We dont need a Walmart!! Learn from the Milk Supply Chain

Congress has gone all out to defend FDI in retail with atwo headed approach.

One head led by Kapil Sibal was trying to prove that FDI might be a monster which would not make any significant change. He velehmently trivialized its impact and even suggested that it was a non-issue for the larger part of our country.

The other head has tried to showcase FDI as the one point solution all ills related to the farm sector supply chain be it procurement, distribution, storage et al. This head was represented by young turks like Junior Hooda and once NSUI leader Anand Sharma.

If we join various dots from both the versions, we may clearly see the ambiguity, misrepresentation and above all a ploy to distract from the real issues. I am providing a few examples below:

FDI in retail will remove supply side deficiencies by removing the middlemen:

Everyone will acknowledge that middlemen should be removed from the farm sector. However, is FDI the only option available with the government? Can't the government come up with structural reforms in managing the supply, procurement and storage of food products? If the government and the congress party is so keen to cut the middlemen, they may bring a legislation to mandate a structural change in the current set up of the wholesale market. Government may increase its responsibility in this area and take up an active role. Is the onus of removing the middlemen lies with Wal-Mart? Is this not an outsourcing of core governance issues to large Multinational corporations? Will Wal-Mart now be responsible to reform the wholesale market and take own the price index?

 

Therefore, we may certainly conclude that middlemen (Adithya) is a mask to sneak in the large retailers.

Milk production and supply chain is an example of government enabled value chain:

Milk is a farm product which reaches consumers at the right time and right price. Farmers also get a fair price. This happens although Milk is a perishable product and needs a comprehensive storage and transportation facilities. We have no Wal-Mart or FDI in this milk processing and supply. If government or government aligned agencies can manage this perishable product without any middlemen (Adithya), why can't we do the same with fruits and vegetables.

Sardar Patel had left a legacy in Gujarat which worked well for the milk farmers. However,leaders like Dr. Manmohan Singh, P Chidambram, Montek Singh etc. have studied abroad, and have also worked outside India for a large part of their productive life, and can seldom think beyond a foreign aid.

This genre lacks confidence on even tried and tested Indian methods. However, they are very suave and possess an uncanny ability to spin their point of view with a barrage of misinformation.

It is time for the country to realize this and oppose FDI in retail. Let the ministry of Agriculture, Food Supplies and Home draft a bill to improve the farm sector. We can’t allow them to outsource their own responsibilities to a Wal-Mart.