Apr 30, 2010

Square watermelons! You must be crazy!!

Square watermelons! Don't be surprised to find them soon in the store near you.

Next summer, or may be even at the fag end of this summer, you might find square watermelons in the supermarket stores. Well, don't be surprised. A Panama-based company has already started producing and marketing the square watermelons. The first shipment is off to New York, the Big Apple.

It is not genetically-modified. As the news report below clarifies, these water melons have been literally 'molded' to make it convenient for shipping. I don't know why, but the world seems to be un-necessarily experimenting with food, trying to carve out an exclusive space in the market. I am completely at easy with the rounded variety that I find with my neighbourhood vendor. It is cheap, sweet, and juicy. I love it.

I hope many of you have the sanity to avoid the tyranny of the markets. These food companies only want you to shell out more in the name of novelty.

Here is the AP news report.

ANTON, Panama (AP) -- A company in Panama is hoping to join in a small niche market of the fruit export business: square watermelons.

The Panama Fruit Producer company has started "rounding up" the square fruit, sending its first shipment of 120 boxy melons to New York.

The company expects to produce about 3,000 of the molded melons this year, and will send them to the Netherlands and Germany as well.

Operations manager Gerardo Diaz said Wednesday that people are surprised at first because "it is not what they were expecting."

"Later they ask if it is a genetic experiment," he said.

Diaz said the watermelons are natural. They are made to grow inside cube-shaped glass boxes and conform to the mold as they get bigger.

The first melons cost about $75 apiece, but producers hope to bring the price down.

The first square watermelons are thought to have been produced by a Japanese farmer and have been sold in some markets in Japan for years. Diaz said the only square watermelon production in the Americas he knows about is in Brazil and California in the US.

Apr 28, 2010

Patenting the entire Food Chain. After Soybean and Maize, it is the turn of pig and meat.

Imagine the entire food production chain of your staple food -- let us take wheat in this case -- from seed to conventional breeding techniques, from improved seed to normal cultivation practices, and from utilisation of wheat straw as animal feed to food products like atta and bread, being patented by a single agribusiness company. Well, while you were oblivious to the threat of patent monopolies, or should I say while you were sleeping, multinationals have gained (and are in the process of gaining) control over the entire food chain.

The implications of such patent monopolies that puts the whole food chain under the control of multinationals is surely dreadful.

This has already happened in case of soybean and maize. It may next be the turn of rice and wheat. After all, rice is the most important staple food globally, and all major food companies are eyeing to control its entire food production chain. So is the case with wheat.

The global coalition "No Patents on Seeds" has issued an alert. It pertains to the latest patent filed by Monsanto. In a pending patent application (filed on Jan 29, 2009) from Monsanto even bacon and steaks are claimed: Patent application WO2009097403 is claiming meat stemming from pigs being fed with the patented genetically engineered plants of Monsanto.

I looked at the patent claim, and found it to be simply absurd. The patent is filed for an invention: "Method for Feeding Pigs and Products comprising Beneficial Fatty Acids." To me, this looks to be a simple improvement in the feeding process, but if you read the claims carefully you realise how cleverly Monsanto has drafted it to include almost everything under the sun. Which means, Monsanto (which already has a patent on pig breeding) actually now lays claim over the entire production cycle of pig rearing -- from what goes into the feed, to pig breeding processes and finally to the production of pork.

Claim 89 (there are a total of 89 claims) says: "The swine feed of Claim 70 wherein said additional feed components are selected from the group consisting of salt, antibiotics, corn, wheat, oats, barley, soybean meal, cottonseed meal, flaxseed meal, sunflower meal, canola meal, wheat middlings, wheat bran, rice bran, corn distiller dried grains, brewer grains, corn gluten meal, corn gluten feed, molasses, rice mill byproduct, corn oil, flax oil, soy protein, palm oil, animal fat, pigs fat, restaurant grease, antioxidents, tocochromanols, tocopherols, vitamins, minerals, amino acids and coccidostats."

Now let us look at Claim 70. It lists three components of swine feed: "stearidonic acid (SDA), gamma linolenic acid (LCA) and additonal feed components," and also adds that wherein said swine feed comprises at least 0.10% SDA and at least 0.07 % GLA, wherein the ratio of SDA/GLA is at least about 1.3.

In other words, this patent is simply about the addition of SDA and GLC compounds to the normal swine feed. As said ealier, the patent is claimed over meat stemming from pigs being fed with the patented genetically engineered plants that Monsanto has produced. In a pending patent application from Monsanto even bacon and steaks are claimed, says 'No Patents on Seeds' campaign. It tells us that a similar patent is applied for fish from aquaculture in March 2010 (WO201027788).

If you thought such patents are only being filed on animals and animal products, take a look at what the campaign has documented about Monsanto's patent over soybean and maize. "In Monsanto’s patent application WO2008021413, methods are claimed that are widely used in conventional breeding. On more than 1000 pages and in 175 claims Monsanto claims various gene sequences and genetic variations, especially in soy and maize. Monsanto even goes as far as explicitly claiming all relevant maize and soy plants, inheriting those genetic elements. Furthermore, all uses in food, feed and biomass are listed."

"By filing specific regional applications Monsanto shows especial interest in applying for this patent in Europe, Argentina and Canada. Already, Monsanto has filed court cases against importers of Argentinean soy to Europe. In another patent application WO 2009011847, Monsanto broadly claims methods for cattle breeding, the animals, as well as 'milk, cheese, butter and meat'.”

And finally, the "No Patents on Seeds" warns of the growing trend globally to patent every part of the food chain so as to extend food monopolies. Which means that in the years to come, your fundamental right of what and where to eat will be determined by the food companies. You would have by then lost all the diversity in foods that you have grown with, and would be forced to eat what these food companies serve on your platter. After all, all other food choices would have disappeared by then.

This is what the campaign says: "In only four years, between 2005 and 2009, Monsanto filed nearly 150 patent applications on plant breeding at the WIPO. These applications show a growing tendency to claim exclusive property rights not only on genetically modified plants and animals, but also on existing biodiversity and traditional breeding. While in the years before 2005 only very few such patents were filed, more than 30% of Monsanto’s patent applications between 2005 and 2009 include conventional plant breeding. This trend can also be observed with other big seed corporations. In the same period Dupont filed about 170 patent applications in plant breeding, 25% involving conventional plant breeding. Syngenta filed about 60 applications, with 50% targeting traditional breeding. Amongst the big seed companies, Monsanto is the only one filing patent applications on farm animals too. Since 2005 about 20 patents on animal breeding have been filed by the US company."

If you still don't feel like doing something, don't blame anyone. A Grave New World awaits us. And if you want to do something to make your voice heard, please visit the web site of 'No patents on Seeds' http://www.no-patents-on-seeds.org/

Apr 27, 2010

ICAR wakes up to the virtues of organic farming. Will the USDA also learn?

At a time when India is already committed to take on unwanted technology from the US under the Indo-US Knowledge Initiative (KIA), and more recently a memorandum of understanding (MoU) has been signed between the US and India in March 2010 for "cooperation in agriculture and food security", the subtle winds of change flowing through the corridors of the Indian Council for Agricultural Research (ICAR) in favour of sustainable agriculture through organic farming, provide a whiff of fresh air.

This is indicative of a mindset change, and it appears the civil society movement in favour of organic agriculture has certainly made an impression strong enough to bring about this change, even if it is still in its infancy. If ICAR begins to move in the right direction, resurrecting the much abused natural resource base, I think this is a change that the country needs to welcome.

I only hope that the US also takes a leaf out of the ICAR book, and launches a nationwide programme to restore sustainability in agriculture. Instead of following the misguided industry-backed food factory approach, the US would do well to revert back to natural farming. It is time the US takes advantage of the India-US MoU and learns from the Indian experience. Future generations in the US would remain eternally grateful to this sensible initiative, if at all the USDA opts for a change for the better.

Unfortunately, US President Obama like the Indian Prime Minister Manmohan Singh is being wrongly advised. Both Obama and Singh have advisors who deserve to be kept at least four kms away from decision making. But then, where do you find real Statesman among the global leadership that you should expect such a miracle to take place.

Nevertheless, the recommendation of a national workshop on organic agriculture, presided over by the new ICAR chief Dr S Ayyappan on April 23, comes as a pleasant surprise. Dr Ayyappan is not a plant breeder, and probably that enables him to look afresh at agriculture. Plant breeders, all over the world (I too am trained in Plant Breeding & Genetics) are cast in a productivity mould, and have singularly done the maximum damage to global agriculture. They have bred crop varieties, which are only suitable for the high-external input agriculture thereby indirectly helping the commercial interests of the private companies.

