Economics Kills

Submitted by souravroy on Mon, 12/05/2011 - 11:56

Bengal, historically, has been the sick man of India. It has a horrible past. It all started in 1770, when approximately one third of the total population of Bengal was wiped out due to a drought. The East India Company, which had occupied Bengal five years earlier, looted the granaries, taxed rice farmers heavily, and subsidized the farming of profitable commodities like opium. When drought hit, about 10 million people starved to death!

If only the granaries were not looted by the British East India Company, if only the farmers of the region had cultivated rice instead of opium, they could have been saved. Well, it was not the military, but plain and simple economic policies that killed these people.

The last of the 40 recorded droughts of Bengal was in 1940’s when 4 million starved to death. Over a span of 182 years, over thirty million men, women and children were systematically killed due to poor economic policies. These Indians had no grudge against the British Empire. They had done nothing to deserve such a cruel fate. At least Hitler hated Jews and killed 6 million of them. What ill did these 30 million poor Indians do (or could have done) to the British Empire?

If the systematic murder of six million Jews was a crime worthy of waging a World War, does the killing of thirty million inhabitants of Bengal not even deserve a footnote in history?

Anyways, the imperial British are long gone, and India is a free democracy now. Once upon a time Shaheed Bhagat Singh had said that, if India is not strong enough for Independence, the white skinned will be replaced by the brown skinned, and exploitation of man by man will continue.

Having said this, let me address the debate of FDI being introduced in India.

Recently the government has introduced Foreign Direct Investment (FDI). I often wonder why the Government and its mouthpieces are trying to spread a notion that the problems associated with better collection, storage, transportation and distribution of farm products can only be tackled and solved by introducing FDI in India. Why are they hell-bent on selling their lands to foreign invaders just like Mir Jafar did in the battle of Plassey.

It is high time we understand that agriculture and retailing in India are not just enterprises. They are very similar to Indian Railways. Indian Railways should never be privatized simply because it is not just a profit making firm that runs trains in India. It is the largest employment scheme ever deployed by the Indian government. Privatization of Railways will lead to ‘optimization of corporate resources’, and millions of Indians will lose their livelihood.

The retail industry in India is a huge source of self-employment. For large sections of the semi-literate and illiterate population, the lack of opportunities for growth in the manufacturing sector and poor returns in agriculture has left retailing as the only meaningful option to sustain their livelihood.

These small street side shops have been a significant source of self-employment for the economic bottom half of the population. Projecting these millions of retailers as ‘entrepreneurs’ is a big joke, since most of them manage to operate their shops for daily bread and butter, not for listing themselves on the stock exchange some day.

With FDI, these retailers will be deprived of this livelihood. They can barely speak anything outside their native language. Asking them to seek employment in Walmart or Tesco is like saying ‘if you don’t have bread, you must eat cakes’!

Retailers are just the tip of the iceberg. The worst hit will be the farmers. Indian agriculture is traditionally based on small farms. These farms are not optimized and are unsuitable for running heavy machinery which can do tilling, sprinkling, or harvesting – but at least they generate jobs for daily wage farmers. They ensure that 600 million people in India survive!

Who does not know that Walmart and Tesco are known to buy out or lease huge farms, which they cultivate using highly optimized methods and techniques? Walmart and Tesco are rich and big – much bigger than any institution in India. They can lobby and change the laws of this land in a keystroke. Yes, initially they will offer huge sums of money as they buy out or lease the farmlands of India. They may even employ farmers on a contract basis, initially.

With newer machinery and spiraling land procurement, they’ll optimize their farm lands. Once they have their huge farm lands spanning great distances, will they continue to employ our farmers? Will they not deploy the heavy machinery and optimized techniques to maximize profit? After all, they are here to do business, not charity. The Indian middle and upper class will surely get a better shopping experience, but what about these 600 million farmers who will be killed systematically?

So, does that mean organized retail should not be brought in India? Yes it should be. But first, the media and government must stop bombarding us with their propaganda promoting the notion that organized retail is equal to FDI. It isn’t. It certainly isn’t.

Amul has proved that organized retail can be achieved. There was a time when milk was a commodity which was scarcely available and was imported to our country. This led to a long battle which finally resulted in the cooperative milk federations of India. Today each Indian state has its own federation which has ensured an efficient supply of milk products at reasonable rates in a sustained kind of a manner with the profits reaching millions of producers, and not one man’s pocket! Indian milkmen today live with dignity.

The same model in the fruits and vegetable market has been deployed by Hopcoms in my native city of Bangalore. Hopcoms ensures that small scale farmers of Bangalore’s nearby districts obtain proper channels to sell their produce. Hopcoms, in fact has saved lives of thousands of farmers in Karnataka.

Aren’t we messed up enough internally? Over the past 20 years, over 2 million farmers have committed suicide. Let alone the ones that were killed by other means. Who doesn’t know that the high farmer suicide rates in the Maharashtra and Andhra Pradesh belt are due to the inability of the Government to prevent cheep subsidized imports which bring the price of the locally grown cash crops tumbling down?

It is known that the Government is working hand in glove with trader lobbies which first export the local produce creating scarcity in the country, and then proft from the higher prices. It is well known that the FCI godowns are rat-holes which destroy the food crops systematically, which rightfully should go to the poorest of poor Indian dying on the streets!

Inflation in India is created. A need for FDI is strategically created when we can simply enforce better supply, transportation, storage and retailing of Indian yield. Why don’t we deploy anti-dumping duties on foreign products which will ensure that food prices in India are regulated and farmers live and prosper with dignity?

For a country like India, with its population and its poverty, the only answer to our problems is to encourage and fix the people oriented models like Mandi Samitis and Cooperatives, which could be streamlined to run like Amul, thereby championing the larger interest of society. Instead, the Government is taking steps which will break the very backbone of Indian markets. It is also a matter of shame that intellectuals of the country are even supporting FDI without even looking at the bigger picture.

The history of this land has proved that economics can kill more brutally than the military. When prices of cars and computers continue to fall and those of rice and wheat become unaffordable for a common man, we know something is terribly wrong with the economic policies of this country.

The government and my fellow citizens must understand that all our farmers, once suppressed beyond a certain threshold, will not commit suicide or starve to death. Some will become naxalites and kill us. Some will join the local mafia and kill us for their daily bread and butter. Some will jump back, kill us, and bring governments down.

I hate to say this, but if not for the future of those 600 million farmers and those 100 million retailers, if not for this country, then at least for the future of our own children, let’s say NO to Foreign Direct Investments in India!