Himachal farmers welcome FDI in retail

Shimla : Opening up the retail sector for foreign direct investment (FDI) is expected to give a boost to fruit and vegetable farmers in Himachal Pradesh, especially as its temperate climate offers the opportunity for off season cultivation , a top farmers body said here Sunday .

”FDI is expected to roll out cool chains that will bring the market closer home, reduce the number of middle men and enhance returns to farmers,” said Prakash Thakur chairman of the People for Environment Horticulture & Livelihood Himachal Pradesh , a prominent farmers body .

Thakur said this policy change is commendable for the farmers of the hill state who grow apple , stone fruit , and off season vegetables , a significant part of it rots and wastes due to lack of a cool chain system in the hill state .

”Highly perishable fruits like cherry, apricots, peaches and plums that have huge demand but unable to tap the market fully due to lack of a cool chain and transport infrastructure . All this should see a boost with opening up of the retail sector for large investments through FDI,” Thakur told the Hill Post .

”Though the government has offered a subsidy of Rs 625 crore, but it will be only with support of FDI that the private sector would be able to import technologies and funding for establishing these much needed cool chains,” he said .

The inter ministerial task force has also projected an investment of Rs 2100 crore for upgrading existing storage and post harvest management facilities in the agriculture sector, FDI would certainly help to bridge any funding or technology gaps thus helping to boost productivity.

Farmers say with the entry of the private sector into Himachal Pradesh’s fruit and vegetable business players like Adani Agro Fresh, Dev Bhoomi, Container Corporation of India or Mother Dairy who have begun to strike deals directly with the farmers in recent years and doing away with traders .

Multi-brand retail with 51 per cent ownership will change the game completely and make the market more competitive, reduce wastage and reduce distress sales for growers , he said .

On the other hand the CPIM’s state unit has criticized the opening of the FDI in retail saying it will destroy small traders .

The party is planning to hold protest rallies agianst this move , said Tikender Panwar , a top CPIM leader of the state .

In a 20 year career published widely. He has worked for the BBC, AFP, The Statesman, IANS and the Business Standard . Known for his hard hitting writing and occasional off-beat stories. He lives in Shimla.

1 Comment

  • If we analyze the issue by keeping party politics at bay, the FDI in retail will be beneficial to both, farmers as well as the consumers due to economies of scale, less intermediaries, and cut throat competition. We have examples in telecom and banking, which were seen with the same doubt years ago. If we are true to ourselves, then we must acknowledge its advantages to consumers. There is only one adverse impact here. Many small retailers have to close their shops due to the shift of consumer base towards big retailing chains. Thats it. Some convenience shops will be needed in neighbourhood but not too many. Consumers fully deserve a competitive and efficient market exposure. For example, branded wheat flour cost ranges anywhere between Rs 160-225 in the traditional grocery stores. If this is the variation in one commodity, imagine the plight of a consumer buying hundreds of such items in a month. For how long will the consumers keep on financing individual retailers for this inefficiency? Surely people buying on credit will have no better option. There is nothing to worry about multinationals and foreign hands in this era of globalization when no one afford to live without commodities and services produced by international brands. We have to believe in governance and regulatory bodies which are working fine in banking and telecom as well.

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