Showing posts with label FDI in retail. Show all posts
Showing posts with label FDI in retail. Show all posts

Surjit Bhalla's flawed economics stands exposed. If you still want to read him, do it at your own peril.

I admire mainline economists. They have the ability to pick up the facts that suits their analysis. More often than not I find their analysis, when sometimes I try to read such articles, is not only motivated by their ideological thinking, but also statistically backed. And since many in this country are in awe of mainline economist especially those who do the rounds of almost every TV channel, they either don't understand the flawed analysis or are afraid to stand up.

Well-known economists Jagdish Bhagwati is one of them. Sometimes back he had made a comment in The Economist, which had prompted me to write a rejoinder. My response, which is still available on the IndiaTogether news portal (Hold economists responsible too. IndiaTogether April 4, 2005 http://indiatogether.org/subsidies-op-ed), was widely appreciated and circulated. I know the stature Jagdish Bhagwati holds but it is important to puncture their incorrect hypothesis.

Over the years, this neoliberal breed of economists has only got bolder. They now come out with outlandish statements often bordering stupidity, illogical comments and theories which have little or no relevance to the existing realities. In fact, most of what the mainline Indian economists have been parroting has already been discarded by the western economists. And that makes me wonder whether India's mainline economist care to read what is being written now to keep themselves abreast or are simply basking in the glory of the TV glamour.

Take the following articles by some western economists which runs counter to what is being repeatedly said in India. But you will see such analysis will never be incorporated in the public discourse. Nor will the TV anchors make corrections when economists/analysts parrot the same old line. The reason: Journalists don't read.

1) Dani Rodrik has bust the myth that the wealthy and the Corporates do not need the governments. Let the markets operate freely and their wealth will grow. This is rubbish. In this well argued article (A class of its own. http://bit.ly/VXjoQr), Dani says: 'The reality is that the stability and openness of the markets that produce their wealth have never depended more on government action'.

2) There is hardly a day when you don't find the economists and business writers drawing attention to the virtues of FDI in retail. They moan the failure of the government not to invite Big Retail into India. They invariably go on repeating the same faulty statistics to justify Big Retail's entry into India. I sometimes wonder why don't these economists even scan the international newspapers to know how the Big Retail is faring in the US/EU. Here is what The Guardian wrote the other day (The death of the American mall. June 19, 2014. http://bit.ly/UPFiF1). If Bid Retail is failing in the US why are we keen to bring a failed economic model to India?

3) Developing countries are poor because they export raw material. They should add value-added products. This is the general understanding. But read Ricardo Hausmann of the Harvard University (The Real raw Material of Wealth. July 26, 2014. http://bit.ly/UxgYXO) and you are jolted from your sleep. But you will never see Indian mainline economists discussing such analysis. Nor will the policy makers try to understand and understand the argument. They don't have to, because they go on parroting what has been taught to them. "Some ideas are worse than wrong,' he says. How true.

4) For decades, Indian economists have blindly followed the garden path shown by World Bank/IMF. Whether they accept or not, almost every major policy decision in the past 10 years was dictated by the World Bank. A leaked report of the World Bank now puts at rest how damaging and environmentally destructive its policies have been (Leaked World Bank policies 'environmentally disastrous.' July 25, 2014. The Guardian http://bit.ly/1omTcK2).

5) At a time when WTO is facing a standoff, Indian economists are shouting at the top of their voice to force India to withdraw its objections on ignoring the food security concerns. Trade is being linked to more growth. Adair Turner of the UK's Financial Policy Committee of the House of Lords refutes this common refrain. He says: more trade does not lead to more growth. (The trade delusion. July 18, 2014. http://bit.ly/1pAJdNJ).

These are just a few examples.

This brings me to economist Surjit Bhalla's article in the Indian Express (A 'principled' Congress stance at the WTO? July 29, 2014 ). This article exposes his flawed economic thinking. The article in fact borders on absurdity. In his article he presents a chart where he is comparing the international prices of rice and wheat with what the procurement prices Indian farmers are paid. Accordingly, for 2012-14 his chart shows Indian farmers were paid a high price exceeding global prices by 64.4% in rice and 62.9% for wheat. He doesn't even know that wheat and rice production is heavily subsidised in US/EU, and also comes with export subsidies. I tweeted to him, and he responded by saying that international prices are worked out uniformly. I then tweeted him back saying: 'If you don't know, read first. Don't go on defending your wrong analysis.' I attached one of my blog posts that tells you how EU utilises cereal subsidies to dump it in developing/LDC countries. http://devinder-sharma.blogspot.in/2010/03/eu-utilises-domestic-cereal-subsidies.html. 

Take a look at the $ 35.5 billion subsidies that US has paid to its wheat farmers between 1995-2012. (http://farm.ewg.org/progdetail.php?fips=00000&progcode=wheat). Surjit Bhalla's analysis therefore falls flat on the flawed data that he has produced in justification.  
If you see the enclosed chart, international prices are taken as an average over three years of the FOB price, which in other words is the landing price. There is no mechanism that separates domestic and export subsidies before the FOB is calculated or determined by the trade. Subsidies paid to wheat growers (including the export subsidies) actually enable North America and Europe to dump wheat in the international markets. The price comparison with the procurement prices paid to wheat farmers therefore is completely wrong. In any case, the best comparison should be with the FOB prices that India offers when it exports wheat. The impression that Surjit Bhalla is mischievously trying to convey is that Indian farmers are the highest paid in the world. If what he says is true then shouldn't we would have seen US farmers asking for the price that Indian farmers get? Shouldn't we see an exodus of American farmers keen to migrate to India?   
Economists like Surjit Bhalla have been churning out such biased and incorrect analysis to manufacture consent. As I said earlier, these kind of economists first draw their conclusion and then look for data which can support their flawed hypothesis. Well, if you still want to read them you do it at your own peril.   

