Consortium of Indian Farmers Associations (CIFA), which is supported by leading corporates including Biocon chief Kiran Majumdar Shaw, has written a letter to Prime Minister Manmohan Singh in favour of foreign direct investment (FDI) in retail.
In the letter written on behalf of farmers' organisations across India, CIFA has requested for implementation of the decision taken on FDI in retail as the middlemen are exploiting farmers.
"The existing marketing system at local mandies and wholesalers is controlled by adthiyas is a highly exploitative system. Farmer is compelled to pay 10% commission in the local mandy to the adthiya [commission agent or dalal]," said the letter, that has been posted on Kiran Majumdar Shaw's Facebook and Twitter accounts.
The middlemen manipulates prices, do not provide any services and official receipts to farmers.
If foreign retailers are allowed, contract farming will enable farmers to bargain for an assured minimum price linked with quality and quantity.
"He [farmer] will also be able to get traceability and group crop insurance. Direct procurement will eliminate 3-4 middlemen who are now taking away 40% to 50% commissions without any value addition," the letter said.
In this way it is a win-win situation for farmers, retailers and consumers, it added.
"We, however, request the government of India that retails must be established in rural areas specially now developing urban complexes. It will enable producer farmers to supply to local chains from the surrounding areas and get the benefit," it said.
Multinational retailers must be controlled by an authority so that they do not resort to unhealthy competition, it added.
According to CIFA Secretary General Chengal Reddy, CIFA represents farmers' organisations from across 12 states in India.
"About 40 million farmers of India are directly and indirectly associated with CIFA," Reddy said.
The letter is addressed Manmohan Singh, with copy to Pranab Mukherjee, Sharad Pawar, Anand Sharma and members of the Congress party working committee, he added.
