Organic Consumers Association

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Giant Walmart vs. the Small Farmer

For related articles and more information, please visit OCA's Politics and Democracy page, Fair Trade & Social Justice page and our Breaking The Chains page.

India is a land of small farmers. According to the United Nations, the smaller the farm, the higher the productivity.

Small farms grow biodiversity. They are falsely described as unproductive because productivity in agriculture has been manipulated to exclude diversity and exclude costs of high chemical and capital inputs in chemical industrial agriculture. When biodiversity is taken into account, small farms produce more food and higher incomes.

In the heated debate on FDI in retail, those promoting it repeatedly claim that the entry of corporations like Walmart will benefit the Indian farmer. Reference is made to getting rid of the middleman.

Any trader who mediates in the distribution of goods between producers and consumers is a middleman. Walmart is neither a producer nor a consumer. Therefore, it is also a middleman; it is a giant middleman with global muscle. That is how it has become the world's biggest retailer, carrying out business of nearly $480 billion. So the issue is not getting rid of the middleman but replacing the small arthi with a giant one. The Walton Family is the global arthi located in the US, not in the local community. And this new kind of arthi combines the functions of all small traders everywhere from wholesale to retail. Instead of millions of small traders taking a two per cent commission at different levels, Walmart gets all profits. If three small traders mediate at two per cent between the producer and consumer, the difference between the farm price and consumer price is just six per cent. When Walmart enters the picture, the difference jumps with the farmer getting only two per cent of the consumer price and Walmart and its supply chain harvesting the 98 per cent. So the issue is not the number of middlemen but their size and their share of profits. It was to avoid this concentration of power over the agricultural produce market that India created the Agricultural Produce Marketing Committee (APMC) Act.

Our mandis are governed by cooperatives, which include farmers. No trader can buy more than a certain amount. This prevents monopolies. It creates a decentralised, democratic distribution system from wholesale to retail.

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