Organised retailing needs Rs 3 lakh cr investment: IACC
Farm incomes in India can double if organised retail enhances farmer realisations on food items from the current 30% to 35% of retail price to over 50%.
By PTI |
MUMBAI: In order to perk up the growth rate to 4 per cent in organised retailing, an investment of Rs three lakh crore would be required from the government, an Indo-American Chamber of Commerce (IACC) study on the issues affecting the farm to retail process in India said.
Farm incomes in India can double if organised retail enhances farmer realisations on food items from the current 30 per cent to 35 per cent of retail price to the international norm of over 50 per cent, the study said.
Indian government has been targeting a growth rate of 4 per cent in the agricultural sector, the actual growth rate of 1.8 per cent over the last few years is much less than the target.
IACC seeks to understand why this problem exists in a nation, which is still predominantly agricultural in nature.
Typically a farmer gets a return of up to 14 per cent on his produce, the trader adds his 12 per cent to it, and the retailer charges the consumer an additional commission of 12-15 per cent. By the end of this 3-step series, the consumer ends up paying over 40 per cent extra for the produce, without any value addition, it said.
"The price paid to farmers for fresh farm produce is currently about 30-35 per cent of retail prices as compared to the international norm of more than 50 per cent of retail price. This differentiation is primarily due to the farm sector being predominantly unorganised in India. Organised retailing in F&G segment can drastically improve supply chain and boost farmers' incomes and will bring a more structured growth to the whole sector," IACC, National President, Deepak Pahwa said.
Farm incomes in India can double if organised retail enhances farmer realisations on food items from the current 30 per cent to 35 per cent of retail price to the international norm of over 50 per cent, the study said.
Indian government has been targeting a growth rate of 4 per cent in the agricultural sector, the actual growth rate of 1.8 per cent over the last few years is much less than the target.
IACC seeks to understand why this problem exists in a nation, which is still predominantly agricultural in nature.
Typically a farmer gets a return of up to 14 per cent on his produce, the trader adds his 12 per cent to it, and the retailer charges the consumer an additional commission of 12-15 per cent. By the end of this 3-step series, the consumer ends up paying over 40 per cent extra for the produce, without any value addition, it said.
"The price paid to farmers for fresh farm produce is currently about 30-35 per cent of retail prices as compared to the international norm of more than 50 per cent of retail price. This differentiation is primarily due to the farm sector being predominantly unorganised in India. Organised retailing in F&G segment can drastically improve supply chain and boost farmers' incomes and will bring a more structured growth to the whole sector," IACC, National President, Deepak Pahwa said.
Start a SIP with as low as ₹500 with ET Money App!
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
