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Economics Kills

Economics Kills

December 05, 2011

FDI does not equate to organized retail....FDI equates to the systematic slaughter of 600 million farmers!

Bengal, historically, has been the sick man of India. It has a horrible past. It all started in 1770, when approximately one third of the total population of Bengal was wiped out due to a drought. The East India Company, which had occupied Bengal five years earlier, looted the granaries, taxed rice farmers heavily, and subsidized the farming of profitable commodities like opium. When drought hit, about 10 million people starved to death!

If only the granaries were not looted by the British East India Company, if only the farmers of the region had cultivated rice instead of opium, they could have been saved. Well, it was not the military, but plain and simple economic policies that killed these people.

The last of the 40 recorded droughts of Bengal was in 1940’s when 4 million starved to death. Over a span of 182 years, over thirty million men, women and children were systematically killed due to poor economic policies. These Indians had no grudge against the British Empire. They had done nothing to deserve such a cruel fate. At least Hitler hated Jews and killed 6 million of them. What ill did these 30 million poor Indians do (or could have done) to the British Empire?

If the systematic murder of six million Jews was a crime worthy of waging a World War, does the killing of thirty million inhabitants of Bengal not even deserve a footnote in history?

Anyways, the imperial British are long gone, and India is a free democracy now. Once upon a time Shaheed Bhagat Singh had said that, if India is not strong enough for Independence, the white skinned will be replaced by the brown skinned, and exploitation of man by man will continue.

Having said this, let me address the debate of FDI being introduced in India.

Recently the government has introduced Foreign Direct Investment (FDI). I often wonder why the Government and its mouthpieces are trying to spread a notion that the problems associated with better collection, storage, transportation and distribution of farm products can only be tackled and solved by introducing FDI in India. Why are they hell-bent on selling their lands to foreign invaders just like Mir Jafar did in the battle of Plassey.

It is high time we understand that agriculture and retailing in India are not just enterprises. They are very similar to Indian Railways. Indian Railways should never be privatized simply because it is not just a profit making firm that runs trains in India. It is the largest employment scheme ever deployed by the Indian government. Privatization of Railways will lead to 'optimization of corporate resources', and millions of Indians will lose their livelihood.

The retail industry in India is a huge source of self-employment. For large sections of the semi-literate and illiterate population, the lack of opportunities for growth in the manufacturing sector and poor returns in agriculture has left retailing as the only meaningful option to sustain their livelihood.

These small street side shops have been a significant source of self-employment for the economic bottom half of the population. Projecting these millions of retailers as 'entrepreneurs’ is a big joke, since most of them manage to operate their shops for daily bread and butter, not for listing themselves on the stock exchange some day.

With FDI, these retailers will be deprived of this livelihood. They can barely speak anything outside their native language. Asking them to seek employment in Walmart or Tesco is like saying ‘if you don’t have bread, you must eat cakes’!

Retailers are just the tip of the iceberg. The worst hit will be the farmers. Indian agriculture is traditionally based on small farms. These farms are not optimized and are unsuitable for running heavy machinery which can do tilling, sprinkling, or harvesting - but at least they generate jobs for daily wage farmers. They ensure that 600 million people in India survive!

Who does not know that Walmart and Tesco are known to buy out or lease huge farms, which they cultivate using highly optimized methods and techniques? Walmart and Tesco are rich and big - much bigger than any institution in India. They can lobby and change the laws of this land in a keystroke. Yes, initially they will offer huge sums of money as they buy out or lease the farmlands of India. They may even employ farmers on a contract basis, initially.

With newer machinery and spiraling land procurement, they’ll optimize their farm lands. Once they have their huge farm lands spanning great distances, will they continue to employ our farmers? Will they not deploy the heavy machinery and optimized techniques to maximize profit? After all, they are here to do business, not charity. The Indian middle and upper class will surely get a better shopping experience, but what about these 600 million farmers who will be killed systematically?

So, does that mean organized retail should not be brought in India? Yes it should be. But first, the media and government must stop bombarding us with their propaganda promoting the notion that organized retail is equal to FDI. It isn't. It certainly isn't.

Amul has proved that organized retail can be achieved. There was a time when milk was a commodity which was scarcely available and was imported to our country. This led to a long battle which finally resulted in the cooperative milk federations of India. Today each Indian state has its own federation which has ensured an efficient supply of milk products at reasonable rates in a sustained kind of a manner with the profits reaching millions of producers, and not one man's pocket! Indian milkmen today live with dignity.

The same model in the fruits and vegetable market has been deployed by Hopcoms in my native city of Bangalore. Hopcoms ensures that small scale farmers of Bangalore’s nearby districts obtain proper channels to sell their produce. Hopcoms, in fact has saved lives of thousands of farmers in Karnataka.