Incidentally, data presented by the All India Coordinated Project on Cropping System Research (AICRPCSR) showed yield improvements with organic farming over a 5-year period from each of its 13 locations. At the same time several NGOs like Timbaktu Collective in Andhra Pradesh have conclusively demonstrated improvement in soil fertility. "Our work in the 26 villages with 890 farmers and 2,700 acres of land is definitely proving that organic farming (no chemical fertilisers or pesticides) is helping soil health improve. Soil test have shown clear increase in both carbon and nitrogen increase. Where we have managed to support the farmers to buy cattle (459 pairs of Halikar cows and 13 seed bulls) and the impact is even greater. We are going to start working with another 300 farmers and 900 acres this year," says Bablu Ganguly.

There is hope for the future of Indian agriculture.

Meanwhile, the following are the highlights of the programme and issue of importance:

* Research data presented during the meet and available in literature clearly indicate that comparable yields are possible under organic management with majority of the crops without application of high doses of organic inputs

• Plant protection issues can be managed without chemicals under organic management.

• Organic agriculture can be an ideal option for resource poor small and marginal farmers in rain-fed and less endowed regions of the country

• Organic farming is not just a crop production system but an integrated farming system approach comprising of soil, water, crops, animals, environment and the farmer.

• Certification is not the requirement of organic and is needed only where market demands for it and assures premium prices.

• Organic farming is a system of intensive crop production using on-farm and low cost biological approaches targeted at reduction in cost of cultivation, preservation of soil health, conservation and judicious utilization of resources and ensuring safe and healthy food free from chemical residues

• A wealth of innovations are available in civil society domain which need to be strengthened, refined, validated and made relevant to today’s requirement with the integration of science.

• There is growing demand for organically grown food in both, international and domestic markets. With its diversity and potential India can become No.1 in the world in supply of organically grown agricultural commodities.

• In spite of initial success there are many unresolved issues on production and resource management front which need to be addressed through research


After thorough discussion following recommendations are being made.

1. Integrated Organic Farming System should be promoted to ensure food, nutritional and economic security of small and marginal farmers on a priority basis.

2. Organic farming being low cost and bio-intensive needs to be promoted wherever feasible and particularly in areas where use of agro-chemicals is minimal (rainfed, hilly and other vulnerable and ecologically fragile areas)

3. While organic farming largely focuses on cropping system based, commercial crops like Basmati rice, sugarcane, oilseeds, pulses, cotton, spices, tea, coffee, cashew, fruits and vegetables which have high demand as organic produce needs to be promoted on priority.

4. ICAR/State Agriculture universities should coordinate to generate and compile information on organic farming practices. The research should be on-farm and participatory action research.

5. The potential of organic farming for mitigating and adapting to adversities of climate change should be documented and harness

6. Scientific validation of various inputs and practices from traditional knowledge and innovated by farmers and other institutions needs to be taken up.

7. Protocols for standardization of processes for mass production of organics and biologicals should be evolved.

8. Participatory Guarantee System based Quality Management Systems should be promoted

9. Research data available so far suggests that in several regions and for several crops yields improved due to organic farming systems therefore proactively these models needs to be promoted.

10. ICAR and State Agricultural Universities should consider establishing dedicated research and educational institutions on organic farming

11. Community Based Extension models should be promoted to facilitate horizontal learning.

12. Organically responsive seed and planting material should be evolved.

13. Locally adopted and produced seed, planting materials and animal breeds should be promoted. Community Based Organizations should be encouraged to manage local seed banks.

14. Best experiences on organic farming from farmers and organizations needs to be identified and documented and used as input for research and extension.

15. KVKs, State Extension and NGOs should be oriented on organic farming and roped in to develop village level resource persons and train farmers on using on-farm produced inputs.

16. Direct Incentives (ecological bonus) to organic farming can be initiated through community based organizations.

17. NREGA can be extended to support organic farming like in Community managed sustainable agriculture program in Andhra Pradesh.

18. Recommendations of “Expert Committee on Organic Farming” on researchable issues need to be addressed. #

Apr 26, 2010

The dark underbelly of India Inc

At a time when India faces the biggest threat to its sovereignty from within, and I mean the rise of Maoism that we witness across the country, more than a hundred representatives of various people’s movements and social campaigns came together in a meeting held at Swaraj Vidyapeeth campus, Allahabad, on March 27-28. They discussed India’s present crisis in depth. It was unanimously decided that all people’s movements and social campaigns should come together to launch a nationwide people’s movement to face the present challenges.  

I missed being at the two-day conclave. But reading the minutes of the meeting, I feel sad the powers that be refuse to see the real cause for the uprising. In fact, I have always said that the Indian political leadership (and to quite an extent that of the national media as well) is actually serving the commercial interest of big business. Somehow an impression is being given, and the urban middle class laps it up, that the people who have picked up guns are the new breed of terrorists, and that the bullet is the only answer. 

It was at this conference that the well-known RTI activist Arvind Kejriwal made some observations, recalling a few incidents from the days when he was working in the Income Tax department. It gives us an insight into the ways of corporate swindle, that actually is at the base of the present crisis that we face.  

"We raided more than 80 MNCs and caught all the foreign managers. They used to show lower salaries and evade taxes in India. Companies like Sony, Mitsubishi, etc., evaded crores of rupees in taxes. When we recorded their statement they said they did not know our laws. When we raided the Nippon airways executive, we recovered minutes of their meeting from his bag which has mentioned that when any Japanese official comes to India, he should not show his salary more than Rs. 10 lakh. When we raided the Denso India executive, he threatened us we are here to help your poor country, we control your Parliament and we can get any law passed. I didn’t believe it at that time. We will get all you transferred. 

"Three days after the Japanese ambassador met the finance minister and told that we will withdraw all aid if these people are not transferred, and we were transferred. When UPA ministry was falling, then all MPs were saleable and I felt that there is no price of our vote. I felt that the US can buy them and Japan also. 

When the Nuclear Liability Bill was introduced, it said that the total liability of any operator company will be 500 crore rupees only. When we see all things together, we are confronted with a horror story that our country is not independent. As long as we do not control our country, our Parliament will keep making 100 such laws in a day. So this is not democracy. We should strive for direct democracy. A law should not be passed unless it is approved by two-thirds of the gram sabhas. As long as gram sabhas or mohalla sabhas, i.e., primary-level local communities do not get the control, things will not change."

Yesterday, when I read another interview of Arvind Kejriwal in the Deccan Herald (April 25, 2010), it reminded me of the Allahabad declaration. In this interview, entitled: "Gram Sabha should be empowered," Arvind talks about the need to empower the gram sabhas, in the absence of which people are losing faith in the system of governance and might take up arms "or even join Maoists as it had happened in Lohandigoda in Chhatisgarh." 

To know more, I read on. This is what Arvind says in response to a question: 

"If you don't empower people at the grass-root level, they will turn to naxalism. Like it happened in the villages of Lohandigoda in Chhatisgarh, where the Tata group had sought permission from the government to set up a Sponge iron plant. From the State Government level to the mukhiya, the proposal was cleared. But the local people were up in arms and were in no mood to give up their land or allow cutting of trees. So they submitted a 15-point charter of demands which included plantation of five saplings for each tree cut. But their demand was rejected out-right. Eventually, the entire 13 villages reportedly turned to naxalism."

What Arvind narrates is a true reflection of the flawed development model that is being thrust upon the people. I haven't seen any national TV channel even daring to make a mention of such destructive development that is pushed in the name of economic growth. It is therefore very important that the nation wakes up to the realities, and does not unleash a war against it own people who are victims of the 'process of development' that has been aggressively unleashed since June 1991. 

The dark underbelly of Tata's and for that matter scores of Indian and foreign business concerns is at the root of the naxal uprising. We cannot muffle the voices of the people by setting up a school here or a health center there under Corporate Social Responsibility (CSR), a concept that the UN promotes. The corporate social responsibility must begin where it actually sows the seeds of revolt. The need therefore is to empower Gram Sabhas, and to ensure that the decision of the village through the democratic process is final and binding. Even the Prime Minister should not have the right to over-rule the decisions of the Gram Sabhas.    

Apr 24, 2010

Industry thrives on masive subsidies.

