REVIEW: DISCORDANT DEMOCRATS: ARUN MAIRA (Penguin Books India)
As I read through Arun Maira’s book, the month unfolded with a number of high-pitched disagreements around the world. In India, quotas and reservations were a hot topic, as was an apparent divergence between the Prime Minister and corporate chiefs on executive income and distribution of wealth. Self-appointed moral police disapproved the expressions of a student of art, while, elsewhere in the world, suicide bombers expressed disapproval of foreigners on their soil.
We are surely not the first to wonder why, after millennia of physiological evolution, societies around the world are still stuck in the same, predictable response: where disagreement (on an issue) translates into disapproval (of a person), more often than not leading to conflict that is frequently violent.
The need to accept differences and the use of democratic dialogue as a process to close the gap is the basis of Arun Maira’s Discordant Democrats. While the book is largely about democracy in India, Maira draws from events, personalities and initiatives around the world to make the case for democracy as the only reasonable mechanism to manage diversity in society, and dialogue as the only reasonable mechanism to sustain it.
This is embodied in a quotation that is commonly attributed to French philosopher Voltaire: “I disapprove of what you say, but I will defend to the death your right to say it.” In fact, Maira goes beyond free speech to the need for mass dialogue. While free speech typically stops at the “right to express different opinions”, dialogue is about the free “exchange” that can move people closer. Dialogue, unlike debate or argument, is not about sticking to one’s own point of view but about parties reaching a consensus through a process of mutual expression and understanding.
When comparisons are made between Communist China and democratic India, democracy is presented as the millstone around the neck of India’s development. India has a demographic diversity that is among the highest in the world, and a body politic that is among the most fragmented. It is the disagreements among the various segments, interest and pressure groups that some people often hold up as the biggest hurdle to India’s economic and social progress. On the other hand, the advocates of “democracy in action”; may hold up noisy debate as the true expression of desires of individuals and small, otherwise powerless, groups. And there is little common ground between these two groups.
But, as Maira writes in the preface: “This book is about democracy and about consensus: two ideas that cannot but be associated with India. Indeed, one must wonder whether India could be one country without democracy or without consensus.”
Maira takes a middle path, in differentiating between the “hardware” and the “software” of democracy. He describes the hardware as the mechanisms that we are all familiar with — the Constitution, devolved institutions and the framework of free and fair elections, whereas the software is dialogue and deliberations. The democratic hardware enables the freedom of divergent expression. But it is the democratic software that enables a convergence to consensus and the emergence of a functional rather than dysfunctional society.
This is an important distinction when we examine the relative success or failure of countries that are all apparently democratic in structure. Most elections may be free and fair, but are the results later really representative of the electorate’s wishes? From what we can see around us, the hardware of democracy is robust, but there needs to be greater emphasis on the software.
Maira devotes the latter part of the book to tools that he calls Weapons of Mass Dialogue. Using topical and real-life instances of the dialogue mechanism being applied, he takes the reader through the steps of creating a common aspiration, exploring and identifying the thought anchors of the parties in the dialogue, framing the situation and then arriving at a solution.
As a comparison, the example of a Native American tribe comes to mind. To resolve conflict between members, the tribe follows a structure that requires a member to silently listen to the other’s views and then express that person’s views back to him until he or she concurs that the listener has completely understood what has been said. Only then does the first listener get the opportunity to express his own views, while the first speaker only listens and then reiterates what he or she has heard.
This mechanism may appear lengthy in most modern debates, but when we are dealing with issues as complex as the evolution of our cities or the uplift of disadvantaged castes and socio-economic classes, do we really have any other option?
Our genetic response to crisis is hard-wired from our days in the wild: fight or flight. While the latter is clearly “escape”, the former is also an “exit” because it shows an inability to deal with a discord to a mutually satisfying result. We need to expand this to a trinity of responses that includes “unite” – an integrative process that can help cope with the complex and interrelated world we live in.
