SOIL Report 2008 - ACCESS Development Services

The Contribution of Corporate Supply Chains to the Livelihoods of the Poorthe various costs to existing livelihoods in the supply chain being modernised, both direct and indirect.While no measurement is attempted in this report, we can keep in mind that the ‘quality’ of a livelihoodmust have three aspects: (i) size of income flow, (ii) the regularity and certainty of that income flow,and (iii) wider quality-of-life parameters, with respect to health and safety of a job, extent of freedomspermitted, and a job’s potential to nurture long-term career learning and expectations.Table 7. 1: The livelihood benefits and costs of corporate retail supply chains1. Frontendretail2 . M i ds u p p l ychain1. Direct benefits 2. Indirect benefits 3. Costs1.1.i New jobs for shopassistants, store managers,packagers, shelvers, warehouseworkers1.1.ii Increased value (budgetsaving) and convenience(time saving) for shoppers2.1.i New jobs for village-,mandi- and region-levelsourcing agents in sorting,quality control, cold storage,packing, transporting2.1.ii New jobs for input andadvice suppliers to linkedproducers2.1.iii Improved and moretransparent supply of goodsfor existing wholesalers1.2.i New jobs for securityguards, cleaners, constructionworkers1.2.ii Expanded marketfor complementary businesse.g. restaurants, publictransport1.3.i Job loss in unorganisedretail1.3.ii Job loss and closureof ‘boutiques’ for apparel,home, artisan goods; threatto small-scale innovationthus fostered2.3.i Job loss at mandi(auctioneers, commissionagents)2.3.ii Job loss among traditionalwholesalers, forwardingagents, transportersetc who fail to submit andadapt2.3.iii Reduced quality ofmid-supply chain livelihoods,vis income flows and freedoms(as they shift fromsmall family businesses tolow-salaried jobs)Quality’ ofa livelihoodmust have threeaspects: (i)size of incomeflow, (ii) theregularity andcertainty ofthat incomeflow, and(iii) widerquality-of-lifeparameters,with respectto health andsafety of ajob, extentof freedomspermitted, anda job’s potentialto nurturelong-term careerlearning andexpectations.3. Production,manufacture3.1.i Improved farm jobswith new and higher valuecrops for those who makethe grade3.1.ii New jobs/ bigger marketsin food processing3.1.iii Improved, new jobs/bigger markets in low-techartisanal fabric and homeproducts3.1.iv New jobs/ biggermarkets in manufacture ofapparel, shoes, home, FMCG,cosmetics….3.2.i Higher purchasingpower of poor in rural andTier II, III urban areas,for all products offeredby the full range of activeretailers3.2.ii More reliable customersfor bankers againstsecure purchase orders3.3.i Reduced quality andloss of farm jobs for thosewho don’t meet stringentquality standards3.3.ii Reduced quality andloss of manufacturing jobsfor those who don’t meetstringent quality standards3.3.iii Reduced quality andloss of jobs for producerswhose scale is too small tosupport linkage to re-gearedsupply chainsFrom the experience of retailers reaching for the mass market (Pantaloons Retail, Reliance Fresh, evenFabindia) there is clearly immense untapped purchasing power in urban India, not simply in the metrosbut in Tier II and III cities too. Re-gearing towards organised retail is still far more about market expansionfor products (increasing the cake’s size) than it is about displacing one retail format with another155