'Need farmers' protection clause under FDI retail policy'

Favouring FDI in multi-brand retail, Bharatiya Kisan Union (BKU) today demanded that the government should come out with guidelines to protect farmers from being exploited by big foreign retailers.

"We are not opposing FDI in multi-brand retail but we want the government to ensure farmers are not exploited by foreign retailers like Walmart when they buy bulk agricultural products from us," BKU general secretary Yudhvir Singh said at the press conference, supported by Bharatiya Krishak Samaj and other farmers bodies.

The government should frame proper guidelines for buying farm produce from domestic growers to ensure there is no monopoly by foreign retailers, he said. "The guidelines are necessary as the past experience of contract farming has not been good. Farmers had entered into a contract farming with a big company for tomato and potato. The crops were grown under their supervision but the company did not buy the produce saying they were of substandard," Singh said, adding such instances might occur even with foreign retailers and hence protection for farmers is needed.

BKU had expressed this concern with the commerce ministry during the consultation process and the ministry had promised that it will incorporate the protection clause while approving the FDI policy, he said. Singh also wanted the government to explain in detail how the FDI in multi-brand retail will benefit farmers. In a bold decision, the government has implemented its decision to permit 51 per cent foreign direct investment (FDI) in multi-brand retail despite stiff political opposition.

The decision led to Trinamool Congress walking out of the UPA government. It has also evoked sharp reactions from its allies including Samajwadi Party and JD-S as well as opposition parties.

As per the policy, foreign investors are required to invest at least USD 100 million (about Rs 540 crore) and their outlets may be set up only in cities with a population of more than 10 lakh. At least 50 per cent of FDI should be invested in 'back-end infrastructure' within three years of the first tranche.