Farmers take a Fresh look at retailing ATTRACTIVE RATES for produce, and no commission Twenty-five-year-old Mr Rami Reddy, whose joint family owns 20 acres in Lakshmar eddy Gudem, a small village in Rangareddy district near Hyderabad, has been grow ing brinjals in one or two acres for the last eight years. But he never saw a pr ice for his produce that he got this season from Reliance. Not only that. He cou ld save money, time and effort in taking the produce to the Bowenpally market, 4 0 km away. "All we need is to take the produce there. We need not pay any commis sion not to speak of the hamali charges," he said. "Two months ago, Reliance rep resentatives came to me and told me about their plans to procure quality brinjal s for their upcoming outlets in Hyderabad," he told Business Line. Mr Reddy is n ot alone. "It has become a hot topic for discussion among the villagers. Everybo dy talks about the attractive rates," he said. Collection centre He is not exagg erating. About 200 farmers from villages in the area have started selling their produce at the Collection Centre set up by Reliance at Shankarpally. The centre collects 7-8 tonnes of vegetables a day and send the lot to the central processi ng centre at Medchal. Vegetables from 2-3 such - 25 - CS-08-029
centres get graded again and processed there before getting into the 17 Fresh outlets the company opened in the twin cities. "We used to sell a 20-kg bhindi (okra) bag for just Rs 150. But now we are getting Rs 10-11 a kg," Mr Jangaiah o f Alamkhangudem said. "It is not just the higher price. We also save on the 10 p er cent commission we pay at the market yards," he said. But they understood qui te well that the ‘maal’ (produce) should be fresh. "It should be plucked too in a certain way. All my life I grew bhindi (okra) the way my father did and sold a s he did in the market. They (Reliance) do not take the second grade vegetables. But it seems I have to change," said. Mr Venkatrami Reddy of Chinnareddy Gudem saw another advantage. "They would tell me what quantity of vegetables they need from me. I ll go there and get my consignment graded at their collection centre ," he said. The centre would get the price-band and quantity of vegetables it ne eded to collect that particular day. Mr Vithal, Secretary of the Agriculture Mar ket Committee at Shankarpally, felt that the procurement by ‘Ranger Farms’ (thro ugh which Reliance procures vegetables) has no impact on the arrivals at the com mittee. The committee accepts vegetable consignments two days in a week. "Some d ays we receive more and some days we see less arrivals. We haven t yet seen any decrease on account of their (Reliance s) entry," he said. Asked about farmers claim that they paid 10 per cent as commission, Mr Vithal said the committee cha rged four per cent. The farmers also needed to pay for weighing and hamalis, he explained. - 26 Exhibit-9 The Economic Times 24 July 2007 1023 hrs IST, AGENCIES We don wa nt Reliance to colonise us, say farmers t CS-08-029 MUNDHA KHERA, INDIA: It s a hot, humid Sunday morning in northern India, but the oppressive heat does not deter a group of about 15 farmers from trudging door-t o-door, offering advice and sometimes warnings. "Do not sell your precious land. Even if you are offered millions of dollars, do not sell. It is your only sourc e of livelihood," Mahavir Gulia, the leader of the group, tells a villager in Mu ndha Khera, 100 kilometres (60 miles) from New Delhi. "Sell your land and you wi ll lose your identity," he warns another as the group winds its way through the cluster of austere mud, brick and cement homes. Gulia is trying to spell out the dangers to locals whose land has been earmarked for a Chinese-style business en clave - a joint venture between the Haryana state government and Reliance Indust ries, India s largest private conglomerate. "We want to be sure our fertile land that gives us three crops a year does not end up as part of the Reliance empire ," he said. "We don t want Reliance to colonise us. Land is what sustains us far mers with food, respect and dignity." In Neemana village, 10 kilometres away, Pr atap Singh, 75, understands the message -- but a little too late. Eight months a go, he was the owner of a 20-acre (eight-hectare) fertile field that yielded thr ee harvests a year. "My sons were lured by the promise of good and quick money. They persuaded me to sell most of my land to the big company," says Singh, squat ting on the sandy floor of the one-room house that he and his wife share with a buffalo. He did get some cash, but it did not last him long in the world outside his usual farming routine. "We have a saying here that our land is our mother," Singh added sadly. "How can you get any respect when you have sold your mother? " India "Great Land Grab" s Singh s land is now part of the 25,000-acre Relianc e-Haryana government Special Economic Zone (SEZ) -- a project encouraged by the Indian government to spur industrialisation, infrastructure development and push economic growth into double digits. For foreign and domestic corporate giants, the SEZs are a tempting option -promising a way around the country s notoriously slow, corrupt and spiritcrushing bureaucracy. - 27 - CS-08-029 But opponents say the government is merely sidelining the still-crucial farm sec tor -- stealing labour and prime land from a sector which employs more than 60 p ercent of the workforce and generates more than a fifth of India