Nov. 30: Nitish Kumar may be opposed to foreign direct investment (FDI) in retail but farmers, a holy-cow constituency considered more valuable than small traders to the political class, have begun to ask uncomfortable questions to those stonewalling the Centre’s decision.

Several farmer groups, some of them led by politicians with ties to the Congress, have asked why some parties are standing in the way of a measure that is expected to reduce the clout of middlemen and increase farm earnings.

A day after Prime Minister Manmohan Singh underscored the same point, the Congress today said it had the numbers to face any adjournment motion in Parliament, signalling it had brought allies Trinamul Congress and the DMK on board. But it is not clear yet whether the murmurs from the farmers are stemming from active political intervention.

The Bihar chief minister though is firm in his conviction as well. “The Prime Minister should immediately withdraw the proposal,” Nitish Kumar told The Telegraph. “We are not going to support it at any cost as it will ruin the life and existence of marginal traders, grocers and farmers. We are here to protect the vast multitude of the marginalised populace rather than promoting the interests of a few monopoly houses.”

If the latent mood reflected by farm lobbies gathers depth and sweep, the parties opposing FDI will have to choose between the small trader and the farmer. “Not only will FDI in retail eliminate four to five middlemen at different levels, it will also enable farmers to get quality inputs,” said Changal Reddy, the secretary-general of the Consortium of Indian Farmers Association (Cifa).

Reddy has a Congress background but his federation’s views cannot be ignored as it has many affiliates spread across the country.

Few political parties will deny farmers are now being ripped off. (See chart)

Big farmers in Bihar are open to the idea of 51 per cent FDI in retail. Sudhanshu, one of the biggest cultivators from north Bihar and recipient of the ICAR’s Jagjivan Ram Kisan Puraskar, argued, “We do farming on about 200 acres of land. Our products, which include litchi and mango besides foodgrain, fetch approximately Rs 35 lakh per annum. This is too small in the context of the investment made.”

“We can increase our profit manifold once the big corporates doing business across the world directly deal with us with no intermediaries around,” said Sudhanshu, also a mukhiya of Naya Nagar panchayat in Samastipur district.

To buttress his point, Sudhanshu gave an example. “I sell my litchi to the transporters at Rs 21 per kg. Passing through different layers of middle-level retailers and transporters, the commodity is sold at the rate of about Rs 200 per kg in south Indian markets and at Rs 400 and even more in British and Dubai markets. In the process, the producers and the consumers are the biggest losers,” he said.

But the vast multitude of small and marginal farmers, ubiquitous retailers and small traders who cater to the majority of consumers still living in the era and culture of the pre-liberalised economy are opposed to the move, willing to lap up what the state government is feeding them on the issue.

A CPM-affiliated farmer outfit betrayed that dilemma. “Agro business would no doubt flourish if FDI is allowed in retail. But there is a rider: it would not benefit the marginal farmers; they hardly produce anything. It would only benefit the big farmers,” said Biplab Majumdar, assistant secretary of the CPM-affiliated Pradeshik Krishak Sabha.

In Bihar, 10 per cent of the people possess 90 per cent of its land, according to official records. Its politics and economy are virtually dominated by that 90 per cent who are marginal farmers, small traders, retailers-cum-middlemen-cum transporters-cum farmers. The state still has 1.15 crore BPL families which depend on the supply from the pubic distribution system and also on the credit with the small traders and grocers — who cater to these sections in the ubiquitous rural marts in the hinterland.

Another farmers’ body referred to another likely dividend from FDI.

“FDI is expected to roll out cool chains that will bring the market closer home, reduce the number of middlemen and enhance returns to farmers,” said Prakash Thakur, the chairman of the People for Environment Horticulture & Livelihood Himachal Pradesh.

“Highly perishable fruits like cherry, apricot, peaches and plums have a huge demand but are unable to tap the market fully because of lack of a cool chain and transport infrastructure. All this should see a boost with the opening up of retail for large investments through FDI,” he said.

Thakur has a point. Although India is the second-largest producer of fruits and vegetables at 200 million tonnes, its storage infrastructure is grossly inadequate. Of the 5,386 stand-alone cold storages, 80 per cent is used to keep potatoes.

The Union Cabinet has kept this in mind while taking the FDI decision. Each foreign investor will have to invest at least $50 million (Rs 250 crore) in back-end infrastructure that will include cold chains, refrigeration and transportation.

Bharatiya Kisan Sangh general secretary Prabhakar pointed to entrenched interests in the existing system. “The farmers are not getting the right price for their produce. The authorised agents of APMC (formed under the Agriculture Produce Market Committee Act) do not give us the right price, nor do we get it from the agents of Indian organised retail firms.”

This does not mean that all farmers support FDI or those who are less antagonistic are expecting matters to improve dramatically.

Krishan Bir Chaudhary, president of the Bharatiya Krishak Samaj, expressed the fear that the global giants could force the farmers to “dance to their tune”.

Some onion farmers in Maharashtra are also sceptical but feel nothing can be worse than the current system.

Swabhimani Shetkari Sanghatana leader Raju Shetty said: “We are not saying FDI in retail would bring happier days of prosperity for farmers but, at least, it may not directly harm them in a worse manner. The big retailers will give tough competition to the middlemen.”