Indian agriculture is facing a policy paradox. It has been
primarily characterized as a means of subsistence, small
investments, small returns and a source of livelihood for
the rural households. Till recent past, element of commerce
was limited to a few commercial crops such as jute, sugarcane,
cotton etc., to provide raw material for the particular
industry rather than fulfilling the household needs. While
India's agricultural policy is still rooted in the goal
of self-sufficiency in grains, consumption patterns are
changing fast towards high value agricultural products such
as fruits and vegetables, livestock products and fish. The
policy environment is lagging behind the structural change
occurring in India's consumption and production basket.
To develop the agriculture on commercial lines to achieve
its accelerated growth rates, the issue of profitability
is coming upfront. Hence, the favorable term of trade with
effective market access is basic. This would be conducive
to capitalize on resources potential-based production through
regionally differentiated production strategies to meet
the growing and fast changing market demands. For demand-driven
and market-orientated production, timely backstopping of
desired quality of inputs and appropriate technology to
start with and necessary mechanism to ensure its availability
in the desired form to the consumer ending with finished
products, is required to be harmonized and in a continuum.
The supermarket revolution has been underway in developing
countries. Supermarkets refer to all modern retails which
include chain stores of various formats such as supermarket,
hypermarket and convenience and neighborhood stores have
now gone well beyond the initial upper and middle class
clientele to reach the mass market. Until recently, super
markets were not a major form of food retailing in developing
countries and confined to only niche markets for higher
income consumers in major urban markets. It is a two-edged
sword. On the one hand, it can lower food prices for consumers
and create opportunities for farmers, processors to gain
access to quality differentiated food markets and raise
income. On the other hand, it can create challenges for
small retailers, farmers and processors who are not equipped
to meet the new competition and requirements of supermarkets.
The government has to put in place a number of policies
to help both traditional retailers and small farmers pursue
policies of competitiveness in the era of supermarket revolutions.
In developing countries, the process of super marketisation
started in Latin America in early 1990s and by now such
markets account for more than 50% of retail food sales in
many countries of the globe. This is being perceived as
the first wave of super marketisation. The South-East Asian
supermarkets followed the suit about five to seven years
later and now supermarkets are registering rapid growth
in many East-Asian countries. A third wave has swept across
East-Central Europe, and Africa led by South Africa. At
present, West Africa, China and India are witnessing a supermarket
revolution. The growth of supermarket is driven by inter
alia of paraphernalia of factors such as rapid urbanization,
sustained income growth, improvement in infrastructure,
increasing entry of women in work force, development of
storage facilities, better access to ICT, changing preferences
and food habits and transportations. Besides, a crucial
factor was the liberalization of retail Foreign Direct Investment
(FDI) which sparked an avalanche of FDI (and competitive
or at times anticipatory domestic investment) through the
1990s and into the 2000s.
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