s gross domesti c product. Journalist-turned-activist Praful Bidwai says the years 2006 and 2007 "will be noted in history for the launch of the Great Land Grab". "It s happeni ng across India," added social activist Vandana Shiva, pointing to farmers prot ests in the Communist-ruled eastern West Bengal state in March. Fourteen farmers were killed when police entered their village to evict them from land designate d for a SEZ - causing a furore and polarising public opinion. Not that land grab bing is a new concept in India - tribal peoples have long seen their forest land shrink with the march of urbanisation. But SEZs are different, says Shiva. "The se are enclaves of privilege, insulated from the laws of the land - whether it i s labour laws or environment laws." Democratic-corporate "schizophrenia" So far, India has approved 303 SEZs and set aside 1,400 square kilometres (540 square m iles) of land on which they are to be built. According to India s trade ministry , the 126 enclaves already operating have generated 32,578 jobs, and this will s well to 1.5 million by December 2009. It also hopes SEZs will generate 25 billio n dollars worth of exports in 2008-2009. While the figures look impressive, crit ics argue that Indian democracy is suffering. "When there is large scale displac ement of people involved, you need their consent. In a democracy, people have th e right to decide their own future," said prominent community activist Aruna Roy . "All the villagers should decide -- not just the village headman." She also po ints to what she sees as the irony of Prime Minister Manmohan Singh s government -- elected on a pro-poor platform in May 2004, but aggressively pushing through the SEZs. "It s a case of schizophrenia," Roy said. Those who may end up profit ing from the affair are India s Maoists, who have seized on the land grabbing is sue and already hold sway in much of the impoverished east. "Agitations like the Maoists insurgency are triggered by the repeated failure of governance to deli ver basic rights," says Roy. Economist Paranajoy Guha Thakurta says India s ambi tion to emulate the Chinese SEZ model is basically flawed - "because India is a democracy". - 28 - CS-08-029 "The Chinese SEZs are like giant urban agglomerations, independent nation states with their own rules for labour and environment," he said. India following the same model will only create "huge islands of industrial affluence in a sea of de privation and poverty. "This will be unacceptable in a democracy." - 29 Exhibit 10 CS-08-029 WAL-MART IN JOINT VENTURE FOR INDIA By Amy Yee in New Delhi, FT.com site Published: Aug 06, 2007 Wal-Mart has succeeded in getting its toe in the door of the Indian market, via a long-planned joint venture with local partner Bharti Enterprises. The world s largest retailer stressed it would “work with and develop local supplies and cre ate local beneficiaries along the supply chain”, in an apparent effort to play d own controversy over the potential disruptive effects of corporate retail in Ind ia. The 50-50 joint venture, called Bharti Wal-Mart, is a “wholesale cash-andcar ry” business that will use Wal-Mart s back-end logistics technology, inventory s ystems, cold chain infrastructure, truck tracking and fuel management. Bharti, o ne of India s largest companies and owner of Airtel, the country s leading mobil e phone operator, recently announced investments of up to $2.5bn in Bharti Retai l, its own 100 per cent-owned supermarket chain that will be supported by Wal-Ma rt s logistics and supply chain technology through a franchise agreement. The pl ans come amid controversy over Wal-Mart s entry into India. Activists and small trade associations insist corporate retailers will disrupt millions of Indians w hose livelihoods depend on farming and retail dominated by small mom-and-pop s hops. Manmohan Singh, Indian prime minister, this spring called for an independe nt study on corporate retail advances into the country. The report is yet to be finalised. Dharmendra Kumar, head of India FDI Watch, which opposes big retail, said: “The government is still to know the likely impact of corporate retail. In the meantime, they are allowing corporations to expand their retail plans at an alarming” India FDI Watch and other activist groups plan demonstrations across India this week. Hakim Singh Rawat, president of the Hawkers Association, said s treet traders would be hit hard by Bharti Wal-Mart and warned the Indian governm ent about favouring “only a few huge corporations”. Opponents insist the joint v enture is a “back door” into India s $300bn retail industry. Under current law “ multi-brand retailers” that sell more than one - 30 - CS-08-029 brand of products are barred from India. Single-brand retailers such as Benetton and Nike are allowed 51 per cent foreign direct investment. In the next seven y ears, Bharti Wal-Mart plans to open 10 to 15 wholesale centres in smaller cities , starting late next year. A typical facility will sell groceries, stationery, c lothing and consumer durables. The companies did not disclose details of their i nvestment in the joint venture. Formal shops, or “organised retail”, comprise ju st 2-3 per cent of India s $300bn retail industry. The majority of shopping take s place in small momand-pop shops, roadside vendors and open air market. About 35-45 per cent of farm products never make it to market because of lack of cold storage and poor transport and roads.