Impacts of Fdi in India
Impacts of FDI in India
Impact on Farming Communities
The emergence of big supermarkets is inevitable once the FDI policy is put into place. What does this mean for the farming community? When supermarkets source from small farmers, they tend to buy from farmers who have the most non-land assets (like equipment and irrigation), the greatest access to infrastructure (like roads and cold chain facilities), and the upper size treacle of land (among small farmers).
When farmers enter supermarket channels, they tend to earn from 20 to 50% more in net terms. Among tomato farmers in Indonesia, for example, net profit is 33-39% higher among supermarket channel participants than among participants in traditional markets. Farm labor also gains. But supplying supermarket chains requires farmers to make up-front investments and meet greater demands for quality, consistency and volume compared with marketing to traditional markets.
Suryamurthy, R. in an article in The Telegraph, claims farmer groups across India do not support status quo and seek retail reforms, because with the current retail system the farmer is being exploited. For example, the article claims: Indian farmers get only one third of the price consumers pay for food staples, the rest is taken as commissions and mark-ups by middlemen and shopkeepers. For perishable horticulture produce, average price the farmers receive is barely 12 to 15% of the final price the consumer pays. Indian potato farmers sell their crop for Rs. 2 to 3 a kilo, while the Indian consumer buys the same potato for Rs. 12 to 20 a kilo.
Various farmer associations in India have announced their support for the retail reforms. For example, Shriram Gadhve of All India Vegetable Growers Association (AIVGA) claims his organization supports retail reform. He claimed that currently, it is the middlemen commission agents who benefit at the cost of farmers. He urged that the retail reform must focus on rural areas and that farmers receive
Impact on Farming Communities
The emergence of big supermarkets is inevitable once the FDI policy is put into place. What does this mean for the farming community? When supermarkets source from small farmers, they tend to buy from farmers who have the most non-land assets (like equipment and irrigation), the greatest access to infrastructure (like roads and cold chain facilities), and the upper size treacle of land (among small farmers).
When farmers enter supermarket channels, they tend to earn from 20 to 50% more in net terms. Among tomato farmers in Indonesia, for example, net profit is 33-39% higher among supermarket channel participants than among participants in traditional markets. Farm labor also gains. But supplying supermarket chains requires farmers to make up-front investments and meet greater demands for quality, consistency and volume compared with marketing to traditional markets.
Suryamurthy, R. in an article in The Telegraph, claims farmer groups across India do not support status quo and seek retail reforms, because with the current retail system the farmer is being exploited. For example, the article claims: Indian farmers get only one third of the price consumers pay for food staples, the rest is taken as commissions and mark-ups by middlemen and shopkeepers. For perishable horticulture produce, average price the farmers receive is barely 12 to 15% of the final price the consumer pays. Indian potato farmers sell their crop for Rs. 2 to 3 a kilo, while the Indian consumer buys the same potato for Rs. 12 to 20 a kilo.
Various farmer associations in India have announced their support for the retail reforms. For example, Shriram Gadhve of All India Vegetable Growers Association (AIVGA) claims his organization supports retail reform. He claimed that currently, it is the middlemen commission agents who benefit at the cost of farmers. He urged that the retail reform must focus on rural areas and that farmers receive