Badal protests against organised retail

It is not the vendors and small shopkeepers but the chief minister of Punjab who voiced the first protest against firms foraying into the retail sector in Punjab.

Chief Minister Parkash Singh Badal has indicated that the corporates should concentrate on the development of infrastructure in the country and refrain from encroaching on the livelihood of small players in the retail chain.

Unlike other parts of the country, Punjab traders and vendors have remained silent on the foray of corporate sector in retail in the state.

Till now, no large corporate has entered into contract farming in Punjab and the retail chains are purchasing fruits and vegetables from the open market like any other bulk buyer.

A senior banker of the region told Business Standard that the organised retail chains cannot upset the existing supply chain in the short run. They would also need the small middlemen to procure the perishables.

He added that due to frequent price fluctuations the farmers, as well as the corporates, inhibit from entering into a contract and as of now no private player has signed any tripartite agreement with any of the banks in the state for contract farming.

Subhiksha has 82 stores in Punjab, while Reliance Fresh has 18 outlets. Spencer and SixTen have also entered the state with about a dozen outlets.

A senior officer of one of the retail chain said that they buy fresh fruits and vegetables from the nearby markets.

He added that the prices of perishables were prone to fluctuation. "If we negotiate for a price of a particular vegetable with the farmers and the prices in the market dip at the time of purchase we would be at a loss."

A commission agent at Malerkotla said with increase in competition in the organised retail sector, the players might prefer to tie-up directly with the farmers. But currently the supply of vegetables was sufficient giving room to the corporates to negotiate in the wholesale market.

However, as the outlets created job opportunities employing 18-20 people in one store, the concern raised by the chief minister might not help him get the political mileage his counterparts got in other states.