Identifier
Created
Classification
Origin
07KOLKATA31
2007-01-29 12:22:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Consulate Kolkata
Cable title:  

DCM TALKS AGRICULTURE IN WEST BENGAL

Tags:  ECON ETRD EAGR ECIN EINV ELAB ENRG IN 
pdf how-to read a cable
VZCZCXRO1180
PP RUEHCI
DE RUEHC #0031 0291204
ZNR UUUUU ZZH
P 291222Z JAN 07
FM AMCONSUL KOLKATA
TO RUEHC/SECSTATE WASHDC
INFO RUEHNE/AMEMBASSY NEW DELHI
RUEHBI/AMCONSUL MUMBAI
RUEHCG/AMCONSUL CHENNAI
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHKA/AMEMBASSY DHAKA
RUEHLM/AMEMBASSY COLOMBO
RUEHKT/AMEMBASSY KATHMANDU
RUEHCI/AMCONSUL KOLKATA
UNCLAS SECTION 01 OF 02 KOLKATA 000031 

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD EAGR ECIN EINV ELAB ENRG IN
SUBJECT: DCM TALKS AGRICULTURE IN WEST BENGAL

REF: CALCUTTA 00017

KOLKATA 00000031 001.2 OF 002


UNCLAS SECTION 01 OF 02 KOLKATA 000031

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD EAGR ECIN EINV ELAB ENRG IN
SUBJECT: DCM TALKS AGRICULTURE IN WEST BENGAL

REF: CALCUTTA 00017

KOLKATA 00000031 001.2 OF 002



1. (SBU) SUMMARY: DURING HIS JANUARY 18-19 VISIT TO KOLKATA,
DCM DISCUSSED FOOD-PROCESSING, FDI IN THE RETAIL SECTOR, AND
LAND POLICY WITH COMMUNIST PARTY OF INDIA - MARXIST (CPM) AND
GOVERNMENT OF WEST BENGAL (GOWB) LEADERS. THOUGH GOWB OFFICIALS
WERE GENERALLY POSITIVE ABOUT THE STATES PROSPECTS FOR
INDUSTRIALIZATION, PROBLEMS OF LAND ACQUISITION WILL REMAIN A
CONTENTIOUS ISSUE FOR THE GOWB IN THE COMING YEAR. STATEMENTS
BY THE DCM AND UNION MINISTER FOR FOOD PROCESSING SUBODH SAHAY,
EMPHASIZING STEPS FOR GREATER INDO-U.S. COOPERATION IN THE
FOOD-PROCESSING SECTOR, RECEIVED A STRONG WELCOME FROM THE
BUSINESS COMMUNITY. END SUMMARY.


2. (SBU) ON JANUARY 18-19, DCM VISITED KOLKATA TO DELIVER A
SPEECH ON USG POLICIES IN AGRICULTURE BEFORE THE INDO-AMERICAN
CHAMBER OF COMMERCE (IACC),INAUGURATE A NEW BUSINESS SURVEY BY
THE AMERICAN CHAMBER OF COMMERCE KOLKATA CHAPTER AT THE NATIONAL
BOARD MEETING, CONDUCT A PRESS CONFERENCE ON TRAFFICKING IN
PERSONS, AND TO GAUGE GOWB PROGRESS ON ECONOMIC ISSUES. THE DCM
MET WITH COMMERCE AND INDUSTRIES SECRETARY SABAYSCHI SEN AND
SPOKE WITH CHIEF MINISTER BHATTACHARJEE AT THE IACC SEMINAR. ON
LAND ACQUISITION, PARTICULARLY AFTER OPPOSITION TO A NEW TATA
CAR FACTORY IN THE RURAL SINGUR DISTRICT, SEN SAID THAT THE CPM
HAD LEARNED A FEW LESSONS (REFTEL). MOST IMPORTANT WAS TO FULLY
CONSIDER THE RANGE OF INDIVIDUALS WITH A VESTED INTEREST IN THE
LAND, ESPECIALLY THE BARGADARS (SHARECROPPERS) WHO HAD CLOSER
TIES TO THE LAND THAN THE OFTEN ABSENT LANDOWNERS. SEN SAID
THAT THE GOWB MUST EXPLAIN TO THE BARGADARS THE POTENTIAL
BENEFITS OF NEW PROJECTS AND PROVIDE A "FULL POLITICAL ROADMAP
FOR FUTURE GAINS" THAT WOULD INCLUDE A REHABILITATION POLICY AND
ALTERNATIVE LIVELIHOODS PROGRAMS FOR FARMERS. THE BARGADAR, NOT
THE LANDOWNER, SHOULD ALSO RECEIVE 75% OF THE COMPENSATION FOR
THE LAND IF THE BARGARDAR PROVIDED THE MAJORITY OF INPUTS, SUCH
AS SEED AND FERTILIZER.



