Prime Minister is spreading false stories about benefits of FDI

The Prime Minister is spreading false stories about benefits accruing to the farmers in terms of better prices for their products owing to the introduction of FDI in multi-brand retail.The stated purpose of liberalising FDI in retail is that it will attract investments for modernising India’s supply-chain infrastructure, especially for the agricultural sector, in turn, providing better returns to farmers and small agro-processing units through enhanced direct sourcing as well as curbing inflation by reducing wastage. The argument is that the giant foreign retail chains will squeeze out the middlemen thereby providing higher prices to farmers and at the same time provide large investments for the development of post-harvest and cold chain infrastructure. Today, in the West, corporate retailers control the entire supply chain of food and farmers have no alternative but to sell to select corporate retail giants. This has led to monopoly conditions, where there is just one or few buyers, farmers have no choice but to sell their produce at the price offered by them. The general practice is that in order to maximise the gain, corporations will contract with farmers and push them for single crop cultivation, using genetically modified seeds with extensive use of pesticides and chemicals which will destroy the fertility of land. It is already happening in India and will only intensify as retailers seek to enter directly in the agriculture sector. All these claims of showering of benefits to farmers are fallacious and the big retails have not helped farmers anywhere in the world. Even in Latin American countries, including Brazil, Argentina, Uruguay and Colombia, where supermarkets, most of them owned by multinational giants, now control 65 to 95 per cent of sales, many farmers have been forced to quit agriculture.Evidences show that farmers in the West have paid a big price, with hundreds of thousands forced to abandon their farms, due to corporatisation of the farming sector, along with corporate control of the purchasing side among processors and retailers. Therefore, there is no point in giving this stake (i.e. multi-brand retail trading) to the foreign retailers, albeit to cater inflation. India might receive some foreign direct investments; but this will make the situation even worse by displacing the farmers leading to increase in rural unemployment and poverty. Given the already over-crowded agriculture sector, and the stagnating manufacturing sector, and the hard nature and relatively low wages of jobs in both, many million Indians are virtually forced into the services sector, particularly in retail trade.( Excerpts from the book authored by this commentator entitled, “FDI in Retail Trade in India: a Retrograde Step” by M/s RAC Publications, No. 38 (Old No. 76-A) Choolaimedu, Chennai-60094.''

The Times of India, Dec.10, 2012.