From Pepsico to Wal-mart: Selling a Fake Dream


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In the mid-1980s, Pepsico came up with a proposal to bring in a 2nd horticultural revolution in Punjab. It was hailed as a path-breaking initiative that would put an end to the continuing distress on the farm. It was expected to usher in the latest technology, improve farm research and extension, create supply-chain infrastructure, and provide marketing linkages from farm to the fork. I remember the kind of excitement that prevailed all around. Politicians, bureaucrats, economists, agricultural scientists and even the Bhartiya Kisan Union (BKU) joined the chorus. All my efforts to reason out the hollowness of the claims, based on Pepsico’s own studies, were simply lost in the din and noise created by the drum-beaters.

Some 15 years after the project was approved, Pepsico’s horticultural revolution is all but forgotten. Agriculture has gone from bad to worse.  The food bowl of the country has also become a major hot spot for farmer suicides. While the soft drink giant remains busy marketing its colas, Pepsico has not been held accountable for its failed promises. It will never be punished for selling a fake dream to the beleaguered farming community.

It is now the turn of Wal-Mart and other big retail giants. FDI in retail is once again being projected as a panacea for all the ills plaguing Indian agriculture. FDI in retail will lay out backend infrastructure, bring in a chain of cold storages and improved transportation thereby reducing crop losses; remove middlemen which rob the farmers of profits, and thereby provide him higher prices; bring in improved technology to help in crop diversification; and of course create millions of jobs. The cheerleaders are once again on the road. This time, it is the corporate controlled electronic media that is drumming up the hype.

Having spent Rs 52-crore in two years for lobbying alone, and after the recent New York Times exposure showing how Wal-Mart bribed its way to control 50 per cent of the retail market in Mexico, the Union Cabinet finally allowed big retail to set shop. If Wal-mart could bribe its way in Mexico, what makes us think they have not been able to do so in India?

We are being told that Wal-Mart, Tesco, Sainsbury, Carrefour and a host of other big retail players are expected to increase farm income. In the US, where Wal-Mart has completed 50 years, if farmers were getting a better income, there was no reason why the farming population should plummet to less than one per cent of the population. Farmers in US survive on the farm not because of Wal-Mart but the massive subsidy support, which includes direct farm income. Between 1997 and 2008, Rs 12.60 lakh crore was provided as income support to farmers. A UNCTAD-India study shows that if these subsidies, classified as Green Box in WTO parlance, are removed, the American agriculture collapses.

In Europe, despite the dominance of big retail, every minute one farmer quits agriculture. Europe provides the highest amount of subsidies, including direct income support. But because 74 percent of these subsidies are cornered by Corporations and big farmers, small farmers are quitting farming. In France, farm income has come down by 39 per cent in 2009, down from 22 per cent in 2008. In OECD, the richest trading block comprising 30 countries, Rs 14 lakh crore was the farm subsidy support in 2009 alone. It is not big retail, but direct income support that keeps farmers in agriculture.

These subsidies also bring down the domestic and international prices as a result of which big retail sells cheap. Empirical studies show big retail charging 20-30 per cent higher than open market in Latin America and Southeast Asia. In India, organised domestic retail has not been able to sell cheaper. A NABARD study for Hyderabad shows Reliance Fresh and other charging 15-20 per cent higher prices. Even at the peak of inflation in India, these domestic organised retailers did not reduce prices. So where is the advantage to consumers?

Studies show in America, before 1950, when farmers would sell their produce for one dollar, 70 cents was his income. In 2005, it had fallen to 4 per cent. With the middlemen wiped out, I thought the farmer’s income should have gone up. No, it is the new battery of middlemen – quality controller, standardiser, certification agency, processor et c—who walk away with farmer’s profits. Number of middlemen, operating under the same hub, actually increases. Let us not forget, Wal-mart is a big middleman, it eats away the smaller middlemen.

There is no evidence that big retail creates backend infrastructure. In US and Europe, rural infrastructure has been created through government support which came in the form of agricultural subsidies. To say that 40 per cent agricultural food that goes waste in India will be drastically reduced is also an illusion. In US also, 40 percent food is wasted and much of it is after processing where Wal-Mart’s should have played a much important role.