In 2009, when the world was bogged down by economic recession, and some ripples were also felt in the country, India too provided a bailout package, in three installments, totaling approximately Rs 3.5 lakh crore.

While we blame farmers and the people living ‘below the poverty line’ for living on government doles, the fact remains that business and industry receive several times more subsidies and tax holidays. In many ways, the profits that business and industry post every year is directly related to the subsidies they get. And you thought it was economic growth! 

In February 2010, when Finance Minister Pranab Mukherjee was to present the annual Budget, the media had launched an orchestrated campaign saying that the economic bailout package should not be withdrawn. You could see almost every TV channel (and the pink newspapers) bombarding day and night how damaging it would be for the national economy if the bailout package was withdrawn.

In my interventions, I did make it loud and clear (to the discomfort of the economists on the TV panels) that the bailout package was not required in the first instance, and should be withdrawn immediately. Subsequently, I heard the Prime Minister say that only 1.5 lakh jobs were created in 2009 against the projected 1.2 crore. I guess this statement was used by the industry and business to defend the need for the continuation of the bailout package.

In my understanding, the bailout package was actually a dole to the industry and business to strengthen its bottom line. If you think that the layoffs in the industry were because of the economic recession, you are highly mistaken. Recession was very conveniently used by the industry to go in for labour-shedding, nothing more than that. Ask those journalists who have lost their job recently, and they will tell you they were laid-off not for reasons of economic meltdown. 

I fail to understand how business and industry, at times of an economic crisis, be on an acquisition spree buying companies in Africa, Latin America and Europe. There have been 11 major acquisitions by Indian companies in the recent past. In fact, India has emerged as a major player in global mergers and acquisitions, and surprisingly at times of economic crisis.  

Godrej Consumer Products Ltd (GCPL) for instance is now planning to make its 6th global acquisition, this time in Argentina. Since 2000, Tata group has acquired as many as 27 companies abroad at a total cost of over Rs 16,000 crore.  The proposed merger between Bharti Telecom of India and MTN of South Africa is billed as the biggest merger in recent times. And so on.

In reality, the economic meltdown provided an excellent opportunity for the rich to amass more wealth. Otherwise there is no way that the world's wealthiest club can grow wealthier at times of an economic meltdown. The financial bailout packages came handy for the rich to accumulate more wealth, and that too in the name of rebuilding the national economy.

Otherwise, how can one explain that the number of billionaires from India has doubled in 2009-2010? Income of the rich doubling at a time of recession is something that is not easily palatable. Let us look at another indicator. Not only had the rich, even the middle class purchased 25 per cent more cars in 2009-2010, buying 1,526,787 cars. I don’t think people buy cars at a time when they have less money in their pocket. In fact, 2009-2010 also saw the highest number of car launches in India so far.

According to Forbes magazine, the richest-of-rich club has 49 billionaires from India, up from 24 last year. Isn't it strange that at a time when the sails were fluttering, the number of billionaires from India should actually double? I don’t understand how can an industry, which could not create more than 1.5 lakh jobs in a year, ensure that its own wealth swells? How can that be possible at a time when the chips were down?

What made the wealth of the richest actually multiply were the bailout packages. It is as simple as that. In other words, the world follows an amazing economic prescription: “Socialising the costs, privatising the profits.” You and me pay for the bailout packages, and the rich pocket it neatly. What we don’t realise is that it is the people who actually subsidise industrial growth. There is no bigger fool than the average citizen, who refuses to understand the corporate manipulation of what is actually his due.

Take the case of Uttar Pradesh government, which has sanctioned a new international airport at Kushinagar, near Gorakhpur. After a lot of deliberations and consultations, the UP government has finally agreed to provide 550 acres of land (out of a total of 750 acres allocated for the airport, and real estate ventures like malls and hotels) at a nominal fee of Rs 100, for a 60 years lease. An acre of land being given for Rs 5.50 paise for a period of 60 years!  

Strange that a time of economic crisis, more than 1046 proposals for setting up Special Economic Zones (SEZ) be granted approvals in various parts of the country. Maharashtra and Andhra Pradesh have the largest number of approved SEZs in the country. Large number of SEZs have been granted approval in Tamil Nadu, Goa, Gujarat, Orissa and West Bengal as well. Ten year tax holiday plus a whole lot of concessions make it easier for the companies to make more money.  

The Rs 40,000-crore IPL cricket honey pot has also seen freebies being given to billionaires and millionaires. Ironically, this is happening at a time when the government is desperate to bring down the food subsidy bill. The current projected cost, computed on the basis of the proposal to provide 25 kgs to every BPL family at Rs 3 works out to Rs 28,860 crore. It will touch Rs 40,400 crore if the government raises the entitlement to 35 kgs per family. Even in the case of the second scenario, the burden on the exchequer would be lower than the existing Rs 56,000 crore annual food subsidies.  

The cost of feeding the hungry must be reduced, and only then can we feed the rich.

This happens every time when the world faces an economic crisis. In 2007-08, when the world was faced with an unprecedented food crisis, the stocks of the food giants swelled to an unprecedented level. The poor went hungry (with the number of hungry going up by another 100 million) whereas the food companies profited. More recently, when India was faced with an unprecedented rise in sugar prices, the stocks of nearly 25 sugar companies went up. 

Mainline economic thinking has made it much easier and simple for the corporate and big business to make more money. You don't have to indulge in any financial swindle; the credit rating agencies and the economists do it for you. And that too without the world even questioning what in simple terms means thuggery. #

Apr 23, 2010

How to feed the hungry

Work out a bankable plan

By Devinder Sharma

At a time when granaries are overflowing, and stockpiles of food are rotting in the open, India is preparing to bring in a National Food Security Act. Saddled with the world’s largest population of hungry and malnourished, the draft bill certainly provides a ray of hope for the hungry millions.

If enacted properly, it can turn appalling hunger into history. But if the intention is to only repackage old wine in a new but broken bottle, it will turn out to be a historic blunder.

The primary objective of the draft Bill, as being suggested by the empowered Group of Ministers (eGoM), seems to be to simply re-classify the population below the poverty line which is entitled to receive 25 kg (or 35 kg if the eGoM agrees) of grain at Rs 3 per kg. Moreover, by relying once again on a bogus Public Distribution System (PDS) to reach food to the needy, I think we are neither serious nor sincere in pulling the country out of hunger for all time to come.

As the new harvest flows in, the question that needs to be asked is why acute hunger prevails in the villages that actually produce food? How come a large population of the hungry reside in those very areas that constitute the country’s food bowl? I fail to understand why in Punjab, where food rots in the open, almost 10 per cent of the population should go to bed hungry? Why is that Punjab, the best-performing state in terms of addressing hunger, should be ranked below Gabon, Honduras and Vietnam in the Global Hunger Index?

There is something terribly wrong in the way we have looked at hunger all these years. We have failed to realise that any programme aimed at providing food-for-all on a long-term basis has to look beyond food stamps and the PDS. Including the destitute and the homeless in the food distribution channel and by ensuring 35 kg of food entitlement per family (including nutritious millets and pulses) is not enough to remove hunger.

Instead of sending search teams to 22 countries that have food security programmes, the eGoM will do well to look inwards, and will find sustainable answers that can be easily replicated. Ironically, the answer lies in the hunger belt of Kalahandi-Bolangir-Koraput in western Orissa. Many years ago, I had stumbled on a cluster of villages in the heart of Bolangir district, which had not witnessed hunger for nearly three decades. My colleagues have since then travelled to numerous other villages throughout the country, which have adopted a socially workable ‘sharing and caring’ approach to remove hunger. If these villages can do it, I see no reason why a majority of the six lakh villages cannot become hunger-free.

In Bolangir, or in rural Pune, some villages have built traditional but small foodgrain banks. Those who are poor and jobless find solace in these grain banks. They are provided an adequate quantity of grains on credit, with the promise that they will return it in kind (along with a small portion as interest) at the time of the harvest when they find work. This cycle of ‘sharing and caring’ has built quite a sizeable foodgrain bank in these hunger-free villages. All that is needed is to train women self-help groups and NGOs in other villages, and food security will become the responsibility of the people.

Making villages hunger-free will also limit the dependence on the unreliable PDS and thereby reduce the mounting food subsidy. It has to be backed by policies that ensure that agriculture is not sacrificed for the sake of industry, mining and exports. As Hivre bazaar in central Maharashtra has shown, the answer lies in giving control over jan, jal and jungle to the people.

