Fresh Food Supermarkets in India: An Analysis of their Inclusiveness and Impact on Primary Producers

Abstract

Linking primary producers with modern markets through corporate agribusiness, especially food supermarkets, is being seen as one of the ways to improve rural livelihoods. But, given smallholder dominance of farming in India, it is important to consider the implications of corporate linkage for smaller links involved/proposed to be involved in the chains i.e. primary producers, so that the process is not exclusionary in nature, and becomes a win-win situation for most of the participants in the supply/value chain. Gujarat is one of the Indian states which have seen significant food retail chain presence and penetration in the last few years in fruit and vegetable procurement and retailing. This paper analyses the functioning of two fresh food (fruit and vegetable) supermarket retail chains (Reliance Retail’s Reliance Fresh and Aditya Birla’s More) in Gujarat with special focus on implications for small producers. The paper situates the food supermarket retail phenomenon in the Indian context and profiles the operations of major players in fruit and vegetable sector and analyses their primary producer interface with a field study of two major vegetable crops procured by the retail chains each. It examines the inclusiveness of the retail chain operations and its impact on farmer incomes. The paper also attempts inferences about the competitiveness of food supermarkets and the mechanisms to promote inclusiveness and significant farmer benefits from emerging supermarket retail operations in terms of both policy and practice, based on the case study.