Sunday, July 06, 2003
Swaminomics on retailing
Swaminathan S Iyer writes at length in the Times of India about the need for the central government to let in large retail chains into the country. According to him, such a move will not only harness growing domestic demand, but will also globalise the Indian agricultural sector.
India has failed to get into the global market for processed fruit and vegetable for a simple reason: global chains like to deal with giant farms that can reliably deliver huge quantities of quality produce on time. They simply cannot deal with hundreds of small farmers of the sort we find in India. Many global fruit companies have studied India and thrown up their hands in despair. But retail MNCs will venture into this difficult terrain to penetrate the fast-growing domestic market. As incomes rise, the demand for superior foods and premium products shoots up. This has been demonstrated in South-East Asia and in India itself, where imported fruit now sell at fancy prices. Retail MNCs will enter India and spark a second green revolution if entry is made simple, and if Punjab and other states establish farmers' associations as legal entities with corporate obligations (there can be no compromise on quality).
India has failed to get into the global market for processed fruit and vegetable for a simple reason: global chains like to deal with giant farms that can reliably deliver huge quantities of quality produce on time. They simply cannot deal with hundreds of small farmers of the sort we find in India. Many global fruit companies have studied India and thrown up their hands in despair. But retail MNCs will venture into this difficult terrain to penetrate the fast-growing domestic market. As incomes rise, the demand for superior foods and premium products shoots up. This has been demonstrated in South-East Asia and in India itself, where imported fruit now sell at fancy prices. Retail MNCs will enter India and spark a second green revolution if entry is made simple, and if Punjab and other states establish farmers' associations as legal entities with corporate obligations (there can be no compromise on quality).
