FDI in Retail: Neither Boon Nor Bane

The deadlock in Parliament for a week over allowing 51% Foreign Direct Investment (FDI) in multi-brand retail was over, with Manmohan’s government withdrawing  the proposal “ for now”.  For the past week, we have heard and read Giga Bytes of information with Aye sayers proclaiming  FDI will bring in better prices for farmers and increase employment and Nay sayers  predicting it will wipe out the small kirana stores thereby increasing unemployment in the unorganized sector.                                              

To me, both are wrong.  For different reasons.

In the heat of arguments, everyone forgot that retail giants that will come in are giant transcontinental corporations  which empathize only with one thing. Profits and more profits.  It is a myth and naivety to even optimistically think these corporations will pay a better price for farmers than that is existent in the market. They will just replace the existing middlemen by they themselves becoming the middlemen and hoarders. Neither will they generate employment to the large extent being projected. In large retail chains, very few are employed in the store compared to the volumes. Even contract farming or captive farming where agreements are drawn beforehand  by the retail chain with farmers for purchase of entire produce has not worked to the advantage of the farmers as is evident from the basmati growers of Punjab, potato framers in Northern India with Pepsi and Subabul, eucalyptus growers in Andhra Pradesh with ITC paper mills. On the other hand, they impose extra burden on the farmer to bring in gloss for the produce like wax coating for apples and protective sponge net for pears.

 

The argument that these retail conglomerates will wipe out the corner store Kirana Wala is also unfounded. Already, India has retail giants for the last several years like More, Reliance, Metro, Subhiksha and a host of others but the mom and pop kirana stores never perished. They have a unique business model of extending credit, home delivery and personal relationship with the consumer. It is a common practice for these stores to give goods on credit even when the order is placed through the house maid or on telephone. In fact, it was Subhiksha that got wiped out and not the kirana stores.

India Inc. too stepped in crying hoarse that withdrawal of the proposal will be a blow to economic reforms and a great loss to farmers. Obviously, the tycoons were salivating at the prospect of  investing in the rest of the 49% equity and riding on the train of super profits. It was hilarious listening to these Armani suite wallahs glibly espousing the cause of farmers. None of the existing retail conglomerates paid a single rupee extra to the farmers than the market price.  With their clout and money power, they have become the biggest hoarders buying up huge stocks at distress price, hoarding them against all laws and selling them for windfall profits.

Rotting Food Grains at Govt. Storage Depots

The government should have announced a slew of measures for the benefit of farmers before the decision to allow Foreign Investment or Indian Investment in retail. It should have come out with plans for massive network of storage houses for grains and cold storages for perishable produce across the country.  All the produce should be bought by the government at a price fixed every two years giving farmers an opportunity to make a decent profit and impose a limit on the percentage of profit the retailers can sell the same. Also a pre-condition should have been imposed that 80% of all farm produce and manufactured goods that are displayed ( not sold ) in retail chains should be procured from within the country. This would have addressed the three most important issues that are plaguing the country, - rotting farm produce due to lack of storage facilities, distress sales by farmers leading to farmer suicides and dramatic rise in food inflation hitting hard the consumers. Instead of addressing the issue holistically, all the politicians without exception took hard stands benefitting none of the three stakeholders-  producer, seller and consumer.
Alas,  What a loss !!

Gen X to Gen Z: What a Difference !

I have no idea about when demographers started classification of generations, but the classifications fit the majority. And vast differences exist between each generation, and from generation to generation the gap increases tremendously.  First there were “veterans”, born prior to 1925 who have witnessed World War II and the tumultuous events of World history, next is “ babyboomers” born between 1940 and 1955 who would have come of age between 1960-1970. Rebellion against authority was part of their profile. They were the beneficiaries of economic boom of 60s. Then came Gen X,  my generation, born in early 60s  who were more rebellious against any type of authority and life was a constant struggle against every stereo type of authority. Usually they grew up with two or three more siblings in the house and had to share everything with the siblings from bedroom to bathroom, from soap to towel. In India, this generation like me stared at the colour TV first time when they were in budding twenties, lived with one Doordarshan channel for more than a decade and could relish the countless channels only after their forties. They stood in long lines in their 20s to book a trunk call at post offices to their homes and waited for hours to get connected. They have enjoyed the fruits of telecom revolution and the quintessential cell phone only when after their 40s. PCs and Internet were only  newspaper stories and most would have touched a key board for the first time in their 40s. PCs storage capacity was talked in MBs.Porn was only in books and in their mid 20s VCR was the most sought after personal entertainment device. Rayban goggles was the ultimate fashion statement.  Most of them would have started in their mid 20s with the prized possession of a Bajaj Scooter and caringly dusted it everyday without fail. One VIP suitcase was used  for a life time without it ever getting even a scratch protected with an olive green military standard canvas cloth cover. Eating out in restaurants was rare and when happened it was a family event and talked for weeks. Owning a car was the biggest dream and owning a house was even a bigger dream. Mega schemes were laid out to own a house. First it would be acquiring a plot of land, somewhere on the far outskirts of the town or city and then planning a savings schedule for the next 10 years to construct the dream house. America was the ultimate dream and any one fortunate enough to settle there was a demi God.

