Business Daily from THE HINDU group of publications
Thursday, Sep 06, 2007
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Business Daily from THE HINDU group of publications Thursday, Sep 06, 2007 ePaper |
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Marketing
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Retailing Agri-Biz & Commodities - Marketing Retailers continue to obtain produce from APMC markets
The Act was amended to enable the farmers to be part of the sellers’ market and not have to auction their produce in the mandis
Divya Trivedi Mumbai, Sept. 5 The Agricultural Produce Marketing Committee Act has been amended in many States to allow retailers to buy directly from the farmers, yet many retailers are procuring fruits and vegetables from the APMC markets. Shoppers’ Stop has one Hypercity and three ExpressCity convenience stores and will increase the Hypercity format stores to 20 by 2011, according to Mr B.S. Nagesh, Managing Director. “We are procuring directly from the APMC yards and not going to the farmers. At present, even when we become 20 stores, I think this is the model we will follow.” Food Bazaar of Pantaloon Retail India Ltd has a presence in more than 40 towns and cities. Mr Sanjay Jog, Head, Human Resources, said, “We are procuring some of our vegetables and fruits from the farmers where the facilities are available, but mostly we are procuring from the APMC.” Explaining why despite the amendment to the Act the company is not buying from the farmers, he said, “We need to build a system in place for that to happen. We have done that in Bangalore, Maharashtra and the NCR region around Delhi, but at other places we just haven’t been able to do it.” Ms Ireena Vittal, Principal of McKinsey & Co said, “Where is the scale for the retailers to procure from the farmers? Today, it is more profitable to buy from the mandis than from the farmers.” The retailers had rall ied for the amendment of the Act so it could benefit the farmer and the retailer alike, eliminating the middlemen, the APMC markets. Mr Sanjay Gupta, Vice-President, Business Development of Spencer’s Retail Ltd of the RPG Group, said he was certain they were procuring from the farmers directly, but did not have the details with him. “In Hoskote in Karnataka, we procure directly from the farmers and there are other places also from where we do that. For any retailer to buy directly from the farmer, he needs to have his backend in place. He needs to invest in warehouses where he can store the goods bought from the farmer, clean the vegetables and fruits, package them and finally distribute them through the network to the shops.” The APMC Act was amended a few years ago to enable the farmers to be part of the sellers’ market and not have to auction their produce in the mandis where they are getting an unfair price, said a commodity analyst. The traders of the APMC markets have been fighting against the amendment of the Act, which 15 States have already undertaken and many others are in the process of doing. Mr Vinod Shetty, Advocate of India FDI Watch said, “In a situation where thousands of traders are involved in the mandis, and stand to loose their livelihoods if the Act is amended, the State governments should not amend the A ct.” Last month, five wholesale markets in Navi Mumbai remained shut for a day in protest of the amendment to the Act and FDI in retail. “You need a whole lot of infrastructure, people and processes to be in place to buy directly from the farmers and we have created such requirements. Wherever possible, we procure directly from the farmers,” said Mr Bijou Kurien, President and Chief Executive Officer, Lifestyle, Reliance Retail Ltd. At present, Reliance is one of the few companies buying directly from the farmers. Mr David Herridge, Director, Supply Chain Solutions of Singapore, helps Reliance with its back-end logistics and said, “Small unorganised retailers will have to consolidate, like in other countries, since Reliance is already getting where Wal-Mart is in back-end management. If they don’t they will be crushed.”
More Stories on : Retailing | Marketing | Horticulture/Fruits & Vegetables
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