What kind of "markets" are we fighting for?

Calls to “cut out middlemen” or “connect farmers directly to consumers” often come up in discussions about how to build local food systems or support small farmers. But such notions can be misleading for food sovereignty struggles. Small farmers and peasants represent only one node within the complex food web. Globally more than 80% of smallholders operate in local or territorial markets, which are the most important markets for providing food supplies to both rural and urban communities. Territorial markets refer to markets that are situated in and identified with specific geographic areas that can encompass different scales, from the village level to district, national or regional. These local and territorial markets involve other small-scale actors who hold important roles, such as traders, transporters, and processors, and in most countries these occupations are a source of living for millions of people.

Women occupy a central role in these markets as buyers, sellers, and producers who supply goods to the market, helping to provide them with an important source of income for their families and bolstering their position in society. This has been the case for centuries. In the book “Southeast Asia in Trade Time 1450-1680” there’s a story about a commander of a Portuguese fleet who stopped in the Moluccas Island and noticed that women were the primary sellers and buyers, even it was the women who dictated the bargaining culture.

Although these local and territorial markets are extremely diverse they do have certain common characteristics. The distance among the small producers and consumers involved in these markets is relatively short, as the agriculture products are being produced, processed, traded and consumed within a given area. The markets contribute to the local economies, and the benefits are retained and returned to those involved almost immediately. Also, small producers and other actors involved have more control in determining the prices of their produce and are more able to build trust and social connection with the rest of the community.

There is an intensifying fight for space between the local and territorial markets and the global markets, represented by supermarket and convenience store chains, as well as the rapidly growing e-commerce companies. This is leading to more persecution and repression of small farmers and open-air markets, which has been made worse by pandemic regulations. Communities and civil society organisations across the region and beyond have been calling for recognition and support of these local markets and all the small holders involved in these markets. They are demanding that such local markets stop being treated as and called “informal”, which makes it often a target of laws and authorities. Local and territorial markets must instead be treated as an integral part of the real economy. Protecting and strengthening these local markets are crucial aspects of food sovereignty and of strengthening local economies within the complex food web.

- Nyeleni newsletter “Smallholders’ market” https://nyeleni.org/spip.php?rubrique174

- Pamhidzai Bamu and Teresa Marchiori, “The recognition and protection of informal traders in COVID-19 laws: Lessons from Africa”, WIEGO, https://www.wiego.org/sites/default/files/resources/file/WIEGO_COVID-19%20Laws_Lessons_Nov2020_EN_Web%20FINAL.pdf

Top photo: Wet market in Singapore. WikiCommons

BioThai (Biodiversity-Sustainable Agriculture-Food Sovereignty Action Thailand) made the call in response to the state order to shut 72 wet markets in 33 provinces that had been visited by people infected with Covid-19. Thirty-three markets have since reopened although fear of the virus still lingers, turning away shoppers.

At a recent seminar in Bangkok titled, "Conserving the Wet Markets, Protecting Lives," BioThai director Withoon Lianchamroom said the new wave of Covid-19 transmission had hit people who live from hand to mouth, including those connected to the wet market trade.

The order to close wet markets to limit the spread of the virus hurt people's livelihoods. The markets involve the whole supply chain, from vendors, consumers, and farmers whose produce is sold there. The closure policy was inconsistent and random, and had worsened the grievances of those at the bottom of the economy.

The government should realise wet markets are vital for the country's food security. It should also help retailers and "grocery shops on wheels"-- the so-called rot phumphuang that cater to people outside their homes.

There must be no double standard in enforcing the policy, Mr Withoon said, noting that while some wet markets seen as posing a high risk of virus transmission were closed for several days to allow for cleaning, modern, air-conditioned stores stayed open. Mr Withoon said regulations must be issued to lift the standard of hygiene across all types of markets. That way, the markets will be clean and safe, which would keep them from having to be closed.

