Colours of unreason

The comrades have picked up the gauntlet. In a familiar resolve to defend their ideological confusion, they will not be deterred from their task even if in the process they must wage battle against a fellow communist. They have sought Prime Minister Manmohan Singh’s intervention to scuttle a proposal to allow foreign direct investment in the retail sector. A strong votary of that proposal, incidentally, is West Bengal Chief Minister Buddhadeb Bhattacharjee. He is lobbying for the entry of a German retail chain in the state in a bid to better exploit its fish and agro resources.

Leaders like Abani Roy of the RSP — a constituent of the Left Front — are worried that the “deep pockets and strategic pricing strategies” of foreign retail firms will wipe out small, independent stores. This is a disingenuous argument. Consider what the effects of professional intervention in agro marketing could mean. By the very nature of their produce, fishermen and farmers tend to be at the mercy of well-connected middlemen. Connecting supply to demand for their perishables is extremely difficult. Given the widespread lack of storage and transportation networks, they cannot leverage the final cost of their produce to get a good price, and must routinely sell it in distress to middlemen. And what is not sold mostly rots. To pull rural areas out of this rut of subsistence returns and preventable wastage, farmers and fishermen need to be integrated more efficiently with retailers and agro-industry. Bhattacharjee thus has the right idea. Just as e-choupals are allowing farmers to access information real-time and optimise their profits, modernising backward and forward linkages could ensure competitive prices for both the producer and the consumer. Whether this supply chain is improved by a small domestic seller or a large foreign retailer cannot be a factor in stalling reform.

Facilitating competitive prices for millions of farmers and fishermen is an important way of kickstarting the second generation of economic reforms. Maximising the returns for rural producers is, after all, integral to lifting millions of people out of poverty. Abani Roy surely cannot have a problem with that.