Big retail in US: The monster is dying.

A deserted mall in the United States. Pic: The Guardian

Every day when you open your newspapers you would notice that the only thing that has not changed with times is the number of articles from the foreign press that are culled out and reproduced. Most of these articles are about subjects that have not much relevance in India, but many have a slant that goes very well with the newspaper's unwritten policy. So when no newspaper took up the courage to republish this article from The Guardian (The death of the American mall. June 19, 2014 http://www.theguardian.com/cities/2014/jun/19/-sp-death-of-the-american-shopping-mall) I wasn't the least surprised.

Some newspapers have in fact been openly lobbying for the entry of Big Retail into India. Leading TV Channels have led the campaign unabashedly. Big Retail is being pushed into India as if it can act like Surf Excel -- wash all stains that afflict agriculture. So when I read the detailed analysis in The Guardian it became obvious as to why US President Barack Obama was lobbying so hard with former rime Minister Manmohan Singh to open up for American retail giants (read my earlier blog post: What do you do when Heads of State indulge in lobbying. http://devinder-sharma.blogspot.in/2012/12/the-line-between-lobbying-and-bribery.html). With American malls dying, the only way to keep the US economy in a respiration stage was to shift the dying malls to intensive care unit in India.

Despite the ruling NDA opposing the entry of FDI in multi-brand retail, big business is not giving up. According to a news report in Business Standard in a report entitled US retail chains won't give up on multi-brand retail (June 21, 2014), the US-India Business council is quite hopeful that one day the government will relent. Backed by an army of mainline economists, columnists and TV anchors, the retail industry has reasons to be hopeful.

Nevertheless, The Guardian report tells us how many of the big malls have now turned into retail graveyards. The bog monsters are dying. Various estimates project dozens to hundreds of struggling US shopping centres will close in the next 20 years. The bigger question is if the craze for super malls in US has dried up, does it make any economic sense for India to go through the same route? I am sure there would be many who would vouch for the Big Retail, but then let's not forget they are the beneficiaries of the exploitative business practices in one way or the other.

Even Wal-Mart, the world's biggest retail giant, realises this. It is planning to open up 300 small outlets called Wal-Mart Express and Neighbourhood Market stores (read this report: Coming soon: a small Wal-Mart store near you. http://www.dallasnews.com/business/retail/20140605-coming-soon-a-small-wal-mart-store-near-you.ece). I don't know why this fact is not known to Indian economists and policy makers. #

Further reading: Made in the United States. The Hindu. Sept 15, 2012.
http://www.thehindu.com/opinion/op-ed/made-in-the-united-states/article3897906.ece 

HUNGER GAMES: "We are waiting for a food riot" -- My interview on food wastage.

The unprivileged sleeping hungry, the rich wasting food, government schemes not making much of a difference and farmers committing suicide! India, despite all the newly acquired progress and prosperity, seems to be deep in the middle of what one can only call Hunger Games. On the crease are the million-dollar dream-boy, the Food Security Act and the lets-shop in-malls Foreign Direct Investment (FDI). The bowler is the aam aadmi, not the political one but the one striving hard for his bread and butter. And no, strangely there are no fielders who could contain the damage collateral or otherwise! With all the food first grown at the cost of the environment and then wasted out of sheer short sightedness, the verdict is out hit wicket. 

Unable to comprehend the bizarre scenario, we asked a third umpire, an expert food analyst. to demystify the scenario. Agri scientist Devinder Sharma has earned the sobriquet Green Chomsky, for his work in the area of food trade and policy. He talked at length to ECO about past mistakes, present confusion and future uncertainty when it comes to food security. Food loss, he said, was the tipping point at which most of the planning and policy really toppled. Excerpts.

ECO: There has been a constant cry for quite some time now that agriculture needs to be throttled up, that we will face a food crisis due to the deficiency of crops. What do you think? 

Sharma: I think we need to clear the air first. Out of the planets total population of 7.2 billion, according to the FAO, roughly 900 million go to bed hungry. So, the entire focus has been to increase productivity in order to maintain the food requirement in the year 2050. I think this is a totally wrong direction to work on. The US Department of Agriculture calculated that the food produced globally in 2012 was enough to feed 13.5 billion people. That means we are already producing food for double the existing population. At the same time we are being told that the population would rise to 9 billion by 2050 and therefore we need to produce more. Population is expected to be around 11 billion by the end of this century. But are we not at present producing food for 13.5 billion people? So where is the crisis on the food production front? Lets be therefore clear. There is no shortage of food. The world is in fact saddled with double the quantity that we need.  

But then what do you make of the millions of hungry people? 

Food mismanagement! At present, around 40 per cent of the worlds food is lost or wasted. If that loss is minimized, we will have food for each and every one. So, food loss is where the thrust should be, globally as well as nationally. The entire focus is on the wrong side when it should be about minimizing food loss. 

How threatening is the food scenario since 40 per cent of all food is reportedly lost in India? 

Who said that? Thats not correct. Everywhere in the media, people say food loss is 40 per cent. Its not according to me. Parliament had asked the Indian Council of Agriculture and Research (ICAR) to do an analysis on the post harvest losses in various crops.  The  ICAR  entrusted  this project to the Central Institute of Post Harvest Engineering and Technology (CIPHET). They came up with the report which says that in case of cereals, the post harvest loss is less than 6 per cent. Similarly, among the vegetables, the highest loss occurs in tomatoes which is around 12 per cent. In case of fruits, guava suffers the most with loss of around 24 per cent throughout the Food Supply Chain (FSC). However, in case of milk there hasnt been any wastage recorded, which is not amazing. 

