Farmer organisations back retail FDI

Written by Nanda Kasabe | Pune | Updated: Dec 2 2011, 09:30am hrs
Even as traders across the country downed shutters on Thursday in protest against the government's decision to allow foreign direct investment (FDI) in retail, farmer organisations are coming out in support of this decision subject to the condition multi-formats are compelled by law to directly purchase from farmers. The farmer bodies are looking for removal of the middlemen, better infrastructure and a good supply chain so that they benefit from the presence of large multi-formats in India.

Our organisation supports FDI. However the government should put in some kind of restrictions to ensure that the effort is focused on rural areas and farmers receive benefits. At present, it is the commission agents who benefit, Shriram Gadhve, chairman, All India Vegetable Growers Association ( AIVGA) said. Gadhve's organisation holds buyer-seller meets at Thane and surrounding areas to help farmers get better prices, adding that contract farming was negligible and should be encouraged. A better cold storage would help since this could help prevent the existing loss of 34% of fruits and vegetables due to inefficient systems in place, he added. AIVGA operates in nine states including Maharashtra, Andhra Pradesh, West bengal, Bihar, Chattisgarh, Punjab and Haryana and claism to have 2,200 farmer outfits as its members. The organisation that was formed in 2004, works towards creating awareness for use of improved technology.

The government last week permitted 51% foreign direct investment (FDI) in multi-brand retail leading to leading to the Bharatiya Janata Party, CPI(M) and TMC opposing this move. A bandh was organised by traders across the country to protest this move.

Bharat Krishak Samaj, a farm lobby with more than 75,000 members says it supports FDI in retail subject to making direct procurement from farmers mandatory. A monopoly exists between the private guilds of middlemen, commission agents at the sabzi mandis (wholesale markets) and the street vendors and vegetable sellers in the retail market. Given the perishable nature of food like fruit and vegetables, the farmer is compelled to sell his crop when it is time to harvest. He cannot wait for a better price and is thus exploited by these guilds. Yet, when it comes to preparing guidelines for FDI in multi-brand retail, the government curiously can only think of trying to secure the right of these very guilds from anticipated competition of large format stores,Ajay Vir Jakhar, chairman, Bharat Krishak Samaj (BKS) said.

BKS wants the government to make it mandatory for retailers a step further and make it mandatory for retailers to buy 75% of their produce directly from farmers, bypassing the 'mandi' auction system. 50% agriculture produce purchased directly from the farmers is from within 100 kms. of each backend processing centre and across geographies, Jakhar said.

Chengal Reddy, secretary general, Consortium of Indian Farmers Associations (CIFA) says FDI in retail could do lots for Indian farmers. India has 600 million farmers, 1,200 million consumers and 5 million traders. I fail to understand why political parties are taking an anti-farmer stand and worried about half a million brokers and small shopkeepers, he said. The biggest problem with farmers today is marketing and if this is taken care of, it will be good for the farmers, Reddy said. CIFA mainly operates in South India in states including Andhra Pradesh, Karnataka and Tamil Nadu and now claims to have a membership of 300 farmerassociations across India including the Shetkari Sanghatana in Maharashtra, Rajasthan Kisan Union and Himachal Farmer Organisations. This orgnisation is a loose confderation

of farmer bodies across states and Reddy now works in Delhi on farmer related policy issues and promoting farmer-industry partnerships. CIFA said it would seek support of farmer organisations across states to give statements favoring FDI in retail and also work towards forming new producer groups of farmers so that retail chains could tap these.