Then came Gen Y, born in 80s and by the time they came of age the next century dawned and the Indian economy was in full swing. By the time they crossed teenage, mobile phone has become another organ of the body and internet was being used by millions. Even hick towns sprouted dozens of internet cafes. Porn has moved from books to PCs and computers capacity was talked in GBs.TVs straightened out and became flat. Jazzy bikes replaced the Bajaj scooter and owning a car by  mid 20s did not even call for a comment. Signing up a 20- 30 year EMI  housing loan did not raise any eye brows. America was still  a dream but only for short term assignments or for a holiday. Cooking at home has become irregular. Curry points mushroomed everywhere.  Number of siblings fell to just one. Use of branded goods has become the fashion statement, whose price made their parents miss a heart beat.

Then came Gen Z, born in 90s usually the children of Gen X.  The decades of hard work and painful and planned accumulation of the wealth of Gen X has become the spring board for Gen Z. Nothing but the best is their motto and a thousand rupee note in their hands transforms into loose change in a jiffy. Authority is no problem for them because they have never encountered one. Friends are virtual and all talk happens only on the Face Book and any advice by teacher or parent is immediately put for validation with virtual friends. They are part of one or other virtual social groups with thousands as members. Google is THE only source of reliable  information. Cell phone is no longer just a phone and does everything except cooking. Palm sized phones boast of GB capacities. Two continuous days of eating at home calls for by default home delivery pizza or KFC. Picking up goods without even looking at the price tag attracts no comment. All decisions are taken independently without parental intervention or advice. It is not uncommon to be the only child.

What a change!! And what a gulf of differences with in just one generation!!

AP Rice Mill Lobby Strangulating Farmers

It is sad that neither media nor the government is concerned about the plight and suicides of paddy farmers in the state as they are about say weavers’ deaths. Not that the death of weavers should not be a matter of concern, but due attention should be paid to the paddy farmers suicides too. While clothes can be made by textile mills and weavers can choose other forms of work, it is the farmer who is stuck with his land and there is nobody on the earth to produce food grains except him. The reasons for the plight of farmers are two. One is the Central Government which fixes minimum support price arbitrarily without taking the actual input costs and refuses to increase it citing the fallacious reason that food prices will increase. It cites the same reason for refusing exports. Its arm, the Food Corporation of India ( FCI ), has grain stocks  double the capacity of its godowns. Crop after crop and year after year, the FCI cites the reason of lack of storage space to avoid buying from the farmer directly.

In AP, kharif crop ( July- Dec ) on average yields 100 – 110 lakh tons of paddy. In Rabi ( Jan – April ) the yields are 110- 120 lakh tons.  The just harvested rabi crop yielded  an estimated 120 lakh tons. Of this, the FCI bought directly from  farmers a meager  5 lakh tons and the state civil supplies  department bought 1.5 lakh tons at the minimum support price of Rs 1000 a quintal. Once the FCI stopped purchasing, the rice millers started purchasing a quintal of paddy at Rs 800- 850. And they bought 98 lakh tons. At Rs 200 lesser price per quintal, the farmers lost a whopping sum of Rs 2000 crore. And this is just for one crop not including the profits earned by millers by exporting rice to other states  and countries. The government in AP, whichever party is in power, dances to the tune of rice millers and so when almost all the farmers had made a distress sale of paddy, politicians are shedding crocodile tears now urging the central government to increase MSP and allow export of rice. And who will benefit from this. None except the rice millers. Each rice mill pays 30% of the milled paddy to FCI as levy and can sell the remaining stocks in the open market. The millers also get 12 kg of rice bran and 12 kg of broken rice for each quintal of paddy milled. The 4-5 kg of husk they get is used to generate power or used to generate steam to make paraboiled rice. The levy rice collected by the FCI is  allocated  to public distribution system for distribution to below poverty line people at a high subsidized rates. FCI has now 50 million tons in its warehouses, double the quantity required to meet the needs of subsidized rice distribution through PDS.

