Business

Walmart helps link 8 lakh producers to markets; skeptical farm groups

TechnoServe, a non-profit organisation that operates in 30 countries, began its association with coffee farmers in the Araku Valley in Andhra Pradesh about six years ago. Their intervention helped farmers create and manage Farmer Producer Organisations (FPOs). Through eight such FPOs, the organisation claims, the farmers’ revenues have increased by over 500%.

Similarly, Digital Green, another non-profit that works among cashew farmers in the State, says a collective approach saw a 13% increase in cashew prices. Professional Assistance for Development Action (PRADAN), also a non-profit working to promote FPOs, says it helped women farmers cut out middlemen.

What connects these three with the FPOs is the global farm products giant, Walmart, which funds these projects through the Walmart Foundation, its philanthropy arm. The company has created a network that links farmers directly to the retail market. This enhances its own capacity to enter India’s retail market if and when it is allowed to, tapping into a retail industry that Boston Consulting Group last year pegged to reach approximately $2 trillion by 2032.

At least 500 organisations with 8 lakh farmers, across nine states — Andhra Pradesh, Uttar Pradesh, Telangana, Karnataka, Odisha, Jharkhand, West Bengal, Maharashtra, and Madhya Pradesh — are involved. Non-profits that implement the progamme are working among small and marginal farmers cultivating coffee, cashew, mint, mangoes, vegetables, wheat, and millet. But farmer lobbies still swear by the mandi system, and cooperatives are sceptical of the global giant.

Julie Gehrki, vice-president, Philanthropy, Walmart said, “We believe that this isn’t about giving Walmart or Flipkart (a subsidiary of Walmart) a competitive edge. This is about helping farmers thrive and we believe FPOs are strong. It really creates a stronger system.”

However, farmers’ organizations are viewing these steps with suspicion. Pavel Kussa, Coordinator of Bharatiya Kisan Union (Ekta Ugrahan) says that when Walmart is involved, it will be for profit maximisation. He also fears that FPOs controlled by Walmart will weaken cooperative societies which are administered by democratically elected office bearers.

in the background

Walmart is not new at promoting FPOs. In February 2020, the Centre had launched the ‘Formation and Promotion of 10,000 Farmer Producer Organisations’ scheme to push forward 10,000 new FPOs until 2027-28. The idea was to build the collective strength of small and marginal farmers — those with land holdings of less than 1.1 hectares.

Walmart itself has experimented with FPOs in Central America and Mexico in the past. “We really think about building FPOs as an important strategy to provide technical support to help farmers build infrastructure to connect to formal markets so that smallholder farmers can grow their incomes and improve livelihoods,” Ms. Gehrki says, adding that the company complements the Union government’s work. She claims Walmart initially made a $25 million commitment which it exceeded, to invest $39 million.

Mr. Kussa, however, says, “Walmart wants to enter the agriculture market in India. Their motive is profit and farmers will have to be careful. We don’t expect anything good for farmers from them. They may be trying to dig new channels so that they can sell their products and aggregate the market in India.” He added that the NGOs are working as the giant’s instrument.

Not-for-profits feel the interventions genuinely help. Puneet Gupta, Country Head of TechnoServe says that with the help of Walmart, they have set up cupping labs in the FPOs among coffee farmers in Araku Valley so that they are able to determine the cup quality of each batch of coffee. “Through these interventions, we have brought on board a bunch of large institutional buyers like Blue Tokai and Starbucks. So, they come in and buy this coffee from these farmer producer companies, while the farmers benefit by getting improved yield and revenues,” Mr. Gupta claims, adding that the organisation works with 5% of the coffee farmers in Araku.

There is also knowledge-sharing with their experiences in other parts of the world, says Krishnan Pallassana, Country Director of Digital Green that has reached out to online retailers like Flipkart and Ninjakart. In the last two years of this experiment, Digital Green worked with 35 FPOs, primarily in Andhra Pradesh and Telangana, with 85% of farmers cultivating chillies, cashew, and turmeric.

Narendranath Damodaran, Integrator at PRADAN, says most of what is produced is sold domestically. “Some of our produces find exposure in the Reliance store in Ranchi and in some other places,” he says, adding that not much is exported. “There have been very rare exceptions when watermelons from Odisha went to Dubai and mangoes from West Bengal went to Singapore. We want local produce to be consumed locally as much as possible,” Mr. Damodaran adds.

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