Do supermarkets bring prosperity for food producers? Not according to a correspondent from Delhi

Devinder Sharma, trade and policy analyst, with a background in plant breeding, writes: “The Ministry of Commerce and Industry has floated a discussion paper on the need to bring in Foreign Direct Investment [FDI] in multi-brand retail, and has even set up a five-member committee to justify it. ” 

Extracts from his column in the Hindi newspaper Dainik Jagran 

The article he sent was written in Hindi on August 20th for a paper which has the largest readership in the world: 5.5 crore.  

A death knell for farming in India? 

[Large multinational supermarkets entering India] is being projected as a boon for the agricultural sector. In reality, it will spell a death knell for farming. It will be the beginning of an end for Indian farmers. 

Importing a failed model from America 

It has happened in the United States. Ever since big retail – dominated by multi-brand retailers like Wal-Mart, Tesco and Carrefour – has entered the market, farmers have disappeared, and poverty has increased. Today, not more than 7 lakh farmers remain on the farm in America . . . 

 

Attribution: Skyblue 

If the supermarkets were so efficient and provided dynamism, why is the US providing a massive subsidy for agriculture? 

Till 1950 in America, a farmer used to receive about 70 % of every dollar spent on food. Today, it is no more than 3 to 4 %. And that is why the American farmers are being supported in the form of direct income support by the American government. 

We are therefore importing a failed model from America . . . 

And Europe . . . 

In Europe, despite the dominance of the big retail, every minute one farmer quits agriculture. According to a report, the farmer’s income in France has come down by 39 % in 2009, having already slumped by 20 % in 2008. In Scotland, low supermarket prices are being cited as the reason for the exodus of dairy farmers. It is therefore futile to expect the supermarkets to rescue farmers in India . . . 

Indian farmers need an assured market and an assured procurement price 

Since 2006, India has allowed a partial opening up of the retail sector. Have these retail units benefited the Indian farmers and for the consumers? The answer is no . . .  

Providing an assured market and an assured procurement price is what the Indian farmers need. This has to be supplemented by a network of foodgrain banks at the panchayat level that can assure local production and local distribution.   

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