Agri-retail: a reality?

Amongst other commercial activities, retail occupies a prominent position and contributes substantially to the GDP growth of India. It is logical therefore to explore the linkage between these two core activities for better socio-economic development.
Retail-Business-Practice

The first point of integration is that of a common vision i.e. both must be profitable activities. The second is that the concept of organised retail can be focused on agriculture, which would include animal husbandry. To make agriculture profitable some sub-vision parameters which need to be considered are: 

(i) Realisation of a fair price to farmers through direct access to the market i.e. removal of intermediaries.

(ii) Timely availability and accessibility of credit to the farming community.

(iii) Training of farmers. 

(iv) Easy access to cold storages and granaries.

(v) Panchayati Raj institutions to be the nodal points for agricultural inputs.

The methodology for achieving the integration requires that the Public Private Partnership (PPP) model be adopted with the active participation of all the stakeholders, which would include: 

(a) Farming community

(b) Private sector-corporate and developers

(c) Agricultural universities/institutions

(d) Veterinary institutions

(e) Banks and financial institutions

(f) Government departments/corporations, and

(g) Non-Government organisation 

The activities of these stakeholders can be synergised to meet the six objectives mentioned above. Whilst the first objective may not be achievable in the short term, a time bound road-map to eliminate intermediaries/commission agents is required to be drawn up for the long term. However, appropriate action on the other four objectives can make agriculture more profitable by bringing on a permanent basis, knowledge and finance to the farmers, all under one roof, rather than the farmer having to go to them. The cumulative beneficial effect would thus motivate the farmer and lead to higher productivity. 

To illustrate:

1. Banks and financial institutions can be brought together not only to facilitate disbursement of credit to farmers but also to educate them on matters of finance and insurance. Innovative methods of providing loans would have to be developed such that lack of collateral does not become an impediment.

2. The agricultural universities/institutes can provide training to farmers on such crucial aspects, like crop management practices, including the role of social forestry, risk management services, and supply chain services.

3. The Government, to ensure easy access to cold storages and granaries for improved post harvest management, adequate irrigation facilities and cost-effective uninterrupted power supply.

4. The Panchayati Raj institutions to coordinate the timely supply of agricultural inputs, e.g. quality seeds, fertilisers, pesticides, extension services in a cost effective manner.

5. Veterinary institutes to ensure easy accessibility and affordable prices for their expertise in the health care of the livestock.

6. NGOs to work for the social up liftment of the rural poor in sync with the various Government departments. This is already happening but needs to be extended to the farming community in a more dedicated manner.

7. Improved telecommunication and IT/ITES must be harnessed to achieve a larger reach cost-effectively. Local youth can be trained as coordinators.

Since agriculture is a rural activity, so must agri-centric retail be. For this, malls are required to be set up, specially designed to allow smooth operations. Thus, the ground floor would have outlets for distribution of fertilisers, pesticides, cement, large agricultural implements, repair facilities and veterinary services so that trucks/tractor trolleys can move in and out easily, even with the livestock and also for groceries. The other floors would have outlets for seeds, smaller implements extension services, banks and financial institutions, rooms and facilities for conducting training programmes and awareness campaigns, household goods e.g. garments, shoes etc. to suit local requirements, food courts serving local cuisine and residential accommodation on the top floor for farmers/training staff. This concept is in line with hotels atop malls in urban areas. A couple of cinema houses in the mall make for a complete package for the rural community as it would provide a three-in-one facility under one roof for the farmers' needs, total shopping for the family, entertainment for the community and thereby contributing to the growth of the local economy. Agricultural fairs which are generally held in the universities could then be held in and around the mall.

Such a development would not only benefit the stakeholders but also rejuvenate the village economy by developing agro-based and cottage industries to supplement agricultural activity. Villages would thus get integrated with the mainstream economy with benefits trickling down to the grassroots--inclusive growth would be a reality whereby the rural-urban economic divide would be greatly reduced.

To execute this concept, a project could be located in the Terai area in Uttarakhand where the main players would be: 

-- State Government

-- The Terai Development Corporation

--Pantnagar Agriculture University

--Indian Veterinary Research Institute (IVRI), Bareilly

--The richer and the more knowledgeable farmers who could counsel the not-so privileged farmers and act as a bridge between the laboratory and the fields.

Since it would be a rural mall, the urban pricing criteria would not apply. For the developer to get a reasonable RoI, a different mechanism would have to be adopted which could include revenue sharing with the tenants and/or tax incentives, subsidy etc.

Can retail and agriculture thus come together for mutual benefit? The answer appears to be an affirmative!

 

 

 

Yashwant Sahay has over 40 years of multi industry corporate experience in leading private sector companies of India, including three years experience in Iraq. For the last 26 years he has been working in the Real Estate/Town Planning sector during which he has been with DLF, Modi and Aeren groups and has also been associated with Unitech. He is an Economics(Hons) graduate from St Stephens College, Delhi University is presently a freelance consultant in Real Estate Projects Management and Town Planning,Corporate and Institutional Management. 

 

 

 

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