Experts divided on benefits of FDI in retail to farmers

NEW DELHI: Agriculture experts seem divided on the issue of benefits to farmers from government's decision to allow foreign direct Investment ( FDI) in multi brand retail in India.

Planning Commission Member Abhijit Sen said the benefits of FDI in multi brand retail to the farmers needs to be analysed in the long run, while noted farm economist Y K Alagh said the move will be successful if it reaches the small farmers and artisan groups in the country.

Consortium of Indian Farmers Associations (CIFA) Secretary General P Chengal Reddy welcomed the move saying that it would help in raising the income of the farmers.

Agriculture expert Devinder Sharma felt this policy will only help the multi-national companies.

Explaining the dynamics of profit, Sen said that benefits to the farmers will increase if the demand increases.

"Whether FDI in multi brand retail will be able to perk up the demand needs to be analysed in the long and medium term," Sen said.

There have been initiatives in the retail sector relating to agricultural products, but so far farmers have not gained much from it, he added.

Echoing similar views, Alagh, who is a former union minister and Member, Planning Commission, said for the farm sector to grow, FDI in multi brand retail should target the demand in the big towns and not just the metros.

"This policy should target big towns, places which have a large customer base and has expanding incomes. Also at the same time there is an urgent need to reach out to the small farmers and artisan groups so that they are encouraged to produce more as well as ensure there is no wastage" he said.

Retail in farm sector needs to be strategically used like China, where the small producers are allowed to sell their products in large retail chains thus providing them a platform to showcase their talent and achievement, Alagh, who is presently Chairman of the Institute of Rural Management Anand, added.

Farmers' body CIFA has thanked the government for allowing 51 per cent FDI in multi brand retail.