Retail Trade in Agriculture, Environment, and Fair-Trade Practices: Review of Experiences and Future Pathways

  • Shah A
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The recent debate on the entry of large private investors, especially multinationals, in agri-food retail markets in India has been marked by the twin concerns of effi-ciency and employment. The fanner refers to a range of efficiency parameters, viz. quality, range of consumer choices, price, wastage, and, above all, flow of the much-sought-after foreign direct investment (FDI) in the hitherto underinvested sector in order to boost up India's economic growth and wellbeing of its citizens. The debate has witnessed one of tile most polarized stances and political opposition primarily on the ground that the FDl, especially the large multinationals already knocking at the huge and growing Indian market, may not necessarily bring efficiency across the various dimensions noted above, and that it would displace segment within the existing unorganized retail sector that has been by far the only resort for a large number of poor and not-50-skilled workers in the country (Singh 20 I0; Shah 2011; Ghosh 2012). With the Government of India finally approving the entry of FDls in multi-brand food retail sector in September 2012, the debate seems to have come to a temporary halt, waiting to see how the realities actually unfold for the sector. The contemporary Indian debate is some kind ofa replay of what was witnessed in the developed countries of the West in the later part of the last millennium (Rear-don and Gulati 2008; Reardon and Minten 2011). Naturally, there has been a ten-dency among a wide range of stakeholders including sections of scholars, policy-makers, business groups, and consumers to seek solace in the power of the market and resort to wishful thinking that entry of the large multinationals into the agri-food retails sector may eventually bring the desired efficiency as well as employment op-portunities after initial frictions within the existing system and displacement of a small segment of workers in the unorganized retail sector, as it happened in most of the developed economies, and, of late, some of the emerging economies in different o Springer India 2016 N. C. Rao et al. (eds.). Organised Retailing and Agri-Business. India Studies in Business and Economics, DOl 10.1007/()7g·81-322-2476-J 4 59 60 A. Shah parts of the world. The need therefore is to pave way towards a smooth transition from a largely unorganized system to a modem, upbeat, and large corporate-based system, operating through global value chains. The claims about historical experiences ofthe developed economies in the world, however, is neither universal nor without flaws. Not only that the experiences, espe-cially, from developing economies are diverse, the global food retail system driven by large multinationals has often raised issues that are yet to be resolved. These, inter alia, include issues like the monopoly/oligopoly power of the giant corpora-tions, wasteful expenditure on advertisement and brand creation, artificially created product standards leading to wastage of agriproducts, intense farm practices, loss of cultural-as well as biodiversity, quality/loss of food value due to processing and refrigeration, lifestyle-related demonstration effects shaping consumer choices, overconsumption and health problems, and, last but not least, environmental dam-age or carbon footprint of the globally procured, stored, and distributed food items. A plethora of literature already exists capturing the wide range of issues noted earlier. Whereas much of the literature has emanated from the developed economies in the West, especially in Europe, evidence from some of the developing countries have suggested that the claims about efficiency on parameters like price and wast-age, etc. have not been actually realized (Singh 20 II). What is more important is that when it comes to food and its retail marketing, India stands out as a unique case




Shah, A. (2016). Retail Trade in Agriculture, Environment, and Fair-Trade Practices: Review of Experiences and Future Pathways (pp. 59–78).

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