Aren’t we messed up enough internally? Over the past 20 years, over 2 million farmers have committed suicide. Let alone the ones that were killed by other means. Who doesn’t know that the high farmer suicide rates in the Maharashtra and Andhra Pradesh belt are due to the inability of the Government to prevent cheep subsidized imports which bring the price of the locally grown cash crops tumbling down?

It is known that the Government is working hand in glove with trader lobbies which first export the local produce creating scarcity in the country, and then proft from the higher prices. It is well known that the FCI godowns are rat-holes which destroy the food crops systematically, which rightfully should go to the poorest of poor Indian dying on the streets!

Inflation in India is created. A need for FDI is strategically created when we can simply enforce better supply, transportation, storage and retailing of Indian yield. Why don’t we deploy anti-dumping duties on foreign products which will ensure that food prices in India are regulated and farmers live and prosper with dignity?

For a country like India, with its population and its poverty, the only answer to our problems is to encourage and fix the people oriented models like Mandi Samitis and Cooperatives, which could be streamlined to run like Amul, thereby championing the larger interest of society. Instead, the Government is taking steps which will break the very backbone of Indian markets. It is also a matter of shame that intellectuals of the country are even supporting FDI without even looking at the bigger picture.

The history of this land has proved that economics can kill more brutally than the military. When prices of cars and computers continue to fall and those of rice and wheat become unaffordable for a common man, we know something is terribly wrong with the economic policies of this country.

The government and my fellow citizens must understand that all our farmers, once suppressed beyond a certain threshold, will not commit suicide or starve to death. Some will become naxalites and kill us. Some will join the local mafia and kill us for their daily bread and butter. Some will jump back, kill us, and bring governments down.

I hate to say this, but if not for the future of those 600 million farmers and those 100 million retailers, if not for this country, then at least for the future of our own children, let’s say NO to Foreign Direct Investments in India!

Photo credit: timesofindia.com 

13 Comments

  • mayank
    By
    mayank
    29.08.13 11:51 PM
    hats off to you bro for presenting the bitter truth of so called "shining india" in such an interesting way
  • Abhinav Mishra
    By
    Abhinav Mishra
    29.07.13 07:34 PM
    Current international conditions and relevant Indian economic & foreign policies leading our country to a new era of economical slavery but our brilliant leaders keep fighting each other only on communal issues. They are not seeing the plague coming to us in the face of FDI. If we don't change there is no place to hide leaving prisons & graves.
  • Krishna
    By
    Krishna
    03.07.13 12:03 PM
    Not allowing FDI equates to the repeated slaughter of 1100 million non-retailers.
  • Rahul Shayar
    By
    Rahul Shayar
    07.12.12 10:16 PM
    The government could have found out a way between FDI retails and the present retail system where Indian middle men loot Indians to make the latter a virtual begger burdened with loans left to hang finally when broke like farmers! to that extent FDI in retails is good!
  • vishal
    By
    vishal
    06.11.12 02:01 PM
    I will like to thank the Author of this article for writing it. I can't understand those people who support FDI in retail. They say that price will go down. I have one question to them: if price of eatable things will go down then people will buy more luxury items (which come from outside) and we end up pumping more money outside India. Also, if now 100 rupee is pumped into economy of India, after arrival of FDI in retail, price will go down to 80 (as they say).. which will lead to loss of 20 rupee to economy ???? Main purpose of economy is to rotate money from one person to another and more the money stay in India, less we need FDI. On one side India can easily loose 200 Lakh crore rupees and on other side we need FDI ? No FDI can bring this much money. This govt. is just joking!!!! more than FDI, we need freedom from govt. control. We need freedom from politicians dalal.. At present these dalal are illegal. But after arrival of FDI, these dalal will become legal.... Wake up people.. We need good goverance, govt. free society. Where govt. only work is to provide roads, schools, hospitals and nothing else.....
  • Raj Khandelwal
    By
    Raj Khandelwal
    06.12.11 12:48 PM
    well, I think people here doesn't have much knowledge about CORPORATES, Backing FDI is like " Please come and kill me ", FDI has already ruined the retail sector in Africa and Thailand as being more specific.So much of Unlimited economic progress and limited natural resources are bound to collapse. Everything Nature, Politics, Corporates, progress, inflation,environment, employment and happiness are all entangled in to one string. In your argument you have the solution " SELF SUSTAIN ", Is the key word. I know I am being philosophical but i have an direct example where the world is not run by any corporate honchos or your so called liberator of technological advancement, like in Arcata, USA
    ( http://www.cityofarcata.org/government/committees/democracy-corporations ),

    or in pennsylvenia, USA. They have already seen " What the Big firms did in name of expansion and development " that's why they are howling and marching in the wall street. Please Learn from your Own mistake, have you forgotten Union carbide, the Killer ' Mosanto '........
    We are creative people, If we can provide them with consultation ideas then why not we do it for ourselves and for our very own country and for our future generation. Be SELF SUSTAIN.