Vendors at markets closed should receive compensation allocated from the stimulus budget. However, they should also comply with the anti-virus transmission guidelines recommended by the Public Health Ministry. The markets should, for example, designate clear entry and exit points, set up body temperature screening spots, install washing basins for people to regularly clean their hands, make wearing of face masks and social distancing compulsory, and launch a major clean-up of the market every week.

Authorities should also explain any decision to close a market. "Wet markets form a vital economic space and food security for a lot of people who are struggling during the pandemic crisis," he said.

Without a market to go to, many people are cut off from their regular food supplies. The wet markets offer diverse produce, raw ingredients as well as other everyday items, some of which are up to four times cheaper than those sold at convenience stores. Mr Withoon added that respiratory system experts confirmed that wet markets are less prone to viral transmission because trade is conducted in open and ventilated areas. "The decision to close the markets must not be made by an individual authority but be based on credible information," he said. "Taking away people's ability to make an income, even for a few days, only exacerbates inequality."

Meanwhile, Niphon Wichai, owner of a food outlet in Samut Prakan, said sales have plummeted after a wet market where he sourced fresh ingredients for cooking was temporarily closed and put on Covid-19 alert. Mr Niphon said the shortage of ingredients forced him to cut back menus offered to customers.

Although the market has since resumed business, most shoppers have not returned, apparently still unnerved by the infections. "The market has gone quiet now. My income has dwindled," he said.

The Joint Action Committee Against Foreign Retail and E-commerce (JACAFRE) was formed in 2018 to resist the entry of foreign corporations like Walmart and Amazon into India’s e-commerce market. Now, some Indian mega-corporations, like Reliance, are going down a similar path of exploitation if not extermination of small traders, partnering with global tech corporations like Facebook and Google. We stand equally in opposition to their ill-intentioned efforts.

Three new farm laws have been passed by the Parliament of India in September 2020. They centre on enabling and facilitating unregulated corporatisation of agriculture value chains, and thus of livelihoods dependent on agriculture. In this process, farmers as well as small traders of agricultural produce become subservient to the interests of a few agri and e-commerce giants. It is not just those traders who directly participate in Agricultural Produce Market Committee (APMC) mandis which get adversely impacted. Removal of possibilities to cap stock limits in the Essential Commodities Act, for instance, seem aimed at allowing a few giant corporations to dominate the entire procurement and trading chain for agri produce at the expense of small and medium traders.

The Government of India, and many state governments, seem intent on pursuing a new economic model where a few giant corporations, through digital or e-commerce platforms, closely control all ‘small economic actors’ in any value chain – be it primary producers, like farmers, or traders, SMSEs (small and medium scale enterprises), and small service providers (like taxi-drivers on Uber). All these ‘small economic actors’ are to be driven into a position of subsistence level existence if not complete elimination from their economic roles. Many traders have had to shut shop because they could not stand the onslaught of giant e-commerce corporations; others have seen greatly diminished revenues.

Employing data pertaining to the dependent ‘small economic actors’, these giant digital commerce corporations begin to exercise a 360 degree control over them. This is achieved through managing their physical as well as informational inputs, operating ancillary services like warehousing, logistics and payments, and controlling the all-important supply of credit, through minute access to all financial, trade and production data. Such new models of 360 degree panoptic, digitally-enabled, control by a few corporations over all small and dependent economic actors – be it traders, farmers, MSMEs or small service providers – is unsustainable and must be urgently checked. The farmers’ agitation needs to be seen in this larger perspective. If the new farm laws are closely examined, it will be evident that unregulated digitalisation is a very important aspect of them.

Taking forward the thinking and process that earlier central and state governments have also been pursuing, the present government unfortunately has formalised them into new provisions and laws regarding e-commerce and agriculture markets.

The government should urgently consult all stakeholders – traders, farmers, MSMEs, and others – towards a holistic new economic model where all economic actors, small and big, are assured their due and appropriately valued role. These small economic actors cannot be allowed to be reduced to being helpless agents of a few corporations, controlled closely through data and digital means. We need a completely new thinking in this regard.

