A couple of months back, I wrote about Kerela’s ban on organized retailing. Most readers agreed that it was wrong-headed. But there was some skepticism about my claim that organized retailing would be beneficial to the farmers. Well, here’s the tangible evidence.
Over the last two weeks, UP has seen a backlash against organized retailing. Small retailers took to the streets and then the usual ensued – shuttered markets, burnt buses, much TV coverage. An earlier post of mine on Street Power is here. Chief Minister Mayawati took notice. That is, if the goons in the streets were not from her party anyway. She quickly rolled back some policy changes which allowed organized retailers to directly procure farm produce from farmers. “60% of the state’s farmers were against this policy” claimed the UP state government.
Not particularly surprising. The Kerela government did pretty much the same thing, including the sound bytes. “The mood of the people is against the entrance of Reliance in the retail sector” was how they put it.
But in unfolding events in UP, surprise, surprise, the farmers are threatening to take to the street as well. According to Business Standard, farmers around Lucknow, led by the Bharatiya Kissan Union, claim that they are incurring huge losses due to the closure of Reliance Fresh.
“It’s an all-party affair and we are united in our fight for the opening of the Reliance stores as never in history the vegetables grown by us fetched such a fabulous price as given to us by the reliance’’, said Ravi Singh, a farmer.
I totally love this. Democracy at work, is what this is. If this thing snowballs a little I’d like to see what Ms. Mayawati does. I don’t know the caste equations here, which matter in a state like UP, but other things being equal, farmers will have an upper hand – more votes – although it is possible that the spark you see coming out of BKU is actually just a few landed farmers incited by Reliance Fresh.
But I hope that is not so. I hope that this is the beginning of an organized response from farmers, who are the affected parties here, opposing wrong-headed legislation.
If any further evidence is required that organized retailing helps farmers, read this piece about how fruit exporters are facing a margin compression because big retailers are pushing farm produce prices up.
“Retail chains such as Reliance Fresh, Subhiksha and Adani are offering better prices to farmers. We are left with no other option, but to match the prices being offered by the retail majors. This has eaten into our margins by at least 10 to 15 per cent,” said Nitin Mathur, CEO, Locus.
I feel your pain Mr. Mathur, but I’ll be shedding no tears.