In order to protect farmers from being exploited by big foreign retailers, the government should come out with guidelines for the same, Bharatiya Kisan Union (BKU) General Secretary Yudhvir Singh stated at the press conference, supported by Bharatiya Krishak Samaj and other farmer bodies. By adding further, Singh said that BKU is not opposing FDI in multi-brand retail but wants to ensure that the interest of the farmers are being protected and not being exploited by foreign retailers when they buy bulk agricultural products from them.
Also, in order to ensure that there is no monopoly by foreign retailers the government should frame proper guidelines for buying farm produce from domestic growers. The past experience of contract farming has not been good where the farmers have entered into contract with big company for tomato and potato. Despite the crops grown under the supervision of the company they were not been procured citing that the crops were of substandard. These instances might occur even with foreign retailers.
During the consultation process with the Commerce Ministry, BKU had expressed the above concern and the ministry had promised that while approving the FDI policy it will incorporate the protection clause.
Despite stiff political opposition the government has implemented its decision to permit 51% foreign direct investment (FDI) in multi-brand retail. As per the policy, foreign investors are required to invest at least $100 million i.e. about Rs 540 crore and at least 50% of FDI should be invested in back-end infrastructure within three years of the first tranche. Besides, the retail outlets may be set up only in cities with a population of more than 1 million.