Governments must step in to mitigate the ill-effects of wholesale corporatisation of erstwhile independent economic actions and actors, like farmers and traders. They need to provide (1) supporting institutions, like APMCs, and government supported e-commerce platforms like eNAM and ‘Open Network for Digital Commerce’; (2) protective regulations like banning e-commerce platforms from trading on themselves, and caps on hoarding agri produce; and, (3) direct interventions in pricing and value share mechanisms, like curtailing predatory pricing and forced discounts on e-commerce platforms, providing Minimum Support Price (MSP) for farm produce, and limiting the cut taken by transport platform companies (Uber, Ola etc.).

All such governmental interventions are essential to keep our economic system fair to all actors against the onslaught of super-powerful digitally enabled mega-corporations. Government is already doing many of these things, but they should all be made consistent and brought under one holistic economic model.

We appeal to the government that it should urgently address the issues raised by those farmers asking for the three laws to be repealed, by at least holding the new farm laws in abeyance and giving them a full re-consideration. Specifically from a traders’ point of view, the role of small and medium traders all along the agri produce value chain has to be strengthened and protected against its unmitigated corporatisation. The government must inter alia strengthen APMCs and remove the tax that is levied on trade undertaken in APMCs. There is no doubt that with passage of time there has been considerable distortion in the way APMC mandis work, but the need of the hour is to improve their working rather than destabilize them.

The government should indeed utilise this opportunity to re-visit the entire economic model where a few digitally-powered mega corporations are to have complete control over every economic sphere and sector. But the government seems to be withdrawing from its role of active economic regulation, protection and promotion. All stakeholders need to sit together to explore alternative economic models where every actor in economic value chains has sufficient control and agency over its specific sphere of contribution, and economic exchanges and value shares are fair and just to all.

We offer ourselves to contribute to any such constructive exercise, which should be initiated as soon as possible. Such an exercise is what will really contribute to a Bharat which is Atmanirbhar and Mahaan.

Sincerely,

Joint Action Committee Against Foreign Retail and E-commerce

Bhartiya Udyog Vyapar Mandal

Federation of All India Vyapar Mandal

Federation of All India Distributors Association

Chamber of Associations of Maharashtra Industry and Trade

Forum for Trade Justice

The farmers allege that the three farm laws would benefit the big retail corporates- national and international- like Amazon, Flipkart, Reliance Retail and JioMart. To facilitate the expansion of organised retail and further consolidate its monopoly over the food market, it is essential to have unregulated wholesale markets (mandies) for agricultural produce with zero liability for taxes or levies or rules; no price guarantee for farmers produce; a license to horde agri-commodities to ensure unrestricted supplies; and a national law to facilitate contract farming. Indian farmers firmly believe that the three farm laws will ensure what the corporate retailers wanted so that they can make huge profits, like they did during the Covid-19 lockdown.

It is not just farmers who are concerned about their future. The laws also have huge impacts for hawkers since their survival depends on government run mandies where they procure their daily supplies for hawking as well as on subsidized food grains from the government food security programme. The unfettered entry of corporates into agri-trading would lead to a loss of livelihood for millions of hawkers with the weakening/departure of the APMC mandies and arrival of private mandies, as mandated by the new laws.

The three farm laws came into force on June 5^th, 2020 and within a few months the impacts were quite visible. In Madhya Pradesh, out of 259 APMC mandies, 47 reported zero business in October and around 143 reported a massive drop in business of up to 50% - 60% between June–November 2020, while 298 sub mandies (which run seasonally) are on the verge of closure due to zero business in the last six months.² The hawkers fear that with the emergence of private mandies, the corporates will ensure complete domination of the entire procurement and trading chains for agricultural produce, thus drastically impacting small businesses, traders and hawkers.