Well, in that case, where in the supply chain does food loss occur extensively? 

With regard to food loss, there is something that hasn't been observed from a wider outlook. And that is the wastage at the level of processing. That is where the crux lies and nobody wants to talk about it. Because that is industrial wastage, I mean a wastage which everyone is OK with! Maximum food that I find being wasted is in the processing sector. And weve been given to believe that this sector will help minimize food loss. 

If we look at the United States, more than 40 per cent of the food loss happens at the level of processing. And we believe that if FDI happens in our country, food loss will be minimized. But studies show that 50 per cent of fruits and vegetables rot in the American supermarkets! 

With reference to India too, the Agriculture and Food Processing Minister went on record stating 0.6 per cent of the food stored has been wasted during storage. Thats a pretty arguable and a non-realistic figure. But it would surprise you to know that private food distribution companies such as Cargill and ADM waste 3 per cent of their stored food on an average. That means even they are not efficient, contrary to the general belief. 

Now with FDI coming in the food market, are we looking at a significant improvement? 

Improvements? Are you kidding me? Are they successful in their own backyards? I know there are problems in the storage sector and transportation in India. But the impression that I have been getting is that unless FDI retail comes to India, things will not improve. What rubbish? In America, FDI retail is not maintaining the backend processes; neither in Europe. Their government is doing that. Moreover in India, we have this wonderful system of milk co-operatives thats famous around the world for its efficiency. If the milk co-operatives can build up a highly efficient food value chain for a perishable product like milk, without the help of America or Europe, why cant we do the same for agriculture in India? 

And its not that retail stores are new to us. For quite some time now, organized retail chains have been in operation in India. We have Reliance Fresh, Fair Price, Big Bazaar, Easy Day and so on. Their argument was the same. They also promised the same quality of infrastructure and transportation facilities that these foreign chains are now boasting. None of them has been able to develop that type of infrastructure. Theyre not interested; they only wanted to earn money. 

But, going by the hype, there must be some ways in which the country will benefit from FDI? 

Why do you think these foreign investors are lined up to invest in the country? So that we Indians can benefit? These retail chains havent been able to do wee bit of improvements in their country. How can you expect them to do anything here? In America, Walmart has completed 50 years now. And I think more than 60 per cent of the consumer products and agriculture products are being sold or procured or marketed by Walmart. That means the farmers over there should be thriving and prosperous. But thats not what it looks like. Studies show that before Walmart came in, for every dollar of produce that the farmer would sell, his income would be 70 cents. In 2005, the income came down to 4 cents. The income should have gone up now that they were no middlemen. Truth is Walmart in itself is the biggest middleman! American agriculture survives not because of Walmart but because of massive federal subsidies. Same goes for Europe. About 145 billion Euros have been provided to agriculture under the common agriculture policy. In a nutshell, if foreign organized retail comes to India, food loss will break records, farmers would get a lower price, food quality will go down and knowing that processed food is largely unhealthy, Indians  will suffer.

Lets start from the first level of Food Supply Chain. At the ground level, how can farmers contribute and ensure that there is no food loss? 

The only food loss that happens at this stage is during drying and threshing. Farmers leave their harvested crops to dry up under the sun. Thats where some wastage occurs. Washing, threshing and cutting are some more phases but you cannot compare them with the massive loss that happens in the processing sector. And if you ask me the reason for food loss at the farmers level, its because of the policies that devoid the farmer of any progress. Unites States develops some technology, Indian policymakers blindly implement the machines on our Indian farmers. Why do you force some foreign machines or technology on the Indian small farmers? These technologies were not developed for small farmers. Why cant you listen to what the small farmers need and then develop you own mechanisms that would help him? Instead we first develop a technology and then want the farmer to fit into it. 

The government has never paid heed to the woes of farmers. Rather they have looked forward to the benefits of big companies. In Punjab, farmers have been lured in to buy tractors that have no commercial viability for most of them. For a tractor to be commercially viable, one needs at least 10 hectares of land. Now, the government has reduced that figure to 2 acres. Result is, every other farmer is buying tractors on loan from these companies in order to cultivate his small piece of land, which really does not require a tractor. Every second farmer in Punjab owns a tractor. Tractor has now become a symbol of suicide. Tell me what kind of policy is this? Instead of this, tractors should be leased out to farmers for their cultivating season at a reasonable price. 

There are three organizations responsible for food storage in India, the Food Corporation of India, the Central Warehousing Corporation and the State Warehousing Corporation. Still, were left with millions worth rotten food grains every year. Why is that? 

See, setting up of a warehouse is not rocket science. Unfortunately, we see it as a highly technical thing. Planning teams from India have gone to Argentina to understand how they store food. What rubbish! In 1979, a programme was launched by the Indian Government named Save Grain Campaign in order to prevent damage of food grains after the successful Green Revolution. The programme suggested that 50 major warehouses be set up in the country in different states. Imagine if that programme  would  have  been implemented, there would have been no need to bring grains from different states and spend on transport. Food grains could have been distributed locally from the respective warehouse. But food storage has never received any priority. Well, even now there is apparently no priority. Its just glib talk. 

Two three years back, the government had decided to construct Panchayat gharsin each of the roughly 265,000 panchayats. Now, this is ridiculous. Panchayats have always been known to operate from open premises. Instead of this, had they converted these panchayat ghars into food godowns, much of the food storage and distribution problem would have been solved by now. Then there would have been local production, local procurement and local distribution. This shows that there is no emphasis on food storage. 

