Retailers have to source from small farmers

The government seeks to make sure that its move to allow 51% foreign direct investment in multi-brand retailing benefits small and marginal farmers too, even as the rage against the reform continues.

The government seeks to make sure that its move to allow 51% foreign direct investment in multi-brand retailing benefits small and marginal farmers too, even as the rage against the reform continues.

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Since the decision will allow global chains like Walmart, Tesco and Carrefour to enter India, a major political row has erupted over their possible impact on small traders and stand-alone 'pop-and-mom' stores across the country.

But a government official, requesting anonymity, said it would be a "socially responsible move". For instance, the government plans to make it mandatory for retailers to give first preference to small and marginal farmers while sourcing farm products.

According to a document HT has accessed, the retailers will also have to source 30% of manufactured items from small and medium enterprises, or companies whose total investments in plant and machinery range between Rs 25 lakh and Rs 10 crore.

On Thursday, traders across the country went on a strike backed by several political parties, arguing that superstores, such as Walmart, with their money and aggressive marketing prowess, would push small retailers out of business.