People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 39

September 30, 2012


Withdraw the Anti-National Notification on FDI in Retail


THROUGH a statement issued from New Delhi on September 22, the All India Kisan Sabha (AIKS) condemned the decision of the Congress-led UPA government to allow foreign direct investment FDI in multi-brand retail. The UPA, the AIKS felt, is openly favouring the big monopolies in organised retail trade and imperialist interests. The fact that this decision is contrary to the government’s own assurance to the parliament that no decision would be taken unless consensus across the political spectrum was reached, also shows the scant respect the government has for the democratic institutions and opinions of states. It has gone ahead with the decision to notify the FDI in multi-brand retail despite widespread opposition to it. Millions of farmers and small unorganised retailers will be left in the lurch by this move, the AIKS warned.


The AIKS has also taken note of the fact that the government has spent huge amount of taxpayers’ money to place advertisements in all newspapers to portray this move as a “farmer-friendly” move. Nothing is farther from the truth; the move is as much against the peasantry as it is against the small retailers. The entire production process will be altered to suit the corporate interests. Worldwide, the giant retail chains have only depressed prices for the peasantry; farmers are many times deprived of even these low prices by citing quality standards. A new breed of middlemen will emerge in the name of quality control, standardisation, certification and the like. Farmers will be deprived of remunerative prices. The claim that big retail will provide adequate scientific storage for farmers’ produce is flawed. Any such infrastructure will only be used to indulge in speculation and hike prices of farm produce as well as profiteer at the expense of the consumers. Shift in cropping patterns away from food grains at the behest of retail giants to suit their interests are also likely.


The unorganised retail trade at present provides jobs to more than 40 million people. A large number of small and marginal farmers, who are hit by the acute agrarian crisis, are also employed in this sector. But FDI in multi-brand retail will lead to a direct threat to their lives. The MNCs that are purely interested in profiteering will displace millions from jobs, and the global retail giants will wipe out domestic retailers operating in the unorganised sector through predatory pricing as well as takeover. They will also dictate prices of wholesale purchase as well as the prices of retail products that will be up for sale.


Farmers are now being fed on the illusion of high prices after public procurement and price-support mechanism has been gradually dismantled. The procurement centres of big corporate houses, seeking to make bulk purchases, may initially pay better than the existing low prices and gradually the mandis as well as the regulated market yards will be pushed into extinction. Once their monopoly is established, they will coerce farmers to sell their produce at the prices arbitrarily fixed by the companies.


Also, the government had earlier allowed for hundred percent FDI in development of seeds, horticulture, planting materials, plantation sector and services related to agro and allied sectors where the entry route is automatic and unrestricted. The present move further exposes the extent to which global agribusinesses are dictating the course of policy decisions in India.


The AIKS therefore demanded that the Congress-led UPA government must desist from using tax-payers’ money for spreading misinformation to justify its undemocratic imposition of FDI in retail. The organization said it would resist the FDI in retail by building the broadest possible unity against this retrograde move.