Wal-Mart to target 35,000 Indian farmers for agri-business supply chain by 2015

Tuesday, October 26, 2010

NEW DELHI - American retail giant Wal-Mart on Tuesday announced plans for roping in 35,000 farmers into its retail-related activities in the Indian agri-business sector by 2015.

“We are already making a contribution to India’s agricultural sector by working with a large number of farmers in Punjab. I am pleased to announce that Bharti Wal-Mart would be directly sourcing from 35,000 small and medium farmers by 2015,” Wal-Mart Stores Inc President and CEO Mike T Duke said here at a function organized by the Federation of Indian Chambers of Commerce and Industry (FICCI).

Wal-Mart, in an equal partnership with telecom group Bharti Enterprise, and operates four cash-and-carry outlets in India and also supplies to retail stores run by Bharti. Duke predicted that the rising aspirations of Indian consumers would lead to huge business opportunities.

At present, the 50:50 cash and carry joint venture, Bharti Wal-Mart, works with 550 farmers in India.

“We will help them by providing skills and technology for crop management. By doing all these, we hope that farmers will see at least a 20 per cent increase in their income levels,” Duke said.
e said Wal-Mart would also train farmers on utilization of water and fertilizers in an optimal manner, adding that at least a million farmers and farm workers stood to benefit in the long-term.

Duke said Wal-Mart could significantly contribute to India’s booming markets.

“We see the opportunity because of the Indian population, the rise in the aspirations of millions of Indian consumers. They want to live a better life. We believe we can contribute to that,” said Duke.

“We think, of course, it would be good for our business. We like the Indian economy and the growth prospects…we see for many, many years, this is a great country that is going to have a great opportunity, and we would like to be a part of that,” he added.

Commenting on the need for upgrading skills in the retail sector, Duke said the current joint venture between Wal-Mart and Bharti would add a third skills training centre in Bangalore soon. Two already exist in Delhi and Amritsar.

Bharti Enterprises Vice Chairman and Managing Director Rajan Bharti Mittal said another skill centre would come in Mohali.

“The target is to train 40,000 students in the next five years and place at least 15,000 students in the next five years,” Duke said.

Already 3,400 students have already been certified and 1,100 people have been place in jobs, he added.

Union Food Processing Minister Subodh Kant Sahai said that the opening of retail chains such as Wal-Mart would introduce market-driven farming in the country.

“This will give the market driven farming to the farmer. This will give a status to the farm produce as a raw material. This will give an opportunity to go for clusterised farming, which is today, fragmented farming. This can happen only when the market intervenes, and the market means the retail market. They are most important because they procure not only for domestic market but also for world market,” said Sahai.

Wal-Mart has long been courting the Indian government, the private sector and local farmers to win support for removing restrictions from foreign companies and investing in a multi-brand retailing in India.

India’s retail sector, however, is largely closed to foreign firms and favours small stores, with 51 percent Foreign Direct Investment (FDI) allowed only in single-brand retail. Multi-brand retail is restricted to cash-and-carry or wholesale outlets.
xperts believe opening up the retail sector would ease massive supply that has helped keep inflation high.

India represents tremendous opportunities to foreign business establishments given the size of the population, expected economic growth, a growing middle class and the lack of a mature and organized retail market.

Analysts say opening retail to Foreign Direct Investment (FDI) may help create thousands of jobs and rein in food price inflation by curbing waste in a country where at least 40 percent of produce rots because of inadequate storage and transportation.

The entry of multinational retailers into India has been mired in controversy, with moves to open up the sector opposed by leftist parties and small traders fearful of job losses.

The other speakers at Tuesday’s function included P.M. Sinha, chairman FICCI Agriculture Committee and former chairman of PEPSICO and Antonio Helio Waszyk, chairman and managing director, Nestle India. By Ashok Dixit (ANI)

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