Indian Journal of Agricultural Marketing
Year : 2014, Volume : 28, Issue : 3
First page : ( 74) Last page : ( 81)
Print ISSN : 0971-8664. Online ISSN : 2456-8716.

Organized retail: Welcome move for competition

Shroff Sangeeta, Kajale Jayanti

Gokhale Institute of Politics and Economics, Pune-411004

Online published on 23 October, 2017.

Abstract

A report commissioned by Emerson, a leading global engineering and technology company, revealed that India is also one of the biggest food wasters in the world wasting 440 billion worth of fruits, vegetables and grain annually. Fruits and vegetables account for the largest portion of the wastage and 18 percent of India's fruit and vegetable production is wasted every year. Wastage in perishable agricultural commodities is usually the outcome of weak farm-firm linkages. Organized retail which can source produce from fields and route it through its distribution centres to end consumers can promote marketing efficiency. Government policy has encouraged domestic players in retail and Foreign Direct Investment in multi-brand retail may soon take off. A case study on organized retail by a domestic player, reveals that farmers do get a higher price in case of sales of pomegranates (about 71.76 percent of retail price against 46.5 percent in case of sales to APMCs) as commission and other market charges in regulated markets is rather high which can be avoided in case of direct marketing. However, scale of operations of organized retail is limited in terms of quantity and restricted only to superior quality produce. Besides corporate entry government is also facilitating Farmer Producer Organizations who can sell produce directly to consumers at a price 10 to 12 percent lower than retailers. While organized retail is being promoted to improve vertical integration, the traditional channel with intermediaries have their own advantages in terms of close personal relations with farmers, timely provision of finance and inputs and other such services. Thus unorganized sector which still dominates agricultural marketing still has its roots and organized retail at present can only provide some competition.

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