Paddy cultivation is  highly labour intensive. The input costs have trebled in the last 5 years but the MSP for paddy has not increased by  more than 40%.  If we take 5 acres farmer, his input costs are Rs 90,000/- which includes from raising nursery, mechanized ploughing, plantation, weed removal, fertilizer, pesticide, reaping and to harvesting. At an average  25 quintals per acre, if he gets MSP, his net earnings are a meager  Rs.35,000 for the entire crop from his 5 acres. If rabi crop is also cultivated and both the crops are not affected by any natural calamity, his earnings per year is Rs 70,000/-, which is less than Rs 6000 a month. It is  a fact that once every 3 years, one crop at least is lost to nature’s fury. having thus lost a year of earnings and with no money for the input costs for the next crop, farmers have to go for loans either from banks or private money lenders. Both these institutes show no mercy on the hapless farmer while recovering the money. This is what makes the farmer take his life. Last quarter, State Bank of India wrote off Rs 41,500 crore as bad debts and not even a single rupee of this colossal amount  would be from a farmer.

The AP government should exert pressure on the central government to allow exports of rice on a continuous basis and stop the practice of permitting millers to export after they buy at a lower price from the farmers. The FCI should be given procurement quota for each state depending on the extent of paddy cultivated. The practice of FCI procuring a lion’s share from only Northern states should stop.  

Media Hyperbole & Free Speech

The release of Shahrukh Khan’s latest film, My Name is Khan (MNIK) has become the biggest story in print and electronic media for the last one week. All the noise started when the self-declared Moses of Mumbai, the senile xenophobist, Bal Thackery has criticized Sharukh for saying that Pakistani cricketers should be taken into IPL teams. This statement, Thackery claimed, is anti-national and threatened to disrupt screening of Khan’s movie. Sharukh refused to budge and apologize. The media went hammer and tongs hailing Sharukh’s stand as heroic and went to the extent of equating watching the film to taking a stand for independence and free speech. What a comedy !! Indian media trivializes even the most critical and sensitive issues and waters down them, in its mad race to reach one slot higher than the competition to garner advertisement revenues. Unlike Sachin or Mukesh Ambani who have gone public saying Mumbai is for all Indians, Sharukh has never made public his stand on Shiva Sena’s jingoism. Sharukh, all said and done, is a matured businessman and his loss-making Kolkota Night Riders team in IPL needs players of caliber to notch up a few wins. So he might have wanted some Pakistani players to buttress his team, which the media has ignored and made him into a real life hero. While it is gratifying to note that Thackery’s calls to boycott the film have been defied by the public openly, it is sickening to watch and read the media catch on to it as if Freedom of Speech and democracy in India depends on this one issue and exhorting public to defy Shiva Sena by flocking to the theatres screening the movie. Putting Shiva Sena in its place requires not flocking to the theatres but media blackout. A party confined to small pockets in one state needs the media platform for survival. However, for the media, ratings was the primary interest, not freedom of speech or taking a collective stand against hooliganism and intimidation. There have been numerous other instances recently of clamps on freedom of speech and never the media had this kind of sustained coverage to drive public behavior. One of the world-renowned painter, the 94-year old F M Husain is in exile in Dubai. Why was he forced to leave his home country. Because right wing religious parties and groups could see nudity of a Goddess in a few lines he sketched on the canvas. Where was the media then. Taslima Nasrin was expelled from India in 2008. Deepa Mehta’s movies, Fire and Water both came under Sena’s ire. The poor taxi drivers of Mumbai who have migrated from all parts of India were vandalized by Sena activists on the urgings of Thackerys. Since these issues do not have the same easy marketability, they were just reported. And easy marketing is at the heart of this campaign. Issues connected with India’s two loves, cricket and Bollywood, a media savvy celebrity, a comic book goon and the perception of participation by painless flocking to movie halls has made this campaign an effort less marketing for the media.
The real fight for freedom of speech and democracy should be the fight against our desperate poverty. Yet there is frighteningly little focus and interest in transparent governance, the prioritization and allocation of the country’s resources for its people. And there are serious issues at stake. The Food Security Act (FSA) is on the cards. FSA says that there are people in our country who don’t even have enough food for basic sustenance. That their numbers are so large that the States and Central Government have been slugging out for months trying to figure out eligibility criteria and a sharing arrangement that they can afford. We also have the National Rural Employment Guarantee Act (NREGA), which entitles each rural household hundred days of unskilled work at minimum wage. These Acts are a testimony to the fact that we have kept a large portion of our population out of the growing economy. However, not even a miniscule percentage of airtime and column space has been spared to discuss these issues. Even worse, there is no national passion for these issues. I shudder thinking of the future of this country, with two-thirds population being crushed under the burden of poverty and the apathy of the media towards critical issues.