The media has shaken the thinking of the average person by showing images of food rotting owing to bad storage. But I doubt if this will even remotely affect the policymakers. Instead of stocking food grains in unhygienic places where they will eventually rot, they could have distributed the grains among the poor! But they did not. The policy makers are waiting for a food riot to happen! Only then, their conscience will wake up from its slumber! 

What are your views on the Food Security Act? Is there any provision in it to combat food loss? 

In my understanding, the Food Security Act is an opportunity lost. After 66 years of independence, the government finally decided to bring in a legal mechanism to provide food for the hungry. But in my understanding the National Advisory Council drafted a lousy bill; its faulty.  This Food Security Act is only good for the dustbin. Why? Well, one-third of the worlds hungry people live in our country of 1.25 billion people. They are not hungry because there is shortage of food. They are hungry because there is a grave problem with food access and food distribution. 

The bill aims at providing food to poor people for all times to come. If you make people dependent on a food dole, then you are not empowering them. Will the government go on providing subsidized food to these hungry people throughout their lives? Why not develop a system wherein the people can themselves become self-reliant in ensuring their food security? The question that needs to be asked is that out of the estimated 6.5 lakh villages in India, 5 lakh produce food. Why is it that the same food producing villagers live in hunger? 

It would have been a better option to have two different programmes under the Act, one for rural areas and another for the urban parts. See, in a country like India, one size is not going to fit all.  Time and again, the government is banking upon the same Public Distribution System (PDS) to deliver. The system had failed earlier. 

If the government opted for something more sustainable, like a food grain bank, it would have been much better. This system was in operation on a large scale before the British came. A cluster of villages would have their own community controlled food grain bank system which would prevent prospective starvation. There are many villages in India where such community driven grain banks operate. There is no hunger in these villages. Why cant we operate this community driven grain bank scheme on a large scale? This is the only way to ensure that people become responsible for their own food security and this, in turn, will also boost local production and distribution. 

At a time when 2,500 farmers quit agriculture daily and 3 lakh farmers have committed suicide in the last 17 years, this Food Security Act is nothing more than a vote security bill. On the one hand, farmers are dying and on the other, a huge population goes to bed hungry. Most of the hungry are in fact farmers. Am I the only one who thinks there is something seriously wrong? After all, providing subsidized food to the poor and hungry farmer is not the solution. 

Roughly sixty per cent of the hungry in India are farmers; the government needs to make agriculture sustainable and economically viable for the farmers so that they he can first become food secure. In a country which has 60 crore farmers, the only way out is to link up agriculture with food security. Driving them out of agriculture and ensuring food security by food imports is a suicidal policy. India needs to do what Mahatma Gandhi had suggested. It needs a production system by the masses and not for the masses. #

Source: ECOEarthCare. Mar 2014. 

FDI in retail: The myths around what it can achieve

There is a popular advertisement on TV. A child is running and falls down in the mud. His mother comes running, picks up the child, dusts his clothes and says: "Beta, get up. Don't worry, Surf Excel hai naa!"

In a country where nearly three lakh farmers have committed suicide, farm incomes are plummeting, where rural infrastructure is in shambles, middlemen rule the roost, and there is jobless growth, FDI in retail is being promoted as yet another Surf Excel. An impression is being created that once FDI in retail is in place, it will not only address all the ills plaguing the food and agriculture sector, but also take care of employment.

In the mid-1980s, when Pepsico came up with a proposal to bring in a second horticultural revolution in Punjab, it too 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.

Some 15 years after the project was approved, Pepsico's horticultural revolution is all but forgotten today. Agriculture has gone from bad to worse. The food bowl of the country has also become a major hot spot for farmer suicides.

Arvind Kejriwal's scrapping of FDI in retail in Delhi has renewed the debate over one of the most contentious of policy issues. Commerce Minister Anand Sharma has expressed displeasure saying that the Delhi government's decision will send a wrong signal to foreign investors. On the other hand, FDI in retail will lay out back end infrastructure, bring in a chain of cold storages and improved transportation thereby reducing crop losses, remove middlemen who rob the farmers of profits, and thereby provide him higher prices and bring in improved technology to help in crop diversification. Of course, it will also create millions of jobs.

Let us now examine how true these claims are, or at least how likely. Wal-Mart, Tesco, Sainsbury, Carrefour and a host of other big retail players are expected to increase farm incomes. But in the US, where Wal-Mart has completed 50 years, if farmers had indeed been getting better income, what reason would there have been for the farming population to plummet to less than one per cent of the total population?

In the US too, 40 per cent of food is wasted and much of it after processing, where Wal-Marts should in fact have played a more important role. If big retail failed to reduce food wastage in the US, why do we expect them to do a miracle in India?


 •  FDI: Just the facts, please
 •  A stimulus package for farmers?
Farmers in US survive on the farm not because of Wal-Mart but the massive subsidy support they get, which includes direct farm income. Between 1997 and 2008, Rs 12.60 lakh crore was provided as income support to farmers. An UNCTAD-India study shows that if these subsidies, classified as Green Box in WTO parlance, are removed, American agriculture will collapse.
In Europe, despite the dominance of big retail, one farmer quits agriculture every minute. Europe provides the highest amount of subsidies, including direct income support. But because 74 per cent of these subsidies are cornered by Corporations and big farmers, small farmers are quitting the sector. In France, farm income has come down by 39 per cent in 2009. 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.

Studies show that in America, some 50 years back when farmers sold their produce for one dollar, their income was 70 cents. In 2005, this had fallen to 4 per cent. With middlemen wiped out, one would have expected the farmer's income to go up. But now it is a new battery of middlemen . quality controller, standardiser, certification agency, processor etc - who walk away with the farmer's profits. The number of middlemen, operating under the same hub, actually increases.

