Press Information Bureau

Government of India

Ministry of Commerce & Industry

22-December-2011 17:30 IST

Farmer Associations Support FDI in Retail

Farmers have reiterated their support for Cabinet’s decision to allow FDI in Multi-Brand Retail. In a meeting with the Minister of Commerce, Industry and Textiles Shri Anand Sharma here today, Secretary General of Consortium of Indian Farmers Associations (CIFA), Shri P. Chengal Reddy conveyed the desire of various farmers’ body to implement the decision as soon as possible. “FDI in retail will free farmers from the middleman and will get the remunerative price for the produce to the farmer” said Shri Reddy after the meeting.

Shri Anand Sharma said that government is undertaking widespread consultation and already consultations with SMEs and food processing industry have taken place after the announcement in the Parliament. The Minister explained that the policy has a distinct Indian imprint that safeguards local farmers and SMEs. “As supply chain efficiencies are built up, post-harvest losses will be considerably reduced, thereby enabling remunerative prices to farmers” said Shri Sharma. The safeguards pertaining to a minimum of 30% procurement from Indian small industries would provide the necessary scales for these entities to expand capacities in manufacturing thereby creating more employment and also strengthening the manufacturing base of the country. Rural economy will benefit as large-scale investment in the retail sector especially in backend infrastructure will provide substantive gainful employment opportunities in the entire range of activities from the backend to the frontend retail business, said the Minister.

Shri Reddy asked the Minister to ensure procurement efficiencies that will get the farmer good price for his labour. Shri Sharma explained to him the inherent provisions that ensure the protection of interests of the farmers.

Anand Sharma also agreed to seriously look into a suggestion for farmers’ advisory body for the Ministry of Commerce and Industry to incorporate the views of the farmers on a systematic basis.

Shri Reddy also informed about the CIFA’s efforts to engage state governments on the issue of FDI in retail. “Many states are reconsidering their opinion as we have explained to them various details because of which FDI will help the small farmers in the long run as it builds competitiveness” informed Shri Reddy.

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FDI in multi brand retail to restructure supply chains and improve farmer remuneration, subject to domestic safeguards. FDI in multi brand retail is framed as a supply chain reform to reduce intermediaries and post harvest loss, improve farmer remuneration, and expand manufacturing and employment, subject to domestic safeguards including a procurement requirement from Indian small industries, protections for farmer interests, stakeholder consultations, and consideration of a farmers' advisory body to the ministry.