18 November,2010 07:27 AM IST | | Bobby Anthony
As danger of losing out looms, they rope in farmers and transporters to oppose foreign investment in retail
TRADERS, who expect to lose out due to the proposed 100 per cent foreign direct investment (FDI) in the multi-brand retail sector, are in the process of forming a coalition of farmer leaders, transporters and allied segments against the move.
"Much of the transport sector is directly dependent on the domestic retail trade. If the government allows 100 per cent FDI in multi-brand retail, transporters and allied sectors will be hit by unemployment," Pravin Khandelwal, New Delhi-based secretary general of the Confederation Of Indian Traders (CAIT), told MiD DAY.
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CAIT also plans to lobby with state governments, which will actually implement the Union government's decisions at the local level
"We're already talking to farmer leaders and transporters' associations to form a coalition against the government's proposed move."
CAIT has also agreed to speak to corporate houses wanting to gain a toehold in distribution, marketing and sales of agricultural produce.
"We are willing to talk but only on a public platform. We are open to a debate, because we are aware that despite their claims, they cannot implement and put in place a parallel and functional system of distribution, which has been operational for hundreds of years," Khandelwal said.
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"They will have to invest a lot of money to establish a chain of cold storage and refrigerated transport if they have to realise their vision. But this will take them a few years. They cannot fly down grain, vegetables and fruits from villages, because there are no airports in rural areas.
Where there are airports, there is no storage infrastructure. Even if they succeed, they can cater only to five-star hotels and the metro-based middle class, which is hardly 10 per cent of the population.
The question is, what happens to the remaining 90 per cent of the population. In fact, we expect them to fail. Yet, we will have to face them, because they will create unemployment."
CAIT also plans to lobby with state governments, which will actually implement the Union government's decisions at the local level.
Political factor
"It is the state governments run by regional parties which will actually implement decisions. We are talking to all political parties, because they are sensitive to the loss of votes at the regional level," he added.
However, that may not be so easy, given the fact that corporate houses like the Mittals (who own Airtel) already seem to have invested in the back-end through a FieldFresh Foods, 50:50 joint venture with the London-based Rothschilds.
Set up with an investment of US$ 50 million, the idea is to leverage the US$ 4 billion fruit and vegetable market in India for exports. Most of the fruits and vegetables grown in India are organic, and there is a premium on organic food in the western market.
FieldFresh has already adopted a methodology of outsourcing, acquisitions and brand-building. It is currently looking at building its own cold chain, though it will outsource its requirements for freezers and trucks.
FieldFresh expects to export roughly 50 per cent of the procured fruits and vegetables. Another 35 per cent will be supplied to the processing industry and hotels. The rest will be supplied to the mandis and the alcohol industry.
