Organised retail of food, groceries can double farm incomes at current prices: CRISIL

12 December 2006

Farm incomes in India can double if organised retail enhances farmer realisations on food items from the current 30 per cent to 35 per cent of retail price to the international norm of over 50 per cent of retail price, says a new report from CRISIL Research.

This enhancement would come from cost savings that will result from improving the presently underdeveloped supply chain for unprocessed food items, says the report.

Higher farm incomes will benefit the vast majority of the nation's population that is dependent on agricultural income.

Moreover, this additional purchasing power in the hands of farmers can add more than three percentage points to the nation's annual GDP growth rate. These conclusions are contained in a
recent study conducted by CRISIL.

Highlights of the study:
Over 70 per cent of retailing is from the unorganised segment
At an estimated Rs.10 trillion in 2006, India's retail industry is almost one-third the country's GDP.