The tools may look contrived and slow to those championing the cause of “action” there are few alternatives to dialogue. But in a world where discordant democrats do not often listen to each other, Maira’s Weapons of Mass Dialogue are definitely worth a try. Here it is on Amazon.co.in.
We want action. And we want democracy. Sometimes, in despair, when that speedy action is difficult in democracy, he seemed willing to forsake democracy. But that is a cop-out. We have to find a way to have both – speedier action and more democracy. Once again, a very important “either-or” choice is raising its head. We must convert it into a ‘both-and’ solution. As Einstein said, we cannot solve the difficult problems that we face with the same thinking that led us into those problems. Rather, we must look into the theories-in-use that are causing the problem, and develop a new one. In this case, the problem with our theory-in-use of how people can work together to resolve problems that they are all part of. The call for an authority above them, “insulated from the intense pressure of democracy” – a dictator or expert that they would be willing to unquestioningly delegate upwards to – is giving up on the further evolution of humanity’s democratic enterprise.
[Here’s the book on Amazon.co.in.]
The New Middle Man
In recent weeks, Usha Tandon’s routine has changed slightly.
She has been walking an extra half kilometre to get her supply of fresh vegetables and fruits from a swank new retail outlet. Tandon, 50, is cook-cum-housekeeper to a busy professional couple in Delhi’s Saket locality, and it is part of her job to lay in the groceries. She has a tight schedule herself but Tandon doesn’t mind walking that extra stretch because she likes ‘the experience’ — an airconditioned store with attractively shelved wares and half a dozen uniformed assistants to attend on customers. But primarily, she goes there because fresh vegetables and fruits are 10-15 per cent cheaper there than at her usual street vendors.
“I no longer buy fruits and vegetables from the street, specially now when temperatures are scorching,” says Tandon. Even the veggies for her family come from this private outlet, although earlier she would patronise the stall set up by the Mother Dairy milk cooperative near her home.
It is a small but significant shift in buying patterns and offers a clue as to why the biggest names in corporate India, from Reliance Industries (RIL), the oil and petrochemicals behemoth, and the AV Birla group to the Mittals of telecom fame, Pantaloon Retail and RPG group to a host of smaller players have jumped into retailing of fresh vegetables and fruits along with other groceries. They have joined a clutch of slightly older firms like Mahindra Shubhlabh Services, Godrej Agrovet and R. Subramanian and associates who promote the standalone Subhiksha chain.
The food and grocery business offers a beguiling prospect, although estimates vary widely. The India Retail Report 2007, put together by leading Indian and foreign consultancies, estimates that the retail pie was worth Rs 1,200,000 crore in 2006, with food and groceries accounting for a whopping 63 per cent. But the share of organised retail in this sector was negligible.
According to Crisil Research, food and grocery
(F&G) items account for a significant 74 per cent of total
retail sales, which it places at Rs 12,80,000 crore (Rs 12.8
trillion) in 2006. However, F&G accounts for only 18 per
cent of the total organised retail market, as the penetration
of organised retail in the F&G vertical is a mere 1 per
What it means is that the “opportunity in agriculture is very, very big” as Rakesh Bharti Mittal, vice chairman of Bharti Enterprises, says. The company, which revolutionised telecom in the 1990s by expanding its reach to millions of customers, is hoping to do the same with its foray into agriculture, specifically vegetables and fruits. It has launched FieldFresh Foods in partnership with ELRo Holdings India, an investment company of the Rothschild family, and expects a turnover of $1 billion (Rs 4,100 crore) in five years.
Mittal says he will be investing Rs 10,000 crore ($ 2.5 billion) to cover 10 million sq. ft. of retail space by 2015. By then, he hopes to cover all cities with a population of one million and above. The underlying philosophy, the company says, is to link Indian farms to the world “by creating the country’s first global outsourcing opportunity in fresh produce”. Its 300-acre farm leased from the Punjab Agricultural University has been experimenting with exotic vegetables destined for the European market. Snow peas, cherry tomatoes, bell peppers and sugar snap peas are being tested out at the Ladowal farm close to Ludhiana, which is the lynch pin of its farming initiative.
