Big retail impact on small farmers ignored: Study

Rishikesh Bahadur Desai Bidar | Updated on January 27, 2011

Organised retailing of fruits and vegetables by corporate chains may not only affect small retailers. A study says it could impact the livelihoods of small farmers too.

“Increased demand for quality fruits and vegetables by retail chains is going to put horticulture farmers under tremendous pressure. The government should support them by training them in producing quality products, and by providing marketing and infrastructure facilities. But it seems to be totally disengaged from this whole process of change,” the Director of the Hyderabad-based Centre for Research on Innovation and Science Policy (CRISP), Dr Rasheed Sulaiman, told Business Line.

He was visiting the Karnataka Veterinary, Animal Husbandry and Fisheries Sciences University to present a paper at a recent conference. Dr Sulaiman bases his arguments on a study ‘ Organised Retailing of Fresh Fruits and Vegetables: Is It Really Helping Producers?'

The study was conducted by Dr Sulaiman and Ms N. J. Kalaivani of CRISP and Mr Jatinder Handoo of the Mumbai-based Financial Information Network and Operations Ltd.

The study notes that the current debate on organised retail of fresh fruits and vegetables overlooks the impact on traditional small farmers, and is focused on small retailers alone. Farmers tend to benefit when they have multiple buyers. However, only a few farmers have benefited from the procurement by organised retailers, as the retail chains deal only with a few farmers who can meet their limited requirements of high-quality fruits and vegetables.

Keep mandis in sight

“Most farmers would continue to depend on traditional mandis, and upgrading the infrastructure and trading practices at the mandis should receive continued attention,” Dr Sulaiman said.

With increasing organised retail and spending capacities, demand for quality fruits and vegetables will increase. If farmers have to benefit from this, they need to be trained to enhance the quality of horticulture products, he said.

Extension support

However, government-led extension support for horticulture producers is currently very weak. This should be strengthened by increasing the access of farmers to qualified extension professionals, he said.

Dr Sulaiman pointed out that there was a huge scarcity of qualified extension professionals in agriculture and animal husbandry.

binding contracts

Another area of concern is that most procurement arrangements between retail chains and farmers are based on trust without any written or binding contract. “The government should work with retailers to evolve ways to ensure written contracts regulate the procurement process,” he said.

Published on January 27, 2011

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