Apr 22, 2010

India's Shameful Paradox of Plenty

Dealing with Hunger:
It happens only in India

By Devinder Sharma

There is no reason why in the 6 lakh villages of India, that produce food for the country, people should be living in hunger.

There is no other country that presents a more shameful paradox of plenty- grains rotting in the open while millions live in hunger. At the same time, no other country allows its staple food to be exported while the population of hungry and malnourished continues to multiply.

It can happen only in India.

In the United States, from where India borrows its economic prescriptions, food is only allowed to be exported after the country ensures that in addition to 309 million people, 168 million cats and dogs have also been well-fed. In India, food — and that includes wheat, rice, maize, pulses, fruit and vegetables — is routinely exported, and the government often provides subsidies to offset the losses incurred in trade.

In America, where one in every ten citizen lives in hunger, it provides a massive federal support of US $ 205 billion for a period of five years to feed its hungry under various nutrition supplement programmes. This marks a continuous increase over the year. In India, which has the world’s largest population of hungry, the food subsidy bill is proposed to be pruned, from Rs 56,000-crore for 2010-11 to Rs 28,000-crore, under the proposed National Food Security bill.

It happens only in India.

The plethora of government scheme to fight hunger and malnutrition is at least impressive on paper. The ministries of women and child development, human resource development and of food and agriculture between them run 22 programmes to alleviate hunger and poverty.

Despite such a wide array of programmes already running, the budget allocation for which is enhanced almost every year, the poor still go hungry. Unicef tells us that more than 5,000 children die every day in India from malnourishment. More than 320 million people, as per a conservative estimate, are unable to manage three square meals a day.

Let us accept that the existing programmes and projects have failed to make any appreciable dent. We will once again fail the nation if we refuse to bring about a radical overhaul of the existing approach to fight hunger. I have the following suggestions to make a beginning:

Poverty line: First and foremost, the time has come to draw a realistic poverty line. The Suresh Tendulkar committee has demarcated 37 per cent of the population to be living in poverty. Earlier, Arjun Sengupta committee had concluded that 77 per cent of the population is able to spend not more than Rs 20 a day. And more lately, former supreme court judge, Justice D P Wadhwa committee has recommended that anyone earning less than Rs 100 a day should be considered as living below the poverty line.

Knowing that India has one of the most stringent poverty lines in the world, I think we need to accept that faulty projections will not address the reality of hunger. It should therefore have two lines to demarcate the chronic hungry from those living in poverty.

The Tendulkar committee’s recommendation of a cut-off of 37 per cent should actually constitute the new Hunger Line, which needs low-cost foodgrain as an emergency entitlement. In addition, the Sengupta committee's recommendation at 77 per cent should be the new Poverty Line.

The approach for tackling absolute hunger and poverty would therefore be different.

Make villages hunger-free: There is no reason why in the 600,000 villages of the country, which produce food for the country, people should be living in hunger. These villages have to be made hunger-free by adopting a community-based localised foodgrain bank scheme. Such traditional systems exist in several parts of the country, and there is an immediate need for its revival.

Food for all: In the urban centres and the food deficit areas, instead of reducing the number of beneficiaries, a universal public distribution system is required.

The existing PDS system has to be overhauled, and this requires a strong political will. Also, there is a dire need to involve social and religious organisations in food distribution. At the same time, nothing can succeed if we do not ensure safe drinking water and sanitation to be part of the hunger mitigation programmes.

Financial support: It is often argued that the government cannot foot the bill for feeding each and every Indian. This is not true. In the budget 2010, Finance Minister Pranab Mukherjee has announced a ‘revenue foregone’ of Rs 5 lakh crore, which means the sales, excise and other tax concessions plus income tax exemption for the industry and business. The annual budget exercise is for roughly Rs 11 lakh crores. Which means, the government is doling out massive subsidies to the industry.

I suggest that Rs 3 lakh crore from the 'revenue foregone' be immediately withdrawn. This should provide resources for feeding the hungry, and also for ensuring assured supply of safe drinking water and sanitation.

Policy changes: But all this is not possible, unless some other policy changes that do not take away the emphasis on long-term sustainable farming, and stop land acquisitions and privatisation of natural resources. This is what constitutes inclusive growth. A hungry population is an economic burden. #

Apr 21, 2010

The Barbaric Ways of Micro-finance

The ugly face of micro-finance was never in doubt. But now even the dark underbelly is coming out in the open. I wonder how much more evidence is required to put a stop to this barbaric activity that goes on unchecked in the name of empowering the poorest of the poor.

Yes, most MFIs operate in an inhuman and barbaric way. In fact, as you have read in these columns the entire concept of micro-finance is based on exploitation.

As a Hyderabad dateline news report in The Hindu (April 19, 2010) states: "Some Collectors sent reports about the harassment of borrowers, intimidation, manhandling, abusing and outraging the modesty of women and extreme punishment like making defaulters stand in the hot sun, tying them to trees and making them run in open grounds."

What more evidence is required.

We call these poor 'beneficiaries'. They fit into the classic model of exploitation that the late C K Prahalad envisioned. They are the "fortune at the bottom of the pyramid" which Prahalad very cleverly camouflaged in the guise of 'eradicating poverty' but actually provided a recipe for making huge profits. There may be some sensible suggestions that he gave, but rest of it was simply on how to exploit the poor and make money. No wonder, the crooks in business and trade have always held him in high esteem.

These poor have been earlier victims in the hands of private money lenders and now the organised class of highly educated (often hailing from the prestigious management schools) money lenders. They have suffered silently for years, and are now being subjected to all kinds of physical and mental torture by the MFIs. They live in perpetual mental agony, always under pressure to repay (on a weekly basis) the heavy compound interest on petty loans. As the report below states, 15 per cent flat interest rate at which the poor borrow, results in an effective rate of 33 per cent per annum on a declining balance.

What do you expect these poor people to do?

I will not be surprised if many of them eventually join the ranks of Maoists.

Here is the disturbing news report, under the seemingly less damaging headline: Andhra Pradesh -- State for de-recognition of MFIs. It says that the MFIs are accused of forcibly enrolling poor women in the rural areas. Some Collectors' reports cite intimidation, manhandling, and outraging modesty of women

Andhra Pradesh -- State for de-recognition of MFIs.

by Ravi Reddy

HYDERABAD: As the spectre of coercive recovery practices, lack of transparency and questionable acts of some micro finance institutions (MFIs) looms large once again after a gap of four years, the Andhra Pradesh government plans to approach the Reserve Bank of India (RBI) seeking their de-recognition.

Following reports of objectionable practices of MFIs in harassing borrowers in rural areas of in Khammam, Mahabubnagar, Warangal and several Coastal Andhra districts, the government has drafted a letter to the RBI seeking de-recognition of the erring MFIs, which will be despatched in a day or two.

The 40 MFIs operating in the State with total finance portfolio of Rs. 3,000 crore are accused of forcibly enrolling poor women in the rural areas even though a majority of them are already part of the carefully nurtured Self Help Groups (SHGs) under the banner of Indira Kranti Patham.

Principal Secretary, Rural Development, R. Subramanyam told The Hindu on Saturday that the MFIs were back to their old tricks forcing the government to act fast. “They (MFIs) are violating norms by enrolling SHG members and claiming them as their own. They are not disclosing the list of members and resorting to coercive recovery practices,” he said.

Some Collectors sent reports about the harassment of borrowers, intimidation, manhandling, abusing and outraging the modesty of women and extreme punishment like making defaulters stand in the hot sun, tying them to trees and making them run in open grounds.

The State had witnessed a similar situation in 2005-06, when borrowers, caught in the debt trap, ended their lives. This forced the YSR Government to appoint a one man committee headed by a senior IAS officer V.P.Jauhari. He had recommended the government to crack the whip on the MFIs for grossly violating the human rights of borrowers in the name of loan recovery and enactment of Money Lenders Act to rein in the MFIs.

Strange modus operandi

The modus operandi is to lure SHG members into taking loans ranging from Rs. 3,000 to Rs. 25,000 at 15 per cent flat interest rate, which results in an effective rate of 33 per cent per annum on a declining balance. There is no loan appraisal or analysis of the borrower's source of income and repayment capacity. Lending institutions are least bothered about pre-existing loans taken from banks, SHGs, other MFIs and unregistered moneylenders.

Mr. Subramanyam said the government had set up district-level task force headed by the Collector to look into each case of coercion. “Harassed borrowers can call up 24X7 Call Centre (number 155321) to report their woes,” he added. Apart from this, the government plans to identify at least three mandal level SHG federations and ten Village Organisations in each district for bulk loaning to provide relief to the poor women.

