Indian Retail industry, which is US$300 billion in 2006, is likely to  reach 427 billion US dollars by 2010 and to 637 billion US dollars by  2015.  Merely 3 per cent of retail in India is organized. Visible retail  revolution is on in India. In a short span of two years, retailing has  exploded on the Indian firmament as a humungous business opportunity.

The rapid expansion of super markets in India started from mega cities  of Bangalore, Chennai and Hyderabad, the southern part of the county.  Nevertheless, in recent years, new retail stores/supermarkets are being  opened at a frenetic pace in different small cities and towns throughout  the country. The country is quickly readying to face profound changes  in the retail landscape. It is only the beginning and the best is yet  to come.

The traditional model of farm plucked vegetables reaching the market  and sold the same day by the petty traders had to slowly give way to  sophisticated storage, handling and retailing of these commodities over few days by organized market chains.  The initiatives by large corporate  such as Bharti, Reliance ITC’s Business Division, Godrej, Aditya Birla  Retail under Trinethra, Fabmall and more, Food World. PepsiCo,  Tropicana and traditional grocery stores, such as, Nilgris, Apna Bazar,  Subhiksha and Metro are also increasing their outlets by connecting to  farmers directly. With appropriate contacting mechanisms stakeholders can  also connect to processing industries and fast food chain such as  McDonalds, KFC, Pizza Hut, Bominos and Narulas which continue to expand their  operations in India. These developments raise several fears and  apprehensions among the stakeholders, policy makers, and civil society  organizations as revealed by the recent protests against opening of the retail  shops by the corporate sector.

Corporate know that the Indian agriculture sector is a potential  goldmine that has not been tapped till now and farmers have a lot of reasons  to be happy with the corporate entry into agriculture scenario. With plenty of money and manpower’s at their disposal these corporate  Goliaths are attempting to give a new meaning to Indian agriculture- a  positive and vibrant.  These entrepreneurs are all set to change the fortunes  of agriculture industry that has so long been considered a failure.  Corporate are more capable of undertaking risks and can face financial  losses than small and medium farmers. The government is supporting all  these big players into the agriculture sector because of big growth  potential which can make a positive impact on the lifestyle of the farmers.  Many of these corporate are making a beeline to farmers’ doorstep for  buying their produce, something, which the poor farmers’ has never  experienced so far.  All the times it was the farmers who had to take  his produce to the market and search for marketing channels. Corporate  entry into agriculture could find an answer that has been plaguing the  farm sector for long- proper and affordable price to the farmers.

Retailing in India is subjected to a plethora of laws/regulations at  the central, state and local/municipal levels. There is lack of specific  legislation controlling distribution trade and there is no nodal  ministry to control and guide the operation of this sector. This has resulted  in delays owing to multiple clearance procedures. Single window  clearance scheme should be set up. The food supply chain is highly fragmented  and is dominated by a large numbers of intermediaries. Marketing of  agricultural produce is governed by the state specific Agriculture  Produce Market Committee Acts which until were quite restrictive in  commercial transactions in agricultural commodities outside the state designated  markets. Under the economic reform program, central government amended  the APMC Act in 2003 allowing agribusiness marketing firms to source  their raw material requirements directly from the farmers through  contracts or other wise. However its implementation, which rests with state  governments, has been slow acting as disincentive for agribusiness firms  to invest.

 As recommended by Dr M S Swaminathan, Chairman, National Commission  for Farmers,the Special Agricultural Zones should be established to  sustain and expand the retail boom from farm to market. SAZ should aim to  bring about a Small Farm Management Revolution which can help to improve   the productivity, profitability and sustainability of the major farming  systems of the country. Special incentive and support  for  conservation of farming, timely supply of credit, effective insurance system and  above all post harvest infrastructure for value addition to primary  produce, biomass utilization and producer oriented marketing must be given  to farm families in the SAZ Multi-stakeholder Contract Farming Regulatory Authority should be  established to ensure mutually beneficial partnership between the growers  and mega retail trade. Authority should ensure equitable social bargain  in this sector and can at as a watchdog body.

Another potential option that can effectively integrate smallholders on  the modern supply chain is to facilitate smallholders to form  grass-root level associations/informal cooperatives owned and managed by  farmers themselves, and/or producer companies- a hybrid between cooperative  ad private limited company- owned y farers but managed by hired  professionals empower them to effectively deal with big industrial players and  reap the benefits of scale economies of marketing.

Public private partnership can create further competition mange the  retailers and reduce the welfare losses of the traditional players such as  petty traders and street vendors of fresh produce markets.   Traditional retailers and street vendors need to be encouraged to form  cooperatives from the existing retailers associations. They should be given  appropriate training to organize them selves and start retail stores which  can effectively compete with the corporate sectors.

Retail boom will not collapse in the recent future provided those  engaged in making huge profits through transnational or national super  markets ensures livelihood security of millions of persons engaged in micro  retailing. Small and marginal farmers should be assured of income and  work security as a result of their partnership with those riding the  retail boom. Small and marginal farmers should be assisted in improving  their productivity and profitability through timely input supply and  improved quality management.

 *Dr Gursharan Singh Kainth
 Hon Director
GAD Institute of Development Studies
14-Preet Avenue, Majitha Road
PO Naushera, Amritsar 143 008
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