Karnataka

‘Boom in food retail can benefit farmers’

BANGALORE: The boom in the organised food and grocery retail sector will benefit farmers if measures are taken to create synergies to bring about a win-win situation for the stake-holders, said economist and South Asia Director of International Food Policy Research Institute Ashok Gulati.

“Failure to take advantage of the unfolding retail revolution will dampen the future growth momentum of organised retail in food and grocery in India, leaving a majority of farmers in the subsistence trap and consumers in no better position,” Dr. Gulati said while delivering the keynote address at the first annual conference of the Indian Society for Agri-Business Management on “emerging trends in agri-business management,” on Thursday.

He said that the benefits of the organised retail could not be measured by winners and losers. But one had to take into account the impact in terms of the generation of revenue and jobs besides the long-term impact on different stake-holders in the agri-food system.

He stressed on the need for all stake-holders in the agri-food system to come to a common platform and discuss the issues that were of mutual interest or conflict through a transparent information campaign.

It was time the Government made an effort to create “firm-farm” synergies to help farmers. Even the civil society should be part of this campaign rather than be hostile to these initiatives, he said.

He said the restrictions on movement and marketing of agricultural commodities should be eased out and private sector participation should be encouraged to stimulate the pace of transformation.

In this regard, there was a need to phase out the Essential Commodities Act and adhere to the Model Act (the legislation through which the APMC Act was amended) providing for private sector participation in agricultural marketing.

Highlighting the importance of organised retailing, he said the famous “White (milk) Revolution” in the country was brought about not just through the cooperative movement of farmers, but also through the organised marketing outlets for selling the milk –which represented organised retailing.

Organised retail in India was not just about big malls in metros catering to the ultra rich, but a mixed bag of supermarkets, small neighbourhood stores and even branded pushcarts, he said.

The organised retailers could bring the traditional retailers and vendors under their banners through franchises, partnerships or by appointing them as employees as was being done in Japan.

The number of organised retail outlets increased from 3,125 spreading over an area of 3.3 million square feet in 2001 to 27,076 stores covering an area of 31 million square feet in 2006.

They were spreading into smaller towns.

The total retail business in the country was expected to grow at 13 per cent from $ 322 billion in 2006-07 to $ 590 billion in 2011-12. Of this, the organised retail accounted for only 4 per cent, but was estimated to grow at 50 per cent per annum and account for 16 per cent of the retail sector by 2011-12.

NABARD managing director K.G. Karmarkar said the agri-business was opening up in the country and there was a huge scope for entrepreneurship in this sector.

He called upon the agriculture science graduates to consider the option of setting up their own enterprise instead of joining other establishments.

The biggest challenge for Nabard was “how to make farmer the manager of his own agri-business,” he said.

University of Agricultural Sciences-Bangalore Vice-Chancellor P.G. Chengappa said that Bangalore was set to play a major role in the country’s organised food retail sector boom with 10 leading companies setting up their base here.

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