Retail Sagas
Gautam Chikermane, in, 'Myth of livelihoods, fable of organised retail, and the sad parable of governance' ;
...Sad as that may be, I’d like Mayawati and her ilk — left or right — to answer one question. What is a larger number — hundreds of thousands or hundreds of lakhs? You don’t need to be an economist to know that the difference is of two zeroes (between 1,00,000 and 1,00,00,000). Somehow, those opposing reforms in retail are unable to see these two zeroes. Everyone knows that the larger zeroes comprise consumers who have been buying trading inefficiencies for six decades now and going forward, because they have no political voice, will continue to buy these inefficiencies, higher prices for goods and increase cost of living.
But the two extra zeroes also include producers, the sexiest of which are small and marginal farmers. Sexiest because it is this seductive banner all politicians carry into plush 5-star conferences in Delhi and across the world, to be used as a mascot for keeping the status quo — and the farmers poor. In fact, the small and marginal producers are an acutely exploited lot. Study after study has shown just how high the mark up is between the price of a farm tomato and one that the vendor sells. Again, one can’t accuse the vendor of gobbling all the profit but the series of middle men who mark up on the way. The price of tomatoes grows at the rate of 30-50 per cent per transaction. In a movement from farm to the market, if there are five middle men, the price can rise by five to seven times. Which are great returns, but on risk taken by the farmer — of crop failure, of no access to credit, of lack of cold storage to protect his produce...
...Sad as that may be, I’d like Mayawati and her ilk — left or right — to answer one question. What is a larger number — hundreds of thousands or hundreds of lakhs? You don’t need to be an economist to know that the difference is of two zeroes (between 1,00,000 and 1,00,00,000). Somehow, those opposing reforms in retail are unable to see these two zeroes. Everyone knows that the larger zeroes comprise consumers who have been buying trading inefficiencies for six decades now and going forward, because they have no political voice, will continue to buy these inefficiencies, higher prices for goods and increase cost of living.
But the two extra zeroes also include producers, the sexiest of which are small and marginal farmers. Sexiest because it is this seductive banner all politicians carry into plush 5-star conferences in Delhi and across the world, to be used as a mascot for keeping the status quo — and the farmers poor. In fact, the small and marginal producers are an acutely exploited lot. Study after study has shown just how high the mark up is between the price of a farm tomato and one that the vendor sells. Again, one can’t accuse the vendor of gobbling all the profit but the series of middle men who mark up on the way. The price of tomatoes grows at the rate of 30-50 per cent per transaction. In a movement from farm to the market, if there are five middle men, the price can rise by five to seven times. Which are great returns, but on risk taken by the farmer — of crop failure, of no access to credit, of lack of cold storage to protect his produce...
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