Himachali farmers see better profits with global retailers

A herbal garden of what used to be a cannabis field

Shimla: No more rotten apples and sweeter profits! That is how cultivators in Himachal Pradesh, a major fruits and vegetable basket, visualise the larger impact of the entry of global supermarket chains like Carefour and Costco into India.

Not here, the brouhaha over the recent decision to allow up to 51 percent stake in the mult-brand retail trade sector to foreign firms. None of the cities in Himachal Pradesh has a population of over one million to qualify for the entry of foreign retail chains.

What the stakeholders see is greater remunerative prices, which today is being cornered by intermediaries, and large-scale investments in cold chains and integrated marketing facilities, the lack of which causes as much as 25 percent of their produce go waste.
“A kilo of broccoli sells at between Rs.20 and Rs.30 in the local market. We prefer to sell locally, as there is no proper storage and transport infrastructure,” said Tek Chand, an exotic vegetable grower in Karsog in Mandi district.

“In Delhi, the same broccoli fetches more than Rs.100 a kilo in the wholesale market. So you can see how much the middleman makes. With multinational retail chains, our produce can travel greater distances and we can get a much better price,” said Chand.

According to Prakash Thakur, director of Agricultural and Processed Food Products Export Development Authority (APEDA), an institution set up by the central commerce ministry, the state needs some $10 billion for integrated storage and marketing infrastructure.

“Where will this money come from? Both the state and the central governments lack funds. Foreign investment is the only option,” Thakur said, refering to a clause that requires 50 percent of foreign equity in retail to be invested in back-end infrastructure.
Himachal Pradesh, which has 90 percent of its population in rural areas, produced l.03 million tonnes of fruits last year, of which 892,000 tonnes were in apples alone. It also produced a record 1.35 million tonnes of vegetables, valued at $400 million.
Stakeholders see a major jump in produce-value, once cold chains are established.

“We don’t need commission agents,” lamented Munish Justa, an apple grower at Kotkhai in Shimla district. He said they get paid Rs.20 a kg for golden apples, which the state is famous for.

“But by the time it reaches Delhi, after passing through a chain of commission agents, a kg of apples fetches a price of Rs.50 in the wholesale market. The transportation costs could be no more than Rs.10 per kg. Clearly, middlemen and pocketing Rs.20 per kg.”

Rajeev Chauhan, chairman of the Himalayan Apple Growers Society, said foreign capital in the retail trade and backend could lead to greater market stability. “At the time of glut, the fruit can be stored. This will cushion both the grower and the consumer,” SAID Chauhan.


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  1. says: Devinder Sharma

    Whereas the Minister of Horticulture views FDI in retail sector as a threat to the local farmers, the farmers are looking at it from the perspective of a great opportunity to rid themselves of the exploitative middlemen. It is certainly going to offer HP farmers an opportunity to make the most out of their capacity to produce off-season vegetables and exotic vegetables resulting from the massive infrastructure of poly vinyl houses all over the State. Red and Yellow bell peppers sell on the roadside at Rs. 100 a kilo and local cucumbers sell at Rs. 50 a kilo. We have an enormous market potential in the metropolis of Delhi for anything and everything we can produce in the nature of upmarket and conspicuous consumption. The State government can chip in by providing a resilient marketing system which prevents exploitation by the middlemen and that is what FDI in retail sector is going to offer to our farmers.

  2. says: Vinod Sharma

    I think the clause of 10m popuation in not madatory.Its only an enablement from the centre. State govt can take a call whether to allow fdi or not in state with less population. Gurgaon is a example.Its Population is around 8lacs. Anyways no doubt that fdi is going to create lot of excitement in the farmer community and I wish them all the best.Middle man may not be eliminated from all the areas but with fdi in farmer will have a choice to sell their produce.

  3. says: Shamsher Singh Banshtu

    Friends, Duo Sharmas above,have made the position very clear regarding the FDIs . I think the matter should be weighed in term of livelyhood of the peasantry. It must not be given political colour. In the present atmosphere the available storages built and managed by the Indian Businessmen would be no different than the FDI. I think we should welcome the decision ,. On the contrary FDIs are only for the cities, whos population is more than 10 Lacs and Himachal does not fall in that.

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