Business, Economics and Jobs

India: And now a word from our farmers


An Indian farmer talks on his mobile phone as he rests on a pile of mangoes at the Gaddiannaram fruit market in Kothapet, located in the outskirts of Hyderabad.



Economists have been banging on for months (years!) about India's decision to open the "multi-brand" retail sector to foreign investment from companies like Walmart. But in all the back and forth, it's rare to hear from ACTUAL FARMERS. And guess what: Farmers in Punjab have already been working with Walmart's wholesale operation since 2008.

So what's the deal? Has Walmart revolutionized agriculture in India's breadbasket state?  Not exactly, according to the Indian Express.

In Mushkabad village of Ludhiana, farmer Davinder Singh says Walmart quotes prices usually 10 percent higher than the state wholesale markets do, but there is uncertainty on the size of orders, the paper said. “A bulk order from Walmart could range between half a tonne to two tonnes, depending on demand. Since the orders are unpredictable, we cannot fully rely on them and sell the remaining produce at mandis, at times at low rates,” the Express quotes Singh as saying.

“The main gain for farmers has been in terms of agronomic practices and technology," Singh adds. "Walmart has set certain standards; there is an additional bonus for delivering quality produce. We are also provided training by their field agronomists. FDI in multi-brand retail will bring post-harvest facilities and cold chains and cut down on wastage.”

Others are more critical.

Jaswinder Singh Sangha, who heads the Jalandhar Potato Growers’ Association, calls the buyers the “new middlemen," the Express writes -- a reference to the oft-recited claim that big retail will give farmers better prices by eliminating today's go-betweens.

“We supply baby corn. The contract price fixed was Rs 8 a kilo. But they usually bring the price down by Re 1 a kilo saying it is below specifications or reject some lots,” the paper quotes Sangha as saying. “Despite producing pesticide-free vegetables, finally the price works out to a mere Rs 1 to 50 paise a kilo more than what the mandis give. Also, the vegetables we pick in the evening first go to their collection centres for sorting and grading and reach retail stores on the third day, when they are no more fresh.”

Similarly, "potato king" Rana Jung Bahadur argues that the contract farming relationship will leave farmers holding the bag if crop damage results in a shortage -- whereas today the market prices for produce rise in that event.

Bharti Walmart, in an email response to The Indian Express, said it is working with over 6,400 farmers in the country and ensures 7 to 10 percent higher prices to farmers than what they get from the market, as well as providing advice on technology and other aid, the paper said.