Apr 20, 2010

Food Security: What the Government Says And What We Want

Yesterday, I attended briefly a concluding seminar organised by the Right to Food campaign. It was a pleasant surprise to find a significant change in the approach the RTF campaign has now adopted, moving beyond the entitlement criteria to restructuring agriculture policies in such a way that it does not compromise on food security, livelihood security and thereby the right to food.

In June 2009, when I last attended a Right to Food seminar in the Gandhi Peace Foundation, I did express my dismay at the narrow focus of the campaign, which was somehow not willing to look beyond public distribution system, mid-day meals and anganwadi programmes. But since then, a lot of effort has been made by some of the grassroot leaders of the movement, to bring in focus on the real causes behind growing hunger as well as increasing marginalisation of the farming communities. Food security cannot be divorced from agriculture.

I am aware that the new position of right to food campaign is at a discomfort of some of the well-known faces of the movement, but I think this is a true reflection of democracy and people's participation. I hope the government also begins to listen directly to the new emerging leadership of the right to food campaign, which is more grounded to the existing realities. I have always maintained that when people take control, right solutions flow in.

A set of slides under the title -- Food Security: What the Government Says and What We Want -- says it all. There is still some room for improvement, as it is always, and I welcome your suggestions and inputs. I am highlighting some of the salient points that have been made (in addition to the entitlements, and the social security programmes mentioned):    

Food Security Must Ensure Nutritional Security and Health

We believe that basic services such as food, education, health, work and social security must be universally available for all. All residents of the country must be covered, and while arguing for universal services, further affirmative action is required for those who are socially excluded. To achieve this, it is suggested:

1. ICMR norms for moderately active male (2700 calories required) be followed

    Food grains -- 14 kg per month or 50 kg per family

    Edible oils -- 800 grams per month or 2.8 kgs per family

    Pulses -- 1.5 kgs per head per month or 5.25 kgs per family month

Inclusion of millets is essential because these are nutritious, healthy, cheap and often culturally preferred.

Food Security In A Vacuum

National Food Security Act povides food security without considering production aspects -- as if food procurement and food distribution can be divorced from production.

In reality, production, procurement and distribution have to be considered together.

Use an Expanded PDS to Revive Agriculture

There is a severe agricultural crisis in the country. Procurement for an expanded PDS will give a boost to production and can become an important instrument for the revatilisation of the farm economy.

Procurement from all mandis, so that all areas benefit from government procurement (not just major procurement from Punjab, Haryana, western UP, and AP as is now the case).

Procurement at MSP of millets, pulses and oilseeds etc to boost these crops which are now facing neglect due to low and uncertain prices and due to low investment.

These crops are easily grown in dryland areas and not water/input intensive.

Procurement should be at a fair and remunerative price.

Local Distribution of Local Procurement

Distribution of grain procured from beyond the district/zone should be resorted to only if there is a shortfall in local procurement. This will allow:

1. procurement, and therefore support to farmers, from all areas.

2. locally preferred grain to be distributed.

3. Drastically cut down storage and transportation costs.

4. Help curb corruption by allowing easier tracking of grain movement.

Policies To Increase Food Production, Consumption, Nutrition

1. Immediate ban on export of food until malnutrition ends in the country.

2. Protect farmers from 'dumping' of unfairly subsidised imports.

3. First call on all natural resources, including food and water, must be for food. No forcible diversion of land, water and forest resources away from food production.

4. Stop corporatisation of agriculture and control of food by agribusiness corporations.

5. Immediate moratorium on genetically modified (GM) seeds, GM food imports, and use of GM food in government food schemes.

6. All speculation and future trading in food items should be banned.

7. Government must eliminate the entry of corporate interests (including contract farming) and private contractors in food production, food market, regulatory bodies and nutrition-related schemes.

8. Government must not enter into any partnership with the private sector where there is a conflict of interest.

9. Government must ensure access to safe drinking water and sanitation for all. 

Universal PDS: Availability of Funds

Compared to many wealthy nations including USA, Sweden etc. India has a very low tax GDP ratio (around 18 per cent compared to 28 per cent in USA and around 45-50 per cent for Scandinavian countries).

Even this very low rate is not realised. The tax foregone (waived) by the Central governemnt on Corporate Income tax, personal income tax, excise and customs was Rs 5,02,299 crores in 2009-10 (79.54 per cent of the aggregate tax collection), and it was Rs 4,14,099 crores (68.59 per cent of the aggregate) in 2008-09. This is about 11 times the current food subsidy bill.

Apr 19, 2010

The Story of India remains embedded in the tussle for BPL, APL and IPL

Minister of State for Foreign Affairs Shashi Tharoor has been asked to resign. Reports, quoting BCCI officials say that the Indian Cricket Board will most certainly ask Lalit Modi to quit as commissioner of the Indian Premier League (IPL). The lid covering the sleazy and murky world of IPL has been finally blown off.

The resignation drama coincided with another development that did not evoke the same kind of media frenzy. More than 1.1 crore poor people (or 11 million) have been added to the list of Below Poverty Line (BPL) families who are eligible to receive a monthly entitlement of food ration. At the insistence of Sonia Gandhi, the Planning Commission has been forced to revise the estimates of the hungry, accepting the Tendular committee recommendation of 37.2 per cent population living in poverty, as the new line for hunger.

Once these estimates are accepted by the empowered Group of Ministers (EGoM) and the National Food Security Act comes into place, the Above Poverty Line (APL) category will stop receiving any subsidised ration. There are at present 115.2 million APL families who are entitled to subsidised food.

The story of India remains embedded in the tussle between BPL, APL and IPL.

Writing in the New Indian Express, Aditya Sinha puts the IPL honeypot to be worth Rs 20,000-crore (US $ 4.5 billion). "Actually, such is the money involved that during the league’s last burst of expansion the auction figures were quoted in US dollars... For IPL commissioner Lalit Modi it is perhaps fitting that the numbers are in dollars. Rupees are the currency of people living in Orissa, Chhattisgarh, Bihar, Jharkhand... well, you get the picture."

According to the Times of India (April 18, 2010): "The current projected cost, computed on the basis of the proposal to provide 25 kgs to every BPL family at Rs 3 works out to Rs 28,860 crore. It will touch Rs 40,400 crore if the government raises the entitlement to 35 kgs per family. 

"Even in the case of the second scenario, the burden on the exchequer would be lower than the existing Rs 56,000 crore annual food subsidy."

The cost of feeding the hungry must be reduced, and only then can we feed the rich.

In his edit page article: How to feed your billionaires (The Hindu, April 17, 2010), P Sainath asks the pertinent question: "How about questions on public subsidies going to some of the ricjest people in the world? The BCCI-IPL cost the public crores of rupees each year in several ways. The waiving of entertainment tax worth Rs 10-12 crore for the IPL in Maharashtra alone was discussed in the State Assembly. Maharashtra has extended other support to the IPL, which is yet to be quatified. This, despite being a state whose debt will cross Rs 200,000 crore in the coming year."  This is not the only concession, there are several other concealed freebies from the public resources.

Maharashtra is also the State where lakhs of cotton growers in the infamous hunger belt of Vidharbha have ended their lives.

As a discerning reader of the Hindustan Times (April 18, 2010) points out: "Nothing mirrors the widening gap between the rich and the poor in our society more starkly than the IPl phenomenon. While millions of people are struggling hard to eke out an existence, the sharks in business and politics are busy capitalising on our love of cricket to make millions of rupees. The dramatic personae in the side-show represents the rottenness in the IPL. Evidently, their fracas is over "to which pocket how much" should go. Nobody at the helm of BCCI-IPL can claim that their actions are completely above board. The valid quation is of why tax waivers, write-offs and subsidies are given as freebies to billionaires and millionaires behind the IPL under the pretext of making it a grand success at a time of drastic cuts in food subsidy despite the rising hunger goes unasked and unanswered." (G David Milton, via email)

Apr 18, 2010

European Agriculture: Some facts you should know

Statistics, they say is like a bikini. It conceals more than what it reveals. I am not sure whether this saying holds true anymore, but statistics often helps us to put things in the right perspective. It is in this context that I think it is important to share certain facts and figures about European Agriculture.

-- European union is the world's largest producer of food and beverages, employing 8.66 per cent of its workforce and 4 per cent of EU's GDP. EU remains the world's leading exporter of agricultural goods (roughly 17 per cent of total global trade).

