Trying to stop large retailers is not in national interest
The Uttar Pradesh government banning Reliance Fresh, on the heels of a previous agitation against the retail chain in Jharkhand, and also in Tamil Nadu, is a bad sign. The protesters are not the truly aggrieved group, who I feel are the thousands of street vendors, whose livelihood will surely be affected. The people who are spearheading the agitation are clearly the better-off middle men, and they are backed by political parties. While I do not want to go into the politics behind Mayawati’s (the UP Chief Minister) decision to ban the retail chain, it is clear that the Opposition’s determination to use this issue to whip up passions has given her cold feet. To my mind, she is a smart politician, and with her action has bought time…
Her claim that the majority of farmers are against the retail chains cannot hold water…in any case she has said that about 60 percent of the farmers are against the organized retailing of farm produce. As far as I know, farmers benefit by the presence of such chains. The chains buy farm produce directly from farmers and give them better rates. Middlemen in India are known to fleece the farmers and the consumer too ends up paying far more for no value addition.
It is known by policy makers that large chains improve the supply chain. Farm produce is picked up in bulk and moves through a cold chain, ensuring greater life for the product. It
The price paid to farmers for fresh farm produce is currently about 30-35% of retail prices as compared to the international norm of more than 50% of retail price. This differentiation is primarily due to the farm sector being predominantly unorganized in India. Organized retailing in F&G segment can drastically improve supply chain and boost farmers’ incomes and will bring a more structured growth to the whole sector
Even more important, a better supply chain means less wastage and in the long run this is very good for our economy, for our country. And ofcourse for the end-consumer. It is a matter of shame though that inspite of being a country basically agricultural in nature, there is a wastage of almost 40 percent of farm produce “due to lack of cold storage facilities and adequate transportation.” Unless we change this, India’s agricultural sector cannot progress. India cannot progress. Until we change this, there is no question of providing nutritious food for all (malnutrition is endemic in India) and we can also discard the hope that more farmers will rake in profits by farm exports.
And I am not even talking about the thousands of jobs that are being generated by retail chains. Or the fact that the ban on Reliance Fresh is making news all over the world and is being taken as a portent of things to come.
Not that the middle men care about these larger issues. Or about farmers. True, they will suffer business losses because of these retail chains, but if they have good entrepreneurial skills, they can adjust. Their security blanket has gone and they hate it.
I feel more sorry for the uneducated street vendor who will find it harder to adjust and has no buffer to fall back on. But I don’t think that he will starve. I have heard that their business has gone down by about 15-30 percent…but in this scenario the best street vendors and mom and pop stores will survive and thrive as many Indians prefer to shop just round the corner. The nature of grocery is such is that it has to be replenished every 2-3 days, and people will continue to buy from the smaller vendors. Some of these vendors have extraordinary selling skills and often go door to door with their wares…perhaps they will take to selling something else.
Doesn’t every single human being suffer career pangs? Is a job as secure today as it was 10 years ago? Unless you are in government service, liberalization has meant insecurity for all…people today are sacked at short notice (unless they are working class) and they have nothing to fall back on! The stock market crashes, people go bankrupt and farmers are committing suicide. Our government gives us nothing…no social security, no health care, nothing. Today, your first job is certainly not your last one!
What is important that in the long term the large retails chains will benefit people, and bring prosperity to millions. India has to progress, the country cannot keep using the same regressive methods it was using earlier! A better supply chain will also ensure that Indians can look forward to a time when not a single mouth will go wanting for lack of food. This is a dream that we must have.
(Photo is by me and for representational purposes only)
Related Reading: Comparison of few large supermarkets