New Delhi, June 10 (UNI) Multinational retail corporation Walmart has drawn out a comprehensive roadmap to support the Government’s ambitious plan of increasing farmers’ income in the country.
"It is Walmart’s endeavor to support the Government’s ambition of increasing farmers’ incomes by FY 28 through four key initiatives," a Walmart statement said.
The four key initiatives of the Walmart’s Market Readiness Programme include direct procurement from farmers and farmer producer organizations; modernization of farming techniques and infrastructure; optimization of crop choice by providing information on consumer preferences; and increased access for farmers to larger markets.
The impact of these initiatives will see an incremental increase of $6.5-7 billion in farmers’ income by FY28. This is in addition to multiple investments in farmer market-readiness projects by the Walmart Foundation, the most recent of which was a $2 million investment in Andhra Pradesh last November.
The Government aims to double farm incomes by 2022. The average farmer’s income is currently less than 30% of the consumer price owing to the presence of multiple intermediaries, inadequate market linkages, low productivity, and other reasons.
India’s crop yield is around 40% lower than that of Brazil or China. Farmers have limited information on consumer preferences and very limited access to national and export markets.
Walmart says that there is evidence to support that direct procurement benefits the farmer. A NABARD Case Study (2011) states that direct procurement by SAFAL, MORE, Reliance etc. led to 10-30 p.p. higher incomes of farmers serving Bangalore, based on type of product.
A pilot project for IFPRI & Asian Development Bank pilot in Uttarakhand (2009) saw 25-35% lower transaction costs for farmers selling directly to organised retailers.
According to Walmart’s internal estimates, company activities that drive increased access for farmers to larger markets are likely to lead directly and indirectly to an approx. $1 billion due to wider market access.
To address these issues, the Government of India has undertaken specific initiatives such as upgrading around 20,000 rural markets to expand markets closer to the production point and earmarking approximately Rs 800 billion for nearly 100 irrigation schemes.
According to Niti Aayog policy paper ‘Doubling Farmer’s Income’ (2017), more than 10% YoY improvement is needed at the bare minimum nationally to meet FY23 target of doubling farm income. The current figure stands at 7.5% YoY, on account of government’s initiatives in irrigation, technology, training, and infrastructure.
As per Niti Aayog 2017 figures 17% YoY improvement is needed nationally to meet FY23 target of doubling farm income.
Currently, 13% YoY happening already due to eNAM, and state-level unified markets. Experts feel 10-15% increase is possible due to expansion to (a) state markets and then (b) national/international markets.
According to an International Food Policy Research Institute case study, farmers contracted by organized retailers earned 38% more from grapes produce due to access to larger markets vs. non-contracted farmers.
Walmart India has successfully undertaken initiatives to increase the incomes of 80,000 farmers. The company is currently working on creating market readiness for smallholder farmers in Andhra Pradesh.
In Uttar Pradesh, Walmart is working on a farmer market readiness project – Sunhara Prayas – to enhance incomes and capacities for mango and banana cultivators. It has successfully supported 60,000 cotton producers in India in adopting better production principles; promoted fair wages and equality of employment; and improved profitability.
The company has facilitated increased socio-economic empowerment for 6,000 smallholder vegetable farmers (85% of who are women) in four districts of Uttar Pradesh and Andhra Pradesh through improved horticultural production and marketing systems.
The company has successfully empowered farmers by upgrading farming practices and local logistics, connecting farmers to the formal retail sector, and delivering training to nearly 10,000 farmers including women and farm workers.
Around 300 farmers have been successfully connected to the formal retail market. The company has also helped provide sustainable economic opportunity for around 1,200 women in two districts of Tamil Nadu.
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