Shaktiman Ghosh, General Secretary of the National Hawkers Federation, told GRAIN, in a phone interview while he was at the Singhu border, the hotpot of farmers’ protests in Delhi, that “with private mandies, the corporates will have absolute monopoly over local trade of agri-produce, including vegetables and fruits, and hawkers would be forced to buy at exploitative prices from corporates or their agents, who will dictate the price which hawkers may not afford. The hawkers will either become slavish to the interests of corporate giants or would be forced to quit hawking.” He also said that, “the farm laws legalise hoarding of agri-produce which will not only inflate the prices but make it unremunerative for hawkers to make profit since the hawkers survive on very small margins. The three farm laws are a curse for hawkers, small informal retail outlets and neighborhood shops in India.”

With the weakening/closure of the agriculture mandies (APMC), India’s food security programme is under threat because the government of India or state governments procure food grains from APMC through the Food Corporation of India (FCI) and then supply it to urban and rural centres of distribution or ration shops. As seen in Madhya Pradesh, the APMC across India are experiencing a drastic fall in crop arrivals and dwindling revenue collection since the implementation of agricultural reforms triggered by the three farm laws.³ If the APMC collapses, the government procurement for the public distribution system will be drastically affected. Shaktiman is quite concerned that if the PDS system collapses it will directly impact 70% of all hawkers out of a total population of 10 million across the country who are directly dependent on the PDS system for their food.

While farmers, hawkers and many others are struggling for survival against the latest agricultural reforms, the corporations who control organised retail are booming like never before. Between October 2019 and January 2021, the number of Reliance Retail outlets in India increased from around11,000 in 6700 cities to 12,201 outlets in over 7000 cities, an increase of 1300 outlets in just 16 months or around 2-3 outlets everyday.⁴ Reliance's online grocery store, JioMart, was launched in 200 cities in May 2020, and since then has been growing exponentially. From July to December 2020, JioMart customers grew 25% and in just six months it’s already servicing half a million customers..⁵ It is not surprising that despite the wide hue and cry against the three farm laws by farmers and others, the government of India is not ready to repeal the laws. Rather, all kinds of draconian measures are being taken to delegitimise the farmers’ protests or to make life quite difficult for those protesting at the Delhi borders.

A delivery driver who had worked for Alibaba has set himself on fire in protest over unpaid wages in January 2021, the latest incident to highlight allegations of mistreatment of workers in China’s booming takeaway sector. While another driver had collapsed and died while delivering food the previous month.

These incidents have brought attention to how delivery apps put riders at risk, as an investigation by the Chinese magazine ‘People’ pointed the finger at the algorithms behind delivery apps. By setting tight delivery times, levying fines for delays and even suggesting routes in violation of traffic rules, the apps encourage couriers to speed dangerously. In practice, the platforms exchange courier safety for time.

Singapore’s street food is a vital part of the country’s cultural heritage and identity. As Covid-19 hits hard, hawkers face a stark choice. A new investigation looks at how the pandemic is changing Singapore’s food hawker culture. Aging vendors are grappling with new ways of working, while younger ones struggle amid Singapore’s recession.

E-commerce companies selling essential items experienced a huge upsurge in demand during the Covid-19 lockdown in India, considered one of the biggest markets of the future. Facebook and Reliance's plans to dominate India’s rapidly growing e-grocery market, which is expected to touch US$18 billion by 2024, will come to nought if the three new farm laws are not in place, as they provide the legal basis for the entry of large corporates into the highly fragmented and diverse Indian food production, processing and distribution markets. The laws create a national framework for contract farming in agriculture, deregulate pricing, purchase and storage of many basic food products and facilitate online sales of agricultural produce.

Instacart, a US based company that operates a grocery delivery and pick-up service, plans to lay off nearly 2,000 workers in March, including the 10 workers who voted to form the company's first union in February 2020, according to a statement from the United Food and Commercial Workers International Union (UFCW).

UFCW, which represents 1.3 million workers in grocery, meatpacking, and other frontline industries, condemned Instacart for firing these grocery workers who have been vital to protecting food access for people in the US during the pandemic.