-- There are 13.6 million people employed directly in agriculture, forestry and fishery sectors, with an additional 5 million people working in agri-business industry. It generates over €355 billion in production. After EU's enlargement (2004 and 2007) an additional 7 million farmers were added to EU's farm workforce.

-- There are 14.5 million agricultural holdings, occupying 47 per cent of the total land area. Small farms still remain predominant in EU, with the average farm size being 12 hectares.

-- Average agricultural income in EU-27 is less than 50 per cent of the rest of the economy. farm incomes decreased by an average of 12.2 per cent in 2008-09 (primarily due to economic meltdown).

-- EU claims its greenhouse gas emissions caused by agricultural activity (including rearing of livestock) decreased by 20 per cent between 1990 and 2007 in the 27 Member States; whereas the proportion of these emissions produced by agriculture dropped from 11 per cet in 1990 to 9.3 per cent in 2007, inter alia as a result of more effective use of fertilisers and liquid manure, the recent structural reforms of the CAP and the gradual implementation of agricultural and environmental initiatives.

-- The share of Common Agricultural Policy (CAP) expenditure in the EU budget has steadily decreased from nearly 75 per cent in 1985 to a projected 39.3 per cent in 2013.

-- As a result of CAP reforms, EU claims it has become a net importer of agricultural goods with over €78 billion worth of products being imported each year.

-- There are over 40 million poor people in the EU who do not have enough to eat.

-- Since the adoption of decoupled Single Farm Payments there has been a resolute move away from trade-distorting measures in line with WTO requirements [Jacques Berthelot says this is another lie: the SPS is coupled 7 times].

-- European Parliament believes that the EU cannot afford to rely on other parts of the world to provide for European food security in the context of climate change, political instability in certain regions of the world and potential outbreaks of diseases or other events potentially detrimental to production capacity [On the contrary, India thinks it can abandon agriculture and depend on other countries to meet its food security needs -- my view].

-- European Parliament thinks that one of the main reasons why the EU needs a strong CAP is to contribute to the development of viable and dynamic rural communities, at the heart of European cultural diversity, and with a view to ensuring sustainable and balanced socio-economic development across all European territory; and points out that there is an urgent need to attract younger generations to rural areas and provide new and alternative economic opportunities for them to ensure a sustainable rural population.

--  EU believes that rural unemployment should be tackled by providing opportunities for diversification and new income sources. (emphasis mine) 

Delivering benefits in terms of public goods, which justifies the need for strengthening CAP, the European Parliament observes:

1. It recognises that farmers deliver a range of public goods which the market does not reward them for; therefore insists that they must be fairly rewarded and further incentivised to continue delivering higher-quality products, better animal welfare conditions and additional environmental benefits;

2. Recalls, therefore, that unless farming activity is preserved across the EU, no provision of public goods will be possible;

3. Recognises that generations of farmers have shaped the valued EU landscapes and, therefore, should be rewarded for continuing to do so in a sustainable way, especially in naturally disadvantaged areas; believes that they are actively contributing to the great cultural value and attractiveness of Europe, providing the backdrop for successful rural tourism; 

4. Points out that farmers have the potential to deliver additional environmental benefits that match societal demands, in particular soil preservation and restoration, sound water management and quality improvement and farmland biodiversity preservation, and that they must be encouraged to do so;

5. Believes that agriculture has a tremendous potential to adapt to and mitigate the impacts of climate change;

6. Believes, in line with the latest research available, that without a common agricultural policy, unbalanced modes of production would develop across the EU (extreme intensification on the best land and widespread land abandonment in disadvantaged areas), causing serious damage to the environment [clearly!]; insists that the cost of support through a strong CAP is nothing compared to the costs of no action and its negative unintended consequences.

7. Notes that the market fails to reward farmers for protecting the environment; therefore believes that the CAP must become greener by incentivising farmers to maximise the delivery of eco-system services to further improve the sound environmental resource management of EU farmland;

8. Believes that farmers are well placed to contribute to green growth and respond to the energy crisis through the development of green energy in such forms as biomass, biowaste, biogas, second-generation biofuels and small-scale wind, solar and hydro energy, which will also help create new green job opportunities.

These are exactly the reasons for which India and for that matter other developing countries are being asked to withdraw State support, and allow markets to deliver public goods.

[Source: Draft Report on the Future of Common Agricultural Policy after 2013 presented by Committee on Agriculture and Rural Development to the European Parliament on Mar 24, 2010]

Apr 16, 2010

US pays Brazil $ 147 million a year in cotton subsidies to keep its mouth shut.

There isn't any respite for the dying cotton farmers in Vidharbha in central India. Nor is there any hope for millions of cotton growers in the four western African nations, popularly called "Cotton-4"  -- Benin, Burkina Faso, Mali and Chad. It was expected that Brazil might succeed in making a historic correction in US federal support to its cotton growers thereby forcing America to at least start phasing out the monumental but scandalous cotton subsidies.

Brazil had won the dispute panel ruling against US subsidies. It could impose $ 820 million in countermeasures against US goods and intellectual property rights. But the much anticipated trade sanctions against the US did not take place.

The US succeeded in bribing Brazil. It offered to subsidise instead Brazil's rich cotton growers to the tune of $ 147.3 million a year. This is a small fee to ensure that Brazil keeps its mouth shut. Which also means that the US can continue to distort the global cotton market by the huge subsidies it provides to its rich and pampered cotton growers. While the US cotton farmers can continue to go on an annual cruise around the world, cotton farmers in Vidharbha will continue to bear the brunt. Many more will die this year.

US cotton subsidies are primarily responsible for the depressed global prices, as a result of which cotton farmers in India are priced out. Many commit suicide, leaving behind wailing families.

The US continues to top the chart when it comes to a rogue trading nation. It continues to hold up fair and equitable trade negotiations. Often the stage managed negative role the US plays in WTO reminds me of the underworld in the Bollywood blockbusters. Everyone knows that the US is the bad guy, but none of the countries (blame their leaders) are even capable of pointing the bluff. Even the mainline economists shy from pointing a finger.
I was therefore pleasantly surprised when an American magazine -- Time -- came out with a real hard-hitting analysis. Knowing that not many American publications and TV channels would dare to stand up and be counted, I must admire the courage of the writer, Michael Grunwald, to call a spade a spade.

Anyway, here is what he wrote. In between, I have added a box just to illustrate what the cotton subsidies mean for the 'Cotton-4'.

Why the U.S. Is Also Giving Brazilians Farm Subsidies http://www.time.com/time/nation/article/0,8599,1978963,00.html

By Michael Grunwald

What could be more outrageous than the hefty subsidies the U.S. government lavishes on rich American cotton farmers?

How about the hefty subsidies the U.S. government is about to start lavishing on rich Brazilian cotton farmers?

If that sounds implausible or insane, well, welcome to U.S. agricultural policy, where the implausible and the insane are the routine. Our perplexing $147.3 million–a-year handout to Brazilian agribusiness, part of a last-minute deal to head off an arcane trade dispute, barely even qualified as news; on Tuesday, April 6, it was buried in the 11th paragraph of this Reuters story. (The New York Times gave it 10th-paragraph play.) If you're perplexed, here's the short explanation: We're shoveling our taxpayer dollars to Brazilian farmers to make sure we can keep shoveling our taxpayer dollars to American farmers — which is, after all, the overriding purpose of U.S. agricultural policy. Basically, we're paying off foreigners to let us maintain our ludicrous status quo. 

I've previously written that federal farm subsidies are bad fiscal, environmental and agricultural policy; bad water, energy and health policy; and bad foreign policy, to boot. Cotton subsidies are a particularly egregious form of corporate welfare, funneling about $3 billion a year to fewer than 20,000 planters who tend to use inordinate amounts of water, energy and pesticides. But the World Trade Organization (WTO) doesn't prohibit dumb subsidies. It only prohibits subsidies that distort trade and hurt farmers in other countries.


National Centre for Policy Analysis in the US says in its Analyses # 547 (Mar 24, 2006):

Every year, farm subsidies cost developing countries about $24 billion in lost agricultural income. Cotton is an excellent example:

World cotton prices have fallen by half since the mid-1990s and, adjusted for inflation, are now lower than at any time since the Great Depression of the 1930s.

Despite the plunge in prices, cotton production in the United States grew 42 percent between 1998 and 2001.

