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.