Moving from desi to global chains: Are consumers the losers?

The likes of Cargill and Monsanto could smell big profits and moved into the agricultural sector with their costly, non-renewable chemical-dependent seeds. Apart from undermining biodiversity and an indigenous agricultural sector, many farmers became trapped in debt and were left in an impossible situation. Under what is termed ‘Mode 4’, India’s pharmaceutical and financial sectors are now being prized open by European Union interests.

The coup d’etat for transnational corporations, however, occurred in 2005 with the US-India nuclear deal. It was a master stroke in securing India’s strategic geo-political and economic compliance. The deal not only created a market in India for US nuclear sector technology and fuel companies, but also secured India’s role in containing China and supporting US aims in Iran.

Environmentalist Vandana Shiva has argued that what many are unaware of, though, is that the deal was also linked to the Knowledge Initiative on Agriculture agreement, which was aimed at widening access to India’s agricultural and retail sectors for US companies.

This agreement was drawn up with the full and direct participation of representatives from various companies, such as Monsanto, Cargill and Walmart.

Little surprise then that following in the steps of US agribusiness, Walmart is now possibly on the verge of gaining access to India. And it’s not difficult to be left with the impression that, as with the cash for votes scandal in securing the nuclear deal, Walmart’s entry into India is going to be pushed through (or at least attempted to be) at any cost, as demonstrated by the uproar in parliament concerning the undemocratic nature of the decision taken by the government to allow 51 per cent direct foreign investment in multi brand retail.    

Anyone who says that giant foreign retail chains will squeeze out most of the competition and exert undue pressure on suppliers is attacked for being stuck in the past. The ones mired in outdated thinking, though, are the proponents of this policy who exhibit a blind faith in the ‘globalisation’ project that underpins the opening up of various sectors of the economy to foreign interests.

Moribund ideology

It’s ironic that at a time when India is opening its economy even more to the forces of international capitalism, tens of thousands are involved in the ‘Occupy Movement’ throughout the US and across the globe, protesting against the policies that have granted so much power to transnational corporations. The message from the protesters is that free market globalisation is a moribund ideology, which is underpinned by corrupt networks of interest and has created unemployment and enormous inequalities.   
 
Take the food retail sector in the West, for instance. Big supermarkets have squeezed farmer’s margins, much of the retail competition has been eliminated and the type of ‘long life’, ‘always available’ food on display has been pumped full of chemicals from field to shelf, or is shipped half way around the world from poorer countries that produce cash crops for export to rich nations, which impacts their own agricultural sector. While beneficial to certain consumers, there are many losers.

Think of the local neighbourhoods with boarded up high streets that have given way to soulless, out of town retail outlets that are inconvenient for the old or the less well off without access to carbon emitting transport.

Think of the massive profits that are reliant on low paid labour and a heavily taxpayer subsidised, heavily squeezed chemical-industrial intensive agricultural sector.

Think of the long-distance, energy inefficient food supply chain and the large volumes of purchase from single producers at take-it-or-leave-it cut throat prices.

And now India wants to import this system for the ‘benefit’ of its own food sector.

India has a decentralised retail sector, where the vast majority of vegetables come to the doorstep, and has a system that is arguably quite effective at meeting consumer demand. Freshly picked, locally sourced vegetables are available from countless competing vendors, whether in tiny grocery stores or from community markets/street traders. Of course, there are certain problems, but this type of small-scale retail not only generates millions of jobs, but is also more eco-friendly and able to provide food at affordable prices. 

The myth of western chains being the great saviour of India’s retail sector is partly justified on the basis that food price increases are caused by an inefficient, wasteful food supply system, while ignoring the price effects of the ongoing restructuring of India’s agriculture in favour of a handful of corporate interests. Moreover, authors Jonathon Bloom and Andrea Segre argue the western model based on corporate retail accounts for the waste of half of the food in the world.  

The big supermarket chains in the West negatively impact the environment because their profits derive from a system that employs the extensive manufacture and use of chemicals. They compel farmers to grow tampered-with food to ‘enhance’ appearance and to ensure long shelf life, while also drastically reducing labour costs and increasing energy use by shipping food around the globe.

The fear is that the increased corporate control of agriculture in India will lead to the destruction of jobs and existing retail infrastructure, while placing decisions of what people eat and how it is produced into the hands of large foreign corporations. The fear is that surrendering control of India’s sovereignty and self determination by way of binding lop-sided international agreements is colonialism by any other name.