State agriculture marketing boards on Saturday said FDI in multi-brand retail will harm farmers, particularly small and marginal peasants.
"Farmers are certainly going to be affected if FDI into multi-brand retail is given a go-ahead. It will mainly cause concerns to small and marginal farmers who have less than four hectares of land," the National Council of State Agricultural Marketing Boards (COSAMB) managing director SS Randhawa said while addressing a farmers’ meet on the issue organised by CII in Chandigarh on Saturday.
Noting that foreign direct investment (FDI) into multi-brand retail would come with only "profit motive", he said the presence of foreign retailers in the sector would create a monopolistic situation that would yield lower realisations to farmers.
"Purchasing will be at low prices, while selling will be at higher rates. As a result, farmers will not greatly benefit from the arrangement," he said.
He further said buying of only high-quality farm produce through contract farming arrangements would have a negative impact on other farmers who could be harassed to become part of the foreign retailing system.
"The sudden halt of procurement of a particular crop by a retailer from a farmer will also lead to a vacuum as there will be no other alternative for the farmer at that time to produce another crop," he said.
Randhawa said that retailers must purchase commonly-grown crops only through contract farming at a price linked with market rates.
COSAMB has a mandate to bring efficiency in agricultural marketing system.