3. (SBU) SEN PREDICTED THE LAND DEBATE IN W. BENGAL, WHICH TO
HIS MIND "HAS ONLY ONE ANSWER," -- THAT OF MORE LAND FOR
INDUSTRY -- WOULD CONTINUE FOR ANOTHER YEAR IN THE RUN UP TO
LOCAL PANCHAYAT (VILLAGE) ELECTIONS IN MARCH 2008 WHICH WOULD
SERVE AS A REFERENDUM ON CHIEF MINISTER BHATTACHARJEE'S
INDUSTRIAL POLICY. THE GOWB WOULD SPEND THE NEXT 5-6 MONTHS
CONSENSUS BUILDING ON LAND POLICY, AND THEN LET THE LAND ISSUE
QUIET DOWN UNTIL THE ELECTIONS TOOK PLACE. CONFIDENT THAT THE
CHIEF MINISTER'S VIEWS WOULD WIN THE DAY, SEN NOTED THAT BOTH
JAPANESE AND CHINESE INVESTMENT WERE COMING TO THE STATE, AND
THAT COMPLETION OF THE NATIONAL HIGHWAY PROJECT IN W. BENGAL
WOULD BRING FURTHER URBAN GROWTH AND POSSIBLY INTEREST BY OTHER
ASEAN NATIONS SUCH AS SINGAPORE AND S. KOREA.


4. (SBU) SHIFTING TO THE POSSIBILITY OF WAL-MART COMING TO W.
BENGAL AS PART OF THE BHARTI PARTNERSHIP, SEN STRESSED THAT
NOBODY IN W. BENGAL WAS AGAINST WAL-MART PER SE. HOWEVER, SEN
SUGGESTED THAT WAL-MART PIGGYBACK ON BHARTI'S ENTRY INTO THE
STATE TO FACILITATE THE PROCESS. AS FAR AS THE GOWB WAS
CONCERNED, IF THE GOI GAVE WAL-MART PERMISSION TO ENTER THE
COUNTRY, THEN WAL-MART COULD SET UP IN W. BENGAL. (NOTE:
DURING HIS VISIT, THE DCM ALSO CALLED UPON CPM POLITBURO MEMBER
BIMAN BOSE AT CPM PARTY OFFICES AT ALIMUDDIN STREET. BOSE
VOICED OPPOSITION TO FDI IN RETAIL, INCLUDING WAL-MART, BY
ARGUING THAT THERE WERE MANY PEOPLE WORKING IN THE
PRODUCER-CONSUMER CHAIN, AND THAT ENTRY BY FOREIGN RETAILERS
WOULD CAUSE THE "INTERMEDIATE CHAIN" TO COLLAPSE AND HIGH
UNEMPLOYMENT. DOMESTIC RETAILERS, HOWEVER, WERE ACCEPTABLE.
BOSE'S COMMENTS DEMONSTRATE THE DISSONANCE THAT REMAINS WITHIN
THE CPM OVER ITS VIEWS ON FDI AND PRIVATE SECTOR DEVELOPMENT.
END NOTE.)



5. (U) ON JANUARY 19, THE DCM, UNION MINISTER FOR FOOD
PROCESSING SUBODH SAHAY AND CHIEF MINISTER BHATTACHARJEE
ADDRESSED THE IACC AT A SEMINAR ON "EMERGING INDO-US TRADE
OPPORTUNITIES IN FOOD PROCESSING - SPECIAL FOCUS ON THE EASTERN
REGION." THE DCM UNDERLINED THE IMPORTANCE OF THE AGRICULTURAL
KNOWLEDGE INITIATIVE (AKI) AND SUGGESTED AREAS WHERE THE U.S.
AND INDIA COULD CREATE PARTNERSHIPS IN DEVELOPING INDIA'S FOOD
PROCESSING SECTOR, CITING PEPSICO'S FRITO-LAY PLANT IN W. BENGAL
AS A MODEL FOR OTHERS. MINISTER SAHAY COMMENTED THAT THE
BHARTI/WAL-MART AGREEMENT SHOWED THAT JOINT VENTURES COULD BE
SET UP IN THE INDIAN RETAIL SECTOR. SAHAY PRAISED THE AKI
INITIATIVE, AND ASKED THE CHIEF MINISTER FOR HIS COOPERATION IN
ENSURING FURTHER GROWTH IN FOOD-PROCESSING. SAHAY FURTHER
REQUESTED THE CHIEF MINISTER TO PAY A VISIT TO THE UNITED

