Will rotting foodgrain bring about a retail revolution?
Pictures of grain rotting in the rain in Punjab have shocked a country reeling under high food price inflation and where hundreds of thousands go to bed every night on an empty stomach.
The estimates vary from 1.2 million metric tonnes of rice and wheat wasting in Punjab alone, and as much as 18 million metric tonnes of food grain lying in the open across the country because of inadequate storage facilities, translating into losses of about 270 billion rupees ($6 billion).
But this is not a new problem. India has prided itself on increasing agricultural productivity, but it has not invested adequately in storage and warehousing facilities, condemning some 40 percent of produce that the country can ill-afford to waste to the trash can.
A CRISIL Research study estimates allowing foreign direct investment in multi-brand retail could cut wastage of about 630 billion rupees in fruit and vegetable wastage alone every year, or about 30 percent of total output.
Foreign retailers including Wal-Mart, who have campaigned for opening up the tightly controlled sector, say foreign investment is key to minimising wastage and lowering prices to consumers.
But private investment in building and modernising the supply and logistics chain has been slow to come.
While the government permits foreign investment in the supply chain, foreign retailers have been unwilling to commit large sums of money as there are still restrictions in multi-brand retail.
Last month, the government issued a discussion paper on opening up retail, a politically fraught issue.
But the urgent need to check food price inflation and the pictures of rotting grain are adding fuel to the fire and may be just the ammunition the government needs to push for easing restrictions in the $450-billion retail industry.
Raj Jain, chief executive of Bharti-Wal Mart, estimates it could take at least a decade to build a supply chain of international quality and standard in India.
We really cannot afford to wait that long to stem the waste and feed our people.