Non-Veg Pickles ( Prawn, Chicken, Mutton )

The process for chicken, mutton and Prawn pickles is the same. Ingredients and quantity are also the same. So if you know how to make one, you can make them all.
Prawn Pickle

Take good-sized prawns of one and half kilo. After de-shelling, prawns will weigh about one Kilo. Devine the prawns and rinse in water at least three times. Keep them aside for some time till water drains off. Add a tsp of turmeric powder, 2 tsp of crystal salt, 2 tsp of ginger garlic paste and mix well. Place the contents in a large dry pan and simmer till water is completely evaporated.
Take 100 gms of coriander seeds ( Dhania ) and fry them in a dry pan with a low flame for 2 to 3 minutes till the aroma reaches you. Put the fried seeds away to cool. Add a finger length cinnamon stick ( Dalchini) and a dozen cloves ( lavangalu) and grind them to fine powder . Add a cup( about 100 gms ) of powdered crystal salt and a cup of chilly powder ( 100 gms ) and mix well. Heat 500 gms of groundnut oil in a deep pan. After oil is heated well, deep fry the prawns for about 2 to 3 minutes till they become slightly brown. It is better to take small portions of the prawns and deep fry them so as not to have the oil overflow from the pan. Add the fried prawns to the container which has the mixed powders. Take 4 spoonfuls ( about your handful) of ginger garlic paste and drop it gently into the simmering oil. Put out the flame of the stove. Let the ginger and garlic paste remain in the hot oil for a few minutes. Add the oil along with the paste to the prawns. Mix thoroughly. Take about 12 average sized lemons and squeeze the juice ( 50 to 60 ml). Strain the juice to separate seeds. Add the juice to the prawns while the oil soaked paste is still hot. Mix well. Let it cool. Do not put a lid on the container as it will condense the vapour to water drops and the pickle will get spoilt. Transfer the pickle to glass jars. Shelf life is 4 to 6 months.
Chicken & Mutton pickle
Chicken or mutton should be boneless. They should be cut into one to one and a half inch pieces. Process is same as prawn pickle. Only more time is needed for deep frying. About 5 minutes.

Obama Disappoints

What a disappointment Obama is !! Just a year ago the World watched every move of this man and prayed for his victory in the belief that he had the capacity to judge things from a global perspective and provide leadership to the World leaders. CHANGE and WE CAN were his slogans and like any other political slogans , they proved to be just that—a mere political catchy words that have no meaning once in power.
Nothing has changed, domestically or internationally. May be I should say no effort has been made to change anything even though circumstances provided the opportunity on a platter to Obama. The US banking and financial sector continues to rot in spite of gobbling up a trillion dollars of tax payers money, the greed of the CXOs continues to be obnoxious, yet nothing has changed. Except for sound bytes to the media on the salaries and bonuses of CXOs, nothing has changed. Even the much talked about health reforms seem to have taken a back seat. The Obama administration is clearly buckling under the pressure of these big corporations.
And now the last blow to all the believers in Obama. Obama has become the first US President in two decades not to welcome the Nobel peace prize winner to the White House since the Dalai Lama began visiting Washington. And this coming from the person who claims that Mahatma Gandhi and his non-violent approach has influenced him to a large extent. Yet he refuses to meet the Buddhist monk and the spiritual leader of Tibet whose only demand is greater autonomy ( not separation ) and preservation of Tibetan culture, which China is systematically destroying. And why this refusal. Because of the pressure from China. So economic considerations outweigh all other factors.
The US President will meet with corrupt, murderous dictators, military junta heads, even embrace them, laugh with them, accept gifts from them, but NOT meet the Dalai Lama? The ultimate failure in honoring human rights and international relationships. And the ultimate disappointment for people like me world over.
Just a year ago during the primaries, Obama urged George W Bush to boycott the Beijing Olympics opening ceremony in protest against the bloody repression of a popular uprising in Tibet. “If the Chinese do not take steps to help stop the genocide in Darfur and to respect the dignity, security, and human rights of the Tibetan people, then the President should boycott the opening ceremonies,” Obama said.
What a CHANGE !!
What a fall !!
What a disappointment Obama has turned out to be !!

