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When he has a ready crop, Dnyaneshwar Nikam’s day would often start with a phone call, typically to the local wholesale agricultural produce marketing committee (APMC) market, which has for decades been the only wholesale buyer of his produce.
These days, his phone list is a lot longer. It includes officials of Godrej Agrovet Ltd, Aditya Birla Retail Ltd and Reliance Retail Ltd and he carefully compares prices before promising delivery of his ripe but unharvested crop that day.
Nikam, who has a 10-acre farm in Pune’s Ranjani village, has heard Subhiksha Trading Services Ltd may also start buying from around here and is excited because, he says, “The more companies there are, the better it is for us because we can choose where we will get better rates and want to sell our produce.”
The next day, when the Godrej officials land up at his farm, Nikam makes sure he lets them know that Birla offered Rs7 for a kg of cucumber and ITC offered him Rs8 for it, while Godrej offered just Rs6 the previous day. The key to selling to modern retail is to ensure that he sells to more than one retailer, he says. But also letting them know that.
Nikam grows tomatoes, watermelons, onions, brinjals, capsicum and chillies on his farm, apart from oranges and chickoos. He sold several of these vegetables to Godrej the previous day.
Driving past the procurement offices that dot that landscape around rural Pune’s vegetable farming strip, it is clear that change is in the air.
For the first time in India’s history, modern retailers are offering farmers a choice of a buyer other than the traders at government-controlled APMC markets.
“There are immense benefits from direct sourcing and price is probably the least of them,” says Balram Yadav, executive director of Godrej Agrovet, which has been buying in the area for four years. “There is a substantial benefit in being able to get good quality stuff that we can get all year round, which we don’t have to grade a lot.”
“Modern retail offers a good possibility for farmers, but it will not automatically benefit farmers,” says S. Sivakumar, chief of ITC Ltd’s agribusiness, which also buys vegetables in this area for its Choupal Fresh stores. “The natural instinct of a retailer is to squeeze a farmer. We need a business model that will be a win-win situation for all, which is a precondition for farmers to benefit.”
So, farmers are also themselves trying several models, apart from selling directly to retailers or APMCs to benefit from modern retail.
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