Take the example of an earlier Walmart-Bharti tie-up for wholesale marketing in Punjab. Baby corn is bought by Bharti-Walmart at Rs 8 per kg, sold at Rs 100/kg in wholesale by big retail, and ultimately the consumer price hovers around Rs 200/kg. It's a clear example of how the middlemen squeezes farm incomes and fleeces the consumers. This is not an isolated case. Much of the farm produce is bought at very low prices across the globe. Primarily for this reason, dairy farmers in UK are quitting on a large scale. They are urging the British government to set up a fair price mechanism that big retail should be directed to adopt.

There is no evidence that big retail creates back end infrastructure either. In US and Europe, rural infrastructure has been created through government support which came in the form of agricultural subsidies again. To say that 40 per cent of agricultural food that goes to waste in India will be drastically reduced by the influx of FDI in retail is also an illusion. In US too, 40 per cent of food is wasted and much of it after processing, where Wal-Marts should in fact have played a much more important role. More than 50 per cent of vegetables/fruits rot in supermarket stores. If big retail failed to reduce food wastage in the US, I wonder why do we expect them to do a miracle in India?

Regarding employment generation and poverty alleviation, lessons need to be drawn from a 2004 study by Stephen Goetz and Hema Swaminathan of Pennsylvania State University, 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, in a market with a turnover of $450 billion, Wal-Mart employs only 2.1 million people. In contrast, for an estimated $460-billion market, Indian retail employs 44 million people. If Wal-Mart is allowed to come in, what has to be understood is that for every job it creates, it is most likely to displace at least 20 workers.

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 cannot be replicated for fruits, vegetables and other agricultural commodities. A solution to the plethora of problems on Indian farms does not lie in the west, but in our own backyard. There is no need to look for a Surf Excel. #

Source: FDI: Neither necessary, nor sufficient
India Together. http://www.indiatogether.org/2014/jan/dsh-fdiretail.htm

India's economic crisis: Bottom of the pyramid has the answers

At a time when the Indian economy is in doldrums, Prime Minister Manmohan Singh has time and again reassured investors that there will be no going back on economic reforms. As usual, he has blamed the external factors for the slump. The internationally respected weekly The Economist has gone a step ahead. To ensure that the Prime Minister does not retract from the promise of delivering more reforms, it has tried to create a fear psychosis among the policy makers so that they don't budge an inch from the faulty economic track the country has been made to follow for the 9-year period of the UPA Government.

Like the cover story in the Time magazine sometimes back that called Manmohan Singh an 'underachiever' (the underlying idea was to provoke him to open up to FDI in retail and other sectors), The Economist has in a frightening analysis titled "Made outside India" (Aug 10, 2013. econ.st/164nUNE ) tried bravely to build up the argument that if India does not accelerate the growth pace, what ever remains in India (in terms of industrial base) will also move out. It was not only amusing to read the biased argument (biased is a soft expression, it is actually a flawed analysis) but makes me wonder how can a reputed magazine support the frauds in trade and business in the name of economic growth. I am shocked that it sings praises for tax havens like Mauritius, and is also praising the decision by Finance Minister P Chidambaram to defer the General Anti-Avoidance Rules (GAAR) which could have brought curbs on the flow of black money and corruption. (Read my earlier blog: Celebrating the induction of black money: http://devinder-sharma.blogspot.in/2013/01/gaar-deferred-investors-stock-markets.html).

It is true that gambling is illegal in India, except a few places. If Sri Lanka is planning to develop a casino industry to attract weekend travelers (like Nepal has done), does it mean that India should also allow gambling to be developed as an industry? This is like saying that India should allow sex tourism to develop on the lines of Bangkok under the proposed India-Thailand Free Trade Agreement that is being renegotiated. I think there can be nothing more stupid as well as dangerous than this argument.

What is amusing of course is the example of Bollywood films that are being shot abroad. The Economist says: "In 1985 Yash Chopra, an Indian film-maker, led a trend of shooting Bollywood "dream sequences" -- in which the hero and heroine sing amidst meadows and snowy crags -- in Switzerland. The Alps were easier, safer than the more familiar location of Kashmir." This is true. But what is wrong in this? Doesn't the Hollywood industry do the same? It has for late done many a films in India or with Indian participation. Does it mean that the Hollywood industry is moving offshore? In any case what the magazine does not perhaps know is that even that trend of filming abroad has come down lately. Film goers love the films that are shot in countryside locales in India. The latest release Chennai Express shot within the country's lesser known locales has been a record earner.

In essence, The Economist is indirectly trying to tell India to strengthen its service industry, cut down on red tape, and allow dirty and corrupt practices to prevail. This is exactly what India has been trying to focus on since 2004-05, and look at where the economy has plummeted to? I will not try to go into the finer details, but I would surely like to draw the attention of The Economist to an excellent analysis by S Gurumurthy that has been published in the New Indian Express. Titled: Reckless imports put Rupee on a ventilator, Aug 19, 2013. http://www.readwhere.com/read/c/1505436 ). The article brings out how a flood of imports because of the deliberate destruction of the domestic manufacturing sector has put the Indian Rupee in a crisis. "The 9-year UPA period saw manufactured goods import of $ 50 billion against just $2.3 billion during the NDA regime." 

It was primarily because of destruction of the domestic manufacturing sector that some of the Indian industry has moved out. It is not because of red tape and bureaucratic hurdles but because the Reserve Bank of India changed the rules that allowed companies to take out money to invest abroad. I see no merit in this. If foreign companies bringing Foreign Direct Investment (FDI) in India can do business and still make profits (despite the hurdles), how come the Indians companies are not? Again, it is The Economist all these years that has been drumming up the need to open up the economy to foreign investors. More the FDI more has been the imports of manufactured goods. More the signing of unreasonable FTAs, more has been the deluge of unwanted imports that further destroyed the domestic manufacturing sector.