KOLKATA 00000031 002.2 OF 002


STATES, TO WHICH HE REPLIED, "WE ARE PREPARING SUCH A VISIT."
SPEAKING PRIVATELY WITH THE DCM, CHIEF MINISTER BHATTACHARJEE
EXPRESSED GREAT SATISFACTION WITH PEPSICO'S ROLE IN WEST BENGAL,
AND THE FACT THAT THIS INVESTMENT WAS BOOSTING AGRICULTURAL
DEMAND AND GENERATING LOCAL EMPLOYMENT. HE CITED THREE
PRIORITIES HE WOULD LIKE TO ACCOMPLISH IN CONJUNCTION WITH
TRAVEL TO THE US: BOEINGS INVESTMENT IN THE MAINTENANCE
FACILITY AT KALIKUNDE, DOW'S INVESTMENT IN THE HALDIA
PETRO-CHEMICAL COMPLEX, AND PROGRESS IN AN AGRICULTURAL RESEARCH
PROJECT INCLUDING SCHOLARS AT UC BERKELEY. (COMMENT: THE
STANDING-ROOM ONLY CROWD AT THE IACC SEMINAR RESPONDED
ENTHUSIASTICALLY TO THE USG/GOI PUSH FOR PROGRESS IN FOOD
PROCESSING. AFTERNOON TECHNICAL SESSIONS WITH INVESTORS,
ANALYSTS, PRIVATE AND PUBLIC SECTOR REPRESENTATIVES WERE
WELL-ATTENDED, AS WAS AN INDIAN CHAMBER OF COMMERCE SEMINAR ON
INTEGRATED VALUE CHAIN MANAGEMENT FOR THE INDIAN FOOD PROCESSING
INDUSTRY, HELD THE FOLLOWING DAY. END COMMENT.)


6. (SBU) COMMENT: THE COMMUNIST BASTION OF W. BENGAL IS AN
EARLY LEADER IN FACING A FUNDAMENTAL ISSUE OF PROMOTING INDUSTRY
AGAINST A BACKDROP OF GREAT RURAL POVERTY - A SITUATION THAT
CONFRONTS INDIA IN GENERAL. THE CPM IS EXPERIENCING A SERIOUS
INTERNAL CONFLICT FOLLOWING THE RECENT VIOLENCE IN SINGUR AND
NANDIGRAM AND POTENTIALLY GROWING DISAFFECTION IN ITS
AGRICULTURAL BASE. IN EFFECT, THE CPM-LED GOWB IS IN A RACE TO
REALIZE THE BENEFITS OF ITS INDUSTRIALIZATION POLICIES BEFORE
THE DISAFFECTION WITHIN THE RURAL SECTOR CREATES A BACKLASH
SUFFICIENT TO BLOCK EFFORTS AT MOVING THE MANY PEOPLE OUT OF THE
INEFFICIENT AGRICULTURAL SECTOR INTO MANUFACTURING AND SERVICES.
AKI, PROGRESS IN FOOD PROCESSING AND EVEN POSSIBLY EXPANSION OF
LARGE-SCALE RETAIL OFFER POTENTIAL SOLUTIONS TO EASING THIS
ROUGH PERIOD OF ECONOMIC TRANSITION, IN CREATING GREATER
EFFICIENCIES, VALUE ADDITIONS AND ECONOMIES OF SCALE. THE DCM'S
EXHORTATIONS ON THESE ISSUES WERE WELL RECEIVED BY MEMBERS OF
THE IACC, THE MINISTER FOR FOOD PROCESSING AND EVEN CHIEF
MINISTER BHATTACHARJEE. THE QUESTION REMAINS, THOUGH, WHETHER
OLD-LINE COMMUNISTS AND OPPOSITION FIGURES WILL STALL THE GOWB'S
ECONOMIC POLICIES, WHILE CLAIMING TO ADVOCATE FOR THE INTERESTS
OF THE RURAL MASSES AGAINST BIG INDUSTRY.
JARDINE