whenever there is a shortage to make windfall profits.
  • Claim 4: Adani group has been given permission to lay down a private railway line of his own to bring in the foodgrains as per will. A railway track has been built especially to cater to their needs.
Truth is Rather Simple – Nothing Suspicious Exists on This Project

A probe into these claims led us to understand that the project is perhaps a case of much ado about nothing. To make sense of this, let us put out a few facts to explain exactly what is going on in this Panipat project.

In 2005, the then UPA government of Dr. Manmohan Singh announced the formation of the Dedicated Freight Corridor Corporation of India Limited which would build and operate dedicated freight corridors (DFCs). One of the corridors identified was the East-West Corridor, which connects Ludhiana in Punjab and Dankuni in West Bengal and passes through Panipat district.

As part of the DFC corridor projects being launched, a government food procurement and storage organization called the Food Corporation of India (FCI) in 2010 called for bids via tender from interested parties who wished to work with the FCI by offering godowns/warehouses to FCI for storage of food grains along with warehousing services at par with Central Warehousing Corporation/State Warehousing Corporations (CWC/SWC), and without services under its Private Warehousing Scheme.

These warehouses are to be built along the DFCs to take advantage of their alignment and creating industrial corridors, the very raison d’etre of the DFCC initiative. The tender document, still available in the public domain, clearly states that the winners shall be service providers to FCI in the form of storage/logistical support, and nothing more.

The Private Warehousing Scheme, it must be pointed out here, is meant to promote PPP model of food management, and was started in 2010, when UPA II when Dr. Manmohan Singh was running the country.  In the entire exercise, it is amply clear that Adani Agro is neither engaged in buying or selling grain in this site. Rather, the warehouse is essentially going to be provided to FCI, which shall use it to its benefit. Clearly, Adani group has no role to play in determining prices of any food items as well.

In fact, Adani group had been working with the Food Corporation of India since 2008. A Financial Express report dated 16 October 2008 clearly shows that Adani Agro-Logistics built state-of-the-art silos for bulk handling and storage of foodgrain in collaboration with state-owned Food Corporation of India (FCI) for the first time in the country, and was expecting to break even over the next 5 – 6 years.

Also, there were several other food and food processing related organizations that similarly won tenders from other organizations. A comprehensive list of such organizations was put out by the Commerce Ministry body, the Department for Promotion of Industry and Internal Trade (DPIIT) online for public discretion. In the case of the FCI tender, one of the sites was to be located in Haryana, and the tender winner in that particular case turned out to be Adani Agro Logistics Limited.

As for the date of clearance, the matter has been in discussion for long now. In 2017, the change in land use needed by the Adanis was rejected by the then Haryana government’s Town and City Planning Department.

The company had already started to purchase land, which is wasteland and has no irrigation facility, as reported by Dainik Jagran, and also got into negotiations with other farmers while putting in its application again.

The reason for disqualification was the width of the road needed – the mandated width was 33 ft but the road here was only 22 ft wide. Subsequently, the company applied put in a CLU application, which coincidentally got approved only on 7 May 2020.

Thus, the claims are simply a case of much ado about nothing. There is neither a case of cronyism, or a case of anyone giving anyone else undue favours. Coincidental timing over a project that has been in the pipeline for years, that too by a company that has been working with FCI for nearly fifteen years is all that there is to it.