    Your talking about employment and development, Which actually means CSR for the companies, that's Corporate social responsibility, and how they play with it to gain people's confidence and then the consequence. An excerpt form the news:-

    Tesco, and its influential chief executive Sir Terry Leahy, makes much of its social responsibility saying: “We recognize our impacts on society, on the economy, and on the environment… Corporate responsibility is not an additional burden or a distraction from serving our customers; it is an essential part of sustaining ourselves as a responsible company”3. But two independent rankings of top companies in 2004 named Tesco as one of the worst offenders on social and environmental issues and heavily criticized its Corporate Social Responsibility (CSR) report for being incomplete and inadequately verified4.
    “Tesco has driven down the price of meat, vegetables, everything, because they have such a huge share of the market. It’s a monopoly position…they can simply go and find someone else who will supply them at the price they want”. Michael Hart, chair of Small and Family Farms Alliance,
    “Beverley didn't need Tesco, it was already a prosperous town. Tesco came to plunder not regenerate. They came to take money out of the economy of an already thriving and wealthy market town”. Richard Wilson, retired lecturer, Beverley
    More than 13,000 specialist stores, including butchers, bakers, fishmongers and newsagents, closed between 1997 and 2002, leaving many communities without accessible shops and services42. Recent statistics reported by the Association of Convenience stores show that the loss of independent shops has accelerated to alarming rates with nearly 2000 closing over the last year alone43. Further loss of choice and services are inevitable unless retail diversity is protected in the high street.

    FOR FULL INFO CHECK THIS LINK - http://www.foe.co.uk/resource/briefings/the_tesco_takeover.pdf

    For my Dear Wal mart :-
    A recent news -

    Some Cities Resisting Wal-Mart Expansion
    http://www.commondreams.org/headlines03/0712-06.htm

    Wal-Mart plans to open more than 200 super-centers in the United States this year. For the first time in Wal-Mart's history, U.S. super-centers in 2003 will outnumber the smaller discount stores that do not carry a full line of groceries.

    The retailer opened its first supercenter in 1988, and is now the biggest grocery seller in the world. The idea is, customers may only visit a discount store to stock up on diapers or detergent a couple of times a month, but they'll need bread or milk twice a week.

    Check the full story !

    So stop bullshiting around with half the knowledge Comment, They ( wal mart and their friends ) don't bother about their very own people from where they have emerged, do you think they will give a damn thought before ruining us.

    I TOTALLY AGREE WITH SOURAV ROY - SAY NO TO FDI, Are we handicapped that we can't make our country progress, Do we need some aliens to make economic development in our country. LOSERS, at-least stop giving pain to the soul of our martyrs who has laid down there life for us, i am not saying do ( cause we are too lethargic to stand out and protest ) but just think ( at-least think twice before you comment or support such a history changing propaganda ) ENOUGH !
  • Harish G.
    By
    Harish G.
    06.12.11 12:41 AM
    .....and it is yet again, one of those articles that only complain and simply fail to provide an alternative.

    India is not well versed in supply chain, nor does it employ effective measures in Agriculture to increase output like developed countries. Don't you want to gain exposure by availing this opportunity? Don't you see what can be accomplished with WalMart? You believe Walmart will exploit farmers, but aren't they already being exploited by intermediate retailers?

    If the Govt. does not allow FDI now, they will have to someday in future, then why not now, things will only worsen for India if they don't.

    Your analogy of privatizing Railways is totally flawed. Railways in no way can be compared to Walmart since one is selling product directly, other is selling products bought from others.

    I understand that retail industry is huge and employs a lot of people. But Walmart is not gonna bring White people from America to work you know. Also, don't you think if you own a shop you should pay taxes. The problems with unorganized retail are the unregistered shops that don't pay taxes. Thus, no incomes tax, no revenue generation, and hence no development. It is a pity that because of retailers who don't pay taxes, Govt. has to turn to foreign companies for money. (Don't bring corruption in here, it's a different issue altogether)