It didn't only end up with massive imports but also destroyed jobs. A Planning Commission sponsored study says that between 2004-05, when Indian economy grew anything between 8.5 to 9.3 per cent, manufacturing sector witnessed a massive job loss. More than 5.3 million people lost jobs in manufacturing. Wrong advise by economists (and also The Economist) had forced the government to bypass manufacturing and follow services in its quest for growth. Remove all the hurdles, and let the markets operate freely is what we have been repeatedly told. But when markets crash, the same set of corporate media advises the government to step in and provide bailout packages.

Markets are always manipulated. There is no such thing as free markets. Whether it is the World Trade organisation (WTO) or the Wall Street, manipulation is the core ability of free trade as well as open markets. So don't get unnecessarily alarmed when the stocks tumble. Just wait and watch. Heavens are not going to fall if the Wall Street crashes completely. This is gambling. Let the gambling rules prevail for those who have willingly put their surplus money in.

I am not sure whether The Economist will ever take my advice. But it will good if they step down from their high pedestal and look at the ground realities more carefully. All that it has been suggesting so far is aimed at creating more wealth. Whether it is through the unhindered capital flows, hedge funds, stock markets, farm land grab,  foreign direct investments etc etc the basic premise is to create more high-net worth individuals. The poor will get the advantage of trickle down. Knowing the economic, environmental and social crisis the world has been pushed into, it is high time to move away from this terribly flawed economic approach. Take the simple case of Hiware bazar village in Maharashtra. Without indulging in all the spoils that neoliberal economists have been tirelessly suggesting and manipulating, this village alone has created 60 millionaires. Imagine if each of the 6.5 lakh villages in India can produce 10 (and not 60 millionaires to begin with), wouldn't the face of India change for ever? And what if the same principle of self-reliance is applied everywhere else in the world?

The solution to the economic ills can be provided by the bottom of the pyramid. Read this: One village, 60 Millionaires. The miracle of Hiware Bazar. bit.ly/15NdWMU 

'Income support not MSP can help with farming woes'