The numbers get bigger with RIL. Officials have refused to discuss its retail plans with media, but company sources say it is setting aside Rs 50,000 crore to build its farm-to-fork linkage. Reliance has drawn up plans for a presence in 784 towns and 6,000 mandi (wholesale market) towns with 1,600 rural business hubs to service these. It has already rolled out 177 Reliance Fresh stores across major towns in 11 states. According to a company report, RIL is targeting a turnover of Rs 40,000 crore in the next few years.
All of a sudden, the farmer is in demand.
Retail chains want his produce — they also want his farm.
Companies from DCM to the Tatas to Triveni are investing big
to help the country’s notoriously inefficient and hamstrung
agriculture to scale up production, modernise farm practices
and persuade farmers to use the best seeds and improved irrigation
For most, one of the inspirations has been PepsiCo. The food subsidiary of the US soft drink company has been successful in transforming agriculture in a part of Punjab where Pepsi pioneered the concept of contract farming for bulk procurement of crops like potato, tomato, groundnut, chilli and paddy. In partnership with the Punjab Agriculture University and Punjab Agro Industries Corporation, it used location-specific R&D to boost yields of tomato and chilli by almost three times.
It is the same idea that is driving the latter-day corporate farm evangelists. Mittal says drip irrigation methods will be promoted to stop the wastage of water which he terms “an ecological nightmare”. Other good practices are part of the package that companies are offering farmers across the country: improved seeds, fertilisers and pesticides, technical support on multi-cropping, better irrigation methods, the works.
All of which would raise farm incomes by at least 30 per cent. Even better, farm employment would go up since horticulture is labour-intensive and would keep more people employed on the farm than other crops. Alongside, this would come an impressive network of infrastructure from pre-coolers and pack houses to cold stores and refrigerated trucks.
For Indian agriculture, this could be a Godsend as it struggles to move up the value chain. Horticulture growth rates in India have been dismal at 4 per cent for the last decade compared with a staggering 56 per cent globally. A 2 percent increase in growth of production in the last two years has brought total production to 184.8 million tonnes.
India is the second largest producer of fruits and vegetables (15 per cent and 11 percent respectively) but way behind China which accounts for 34 percent of world output.
Fortuitously for the farmers, retail interest
is happening at the right time when the interests of big business,
the farmer and the consumer are coinciding. And as it happened
with the Green Revolution, a public-private partnership is falling
into place. Since 2004, the agriculture ministry has been taking
more than a cursory interest in this sector and set up the national
horticulture mission to give the much needed thrust to the farm-to-fork
campaign. S. K. Pattanayak, joint secretary in the agriculture
ministry, says the basic effort is to help farmers equip them
to meet domestic and export demand more efficiently. A star
feature of this plan is the terminal market, a one-stop shop
that will offer state-of-the art facilities for grading, storing
and transport of perishables, besides banking.
The first of these is coming up in Chandigarh and Reliance is among the four companies that have been shortlisted by the Punjab agriculture department. Eight of these terminal markets are coming up in the country in an initiative that is being monitored by Yes Bank as the consultant to the project. For both farmers and the retail chains, these markets will be linked to a number of collection centres in key centres.
Why should the entry of big companies in F&G mean good news for the farmer, 75 per cent of whom are small and marginal cultivators with less than a hectare of land? The simple reason is that almost all of these companies are planning huge backend operations to create captive agricultural bases, either for their retail outlets or for supply. For starters, it means that farmers can sell directly to these retailers or aggregators such as Trikaya Agriculture and break free of the regulated mandis (see ‘Restrictive laws’). In this scheme of things, the farmer’s share in the retail price is as little as 12-15 per cent compared with 40 per cent for farmers in Thailand.
