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For U.S. President Barack Obama there could be nothingmore cheering. The ‘underachiever’ now goes to the Presidential polls with a lot of confidence — India’s decision to open up FDI in multi- brand retail comes as a shot in the arm for the beleaguered American economy and will obviously boost his poll prospects. Mr. Obama certainly knows what is good for the U.S. economy; Prime Minister Manmohan Singh also knows what is in America’ sinterest. Mr. Obama, for instance, wanted to stop outsourcing to protect U.S. jobs. No amount of persuasion from India changed his mind. Similarly, knowing how important FDI in retail is for him, he had pitched for a newwave of economic reforms. It was surprising to see Mr. Obama telling India what is good for us. Aided and abetted by TIME Magazine and credit rating agencies like Standard & Poor’s, Fitch and Moody’s, India finally buckled under global pressure. What is little known is that India was also under a G-20obligation to remove all hurdles to the growth of multi-brand retail. But is FDI in retail really goodfor India? Will it improve rural infrastructure, reduce wastage of agricultural produce, and enable farmers to get a better price for theircrops? Agriculture: The Prime Minister has repeatedly projected FDI in retails a boon for agriculture.Unfortunately, this is not true. Even in the U.S., big retail has not helped farmers— it is federal support that makes agriculture profitable. In its last Farm Bill in 2008, the U.S. made a provision of$307 billion for agriculture for the next five years. Where is the justification for such massive support if big retail was providing farmers better prices? And let us not forget, despite these subsidies studies have shown that one farmer in Europe quits agriculture every minute. The second argument is that big retail will squeeze out middleman and therefore provide a better price to farmers. This is again not borne by facts. In the U.S., some studies have shown that the net income of farmers has come down from 70 per cent in the early 20th century to less than four percent in 2005. This is because big retail actually brings in a new battery of middlemen — quality controller, standardiser, certification agency, processor, packaging consultants etc. It is these middlemen who walk away with the profits and thefarmer is left to survive on the subsidy dole. Monopolistic power enables these companies to go in for predatory pricing. Empirical studies have shown that consumer prices in supermarkets in Latin America, Africa and Asia haveremained higher than the open market by 20 to 30 per cent. And finally, the argument thatmulti-brand retail will provideadequate scientific storage and thereby save millions oftenest of food grains from rotting. I don’t know where inthe world big retail has provided backend grain storage facilities? FDI is already allowed in storage, and noninvestment has come in. Let it also be known that even the 30-per-cent local sourcing clause forsingle-brand retail has already been challenged and quietly put in cold storage bythe Ministry of Commerce. Employment: The Indian retail market is estimated to be around $400billion with more than 12 million retailers employing 40 million people. Ironically, Wal-Mart’s turnover is also around$420 billion, but it employs only 2.1 million people. If Wal-Mart can achieve the same turnover with hardly fraction of the workforce employed by the Indian retail sector, how do we expect bigretail to create jobs? It is theIndian retail sector which is amuch bigger employer, and big retail will only destroy millions of livelihoods. State Government’s prerogative: Very cleverly, the Central government has allowed the State governments the final say in allowing FDI in retail. This may to some extent pacify those State governments opposed to big retail. However, the industry is upbeat and knows well that as per international trade norms, member countries have to provide national treatment. Being a signatory to Bilateral Investment promotion and Protection Agreements (BIPAs), India hasto provide national treatmentto the investors. Agreementswith more than 70 countries have already been signed. State governments will, therefore, have to open up for big retail. Industries will use the legal option to force the States to comply. And more importantly, let us look at how the virus of big retail spreads, even if the promise is to keep it confinedto major cities. Recently, a New York Times expose showed how Wal-Mart had captured nearly 50 per cent of Mexico’s retail market in 10 years. What is important here is that as per the NYT disclosure “the Mexican subsidiary of Wal-Mart, which opened 431 stores in 2011,had paid bribes and an internal enquiry into the matter has been suppressed at corporate headquarters inArkansas”. In India, we are aware that Wal-Mart alone had spent Rs.52 crore in Two years to lobby, as per a disclosure Statement made in the U.S. It has certainly paid off,