IN A free wheeling talk with GOI Monitor, food and trade policy expert Devinder Sharma favours income support for farmers, attacks FDI and indicates that there is a smear campaign going on against the civil society
Tell us about the farmers' commission which the Karnataka government has decided to set up based on your recommendations.
Farming income
Average monthly income of a farmer is just Rs 2,400 Pic:Sahaja Samrudha
To understand that, let's first talk about all the efforts that have gone into pulling farmers out of poverty. During green revolution, a common parlance gained ground that more you sow, more you produce and hence more your earn. The message found acceptance among farmers who invested a lot of money buying pesticides, fetilizers, seeds and the machinery. However, even after over 40 years of green revolution, the farmers are practically on the poverty line. The NSSO survey of 2003-04 tells us that the average income of a farming family of five members is Rs 2,115. There were only three states above this limit: Jammu and Kashmir, Punjab and Tamil Nadu. That was the first and last time the farm income was measured. I guess the government was too embarrassed with the results to repeat the exercise.
At today's price, the income calculated must be around Rs 2,400. But look at the contrast. The lady who comes to my house for cleaning gets a monthly payment of Rs 2,000 for two hours of daily work. Under the 6th Pay Commission, a peon in government service gets a minimum monthly salary of Rs 15,000. But a farmer plus his family who work much longer hours in their fields get just Rs 2,400 a month. The minimum support price (MSP), which was termed a classic way out, is only helping 30 per cent of the farming community because 70 per cent farmers don't have surplus to take to the mandis.  But even if they hardly have anything to sell, they at least produce food. Let's say tomorrow they stop producing, the country would be forced to import that much quantity of food. In other words, they are producing economic wealth for which they should be adequately compensated.
If you look at agriculture globally, on one hand there are highly subsistence farming in developing countries like India and on the other there is highly subsidised farming in rich countries like US, Japan etc. The only way to bail out subsistence farmers is to provide them with direct income support as is being done in the rich and industrialised countries. Former Karnataka Chief Minister B S Yeddyurappa took notice of these suggestions of mine and discussed the issue in detail. Now present Chief Minister Jagdish Shetter has announced the policy. The good thing is somebody has taken this initiative and now I am sure there will be a dynamo effect with farmers' unions mounting political pressure in other states too. In my understanding it will be a game changer which will be highly beneficial for the farmers. Also, this will lead to reverse migration thus reducing pressure on our cities.
What are the things the proposed commission needs to look into?
The farmers' commission has to sort out several things. The direct income defined should be location specific as agriculture cost varies according to areas and factors like size of land, soil quality, productivity et al. Also, the money should not be given for farmers to sit idle.All these factors have to be woven into before the direct income support is announced. This way when the consumer demands cheaper food, it won't impact the farmers. They will be insulated from the market demand.
You have been opposing FDI which is being widely promoted as something which will bail out farmers by removing middlemen.
This hope that with FDI in retail, middlemen will go and farmers' income will rise is just a mirage. Another concept now being promoted is commodity trading which is claimed to help farmers realise the price. However, if these two mechanisms were working, the farmers in US, which is the home for Walmart and commodity trading, would not have been paid Rs 12.50 lakh crore subsidy between 1995-2009. Let's take the example of cotton which is a major crop.  It's the income support, not walmart or commodity trading, that makes cotton farmers of US economically viable. A 2005 analysis tells us that the total production of cotton was worth 3.9 billion dollars but the farmers were paid support of 4.7 billion dollars. On top of it, textile industry was paid 187 million dollars to buy that subsidised cotton. So, the US farmers became “efficient farmers”. On the other hand, farmers in West Africa and India's Vidarbha region were priced out and became “inefficient farmers” not because of productivity but lack of subsidy. When Brazil took the US to World Trade Organization's dispute panel, US lost the case but instead of cutting down its domestic subsidies, it started providing 147 million dollars support to Brazillian farmers.
We are hearing divergent voices on the draft food security bill. What was the traditional system India had to deal with food insecurity?
The proposed food security law is just a political gimmick for the elections. It is an extension of the highly-inefficient public distribution system we already have. More of the same is not the answer. Instead we have to look out newer ways to check pilferage and also feed the hungry.
In 1996, when I was researching for my book 'The famine trap' I got to know about a cluster of villages in Kalahandi, Odisha, which had never seen hunger in last 20 years. Now Kalahandi, as we all know, is called the hunger and starvation belt of India but within this desert what I found was an oasis. The villagers were following a traditional system of 'sharing and caring', remnants of which can be found in several states of the country. In Bihar, it is called 'Gola' system. The villagers form a consolidated fund and buy grain from the farmers to be stored at one place.. Anyone in need of food can approach the committee and take the quantity of grain needed with the condition that he will return the amount plus a rate of interest during the next harvest when he would most likely get some manual labour work in the fields. The Kalahandi villages had this system running for last 18-19 years and they had a surplus of 200 quintal grains. There was no hunger and the neighbouring 20-25 villages had also picked up the concept. At the time of cyclone, these villages were not dependent on government rehabilitation. When M S Swaminanthan got to know about this, he also visited the villagers and the government took note. It adopted the idea but gave the supervisory powers to block development officers (BDOs) and the scheme flopped. That clearly shows how government can mess up a good programme.
Today we have 6.4 lakh villages out of which over 5 lakh villages produce food, rest being cash crop areas. However, we still have people going to bed hungry in these villages. India accounts for one third of world's hungry. This problem can be solved if we ensure that our villages become self reliant in food security through local production, local procurement and local distribution just like the Gola system. It will also reduce pressure on PDS which can then cater to more vulnerable areas hence requiring less expenditure and lesser corruption. However, our leaders don't want that to happen because if people learn to be self reliant, they won't require the government doles. And we all know, doles come handy for elections. This policy started at the time of Britishers who wanted everything in their hands so that people are always dependent on them.
Whenever we talk about India's policies, it is said they are dictated by international organisations like WTO and World Bank dominated by developed countries. Why have we not been able to strengthen our position over the years?
When World Bank gives you loan, it comes with 150 conditions which you or I won't get to see but the government has to address them. These conditions have led to the policies which the country is following now or since whenever we started taking loans. Besides World Bank, we also have WTO, IMF, groups like G20 and other international financial institutes. They are all part of the same design. If you go through past G20 declarations, you will see that what was prescribed there is what India is doing. At WTO, India is one of the countries taking a tough stand against the dominant powers because civil society back home is pushing for that. Otherwise India would have been sold out by now.
The civil society has most often been accused of taking extreme positions on policy matters. Do you agree that just like any other field, everything is not white with activism too?
The idea of civil society being always critical and always taking extreme position is a clever strategy to present an image to the public that civil society is not their supporter or fighting for their cause. But I can tell you by and large those standing against the system are doing it genuinely. They have odds stacked again them.  Now, when it comes to opposing policies of the government or the corporates, we do it only after a thorough research.
Take the example of agriculture. Punjab government has signed an MoU with Monsanto for setting up centres of excellence in the state. If we stand against this, we are labelled as “anti-farmers.” But tell me, if after 45 years of green revolution, Punjab's farmers are committing suicides, 19 people die of cancer daily, soil has been devastated beyond measures and water table has plummeted to dangerous levels, how can we term it development? Government and companies have vested interests which is why they will keep on promoting the same. Who should be paying a penalty for all the damage that has been done? An engineer is punished when a bridge build by him falls down, a doctor is punished for medical negligence, why can't we ascribe responsibility on agricultural scientists, corporates and economists because of whom people are dying. How can they get away for using bodies as stepping stones for growth?
There are definitely black sheep in civil society too like there are in every sector but we have to understand that civil society is not a homogeneous clout. There are several corporates which form foundations and they are also part of the civil society. But most of the time they are just doing a lip service. It's not easy to stick your neck out and those are braving it must be appreciated.

What do you do when Heads of State indulge in lobbying ?

The chorus is getting louder. So what if Wal-Mart had spent Rs 125 crore ($25 million) in lobbying to gain access to the lucrative Indian retail market. After all, it's not one-off case, US firms have been doing it for long, says another news report (Hindustan Times, Dec 12, 2012. http://bit.ly/X9pbfg). Not only the print media, almost all TV discussions in India in the past few days have by and large carried the same line.

The demand is for legalising lobbying, following the pattern in the US, and thereby bringing in some regulations to make it more transparent. After all, the US has 12,220 lobbyists (consultants, lawyers, associations, corporations, NGOs etc) registered in 2011. There are over 15,000 lobbyists based in Brussels alone, who try to influence the European Union legislative process. In India, except for the industry lobbying groups -- Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI) and the Associated Chambers of Commerce and Industry of India (Assocham India) -- not much is known about the other players in lobbying.

There are layers at which lobbying operates. Starts with academic institutes, and then goes to economists and scientists. They help with funded studies and reports that come in handy to convince the bureaucrats and politicians. Media then steps in raising the pitch. And finally, it is the politicians, political parties and ministers who remain the prime targets.   

