Give small players in food retail a new deal

Published: Saturday 30 June 2007

the unrest over Reliance's plans to enter the retail fresh vegetable and fruit market is only to be expected. It is just about possible that its entry into this sector will not completely drive out small vendors who are at present the backbone of the trade, but the fears that it will do widespread damage to this backbone are very real and well-founded. It is easy to point to the Safal and Mother Dairy chains and argue that they have co-existed with street vendors and small vendors, but the argument ignores the fact that both Mother Dairy and Safal are co-operatives and not corporate entities and certainly do not have the destructive potential of a behemoth like Reliance.

This is precisely what should scare consumers as well. Some of them may be happy in the short run that the big retailers are going to offer goods at lower prices. But they will do well to heed those who express the fear that Reliance will use the thin end of the edge with its customary ruthlessness meaning once it has a foot in the door and cornered a significant slice of the market pie, driving out small and tiny players, it will move swiftly to dictate to both producers and consumers. This effectively despatches the argument that Reliance or other retail chains will give more remunerative prices to farmers by cutting out the chain of intermediaries that currently exists.

Leaving counterfactual arguments aside, what must be addressed is the immediate, ascertainable question of equity and justice. It can hardly be gainsaid that a lot of small vendors will lose their livelihoods if big retail chains enter the fresh fruit and vegetable market. So, is this unfair? The answer must unambiguously be yes. Small vendors have been providing an indispensable service, making peanuts themselves and running the gauntlet of harassment from municipal authorities, the police and neighbourhood toughs, while the big retailers will come in with the government facilitating deals on procurement, setting up outlets and, perhaps, throwing in other benefits.

It would hardly be asking too much if one were to urge the government to give small vendors credit lines, outlets, access to cold chains and other facilities that would put their businesses on a firmer footing. At the very least, it could legalise the innumerable street vendors to create a level playing field.

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