The Acid Test For Indian Society

A week back three youngsters in their budding twenties poured acid on two unsuspecting girls causing serious third degree burns in Warangal in Andhra Pradesh, India. The reason for this heinous crime was one of the girls had spurned the overtures of one of the culprits. Both the girls are battling for life with one girl, doctors say may lose vision permanently and both the girls, if survive, will need multiple plastic surgeries. It is no wonder that the entire town came out in rallies and expressed sympathy for the girls. However, what was surprising was every section of the society, including the students, demanding the police to catch the suspects and encounter them which meant shooting them to death. Instant justice in this instant world ! A day later the three suspects were caught, interrogated, confession extracted, paraded before the media in the late evening and Lo and behold ! all the three suspects end up dead in the middle of the night on the outskirts of the town. The official version was police had taken them to a location where the suspects said they hid a stolen motorcycle but when they reached the spot, the suspects tried to attack the police and so were promptly shot to death. This usually is the standard official version for most of the deaths in the police shootouts. As news spread, there were celebrations in the town, people praising the police for swift action and awed college students pestering the police officers for autographs. Even in state capital, the educated elite were openly praising the police for this instant justice delivered. To my horror, even the state government released a statement that indirectly meant that any such acts will invite similar response. A few sane voices and their feeble protest at this form of delivering instant justice were drowned out in the cacophony of jubilation. We have been witnessing similar jubilation and approval across the country whenever such incidents take place. In the wake of sympathy on the plight of the girls and the hatred on the perpetrators of the crime, we seem to have forgotten that we are in a civil society governed by the laws of the land and judiciary. While it is true that many of our laws do not reflect the modern realities and need to be comprehensively changed, it is as reprehensible as the crime itself to eulogize custodial deaths. Instead of bringing pressure on the governments to amend the laws to make the punishments more stringent and revamp the judicial process for quick trials, we seem to have taken the easier option of condoning and even demanding instant justice. We should not for a moment forget that this makes every individual policeman, the investigator, the prosecutor, the judge, the jury and the executioner. Is any one person or a group capable of playing all these roles without bias.
Have we as a part of the civil society forgotten the brutal Bhagalpur blindings in 1980, where the police blinded about 30 undertrials with cycle spokes and then poured acid into the eyes. Most of them were petty thieves, waiting for the trial to commence. Can we condone the act in the name of instant justice since the case would have taken a long time to conclude in the usual process? Or for that matter, the police shooting of a business man to death last year in Delhi due to mistaken identity. It could be you and me tomorrow in the place of the businessman.
I ask those of you who have openly come out in support of the police shooting to death the three suspects, shall we as a society dispense with the judicial system altogether and give rights to the police to deliver instant justice. A thief can have his hands amputated, a person accused of murder can be hung to a lamp post and eve teasers stoned to death in public. There are societies where such forms of public punishments are in vogue. We call those states barbaric.
Despite the passing of the Protection of Human Rights Act in 1993 and establishing a National Human Rights Commission, incidents of police brutality continue to take place in various parts of the country. This is because of the silent approval of the public.
The acid test for the Indian society is whether in the near future it opts to pressurize governments to amend the laws and make punishments more stringent, revamp the judicial process for speedy trials, demand better policing methods and respect the Human Rights or continue to encourage models of instant justice. There will lie the answer to where as a nation we are headed.