[Debate] (Fwd) Hillary Clinton's retail therapy problems in India

[Patrick Bond]

December 12, 2011


  FDI in retail — UPA ‘retired hurt’

P. Sainath

*/Here's the wonderful thing about the FDI-in-retail debate: never have 
struggling Indian farmers found so many champions. They've been crawling 
out of the woodwork./*

Foreign direct investment in retail may be on hold, but Hillary Clinton 
can stop worrying about Anand Sharma and Pranab Mukherjee.

“How does (Commerce Minister) Sharma view India's current Foreign Direct 
Investment guidelines? Which sectors does he plan to open further? Why 
is he reluctant to open multi-brand retail?” Those were among the 
questions U.S. Secretary of State Clinton posed in a cable to her 
embassy in New Delhi in September 2009, some months after Prime Minister 
Manmohan Singh began his second term. (See: Hillary checks out Pranab, 
and the competition, from The Hindu-Wikileaks India Cables series: March 
18, 2011 
<http://www.thehindu.com/news/the-india-cables/article1547377.ece>).

Note her pointed query on opening up ‘multi-brand retail.' She had other 
worries, too. “Why was (Pranab) Mukherjee chosen for the finance 
portfolio over Montek Singh Ahluwalia? How do Mukherjee and Ahluwalia 
get along?” And “does Sharma get along with Mukherjee and Prime Minister 
Singh?” They get along fine, Hillary, and they're all in it together, as 
a team.

Hillary has reason to be concerned about FDI in retail. There's the tens 
of thousands of dollars she earned from serving as a director on 
Walmart's board. And the other thousands of dollars contributed to her 
2007-08 campaign by Walmart executives and lobbyists. An ABC News report 
on that in 2008 also observed that as a director, Hillary Clinton 
remained “a loyal company woman” (/Clinton remained silent as Wal-Mart 
fought unions/: ABC News, January 31, 2008).

And she surely knows the UPA's FDI retreat is tactical. Pranab Mukherjee 
put it with disarming candour: we don't want mid-term polls. Hillary too 
had flip-flopped during her election campaign, going by the ABC News 
report. (While on its Board of Directors, she had said: “I'm always 
proud of Walmart and what we do and the way we do it better than anybody 
else” — June 1990.)

Yet, Hillary's campaign website of 2007-08, points out the ABC News 
report, omitted “any reference to her role at Walmart in its detailed 
biography of her.” As the race heated up, she recanted: “Now I know that 
Walmart's policies do not reflect the best way of doing business and the 
values that I think are important in America.”

Perhaps Hillary's FDI concerns are loftier. She must be worried about 
the poor Indian farmer. The wonderful thing about the FDI-in-retail 
debate is the explosion of concern for agriculturists. Never have 
struggling Indian farmers found so many champions. They've been crawling 
out of the woodwork ever since the FDI announcement. From Deepak Parekh 
to Ratan Tata, they've suffered sleepless nights, agonising over the 
small farmer.

They might want to take a look at the American farm population. At 
/their /family farms, especially smaller ones, wrecked by corporate 
monopolies at every level, from giant agri-businesses to mammoth retail 
chains. Presently less than one million Americans claim farming as their 
occupation. That figure was over 25 million in the 1950s.

With what credibility does our regime, on whose watch farm suicides 
crossed the quarter-of-a-million mark, speak of helping farmers? Who 
knows what windfalls the deals struck with retail giants have brought to 
individuals in this most corrupt government in our history? We need to 
embrace that old journalistic principle: Follow the money. (Hillary 
does, though in a very different way.) Meanwhile, look at our 
government's claims.

*Who it affects*

*Doing away with the ‘middleman'*: The first to be devastated will be 
that poor ‘middlewoman' — the vendor who daily provides our towns and 
cities with fresh produce. She did not push up the prices and has her 
modest margin squeezed each time they rise. That woman carrying that 
huge basket to your doorstep, on her feet 14-16 hours a day to feed her 
family. She's the first ‘middleman' target.

The more exploitative middlemen in the chain will be co-opted by giant 
retail which needs collectors and contractors, though not so many. It 
will slash their numbers after a while. This is The Mob taking over from 
the little guys on the block. You're looking at massive displacement in 
the agricultural supply chain. Only, the new ‘middlemen' will be 
Cardin-clad and Gucci-shod, with better access to government than the 
farmers everyone's dying to save.

