11.06.2013

Will the organised retail chains only put the middlemen in the food trade out of business? Or will they also wipe out street vending and farmers markets completely? Many fear that the traditionally small and marginal farmers in India will be worst hit. Will they continue to earn a livelihood from their smallholdings, or will they be forced to give up and eventually join the urban slum population?

The traditional supply system: not the cream of the crops

Right now, urban retail is extremely dispersed, and not many supermarkets are to be found (Bangalore is said to have the highest organised retail market share at 22 %). At the same time, the country’s agricultural sector is very fragmented. For food logistics, this poses an enormous challenge. Lacking their own transport, farmers are more or less forced to sell their produce locally, making use of a long chain of intermediaries, who will take care of load consolidation, transport, and distribution.