The debate is on from long time on multi brand retail in India. Now there are indications 26% FDI would be open up on multi brand retail. If so happen, there will be certain benefits farmers will get.
1. Assured purchases- Any large retail chain will need supplies. These are not going to come from abroad. These will have to be produced in some part of India. The company will have to get into a contract farming agreement with farmers and ensure that the produce is picked up and transported regularly.
2. Increase in productivity- Companies will have to compete not only on prices to the consumer but also on remunerative prices to farmers. This is possible only if they invest in better seeds, fertilizers and farm practices. The farmer has to get higher returns from his land and he needs support to do this: be it technology, better inputs or management. The winner will be the one which can get the farmers’ incomes up and keep the consumer prices down.
3. Better Quality- It calls for intervention at the farming, transport and storage stages. Besides giving right seeds and other inputs to the farmers, companies will have to advise farmers on management of the crops and use of consumer friendly pesticides.
4. Better Supply Chain Management- Perishable agricultural produce is now subjected to unscientific handling, resulting in huge wastage. Most often, the consumer pays for this wastage. A large company would consider increasing its competitiveness by ensuring the efficiency of logistics. This requires investments in warehouses and in transport and handling.
5. Introduction of new technologies- The competitive advantage of companies will come from introduction of new technologies to enhance productivity and quality at the farm level and in logistics. This could benefit a large number of farmers.
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