That poor woman vendor, whose life we need to improve, not destroy, 
brings you fresh produce. She has to, or she can't sell it. (Tip: big 
retail operators pasting the words ‘natural' or ‘fresh' against their 
names are selling you stuff that could have been refrigerated, even 
frozen, for days).

*Ten million jobs:* Try not to die laughing. This comes from a school of 
economics that has gifted the world jobless growth for three decades 
now. We worked hard for two of those, making a big expansion of jobs 
impossible within our policy framework.

 From the early 1990s, fantastic claims have been made of small farmers 
gaining from neo-liberal globalisation. For instance: farm incomes would 
rise 25 per cent if Indian prices were aligned to global prices; 
purchasing power would shoot up.

Many steps were taken on such claims, including 100 per cent FDI in 
sectors like seed. All achieved the opposite. These moves helped double 
the indebtedness of the peasantry and further spurred the worst-ever 
recorded wave of suicides. Apart from which we've seen seven-and-a-half 
million people abandon agriculture in a decade, many driven out by 
policies to ‘benefit the farmer.' Now we should believe that FDI in 
retail will undo all the damage that these policies — from the very same 
authors — caused? And these guys predict 10 million jobs within a year?

The UPA wants to open up a sector that for all its awful flaws and 
hardships presently employs 44 million people and has total sales of 
close to $400 billion. (That's about 20 times the number Walmart employs 
on roughly the same turnover.) And gives some sustenance to many 
millions more if you think families. Small shops and ‘big box retail' 
can co-exist, so croons the corporate choir. Sure, after wiping out 
countless thousands of tiny shops, the survivors can ‘co-exist' with the 
big guys, who might even have minor errands for them to run. India's 
powerful will run the more important errands. That was clear from 2005 
when then Walmart International Division chief John Menzer told his 
company's annual meeting: “In our six government meetings, we created a 
very positive image [of Wal-Mart]…” And: “We've energized the FDI lobby 
and preempted the anti-FDI lobby in India.” (/Wal-Mart's Hot in India/, 
CNNMONEY.COM <http://CNNMONEY.COM>, June 6, 2005)

*Efficiency:* The giant chains can never match the efficiency of 
farmers' markets selling food produced locally or nearby. Their sourcing 
of produce from all over the world, central warehousing systems, giant 
transport operations — all these are hugely energy intensive. Which 
means a lot of what you get is old and much-refrigerated or frozen. Know 
the other costs of what you pay for.

*Benefitting farmers:* Here's a paradox. Just when we march determinedly 
towards super markets, people in the homeland of Big Retail are buying 
more and more from “farmers' markets.” That is, the oldest form of 
direct marketing by small producers. More and more Americans seek decent 
produce not drowned in chemicals, pesticides and preservatives. Growing 
numbers of that nation's small and family farms are selling through 
farmers' markets each year. In India, every market was once a farmers' 
market. Over time, farmers have lost control of such markets to traders 
and moneylenders. Now comes the /coup de grace/.

The coming of Big Retail is not simply about shops in the towns of over 
one million. It brings a radical restructuring of the entire agri-supply 
chain. The kind of investments — above $100 million — will obviously not 
go towards labour-intensive operations. The new structures that will 
confront farmers are stronger than any they have ever known. As a paper 
on the “U.S. Farm Crisis” from the Kerr Center for Sustainable 
Agriculture, Oklahoma, puts it: “large corporations have in recent years 
moved to curtail farmer independence through production contracts and 
other forms of vertical integration. These moves have included 
establishment of huge corporate-owned Confined Animal Feeding 
Operations, where animals are raised without farmers.”

The new middlemen the government welcomes have no regard for village and 
community. Maximising their own profit is their sole concern. As the 
number of buyers shrinks to a handful of corporations, farmers will have 
fewer places to sell their produce. What kind of bargaining power will 
they have against these mega-middlemen, some of whose worth would place 
them, if treated as nations, amongst the top ten economies in the world? 
The “contracts” in the new dispensation will reflect that power 
equation. The National Commission for Farmers headed by Dr. M.S. 
Swaminathan had observed that rushing into contract farming without 
ensuring the needs, safety and bargaining power of the farmer would 
result in major displacement in the sector. But not to worry, Hillary, 
your team is still out there batting. Only retired hurt for the moment.

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