Local focus: Walmart India invests US$4.8m to hit 25% direct sourcing goal

17-Sep-2019 - Last updated on 17-Sep-2019 at 08:37 GMT

Walmart India has announced a US$4.8mn grant towards programmes to develop and boost local agricultural technologies and capabilities to help it source 25% of fresh produce from local farmers. ©Getty Images

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Walmart India has announced a US$4.8mn grant towards programmes to develop and boost local agricultural technologies and capabilities to help it source 25% of fresh produce from local farmers.

The major beneficiaries from this grant were non-profit agency TechnoServe, and farmer development organisation Digital Green. Both institutions focus on programmes that promote the advancement and development of farmers in India via technological or business solutions.

“These grants are a part of the Walmart Foundation’s commitment made in September 2018 to contribute US$25mn over [five] years to improve farmer livelihoods in India,” said Walmart in a statement.

“[In addition to this], Walmart India [will also look to increase] direct sourcing from farmers to 25% of produce sold in Cash & Carry stores by 2023.”

The main areas of focus will be on smallholder farmers, and improving access to agriculture technology, providing training on sustainable farming methods, helping them to gain enhanced access to formal markets, as well as offering skill and capacity building.

According to Walmart Executive Vice President and Chief Sustainabilility Officer and Walmart Foundation President Katheleen McLaughlin, the Indian market is ‘incredibly important’ to the company.

“In terms of the business, for quite some time we’ve been focusing on strengthening the suppliers that we source from, for example [the 25% produce sourcing] commitment we’ve made will be from local farmers,” she said in a live television interview with CNBC.

“The 25% that we’ve committed to sourcing locally will be within the trade area for Cash and Carry is for each store – [this means] we’re looking to fulfil the needs of customers within the area [from] the immediate farmers, so as to create a sort of local market.

“Also, Walmart has a global sourcing hub in India, and we’re [definitely] looking for great local produce that we can sell across our 26 other countries that we operate in [for] all of our customers all around the world.”

Walmart’s US$25mn commitment to India

Walmart India announced its US$25mn commitment to the country in September last year, saying that this would first focus on smallholder farmers as they were ‘the backbone of the Indian economy’, and this would ‘add up to a stronger supply chain, stronger local businesses and better lives’.

The latest grants above were announced as part of the ‘Strengthening Agri Systems: Road To Supporting Smallholder Farmers And Boosting Incomes’ Summit, during which the Indian Minister of State for Food Processing Industries Rameswar Teli said Walmart’s US$25mn commitment to India would go a long way towards assisting India in achieving its national goals.

“I laud Walmart for its INR 1.8bn (US$25mn) commitment towards strengthening the Indian farm sector,” said Tell.

“The private sector is playing a strong role in aiding development in the agriculture and food processing sectors. These will play a major role in the government's vision of doubling farmer incomes by 2022."

India Minister of Agriculture and Farmers Welfare Vivek Agarwal added that the achievement of India’s growth goals for farmers and market access ‘necessitated the intervention of private sector players’ such as Walmart.