Protect Democratic Rights of Farmers & Consumers -- -- National Referendum on FDI, Than Half Pant Blackmail

Protect Democratic Rights of Farmers & Consumers --

-- National Referendum on FDI, Than Half Pant Blackmail

 

It is the Democratic Rights of Farmers to get remunerative price for their produce and sell his produce as per his preference not auctioned in Mandis and it's the Democratic Rights of Consumers to get Quality Products at most competitive prices – without Control of Middlemen Traders.

 

India produces over 210 million tones of fruits & vegetables – Horticulture production 223 million tones, 240 million tones of food-grains, 112 million tones of milk, 30 million tones of sugar, 35 million bales of cotton plus huge meat & poultry production – except for procurement of 20% of milk there is very little storage provided to farmers when actually farmers ought to store foods and commodities in safe storages immediately on harvest and in addition farmers ought to process foods in their villages itself.

 

Efficient storage and processing alone could provide enough nutrition to address Malnutrition in India.

 

Not more than 25% farmers get bank credit while traders get more credit than farmers. In the absence of credit to farmers and support for Cooperatives – farmers are entirely dependent on moneylenders and traders. What is the justification of giving Rs.3,00,000 crores to traders as bank credit when they realize 50% to 10,00% profit margins in multi-stage operation? For example Potato price has crashed to Rs.1/- per kg but we in Delhi still pay Rs.15/- to Rs.20 per kg.

 

I have visited biggest Mandis in India in Punjab – all the biggest traders possess other than 200 sq.ft. shop that has mattress and a Cash Box – few Grain Cleaning machines that cost few thousand each, few weighing scales, few brooms and implements. All labor is on contract, Grain Yard largely open to sky is owned by Mandi Board – even as trader may have Rs.100 crore turnover and may have taken Rs.25 crores as Trading Loans from banks.

 

90% of the products and services are accessed by farmers and consumers in Developed Democracies without any intervention of Middlemen – retailers like Walmart by Quality Products directly from manufacturers and farmers and sell directly to Consumers.

 

Walmart provides assured Contracted Price to farmers and manufacturers and Assured Quality of Products and Services. Walmart to achieve this provide own specialized storages, transport and quality control – total infrastructure.

 

None of Indian traders and middlemen provides this service. 

 

In Punjab most of the Cold stores are owned by farmers in Potato growing area when in fact every potato growing village need a Cold Store for storage of potato and other perishable foods.

 

Similarly Consumers too need Quality Products delivered to them by Retailers who have Scientific Quality Control Based procurement and After Service Skills.

 

In 2000 I was forced in install inverter but the battery didn't last even 18 months – when Regional Manager for North India refused to replace it – I petitioned to its CEO in USA – RM came and replaced the battery that lasted 8 years – now again same battery has failed in 18 months. We really can't do much when even Tatas go up to the Supreme Court against Consumer Forum orders to replace defective Indica Car. CFL lamps we buy expecting 6000-10,000 hrs service life that barely last 1000 hrs.

 

Companies like Walmart have the skills.

 

India actually need atleast Rs.10,00,000 crores investment in Agriculture and Agro Processing and Agro Retail.

 

800m farmers and 400m consumers are fully behind FDI in retail.

 

We need 'National Referendum on FDI'.

 

BJP RSS have opposed all Revolutionary Initiatives of GOI and GOI should not give in to Half Pant blackmail.

 

Ravinder Singh

November30, 2011

 

http://nhb.gov.in/database-2010.pdf

 

ILL- INFORMED OPPOSITION TO RETAIL FDI

by Amitabha Pande

 

MOST criticism of and opposition to the government's decision to permit 51 per cent FDI in multi- brand retail is pathetic in its ignorance.

 

The very fact that both the Left and the BJP are mouthing the same platitudes should make it evident that the case against the government's decision is based on the worst kind of ideological opportunism, rather than any knowledge of the enormous weaknesses in India in the supply chain, especially in the case of agricultural produce, and more particularly in the case of perishables.

 

In the manner in which the opponents pose the issues there is, first of all, a deliberate obfuscation of issues. The issue is being posed as the ugly, rich, big box foreign retailer versus the small, struggling, neighbourhood kirana wallah and the roadside vendor pushing his cart.

 

This conveniently overlooks that big, branded retail is already here and has been so for more than half a decade now and has co- existed happily with the neighbourhood store as well as the pushcart vendor.

 

The decision to permit FDI only means that instead of multi- brand retail being the preserve of just Indian companies, we will now have the bigger multinationals as well. So instead of just Reliance or Big Bazaar or ITC, we may also have Walmart and Carrefour.

 

But why is it that what is okay for Indian companies to do what is thought to be against the interests of small businesses and livelihoods, becomes a devilish conspiracy if a foreign investor comes in? Indian retail has for eons been the weakest link in the long, extremely complex value chain between the laboratory to the seed on the one end and the farmgate to the end consumer on the other.

 

The chain of linkages is so complex that isolated interventions which do not tie up each link in the chain carefully and completely are bound to fail.

 

Many Indian businesses, including big companies, burnt their hands badly in the past because they invested in one part of the chain oblivious to this critical requirement.

 

In India, the gaps in the chain, particularly from the farmgate to the retail store are currently filled by a vast range of middlemen.

 

Take the case of fresh fruit, for example.

 

Between the orchard grower and the arhtiyas in the bigger mandis who arrange for the daily auction of the produce, there is a chain of various middlemen who take care of different aspects of the business — from organising watch and ward and safety of the crop in the orchard, to picking the fruit, culling it, grading it, packing it for bulk transportation, transporting it before the fruit rots and getting to the auction agent at the right time when it can command the best price.

 

Each part of this requires different areas of specialisation and different kinds of middlemen, and each group adds his margins to the cost including the cost of the working capital advanced to him by the main auction agent.

 

There is a subsequent chain of middlemen from the auction agent to the retailer, who in turn add their margins to the cost.

 

THE INDIAN retailer plays no part in this entire process because traditionally, he just ensures that he provides the appropriate space for the produce, some kind of display, and an ability to position himself in a location where he can attract buyers.

 

He is in no position either to influence the price that is paid to the grower or see to the quality of the produce or its packaging or its branding, nor does he even think this is any part of his job.

 

For the organised big retailer on the other hand, operating in a competitive environment, managing, controlling and supervising each part of the operation, at every stage from the farmgate onwards, is vital both for keeping a tight control on costs, as well as to ensure the sanctity and image of his brand.

 

Not only that, he has a vested interest in having a long term relationship with the grower to ensure the reliability of his supplies. It is, thus, natural for him to invest, not just in post harvest infrastructure, but in the growing of the produce as well.

 

Why is FDI so important for this? It is often forgotten that "technology" is not just invention and innovation and dazzling new gadgetry or codes and formulae, but experience in the use of technologies in widely different markets and environments.

 

It is these "soft" technologies that the multinationals offer which are invaluable and which cannot be homegrown because our experience is limited to the very underdeveloped markets we have functioned in.

 

It is experience of functioning in extremely competitive situations, working on wafer- thin margins, keeping constant control on all costs at every stage and ensuring that the "brand" retains its value that we desperately need the multinationals.

 

The benefits to both the consumer and producer are huge and time will show how these benefits are actually realised.

 

For once, the government has thought in long- term, strategic terms and deserves fulsome applause, rather than ill informed opposition.

 

The writer is a retired civil servant who played a major role in bringing Pepsico into Indian agri-business in the Eighties