    I totally support FDI in multi-brand retail, it's not an option any more, it's an investment for the better of future, don't let 60 years of bad practices and technological backwardness give you reasons to throw away yet another opportunity. You remind me of those who opposed liberalization in the 1990s.
  • Arpit
    By
    Arpit
    06.12.11 12:18 AM
    @Raj and Vishal: just a fact for you. Wal Mart employs 2.1 million people and has a revenue of $450 billion. Indian agriculture industry is about 15% of the GDP(4,198,609 million $) which is approx $608 billion and employs more than 60 million people! Now do you think that all of these people would easily sustain after coming of these players? If that was the case, why were Reliance fresh opposed on a first place? Yes customers have the right to choose, but these marts are always more lucrative to common man due to their brand value and less price. They buy whole farms and create a supply of products direct from farms to their stores. This way they can provide goods at a low cost.
    If a big mart starts a business they would first buy land from farmers for a huge profit to farmers. Farmers would readily give their lands little realizing that they lost a fixed asset and have no source of income left.
    Next, they would mechanize the process, bringing technology to each patch of land. This would make the farm labourers redundant and they would have no choice but to go to cities and do menial works, or simply suicide!
    Then they will establish a supply chain which would eliminate every small dealer or retailer alongwith the middlemen. But that doesn't mean farmers would get their due. Because land would be mart's, technology would be mart's and machinery would be mart's, the farmers would get just meager wages and no part of profit whatsoever.
    FDIs would mean millions would become jobless. It would mean slow death for whole generations to come. We welcomed Union Carbide by both our hands, but look what they bought for us! It is really sad that we Indians never learn from our mistakes.
    @Sourav: Really well written. Hope this thought provoking article reach many people and enlighten them up. Our Government is all set to bring FDIs. Tonnes of rice is let to rot in Andhra Pradesh with takers and no storage provided by Government. I think this is all a set up to justify foreign investment in agriculture saying we don't have the technology and know-how of storing grains. I wonder what percent of its profit has these companies offered our ministers that they are ready for mass-murder of their own people. May better sense prevail in them.
  • HARRY
    By
    HARRY
    05.12.11 11:04 PM
    Sourav Roy

    This is the best article you have written so far, and it has touched my inner core on what you have said in the article.

    You are right about Wallmart and Tesco, they both are bunch of greedy fuckers and I would not trust them as far as I can throw them. They should deploy a same scheme as Amul dairy coop rather then bring in the external greedy pigs.

    Tesco in UK only offers what they think farmers should be paid for their produce, rather then what it realy cost to produce and this is not a myth. The farmers in UK and Europe are putty in their hands. There was once milk cost dispute in UK when cost per 2lte milk for farmers to produce was 65pence including the cost of supply and Tesco only offered to pay 50pence and this was 2 years ago bearing in mind they retail this for £1.49pence. This happened because Tesco thought their compititor were paying less then them. The above figures are the closest approxamate. This story is not a fiction.

    Once given chance to Tesco you got as much chance as rat controling snake and you and I both know it's not going to happen.

    Sourav thankyou for bringing the truth to light no matter how bitter it is . Those who still prefer big Wallmart or Tesco shopping centre will have think twice before saing yes to them.

    I am all for FDI but this is not a way forward for our mother land as some of you suggest in your post. As much as I like shopping in Wallmart or Tesco, but giving them this is like selling our soul to the highest bidder and that's not on at any price.

    HARRY
  • Anna
    By
    Anna
    05.12.11 03:38 PM
    I learned alot of things reading your post. Think I have reread it several times and ponder a bit about it. Thanks for being so thought provoking.
  • Vishal
    By
    Vishal
    05.12.11 03:11 PM
    It's weird how we can end up trapped in the politicians' rhetoric. If we are so concerned about the improvement of lives of these small scale retailers, why is something not done to improve their condition? Cold storage, logistics and technology does not improve, leading to traders with deep pockets hoarding commodities, making them more expensive for all of us (including your small scale traders). The government did not do anything to improve the auto industry, nor the IT industry... opening the sector to foreign investment and tech transfer did. FDI in retail will lead to the private sector improving infrastructure. How many players in India are able to leverage the knowledge of Future Group or Amul? Food is rotting away; the sufferers are farmers and common man, who cumulatively outnumber traders with a political clout 50:1. The small scale retailer cannot fizzle out; he has too much of a competitive advantage over organized retail. So Sourav, is it justified that we pay a premium for goods while some pockets keep getting filled up?
  • Jayanth Tadinada
    By
    Jayanth Tadinada
    05.12.11 12:23 PM
    Well written article man. You have touched all the points.
  • raj
    By
    raj
    05.12.11 09:37 AM
    The truth is big retailers compete for customers and the customer chooses where to go and buy stuff. If no one decides to go to Walmart, Walmart will go bankrupt. People should have a choice to buy where they want.


    First we need real investment made in farmland technology and supply chain. It requires lots of $$$ which India doesn't have nor does any people oriented models have.

    You complain that the price of food is sky rocketing, and you rightly blame the economic policies. But you don't understand why it's rising. There is less food because a large part of food is left to rot because of inefficient infrastructure.

    If you want millions to starve, continue to oppose FDI in India.

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