But what worries me more is when Heads of State start indulging in lobbying. If you have followed the news reports regularly, all Heads of State of major economic powers who visited India after 2009 had lobbied strongly in favour of FDI in retail. US President Barack Obama, UK Prime Minister David Cameron, Former French President Nicholos Sarkozy and German Chancellor Angela Merkel had impressed upon the Indian Prime Minister Manmohan Singh on the need to open up for big retail. US Secy of State Hilary Clinton, who had earlier served on the board of Wal-Mart, had even gone to the extent of lobbying with the West Bengal chief minister Mamata Banerjee when her party Trinamool Congress was part of the UPA-II Coalition in India. 

Although the Indian government has agreed to institute an inquiry in to the specific case of Wal-Mart lobbying to know who was paid , if at all some payments were made, to influence the political decision making, the fact remains that the rut runs much deeper than what is visible. Take the case of Dow Chemicals, which later bought Union Carbide. According to a news report, Dow Chemicals had in 2011 spent $ 8 million (Rs 50-crore) to seek market access in Thailand, India and China. Well, this is is only one of the activities that companies often indulge in. Prior to lobbying activities in 2011, the US Securities and Exchange Commission had in 2007 fined Dow Chemicals $325,000 for bribing Indian officials to fast track permission to sell their pesticides brand that are banned in the US and many other countries (Dow bribed Indian officials with cash. jewellery and hospitality, Economic Times, June 28, 2010. http://bit.ly/RoiHwg).

India had instituted a Central Bureau of Investigation (CBI) inquiry into the bribery case. But did you hear anything after the case was filed? And knowing how the Union Carbide was for all practical purposes let off the hook for its role in Bhopal Gas disaster, big business would never be held accountable for its acts of omission and commission, forget about criminal culpability.  

Monsanto, the global seed and technology giant, is known to be aggressively pursuing the introduction of controversial genetically-modified crops in the developing world. In 2005, the US Department of Justice had charged Monsanto with bribing Indonesian officials, and the company had agreed to pay a fine of US$ 1 million (Department of Justice, http://1.usa.gov/12764b3). Interestingly, the bribe amount of $50,000 to a senior Ministry of Environment official was shown as 'consultancy fee' in the company's books. In other words, it was shown as a lobbying fee. How does one therefore try to separate lobbying from bribery? No company has a separate head for bribery in its books and records. I don't know how can an inquiry separate the grains from chaff?

The GM industry has set up an NGO for lobbying purposes. The International Service for the Acquisition of Agri-biotech Applications (ISAAA) has an office in India, like many other developing countries. It lobbies with the scientific institutions as well as the politicians. There are instances of such lobby groups routinely taking journalists and government officials on visit to Monsanto's headquarters in America. This may be purely legitimate form of lobbying, but goes a long way in manipulating public opinion. Coming back to Wal-Mart, the New York Times had sometimes back had taken the lid off a massive scandal by Wal-Mart in Mexico -- where it allegedly paid bribes to seek expansion of its stores (Wal-Mart's US expansion plans complicated by bribery scandal. NYT April 29, 2012. http://nyti.ms/VBF5h8). In India too, an investigation has been launched into the violations of the foreign investment rules by Wal-Mart.

I don't therefore understand how can we believe that lobbying is completely a pious and legitimate activity unless we try to dig out how the companies bribe officials, and that includes economists, agricultural scientists and media owners, to get its way through. Lobbyists have known to be moving in the corridors of power, and more often than not carrying a bag of money. Ask any business and political journalist and they will tell you who's who of the corporates who have their lobbyists moving in the corridors of power. Not only Niira Radia, quote a large number of corporate lobbyists have been successful on the job, and seemingly operate silently without the public glare. Most decisions that you think have been taken in the national interest are actually swayed by money bags. Isn't that lobbying? Isn't lobbying therefore a cleaver phrase to provide a neat cover-up to everything bad associated with bribery?    

It is a known secret that media remains one of the biggest beneficiary of lobbying. Not carrying a news report, which obviously benefits the corporate client, is one such unnoticed activity that media indulges in very frequently. Let me illustrate. At the height of the Wal-Mart debate in parliament, some media houses (who knew about it) had refused to carry a news report from Punjab which showed Wal-Mart paying a meager Rs8 to farmers growing baby corn. Wal-Mart sold it in wholesale for Rs 100/kg, making a neat Rs 92 in the process. This would have negated and exposed the government's claim that big retail would provide a better price to farmers by removing middlemen. Moreover, some of the major newspapers have never (or rarely) carried any critical view on FDI in retail. We know it why. Still more importantly, the way media appears more than keen to seek legitimacy for lobbying raises eyebrows.     

Lobbying has over the years become more sophisticated. It is not only a particular bureaucrat or a government official who gets an all-paid foreign trip or jewellery or other expensive gifts (like the way doctors are bribed by pharmaceutical companies as part of the lobbying activities to promote their brand of drugs), lobbying is now becoming a diplomatic activity. Several times we know how the US Ambassador in India (backed by the USIS and USAID) for instance had lobbied hard to push American commercial interests, including the nuclear treaty. EU diplomatic missions regularly hobnob with Indian officials lobbying on behalf of their respective businesses. Sometimes back, Wikileaks had exposed the use of diplomatic channels for lobbying across the world. Diplomatic lobbying also comes with arm-twisting, if required. Many such instances were exposed in Wikileaks.


Also see: The world of lobbyists. Deccan Herald.
http://www.deccanherald.com/content/210565/world-lobbyists.html

From Pepsico to Wal-mart: Selling a fake dream


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 per cent 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 per cent 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 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.