Retailing our woes

When our elected parliamentarians holds the nation to ransom as they bicker on some or the other issue by preventing the house from functioning in its core business of discussing and passing bills that are the dire need of its citizens, one would think that any bill passed by the Government in such times would be received with a thunderous applause. But that has not been our experience recently. The FDI in multi-brand retail has been quashed by opposition from left-wing political parties, who see more harm to our people than good. The argument is that they will finish the kirana-wallas (mom-and-pop stores) and then dictate their prices to the small farmers and exploit them! Those who support FDI in multi-brand retail argue that the large food chain specialists will offer better prices to farmers, invest in better cold-storage chains and yet offer consumers a better deal than the present market mechanism does.

Indian traders have, for several decades, dictated terms to small farmers and producers, fleeced middle class consumers by flouting every regulation meant to protect them and have unjustly enriched themselves all along. Several success stories of small-time retailers turning into big-time business houses with companies now listed on bourses get featured regularly in the media. Yet, it was these very retailers that got bailed out by opposing the FDI proposal in multi-brand retail! Basically, organized global retailers of the kinds of Walmart and Carrefour lost out – at least for the moment.

The young prince of the Congress party has been telling our farmers how they had been deprived of an opportunity to get better prices from these charmed global giants and would continue to suffer from the handouts from local traders due to the opposition to the proposed FDI.

What one ought to ask is this: Weren’t the various malls that were set up by Indian entrepreneurs, the likes of Big Bazaar, Subhiksha, More, Reliance Fresh and several others – which were also supposed to cut out the middleman from the chain and offer better times for producers and consumers from their efficient supply chain capabilities – supposed to do exactly this? But they did not prevent farmer suicides or prevent the exploitation of the small producers, did they? So how is it that bigger global players would do what the local entrepreneurs fail to? If conditions of investment in cold-chains and better supply chain facilities would be enforced for FDI investors, wouldn’t the same conditions imposed on domestic players have not been the right way to go? Would we not have seen better infrastructure if these conditions had been in place for local large-format retailers already?

The magic potion of multi-brand retail revolution having been thwarted, the government hurriedly passed the Food Security Bill! The succour to our hungry millions, it would seem. But the recent introduction of the Food Security Bill has been criticized in the press for several shortcomings and significantly for the huge burden [estimated to be Rs. 5,45,000 Crores] on the ex-chequer at a time when the fiscal deficit already poses an insurmountable challenge for the government to cope with. Deficit aside, the poor delivery mechanisms that our previous programs prompt us to be skeptical of the basic purpose of any food security bill – to ensure every citizen gets his two square meals every day! Will he? Or will some politician now go around and tell the hungry that the pseudo intellectuals in our society opposed the FSB and deprived you of your rightful meal today, that we sought to deliver?

One cant but admire the work of various NGOs committed to feed the hungry - they dont wait for the government to pass a piece of legislation!