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E C O N O M I C Snumber of supermarket chains… evidencefrom across the EU suggestslarge supermarkets are abusing theirbuying power to force down pricespaid to suppliers (based both withinand outside the EU) to unsustainablelevels and impose unfair conditionsupon them.’ In the United States, marketingmargins for major food itemsincreased rapidly in the 1990s, a periodwhen there was significant concentrationof food retail.The idea that cold storage andother facilities can only be developedby large private corporates involvedin retail food distribution is foolish:proactive public intervention can (andhas, in several countries) ensured bettercold storage and other facilitiesthrough various incentives and promotionof more farmers’ cooperatives.The argument is also made that corporateretail will encourage more corporateproduction, which in turn supposedlyinvolves more efficient andless ‘wasteful’ use of the production.But calculations of efficiency basedonly on marketed output really missthe mark, because they do not includethe varied uses of by-products byfarmers. Biomass is used extensivelyand very scrupulously by most smallcultivators, but industrial-style farmingtends to negate it and does noteven measure it. Biodiversity, use ofbiomass and interdependence that createresilient and adaptive farming systemsare all threatened by the shift tomore corporate control of agriculture.Food production andconsumptionThere is another crucial implicationthat is all too often ignored in discussionsof corporate retail. Corporateinvolvement in the process of fooddistribution causes changes in eatinghabits and farming patterns, whichcreate not just unsustainable forms ofproduction that are ecologically devastating,but also unhealthy consumptionchoices. In the developed world,this has been effectively documentedby books like Eric Schlosser’s FastFood Nation and Michael Pollan’sThe Omnivore’s Dilemma.In the Baltic countries, this hasA Walmart store in China. Many of the claimed benefits of bringing multinationalretail chains into developing countries are suspect.led to a striking breakdown of any reallink between local production and thesupply of food. The global supplychain has become the source of mostfood and the European market hasbecome the destination of food production:all mediated by large chainsthat deal in buying from farmers (oftenin contract farming arrangementsthat specify inputs and crops beforehand)and in food distribution downto retail outlets. Anecdotal evidencesuggests that farmers have not gainedfrom this even in aperiod of risingfood prices, as theyare powerless relativeto the largetraders who nowcontrol the market.And consumerscomplain about therising prices offood, which thesupposedly more‘efficient’ supermarketshave notprevented at all.As affluentWestern marketsreach saturation point, global food anddrink firms have been seeking entryinto developing-country markets, oftentargeting poor families and changingfood consumption habits. Suchhighly processed food and drink isalso a major cause of increased incidenceof lifestyle diseases such asobesity, diabetes, heart disease andalcoholism, all of which have been risingrapidly in the developing world.The recent experience of South Africais especially telling: around onefourthof schoolchildren are nowobese or overweight, as are 60% ofwomen and 31% of men. Diabetesrates are soaring. Yet, nearly 20% ofchildren aged one to nine have stuntedgrowth, having suffered the kind oflong-term malnutrition that leaves irreversibledamage. And it has beenfound that obesity and malnutritionoften occur in the same household.Around 44 million people in India are involved in retail trade,mostly in small shops or self-employed.These considerations – which areat least being noticed in the fierce debatenow raging in India around thisissue – surely deserve greater publicattention across the world. ÿuJayati Ghosh is Professor of Economics atJawaharlal Nehru University in New Delhi. Thisarticle is reproduced from the Triple Crisis blog(triplecrisis.com/multinational-retail-firms-in-india,9 December 2011).THIRD WORLD RESURGENCE No 255/2569