The World Bank believes that huge investments by the retail biggies in the supply chain infrastructure could usher in a service revolution that would shorten the distance that fresh produce travels to reach the consumer. In a supply chain analysis of 13 high value commodities that covered 1,400 farmers, 200 commission agents and 65 exporters across the country, the Bank found that high transport costs and multiple players in the linear supply chain were crippling horticulture. India is a large low-cost producer of fruits and vegetables but is unable to compete in the global market on account of what it terms the logistics tax on fresh farm produce. The inefficiencies in the system also mean that 25-30 per cent of the produce (valued at Rs 50,000-52,000 crore) is wasted, imposing additional burden on both the grower and the consumer.
Big retail’s plans to clean up the back-end may change all this. Trikaya Agriculture and Mahindra Shubhlabh are just waiting for organised agro-retail business to take off. According to the Central Potato Research Institute of India (CPRII), India produces 25 million tonnes of potatoes. For those who can link the supply chain from the farm to the shelf, a business worth Rs 2,500 crore is up for grabs. Mahindra Shubhlabh is upbeat about this development and is already testing different supply chain models to link agro-retail firms. It would either enable the transportation of farm products to a store or become what are known as “aggregators” of farm produce. This term is used when the retailer leases out a small section of a store to the aggregator, whose business is to collect produce from different farms and fill up empty shelves in the store.
The profit sharing margins on the particular space leased in the store would depend on the retailer. The aggregator could use a mix of warehouses, cold storage facilities and refrigerated trucks depending on the kind of product that is to be put on the shelf. He will also bear the loss in the case of perishable items when in transit. Tesco in Europe has 7 per cent of its $40 billion business being managed by ‘aggregators’ and ‘distributors’. “If this happens in India with agro-retail, there is a lot of money for us,” says Vikram Puri.
Mahindra Shubhlabh is already working in 100,000
acres of farmland, which includes contract farming. They have
also leased 55 acres from farmers in Punjab for the same purpose.
In the process of setting up the retail networks, these large corporations are changing the domestic agricultural landscape. For starters, they are introducing the Indian farmer to better seeds, new technology, supply chain management and food processing. These companies have already brought in technology that increases the shelf life of fruits and vegetables.
Primarily, there are three models being worked on by India Inc. First, a model farm like Bharti’s FieldFresh. Second, contract farming. Third, contact farming. In contract farming, the farmer is supplied seeds and other ingredients by the company. The contractor buys the entire farm produce at a pre-fixed price. However, in case there is a supply shortage and the price offered by the government is higher than the price contracted by the company, the farmer can sell it all to the government.
Contact farming is a more complicated. Here, a farmer takes land on lease from other farmers. He is generally paid Rs 15,000 per acre every year, while the marginal farmer is employed to work on his land for which he is paid a monthly salary. But Bharti says it is switching to contract farming because of the complexities of contact or collaborative farming.
Not surprisingly, Punjab is ground zero for both Bharti and Reliance’s food retail ventures. After all, Punjab is where the Green Revolution changed the face of Indian agriculture in the mid-1970s. Punjab is also the first state to set up the terminal market that will act as a major catalyst for farm growth.
In other parts of the country too, companies —like farmers — will be benefiting from the groundwork done by the government to promote precision farming in horticulture.
Companies from Mumbai are making a beeline
for Tamil Nadu’s Dharmapuri village, which has made a
signal success of its fruit and vegetable production, thanks
to government support. It has corporates with big retail plans
knocking on the doors. Officials from Reliance and the Aditya
Birla group have visited the village, looking to source vegetables
These retail chains are sourcing produce through three routes. One, from village markets or mandis. Second, from APMC yards. And, third, by linking directly with farmers. Food Bazaar has links with farmers growing potatoes and fruits. It has even gone on to link farmers in the dairy business with the help of a company called Dynamic Dairy in Maharashtra. It has also sourced produce from farmers growing exotic vegetables like red pepper, mushroom, etc.
In Ratnagiri, Maharashtra, farmers have formed
cooperatives and regularly supply mangoes to retail chains.