Due to subsidies, American cotton farmers receive up to 73 percent more than the world market price for their crop. To compensate for falling prices, U.S. cotton subsidies have doubled since 1992, and in 2001-2002 America's 25,000 cotton farmers received a $230 subsidy for every acre of cotton planted - a total of $3.9 billion. By comparison, wheat and maize subsidies amount to $40 to $50 per acre.

Cotton Subsidies Harm Africa. American cotton subsidies cost sub-Saharan Africa $302 million in 2001-2002 alone, according to Oxfam International, an antipoverty organization.

Specifically, West Africa's Burkina Faso lost 1 percent of its GDP, and export earnings declined 12 percent due to competition from subsidized U.S. cotton. In Burkina Faso, 85 percent of the population (more than two million people) depends on cotton production and over half the population lives in poverty. The cost to produce a pound of cotton is one-third the cost in the United States, but farmers there cannot compete in world markets against American cotton. There are similar problems in other countries that also rely heavily on cotton. In 2001-2002, Mali 's GDP fell 1.7 percent and export earnings dropped 8 percent; and Benin lost 1.4 percent of its GDP and 9 percent of export earnings.

Subsidies have devastated Central and West Africa, where more than 10 million people depend directly on cotton production. Millions more are indirectly affected because cotton is also the major source of foreign exchange and government revenue. The International Cotton Advisory Committee (ICAC) estimates that ending U.S. cotton subsidies would raise world prices by 26 percent, or 11 cents per pound. The results for African countries dependent on cotton exports would be substantial:

Burkina Faso would gain $28 million in export revenues;

Benin would gain $33 million in export revenues;

Mali would gain $43 million in export revenues. [See the figure.]

These additional revenues would help stabilize developing economies, fuel development, reduce dependence on foreign aid and significantly improve the lives of millions of people.

And yes, U.S. cotton subsidies do that too. By encouraging Americans to plant cotton even when prices are low, they promote overproduction and further depress prices. An Oxfam study found that removing them entirely would boost world prices about 10%, which would be especially helpful to the 20,000 subsistence cotton growers in Africa. In 2005 the WTO upheld a challenge that Brazil had filed against the cotton subsidies as well as some export-credit guarantees for all American farm products, but the U.S. essentially ignored the ruling.

So last August, the WTO gave Brazil the right to impose punitive tariffs and lift patent protections on $829 million worth of U.S. goods — including nonfarm products like cars, drugs, textiles, chemicals, electronics, movies and music. The retaliation was supposed to start Wednesday, April 7, and it would have driven home how our relentless coddling of farmers hurts other American exporters, paralyzing our efforts to open overseas markets to the nonfarm goods and services that make up 99% of our economy. But at the 11th hour, negotiators from the Office of the U.S. Trade Representative and the Agriculture Department reached a temporary deal with their Brazilian counterparts, so the retaliation is on hold.

The obvious solution, in an alternate universe, would have been for the U.S. to get rid of its improper subsidies. But the current farm bill does not expire until 2012, and the congressional agriculture committees don't want to mess with it because, well, they just don't. Senate Agriculture Chairman Blanche Lincoln of Arkansas and ranking Republican Saxby Chambliss of Georgia on Wednesday praised both governments for finding an alternative solution and pledged to "explore modifications" in 2012. Maybe they will, but don't bet on it — cotton, after all, is not unheard of in Arkansas and Georgia. (Here's the top recipient of federal cotton subsidies, with a cool $24.2 million from 1995 to 2006. Yes, that's an Arkansas farm.)

The U.S. negotiators did agree to modify the complicated export-guarantee program to make it less of an export-subsidy program. They also agreed to ease restrictions on Brazilian beef that have been justified as an effort to protect Americans from foot-and-mouth disease — and criticized as an effort to protect U.S. cattlemen from competition. But the big-ticket item is the settlement's "technical assistance" fund of $147.3 million, prorated, for Brazilian cotton growers. That just happens to be the precise amount of the retaliation the WTO had approved for the improper cotton subsidies. According to the U.S. press release, the fund will be replenished every year "until passage of the next farm bill or a mutually agreed solution to the cotton dispute is reached." So the total cost will exceed the price tag of the infamous Alaskan bridge to nowhere, which was at least designed for Alaskans; the annual cost will far exceed the $100 million President Obama ordered his Cabinet to cut from the federal budget last year. 

Of course, helping Brazil's Big Ag — which is just as big as our Big Ag — won't stop the U.S. (or Brazil!) from dumping cut-rate cotton into the world market, hurting subsistence cotton growers in Mali and Burkina Faso. (I've heard the deal may include modest aid for African farmers, but it's not in the press release, and government officials never replied to me with answers to my questions.) But there is at least one piece of good news from the fields: U.S. cotton subsidies have been declining lately, because U.S. cotton farmers want to be independent of government assistance.

Just kidding! U.S. cotton subsidies have been declining lately, but only because the government-subsidized ethanol boom has made government-subsidized corn and government-subsidized soybeans even more lucrative for farmers. The fix is still in when it comes to American agriculture. Congress might "explore modifications" in 2012, but somehow its explorations and modifications always end up shoveling even more cash.

Apr 15, 2010

Banks make big money from the poorest

Samuel Ighagbon watching employees at his piggery. He has defaulted several times on loans from LAPO. The overriding question facing the industry, analysts say, remains how much money investors should make from lending to poor people, mostly women, often at interest rates that are hidden. -- NYT photo

Sharks come in different sizes. 'Loan sharks' too are available in different shapes and sizes. But when the going gets tough, the smaller among the 'loan sharks' start crying foul. This is a usual phenomenon.

It is therefore amusing when Muhammad Yunus, who won a Nobel Peace prize in 2006, cries foul. The New York Times (April 14, 2010) quoted him saying: “We created microcredit to fight the loan sharks; we didn’t create microcredit to encourage new loan sharks,” According to NYT, Mr. Yunus was recently addressing a gathering of financial officials at the United Nations. “Microcredit should be seen as an opportunity to help people get out of poverty in a business way, but not as an opportunity to make money out of poor people.”

Look who is talking?

The man who started Grameen Bank, which is a pioneering institution for organised money lending, and is making tonnes of money by exploiting the poor, is now howling. The problem is that bigger 'loan sharks' have taken over, and that is worrying Mr Yunus. No wonder, after the successful marketing of mobile phones in the name of the poor, he is now venturing into providing the poor with cheaper Adidas shoes. This is what is called diversification. A smart and shrewd businessman is always looking to diversifying his business.

The New York Times report "Banks Making Big Profits From Tiny Loans" only endorses what we have been saying in these columns. It is not only banks elsewhere which make money from the poor. In India too, it is in many ways the poorest of the poor who sustain the banks. So the next time you see a similing CEO of ICICI Bank Ms. Chanda D. Kochhar, you should know the reason.

I still can't overcome my anger when I recall the statement her predecessor KV Kamath had made some years back: "There is enough money to be made from rural areas." I thought Mr Yunus should have been the first one to slam Kamath for saying this. But then I forget, birds of the same feather flock together.

Let us look at some of the salient points made in the New York Times report:

-- Drawn by the prospect of hefty profits from even the smallest of loans, a raft of banks and financial institutions now dominate the field, with some charging interest rates of 100 percent or more.

-- Te Creemos, a Mexican lender has some of the highest interest rates and fees in the world of microfinance, analysts say, a whopping 125 percent average annual rate. The average in Mexico itself is around 70 percent, compared with a global average of about 37 percent in interest and fees, analysts say.

-- Making pots of money from microfinance is certainly not illegal. CARE, the Atlanta-based humanitarian organization, was the force behind a microfinance institution it started in Peru in 1997. The initial investment was around $3.5 million, including $450,000 of taxpayer money. But last fall, Banco de Credito, one of Peru’s largest banks, bought the business for $96 million, of which CARE pocketed $74 million.

-- Compartamos, a Mexican firm that began life as a tiny nonprofit organization, generated $458 million through a public stock sale in 2007, that investors fully recognized the potential for a windfall, experts said. Compartamos charges an average of nearly 82 percent in interest and fees.

-- You can make money from the poorest people in the world — is that a bad thing, or is that just a business?” asked Mr. Waterfield of mftransparency.org.

You can read the full report at: http://www.nytimes.com/2010/04/14/world/14microfinance.html?scp=1&sq=microcredit&st=cse

Apr 9, 2010

The war against hunger (in Hindi)

This article is published today in Dainik Jagran (April 9, 2010). Just a correction. In para 3, I had mentioned that as per UNICEF more than 5,000 children die every day in India. The person who translated this article perhaps could not believe this astounding figure and thought that I must have got it wrong, and so changed it to 5,000 per year !

