Organic Farming

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Organic Farming Association of India
Organic Farming Association of India (OFAI)
G-8 St. Britto’s Appartment, Fiera Alta, Mapusa, Goa - 403507 myofai@gmail.com
Issues with FDI in Multi-Brand Retail for Indian Agrarian Community Submission to Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce & Industry stakeholders meeting held on 13th January 2012 Udyog Bhawan, Delhi

Summary Statement
OFAI supports retail reforms in the form of improving supply chain and infrastructure to aid and economic security for farmers in the country but does not endorse the current proposal of 51% FDI in multi brand retail. We believe that India is capable of managing its own market through the states. Indian government and states can easily access funds available by removing unrequired subsidies to the tune of USD 20 billion a year e.g. through removal of fertilizer subsidy. Arguments and assumptions for this proposal debate piggyback on farmers stating that somehow this will help them in the long run in addition, help tackle national inflation and create newer jobs and infrastructure. The evidence however is on the contrary to this end so far as farmer of other countries fare with such retailers. In America every food dollar sends only 12 to 21 cents to farm gates. There is no provable evidence on whether such a move by even existing retail players of the country has helped the farmers nor is there any current evidence on how the cost of creation of newer infrastructure shall in the long run actually ensure best prices to customers and farmers. In fact in countries where these players operate has seen significant reduction in the overall farming communities and have become net importing states. While the farming community needs better infrastructure to move produce across the country, it also needs assured, stable marketing base which will not dictate to it in terms of inputs, seeds and types of crops. In addition the existing GHG emissions in India will only be added to in the short and medium term too. If India is not able to meet global demand for GHG cuts it will only add economic pressure on the country. While there are lacunas in the current system of marketing, there is also the belief that the solution must come out of our own structures as they exist today without having to resort to foreign funds. As per a 2009 report on North American grocery retail has actually indicated that even in those countries large retail companies actually prefer to open smaller stores more accessible to consumers. This indicates that opening large format stores actually does not work sustainably in terms of environment and costs in the long run anyways. Finally, we believe that retail reforms addressed in this way actually take away the actual economic shock absorbing capacity inherent to the diversity of various traders and retailer in our country. This will be transferred to the hands of a few large entities, which today being susceptible to failure lead to a wide will spread economic havoc the country can ill afford to handle. Organic Farming Association of India

Organic Farming Association of India (OFAI)
G-8 St. Britto’s Appartment, Fiera Alta, Mapusa, Goa - 403507 myofai@gmail.com
Issues with 51% FDI in multi branded retail towards Indian Agrarian Community Farmers do not get promised price even if foreign players enter the market or for that matter large retailers 1. For every food dollar the American spends the farmer gets 19-22 cents, whereas a decade ago they made 40 cents. US farm gate prices as per cent of final retail price is 7 to 45%. Even in the UK the picture is no different. (Gorelick 2001)Their countries heavily subsidize their farmers to prevent them from committing suicide. Alas in India life of a farmer is far much cheaper than their western counterpart. Currently in India farmers get 50% or higher the price even at times of what gets sold. It will be untrue to state that the farmers in India are dying...
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