“We sold 35,000 tonnes of mangoes from Ratnagiri last
year. The farmers managed to get 90 per cent of the original
cost,” says Arvind Chaudhary, CEO Pantaloon Retail’s
If they had gone to a mandi they would have realised only 70 per cent of the cost. This year, Pantaloon’s Food Bazaar is planning to buy 100,000 tonnes of mangoes. The supply chain is managed such that mangoes are transported to the store a week before they become ripe. Cold chain is used only in the case of potatoes, where 5,000 tonnes are stocked in UP. Pantaloons food business is growing at 25 per cent in the entire Big Bazaar chain, which also sells FMCG products.
However, there are certain issues that agro-retail chains will have to address before they can make the farmer smile. “Hurdles such as bad infrastructure, high cost logistics management, the middleman and the limiting APMC Act will have to be crossed if retail has to assist the farmer,” says Choudhary. Since the existing supply chain allows them to connect with only those farms that are nearest to the cities, those living in the hinterland still have no access to markets. Importantly, the best of these stores shy away from commenting on the investments.
Godrej Agrovet on the other hand has tactfully used its marketing experience in rural areas by opening advice centres called ‘Aadhar’. These centres will enable the farmer to increase his production from 40 tonnes per acre to 100 tonnes per acre. This year, the company will cover 2,500 villages and farms in these villages will be directly linked to its retail business, Nature’s Basket, in Mumbai. “The proposition here is to remove the intermediary who is adding more cost than value,” says C.K. Vaidya, managing director of Godrej Agrovet. Godrej too does not use the cold chain. A modern supply chain, including refrigerated trucks and warehouses, would come at a high cost and the burden is borne by the consumer. “The consumer should be prepared to pay this cost,” Vaidya says.
This development poses two challenges for retail firms. First, they would have to squeeze the supply chain in order to offer the best prices. Here, the farmer will have to bear the brunt and could end up sacrificing more than he can in terms of price realisation. Second, the consumer is left with no choice but to pay a higher cost for getting fresh farm products. This is an issue that retail stores will grapple with and only certain items such as oranges and potatoes will be stored in the cold chain. Importantly, they will stick to proximity. Access to farms within a 4-5 hour reach will determine pricing and the product mix in the agro-retail business.
This apart, there has been a call to set up an exchange market for agricultural produce. This free market principle, CEOs feel, will liberate the farmer in terms of actual price realisation and keep him out of debt for the coming season. The National Spot Exchange Limited, an exchange which is dedicated for agri-produce, is supposed to create a benchmark even for the small farmer who can sell only one quintal. “The price in the exchange will be determined by many buyers around the country and not the local trader,” says Anjani Sinha, managing director and CEO of NSEL. The NSEL is in the process of setting up 117 warehouses and cold chains of 700,000 metric tonnes capacity each to make the exchange operational.
Though farmers are upbeat about selling directly, they are still wary. “They (corporate retail chains) wanted to ink a deal with us and were even talking about a partnership model. But we need a fixed price over a certain period,” they say.
Right now, companies are mostly dealing with
farmers on the periphery of cities but analysts say they would
ultimately have to invest in cold chains and move into the interiors.
Whether companies — except for those with deep pockets
like Reliance — will have the courage to do that is in
question. According to the confederation of Indian industry,
if India has to double fruits and vegetables production to 300
million tones by 2012, it would require pumping in close to
Rs 20,000 crore. But analysts warn that such investment may
not pay dividend since it doubles the cost of transportation.
So, how will retail chains be able to pay the farmer a higher price, subsidise the cold chain and yet give it cheap to consumers in the long run? Most vegetables and several fruits don’t need cold chains, says S. Sivakumar, ITC’s chief executive, agri businesses. “Vegetables are grown in the periphery of towns and they can move in ambient chains. What’s required is better coordination along the chain to minimise wastage.”
But, for the moment, retail chains continue to side-step the key question: Will farmers benefit? “It is competition that will bring down the margins but the savings will be pocketed by the retailers themselves. But the savings could very well be pocketed by the retailers themselves,” concedes Siva Kumar.“It’s a different universe out there,” says he. “Companies need to empathise with the farmer and build relationships on a win-win wicket. Otherwise, it just won’t work.”