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How FDI in Retail can ruin Bharatiy Farmers

Posted by Sandeep Shelke on December 30th, 2011


… In 1970, hog producers received 48 cents of each dollar spent on pork. in 2000 they received only 12 cents. Prices to consumer did not decrease.

… In 1990 ranchers and farmers received 60 cents of the dollar spent on beef, retailers received 32.5 and meat companies 7.5 cents. In 2009 Farmers received 42.5cent (down by 17.5), retailers 49 cents, meat packers 8.5cents. ..

… 4 pints of milk in UK costs 1.45 pounds and farmer receives 40%(58 pence) of it. Causing a loss of 3 pence per 4 pints. Causing small farmers to close there shops. In Bharat farmer receives 75% of consumer spend on a litre of milk. …

… US farmers received direct commodity subsidies of over $167 Bn in 1995-2010. EU paid farmers direct subsidies of $51 Bn in 2010 alone. So why these big retailers are not helping reduce the subsidies to the farmers. …

…. In Mexico 25% of small farmers are off farming now due to big retail and imports under NAFTA. ….

As mentioned in image above in Europe flow of goods from 3.2 million farmers is controlled by 110 buying desks of big retailers catering to 160 million consumers. Today Bharat has more than 600 million (78% 0f  total farmer population)  small and marginal farmers and a huge consumer base of more than a billion. Now imagine what havoc it may create when our small and marginal farmers will have to compete with bigger farmers of developed nation who fetch huge subsidies from their governments.

32 Lakh European farmers received total subsidy of Rs 26,970 Crores i.e. average Rs 8,41,680 per head approx. Now 21 Crore Bharatiy farmers received total subsidy of nearly Rs. 1,54,000 Crores i.e. average Rs 19,494 per head approx. Now if tomorrow these retail giants start importing (using free trade agreement) from foreign farmers since the prices would much lesser with the help of their governments where would Bharatiy farmer go?

How can Bharatiy farmer compete with rival farmers,
– when basic infrastructure is not in place?
– when rival farmers receive subsidies almost triple the yearly turnover of Bharatiy farmers?
– when crop insurance is not in place?

I’m afraid that such uneven and misplaced competition would lead our farmers off their land into labors jobs since they do not have enough capital and supporting government.

On other hand that farmer’s income will be improved argument fails sharply since even after having established big retailers network the USA and EU is consistently increasing the subsidies to the farmers and still their farmers are into losses. What is the guarantee that FDI in multi-brand retail won’t displace Bharatiy farmers? and put pressure on government to increase the subsidies too?

Lastly, lets not blindly copy paste western models. We can definitely learn from them but by looking evenly at all sides and not just one which is shiny.

Jai Bharat!

Related article: FDI in Retail – A macro analysis, Impact of Foreign MNCs on Bharatiy Agriculture, and Death Knell into the Coffin of Biggest Enterprises Network

Find out yourself Subsidies given in USA

One Response to “How FDI in Retail can ruin Bharatiy Farmers”

  1. Government, Farmers and That FDI [My tweets] « ॥ कृषी देश ॥ Says:

    […] Related articles: FDI in Retail – A macro analysis And How FDI in Retail can ruin Bharatiy Farmers […]

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