Regarding employment generation and poverty alleviation, lessons need to be drawn from a 2004 study of Pennsylvania State University by Stephen  Goetz and Hema Swaminathan, which showed how higher poverty prevailed in areas where Wal-Mart stores had come up compared to those states where big retail was absent. In any case, for a $450 billion turnover, Wal-Mart employs only 2.1 million people. Whereas for an estimated $460 billion market, Indian retail employs 44 million people. Let us not forget, Pepsico had also promised to create 50,000 jobs. As per a question in Parliament, it became known that Pepsico had created less than 500 jobs, including 250 unskilled workers. Moreover, last month, massive demonstrations rocked US by Wal-Mart workers complaining of poor working conditions and exploitative salaries. Who creates employment, and also provides better working conditions, therefore is all evident.

Yes, there is a need to improve rural infrastructure, provide a sophisticated supply chain, and provide better income to farmers. The milkman of India, late Dr Verghese Kurien, had shown us the way. The cooperative dairy structure, which led to the evolution of the Amul brand, is the right approach. If he could do it for milk, which is a highly perishable commodity, there is no reason why it can’t be replicated in fruits, vegetables and other agricultural commodities. From a milk importer, India has now become the world’s biggest producer of milk. It is therefore obvious that solutions to the plethora of problems on Indian farms does not lie in the west, but in our own backyard. We need to look inwards. Otherwise we will go on committing the same mistakes, and in the process turn farms into killing fields.

Posted in Ground Reality

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ICC T20 World Cup 2012: Super Eight Stage Points Table as on October 1, 2012.


ICC T20 World Cup 2012 Points Table and Team Standings for Super Eight stage as on October 1, 2012:

Group 1

Teams Matches Won Lost Points
Sri Lanka 3 3 0 6
West Indies  3 2 1 4
England 3 1 2 2
New Zealand 3 0 3 0

Sri Lanka and West Indies have entered the semi-finals.

Group 2

Teams Matches Won Lost Points
Australia 2 2 0 4
Pakistan 2 1 1 2
India  2 1 1 2
South Africa 2 0 2 0

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Every Third Senior Citizen in India Abused, Mainly by Son: Study


By Kounteya Sinha

Sep 29, 2012

NEW DELHI: Indian sons, and their wives, aren’t treating their aged parents well. A study on abuse of India’s elderly, conducted across 20 cities and involving over 5,500 older people, has found that almost 1 in 3 (32%) have faced abuse. The son has been found to be the primary abuser in 56% of cases, followed by the daughter-in-law in 23% cases.

The study, to be presented to President Pranab Mukherjee on October 1, celebrated globally as the International Day of Older Persons, said more than 50% of those abused had faced it for more than five years. More than half (55%) of those who were abused did not report it to anyone. Around 80% of them did not report the matter to uphold family honour.

Delhi actually witnessed an exponential increase in abuse of the elderly. In 2011, Delhi’s abuse of the elderly rate stood at 12%. In comparison, 29.82% elderly people in Delhi said they faced abuse in 2012.

The study, conducted by Help Age India, found that abuse was highest in Madhya Pradesh (77.12%) while people in Rajasthan (1.67%) were most well behaved with the elderly in their family. Nearly 30% or 1 in 3 elderly persons reported abuse in Maharashtra while the abuse rate was just above 1 in 4 (27.56%) in Tamil Nadu. It was 60% in Assam, 52% in UP, 43% in Gujarat, 42.86% in Andhra Pradesh and 40.93% in West Bengal.

The study also brought out some shameful figures for Delhi. While nearly 30% of Delhi’s senior citizens had faced abuse, the primary perpetrator of abuse was the son in 60% cases, followed by the daughter-in-law in 24% cases. In Delhi, 76% of those abused did not report it, while of those who felt abused, 69% had felt disrespected with 35% facing it daily.

Around 86% of elderly felt that the most effective measure to control elder abuse was through sensitizing children and strengthening inter-generation bonding and 14% felt increased economic Independence was the solution.

The study said that in India, the family has been the mainstay of social support. “Even in this age and time, 58% of older persons in India are living with the family. The findings of this report also affirm confidence in the ability of the family to care for its older members,” the report said.

The National Policy on Older Persons has also recognized the importance of family for the well being of older persons and has decided to have programmes to promote family values, sensitize the young on the necessity and desirability of inter-generational bonding and continuity and the desirability of meeting filial obligations.

“State policies will encourage children to co-reside with their parents by providing tax relief, allowing rebates for medical expenses and giving preference in the allotment of houses. The policy also says that short-term staying facilities for older persons will be supported so that families can get some relief when they go out,” the study said.

The report made an interesting recommendation. In order to prevent elder abuse, it said there should be nationwide programmes in schools and colleges for sensitizing children and young adults towards the ageing and the aged, sensitization of healthcare workers to recognize and develop a protocol for treatment, develop a robust social security system that not only ensures income security to the older persons but also gives them opportunities for income generation.

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