Retail FDI: do we need more Amuls or Walmart?

There have been wide ranging debates over the decision of UPA-II to open up multi-brand retail for Foreign Direct Investment (FDI). The votaries of FDI in retail have rallied that FDI is ultimately going to benefit the Indian farmer and improve the back end of the entire agricultural supply chain.

Agricultural analyst Devinder Sharma does not agree. Speaking to CNN-IBN he said, "The presence of Walmart has not benefited the American farmers in any way. They have not obliterated the middlemen but they have become big intermediaries, like a big fish in a small pond." He also quoted a Punjab Agricultural University that stated that contract farming, one of the precursors of FDI in multi-brand retail has failed and 65% farmers want to leave contract farming.

Will Walmart solve India's farming woes? AFP

Instead of looking at Western models of improving our retail and agriculture sectors, one should look at home grown co-operative organisations like Amul. According to him, it was a highly successful model that should be replicated in the farming sector as well rather than bringing 'failed' models like Walmart to Indian shores.

Asked if he was infringing on the right of the consumer to choose the retail format, he said, "If you want to bring in FDI in retail, do so by all means. But don't do it in the name of the farmer."

Published Date: Sep 25, 2012 14:16 PM | Updated Date: Sep 25, 2012 14:16 PM