Tuesday, November 29, 2011

Hate for the middleman


There's a debate going on about whether to allow foreign retail chains to operate in India. There are libertarian voices who, by principle, are aghast at the thought of imposing needless restrictions. Urban Indians view retail FDI favorably mostly because they like the idea of having more joints to shop in. Yet the majority of the folks I have come across seem to embrace a protectionist view that invokes dire consequences for everybody if these retail chains come in. I have been more intrigued by how people have been taking sides of some perceived victims while inexplicably abandoning others.

People talk about the three separate characters that have a role to play in the FDI drama; the farmer, the middleman and the retailer. As expected, folks view the farmer most sympathetically. He's the innocent, hard-working soul barely making ends meet. Of course, for this argument, nobody is thinking of the rich areca growers that populate my village or the spoilt coffee planters in my neighbouring town because that would completely spoil the narrative. The retailer too has earned his share of the pity. FDI will take away his livelihood and that would be sad. The stereotype here is the neighbourhood kirana store guy your mom loves to haggle with, who despite his thrifty ways is invested in the community for the long term. The third player, the middleman, for some strange reason gets no backers at all. He is always caricaturized as the scheming opportunist who needlessly drives up costs of your provisions and screws the farmer all at once. People are definitely not thinking about the mandi owner in Tarikere who is taking enormous risks in keeping his unpredictable, erratic income flowing in, while vitally providing a conduit for the farmers' produce to make it to the markets. Despite doing exactly what the retailer does - buying at a cost and selling with a margin - nobody spares a thought for how the Walmarts and Tescos will definitely drive him out of work. There's something about our innate sense of ethics that makes us hate the speculator who makes his money without putting a regular amount of work every day.
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