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LATEST NEWS UPDATES | Modi-led panel of CMs had suggested organized retail in report to PM

Modi-led panel of CMs had suggested organized retail in report to PM

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published Published on Nov 30, 2011   modified Modified on Nov 30, 2011
-The Times of India

Promotion of organized retail and contract farming to improve farm production and modernize the agriculture supply chain as well as direct marketing initiatives are among the highlights of the report on consumer affairs prepared by a group of chief ministers chaired by Gujarat CM Narendra Modi. 

In a report submitted to Prime Minister Manmohan Singh in March, the committee headed by Modi prioritized reducing farm gate to retail costs, saying, "To some extent, farmers will benefit from promotion of organized retail/contract farming as it will have stakes in increased farm production." 

While the report did not go into foreign direct investment (FDI) in retail, it recommended that "organized retail should be incentivized to make direct purchase from farmers but ensure that for essential commodities, they obtain trading licences and do their purchase in a transparent manner". 

Advocating reform of agriculture markets, the report said, "...farmers and consumers can be best served by increased competition in the agriculture market. Organised retail sector, because of the scale of operations and access to financial resources, has the potential to minimise the marketing channel between farmers and consumers." 

The working group that comprised CMs of Maharashtra, Andhra Pradesh and Tamil Nadu besides Modi, said "corporate and contract farming can help in protecting farmers' income". It added that "direct marketing of fruits and vegetables by farmers/farmer cooperatives" could shorten the marketing channel. 

Shortly after submitting the report, Modi's blog noted that the working group had suggested that competition could be increased by promoting retailing by organized sector and cooperatives. The report elaborated that such measures could help provide better seeds, micro irrigation and allow direct purchase from farmers. 

The report noted that there was often a time lag between demand signals reaching the farmer and it was not easy to respond or anticipate market trends in time. This often disadvantaged farmers who did not get remunerative prices, while small holdings limited their scale of operations. "Farmers interact with market for purchase of agri-products and sale of agri-produce with some time lag," the report said. 

"Also, efforts should be made to improve the functioning of spot (including APMC) and futures markets," the report said. It recommended an increased role for private enterprise in setting up more processing units and for agri-marketing to be made eligible for priority sector lending. 

There seems to have been a consensus among the CMs on unbundling the procurement, storage and transportation functions of the Food Corporation of India while suggesting that there be a third party evaluation of the corporation's operations. The report also felt that private sector could be involved in storage of minimum stocks of essential commodities. 

The Times of India, 1 December, 2011, http://timesofindia.indiatimes.com/india/Modi-led-panel-of-CMs-had-suggested-organized-retail-in-report-to-PM/articleshow/10937005.cms


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