Why organised retail benefits farmers in Punjab & Himachal

Chandigarh, November 26
With Foreign Direct Investment (FDI) in retail opened up in 53 cities in the country ( which have a population of above 10 lakhs), Himachal Pradesh is unlikely to be affected directly, although vegetable and fruit growers in HP will possibly be able to bargain better with big retail chains. But with the BJP opposing FDI in retail nationally, the Himachal unit of the BJP too has succumbed to the political compulsion of opposing it.

In any case, since the retailers will have to register and obtain licenses, the state governments will be responsible for granting or rejecting the applications.

But to its enormous embarrassment, staunch ally Shiromani Akali Dal has been effusive in welcoming the move. Punjab deputy chief minister, Sukhbir Singh Badal, was quick to write a letter to Commerce Minister, Anand Sharma, endorsing the decision. Entry of foreign players, he said yesterday at Anandpur Sahib, would create a more competitive market for agriculture produce.

His optimism is based on Punjab’s successful experience with agri corporates. The entry of agri corporates like Bharti Wal-mart, Pepsi Co, Tata Khet Se and Metro Cash and Carry, has actually helped in strengthening the retail supply chain. Farmers in Haider Nagar locality of Malerkotla, who supply vegetables to Bharti Wal-Mart, have not just been able to improve the quality of the vegetables they produce, but they are also getting better prices. Potato growers in the Doaba region have also benefitted by selling their produce to Pepsi Co.

“Most of the agri businesses are sourcing 30- 40 per cent of their requirement from farmers within the state. As a result, farmers are assured of a buy back arrangement with these corporates and of higher returns.

“These farmers also learn better agricultural practices from the experts appointed by these companies, thus leading to a better quality of produce,” said a senior official in the state Agriculture department.

The entry of corpoartes in the poultry sector in Punjab, too, has made the small poultry farmer in the state viable. Big poultry corporates like Suguna and Venkateshwara Hatcheries have “integrated” with many small poultry farmers in Gurdaspur, Pathankot and Rajpura. These corporates supply their own seed, feed for birds and medicines, while the farmers nurse and attend to the birds before selling them to the firms.

Ironically, even in Himachal Pradesh, the entry of agri corporates like Adani Agrilogistics, Dev Bhoomi, Reliance Retail and Mother Dairy procuring apples, other fruits and exotic vegetables, has helped raise the economic condition of growers.

But talking to The Tribune, the chief minister Prem Kumar Dhumal said, “ The small shopkeepers will lose their business and it wll add to unemployment. With the withdrawal of the industrial package, our state is already facing a lot of unemployment. Agreed that some agri corporates have been buying select fruits and vegetables from Himachal, but the majority purchase is still being done by the state government,” he said.

Several farmers’ organisations, too, are sceptical about the move. Balbir Singh Rajewal, President of Bharatiya Kisan Union, said the move would benefit just those farmers who have large land holdings. Almost 70 per cent of the farmers in Punjab have less than five acres of land holding and will not be able to make enough investments in improving their farming operations, as desired by foreign agri corporates, he said.