Mukesh Ambani on retail and SEZ plans

via Rediff: "Is there this kind of arbitrage in agriculture?

Let me give you some numbers. Take potatoes, the most common food across the world. From Bill Gates to my driver, everybody eats potatoes. Now, plot the prices. Farmers in Uttar Pradesh and Bihar get about Rs 4-5 a kilo; in the Middle East, the wholesale price is about Rs 25-30 a kilo. In the US, Sam's Club, it is Rs 90 a kilo. In Europe, it is Rs 110 a kilo. The arbitrage is 1:20. If we get our produce right, and if the US market is opened up, you will be surprised how quickly we reach $20 billion.

The food market is much bigger than the software services market. And the money goes straight into the hands of millions of farmers. The spinoffs are enormous -- jobs, houses, durables, a whole new consumption boom will start in rural areas."

The country produces 150 million tonnes of fresh produce today. We can go to 300-400 million tonnes fairly quickly over a few crop cycles, as long as we can move those millions through the system and have world-class quality.

This means that when you go to the market -- doesn't matter whether it is Reliance or Bharti -- you should have the confidence that you are buying quality and it is safe to eat. After meeting the needs of Indian consumers, how do we take advantage in fresh through exports and value added industry such as processing?

It's really a yield-productivity-distribution story that we are involved with right now.

We are driven by creating purchasing power first. The farmers will have purchasing power and their staff will have purchasing power. Today, the farmer with two acres of land has five people in his family. It is like running a factory, but one that is only running 20% of the time because 80% of the time he cannot sell his products.

He doesn't have the inputs to produce the right quality. What we have to do is win his trust and bring him to his true potential so that he can run his two acres at 90% and increase his income by nine times.

We studied what people want to spend their money on at all income levels and in different geographies.People first want to spend money on food -- that is common across the world. The second, in India, is education. In many parts of the world, it comes way down the list of priorities. So, there is a huge opportunity.