The Economic Times - A recent analysis of Nielsen data on food prices in US done by JP Morgan has found that for every 12-week period since May 14, 2011, Wal-Mart has been raising food prices faster than its competitors. So, if the consumers are not benefitting by way of lower rate of price increase, then who is benefitting from large retail chains? Certainly not the suppliers. Contrary to popular opinion, the FDI in India is not being driven by the consumers. Nor by the producers.
The process by which capitalism has been replaced by corporatisation is being defended using the theoretical principles of competitive capitalism. However, there is no theoretical economic foundation to support the prevailing belief that a corporatised economy is capable of meeting the overall needs of society.
Corporatism is not capitalism. Corporations are designed to amass capital – to generate profit and to grow. None of the necessary conditions for competitive capitalism exists in today’s economy in India. The economy is moving away from market coordination towards a corporate version of centralised planning (supported by state-of-the-art technology). The problems of the centrally-planned economies of the communist regimes were not merely a lack of sophistication in management and planning. Central planning by government or corporation is a fundamentally wrong way to try to coordinate an economy. Had centralised planning been a result of free-market competition, it would then have been good for society. Corporatisation is not a market aligned system but a centrally-command structure with the basic flaw of growth for the sake of growth.
Corporate agriculture is fundamentally different from the agriculture we have known in India, in the past. A corporation is a legal entity and not a person. It has no family, no community, and increasingly no nationality. The corporations that increasingly control agriculture have no commitment to India and certainly not to the farming in India. The retail corporations may help the growers get loans to buy buildings and equipment but they will abandon those growers if the contractual arrangement becomes unprofitable or even troublesome. We are in the midst of a great social experiment – an experiment being carried out by non-human entities that we have created and let loose to plunder Indians.
Specialisation, standardisation, and consolidation are often cited as the keys to successful farming. In the past, the policy and practice in India had supported the industrialisation of agriculture by favouring those who have specialised in specific enterprises, standard production practices and operated on a commercial scale. Until recently, the industrialisation of agriculture meant advantages of the economies of scale but now it points to a situation of increased corporate control.
For the farmers, the most important strategy for surviving the next farm crisis may be to get to know the neighbours and turn them into customers. The concerted moves for dismantling the APMC market structure in the name of malpractices and corruption is directed to deny the opportunities of a decentralised free-market to farmers.
Farmers’ markets, or cooperative marketing in any form, will provide more opportunities to bring local farmers and community members together through their common interests in sustainably produced food. Friends don’t abandon friends in the neighbourhood when the going gets tough.
Those who eat locally won’t go hungry and those who market locally won’t go broke. Instead, they will find ways to work through their problems together and their relationships will grow stronger as a consequence.
Shyamal Gupta Chief Business Officer NCMSL
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