Kinnera garu, yes the hidden costs are not understood. Experience shows that mega-chains do not pay farmers enough. In US, farmers are dependent on government subsidies. People expect direct buying from farmer would reduce costs by elimination of middlemen. But, normally, they do not factor the costs of procurement (HR, transport, etc) of a single buyer. A big corporate will usually have big overheads, which would replace and surplus the current costs of market intermediaries. these costs would not be limited to one particular chain of procurement, say rice in one area. It would include costs of all procurement chains across the globe. And, then, ‘bad’ business decisions. For example, big corporate decides buy huge stocks of ‘x’ product, and the market for such ‘tanks’, they would end up with losses, sometimes notional and sometimes real. these losses would again be spread across, and would not be limited to that particular product.

Expectation that big corporates would pass on the ‘intermediary’ costs of the farmer is more a wish, than a fact. They would rather ‘store-up’ the surpluses for bad times, than pass it onto the farmers. In fact, big retailers, in recent years, have failed to control quality of agri-products, and also could not prevent pilferage, corruption, product dis-uniformity and price standards.

FDI in retail would also take out ‘liquid’ currency out of India, and would become a route of ‘extra’ economy, ably facilitate by the government. It would also lead to spiral of consumerism, and result in increase in packaging waste (mountains and mountains). These retail spaces would incude ‘shopping’ addiction and wastage of precious environmental resources.