The coming of supermarket chains
Our big corporates talked big but have they gone anywhere?
Reliance and Sunil Mittal haven’t gone anywhere, it seems!
How these two developments   help farmers?

Two latest developments that are likely to impact the farmers, the farming future and the very growth prospects of farmers and the rural development are the SEZs and the retail revolution.

SEZs have led to large-scale displacement of farmers, either voluntarily or against their own will, SEZs have led to much new heartburns and questions as to their real value for Indian agriculture future.

The point is that there is no clear analysis of the issues involved here either among the planners, no Planning Commission member or the chief or the deputy chief seems to have delivered any public lecture or there has been any debate or any clear perspective so far.

Now, the industrial development and the SEZs is one thing. The criticism  of SEZs, so many of them, even in states like Maharashtra or elsewhere is whether it was driven by the particular purpose for which land was acquired or land was diverted to real estate or for  some other  purposes.

The matter needs some study in depth by some competent institution, if it is done by some independent development institute or some university study and also its agricultural impact that would help everyone, including the farming community.
In the absence, we have to go by some impressions.

Our own impression is that considering the players like Reliance and players like such India’s big corporates, the SEZs lands were often used to get all the tax exemptions and not for even promoting remotely connected with the stated purposes.
As for the agri-related SEZs, there are clearly no such SEZs as far as we know.
Not even for agro-processing activities in any big way.

And that is one limitation of our vision for SEZs.

As for the future of agriculture transformation, we see the developments in agri processings helps add value to the primary produces. Unfortunately some of the biggest agro processing co.s like Nestle or coffee roasting co.s they are all in foreign hands.

So, we have to go for promoting agri/food processing SEZs and that only will be in the long-term health of the agri and rural sector.

As for the retail revolution, the issue is again very hazy.

The retail revolution, more so in the hands of the big corporates, be it Reliance or Wal-Mart, there is this danger of exploitation of farmers, more so the small farmers.
Already, Sunil Mittal’s retail big talk had remained only talk.

As for the others too, Reliance retail didn’t take off in a big way so far.

As for the supermarket chains giving a guaranteed price for farm produce and saving the farmers from periodic price falls there is no proof to this claim.

We can see wherever there have been supermarket chains like Tesco in UK, Carre in France; they tend to squeeze out the other trade routes, traders into sole suppliers and the monopoly they develop over almost all the supplies.

The national government, it is said, need to introduce some competition policy; the government has to regulate the monopoly power of the supermarket chains from exploiting the weakness of farmers.

Even Wal Mart  executive in the UK, Lee  Scott said that whenever there is a dominant  share, say, exceeding 30 per cent share of any market, this he said in connection with the British supermarket chain, Tesco, there is a need  for the government to take action, to intervene”( Making Poverty, A history, by Thomas Lines, Zed Books, 2008,London).The author points out similar anti-trust action taken by the US government  from 1915 to 1949.He mentions the names of firms against which such actions were really taken.

So, in India too we have to come out with an anti-trust act or action under the monopolicies and restricted trade practices act.

Unfortunately, there is almost total ignorance or unconcern for such talks, given the euphoria that characterises the economic reforms talks here. Of course, there is now some silence in the wake of the economic recession and the Mumbai terror aftermath!
This so-called stimulous packages have now come in handy for the bureaucrats turned policy makers.

They simply do these packages just to satisfy the need for some action. Really this is no action.

We need really stimulous package for really activating the agriculture production and also facilitating intra-region and regional and much focused agricultural trade in commodities where India has the advantage.

There is no such thinking at all here.

There is even now the presence of big monopolies in agro/food processing areas of agriculture and trade. This need to be taken into account before we can hope to protect our farmers, our agri export prospects. In some food processing, there is brand domination like Nestlé. Take coffee where there is the strong brand presence. Jacobs and Douwe-Egberts as well as Nescafe.

Just two co.s dominate the 57 per cent of the world trade in roasted and instant coffee!

So, what chance our officially-controlled Coffee Board can do anything in coffee promotion! Two largest agrifood co.s, Nestle and Kraft Foods buy over 30 million standard 60kg bags of coffee every year!

Coffee is one of the highly monopolised traded commodities. So too are some others. So forget any justice in getting fair price for primary coffee growers!

Likewise, 25 largest food and agribusiness co.s come from just 8 countries! One, Interbrew AmBev is the 16th largest agro-food co.

So too in some other agri commodity. In banana trade three powerful co.s control 47 per cent of the world banana trade.

So on and on.
There is very little chance for farmers, more so unprotected farmers as we have in India, to have any hope for a more steady growth prospects.
Our own government is either ignorant or don’t care!

So, farmers, rural Indians this is the hard reality we have before ourselves.

Or, more exploitation of farmers we will see?
The year 2007 saw an unprecedented agriculture crisis. There were food shortages worldwide. The price of wheat, for instance, doubled!

In India, the agriculture crisis was particularly acute and there were unstoppable farmers’s suicides. As we write, we just read the 7 farmers suicides in Maharashtra, supposed to be an urbanised state and also where we see much agriculture modernisation, sugar co-ops, horticulture development and we have our Union Agriculture Minister himself developing a highly developed agriculture hub around his constituency. Yet it is in Maharashtra, the home for our Rashtrapathy too this farmers distress becoming symbolic of all that is wrong with our agriculture policy making and implementation.

Now, there have been new developments. The largest number of special economic zones. The   emergence of the latest retail revolution. The supermarkets are coming in a big way and everyone is predicting that this retail revolution is good for the farmers, those who cultivate vegetables and fruits and they are supposed to get higher prices and more steady incomes.

May be like all other previous revolutions in agriculture, these latest developments, SEZs, the supermarkets will help agriculture?
First of all we have to see that the WTO negotiations that are supposed to liberalise the world trade hasn’t progressed far enough.

2 Thoughts on “Special economic zones

  1. Unless government make some strict law for monopolies our farmers denetly going to suffer no matter what.

  2. I am a member of John Beck’s real estate program. I have learnt a lot from his steps strategies. I have come to know more information from your post. Good contribution. I will be looking forward for more posts.

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