भूख के खिलाफ जंग

देविंदर शर्मा

कोई और ऐसा देश नहीं है, जहां प्रचुरता की शर्मनाक विडंबना देखने को मिले। भारत में खाद्यान्न खुले में सड़ रहा है और करोड़ों लोग भुखमरी के शिकार हैं। साथ ही अगर किसी देश पर भुखमरी और कुपोषण का साया है तो वह प्रमुख उपजों का निर्यात नहीं करता। ऐसा केवल भारत में ही हो सकता है।

अमेरिका में, जहां से भारत आर्थिक नुस्खा प्राप्त करता है, खाद्यान्न को तभी निर्यात किया जा सकता है, जब यह सुनिश्चित हो जाए कि वहां की 30.9 करोड़ आबादी और 16.8 करोड़ कुत्ते और बिल्लियों के लिए पर्याप्त खाद्यान्न उपलब्ध है। भारत में खाद्यान्न, जिसमें गेहूं, चावल, मक्का, दालें, फल-सब्जियां शामिल हैं, का निर्यात दस्तूर बना हुआ है और सरकार इस व्यापार से होने वाले घाटे की भरपाई के लिए अकसर अनुदान उपलब्ध कराती है। अमेरिका में, जहां हर छह नागरिकों में से एक आदमी भुखमरी का शिकार है, अमेरिका खाद्यान्न अनुदान के रूप में पांच साल में 205 अरब डालर की भारी-भरकम रकम मुहैया कराता है। भारत में, जहां विश्व की सबसे अधिक आबादी भूखी है, खाद्यान्न अनुदान बिल को 56 हजार करोड़ रुपए से कतरकर प्रस्तावित राष्ट्रीय खाद्यान्न सुरक्षा बिल में 28 हजार करोड़ रुपए कर दिया गया है। ऐसा केवल भारत में ही संभव है।

भूख और कुपोषण से लड़ने में सरकारी योजना की विपुलता केवल कागजों पर ही प्रभावी नजर आती है। महिला और बाल विकास मंत्रालय, मानव संसाधन विकास मंत्रालय और स्वास्थ्य एवं कल्याण मंत्रालय और कृषि व खाद्य मंत्रालय भूख व गरीबी के उन्मूलन के लिए 22 योजनाएं चला रहे हैं। पहले से चल रही इन योजनाओं के इतने व्यापक फलक के बावजूद देश में अधिकाधिक गरीब भुखमरी के शिकार हो रहे हैं। यूनिसेफ के अनुसार कुपोषण से भारत में हर साल पांच हजार बच्चे मौत के मुंह में समा जाते हैं। हर रोज 32 करोड़ से अधिक लोग भूखे सोते हैं। यह देखते हुए भी कि विद्यमान कार्यक्रम और योजनाएं गरीबी और भुखमरी में जरा भी सुधार करने में विफल रही हैं, यह सही समय है कि प्रस्तावित राष्ट्रीय खाद्यान्न सुरक्षा बिल को उचित तरीके से इस्तेमाल किया जाए। अगर हम भूख से लड़ने में विद्यमान तौर-तरीकों में आमूलचूल परिवर्तन नहीं करते तो हम देश को विफल बना देंगे। सबसे पहले तो भूख से निपटने के संबंध में निर्णायक नौकरशाही और विशेषज्ञों तक सीमित बहस को राष्ट्र के बीच ले जाना चाहिए। इसकी शुरुआत के लिए मेरे पास कुछ सुझाव हैं।

सबसे पहले और सबसे जरूरी तो वास्तविक गरीबी रेखा का निर्धारित होना चाहिए। सुरेश तेंदुलकर समिति ने सुझाया है कि 37 प्रतिशत आबादी गरीबी रेखा के नीचे रह रही है। इससे पहले, अर्जुन सेनगुप्ता समिति कह चुकी है कि 77 प्रतिशत जनता यानी 83.6 करोड़ लोग, रोजाना 20 रुपये से अधिक खर्च करने में सक्षम नहीं हैं। इससे अलावा, सुप्रीम कोर्ट के पूर्व जज डीपी वाधवा समिति ने अनुशंसा की थी कि सौ रुपये प्रतिदिन से कम कमाने वाला व्यक्ति गरीबी रेखा के नीचे माना जाना चाहिए। यह जानते हुए कि भारत में विश्व के सर्वाधिक गरीब लोग रहते हैं, दोषपूर्ण आकलन से असलियत में भूख को समाप्त नहीं किया जा सकता। भारत गरीबी और भुखमरी पर पर्दा नहीं डाल सकता। इसलिए भारत को भुखमरी और गरीबी में स्पष्ट विभाजक रेखा खींचनी होगी।

सुरेश तेंदुलकर समिति की 37 प्रतिशत आबादी के गरीबी रेखा के नीचे रहने की अनुशंसा वास्तव में नई भुखमरी रेखा के रूप में चिह्निंत की जानी चाहिए, जिसके लिए बेहद कम कीमत पर खाद्यान्न मुहैया कराया जाना चाहिए। इसके अलावा, गरीबी रेखा के नीचे रह रहे लोगों का अर्जुन सेनगुप्ता समिति द्वारा सुझाया गया 77 प्रतिशत का आंकड़ा नई गरीबी रेखा के रूप में स्वीकार किया जा सकता है। इस वर्ग के लिए कम कीमत पर खाद्यान्न की व्यवस्था की जानी चाहिए। इस प्रकार भुखमरी और गरीबी से निपटने में अलग-अलग तरीका अपनाया जाना चाहिए। ब्राजील की तरह भारत को भी शून्य भूख का लक्ष्य निर्धारित कर योजनाएं तैयार करनी चाहिए। यह दुर्भाग्यपूर्ण है कि देश को खाद्यान्न उपलब्ध कराने वाले छह लाख गांवों के निवासियों को भूखे सोना पड़े। इन गांवों को भूख-मुक्त बनाने के लिए समुदाय आधारित क्षेत्रीय खाद्यान्न बैंकों की स्थापना होनी चाहिए। इस प्रकार की परंपरागत व्यवस्था देश के अनेक भागों में पहले से जारी है।

शहरी केंद्रों में और खाद्यान्न की कमी वाले इलाकों में लाभार्थियों की संख्या घटाने के बजाय सकल सार्वजनिक वितरण व्यवस्था जरूरी है। विद्यमान सार्वजनिक वितरण व्यवस्था का कायाकल्प होना चाहिए और इसके लिए मजबूत राजनीतिक इच्छाशक्ति की आवश्यकता है। इसके अलावा, सामाजिक और धामिक संगठनों को खाद्यान्न वितरण से जोड़ने की भी बेहद आवश्यकता है। इन संगठनों ने बेंगलूर जैसे शहरों में बेहतरीन काम किया है। साथ ही अगर हम स्वच्छ पेयजल और सीवर व्यवस्था उपलब्ध नहीं कराते तो भूख से त्रस्त जनता को राहत नहीं मिल पाएगी। अकसर दलील दी जाती है कि सरकार प्रत्येक भारतीय नागरिक के भोजन का खर्च नहीं उठा सकती। यह सही नहीं है। अनुमानों के मुताबिक अगर सकल सार्वजनिक वितरण व्यवस्था को लागू किया जाता है तो देश को अतिरिक्त छह करोड़ टन खाद्यान्न यानी प्रति परिवार 35 किलोग्राम, की जरूरत पड़ेगी। दूसरे शब्दों में देश का एक साल तक पेट भरने के लिए करीब 1.1 लाख करोड़ रुपयों की आवश्यकता होगी। भारत में खाद्यान्न और पैसे का कोई अकाल नहीं है। सर्वप्रथम, गेहूं और चावल के भंडारण की उचित व्यवस्था न होना महंगा पड़ रहा है। अगर खाद्यान्न की बर्बादी रोक दी जाए तो भारत में प्रत्येक परिवार के लिए प्रति माह 45 किलोग्राम खाद्यान्न उपलब्ध हो सकता है। गेहूं और चावल के अलावा खाद्यान्न वितरण में अन्य पौष्टिक मोटे अनाज और दालें भी शामिल की जानी चाहिए।

2010 के बजट में, प्रणब मुखर्जी ने घोषणा की थी कि उद्योग और व्यापार क्षेत्र के लिए करीब पांच लाख करोड़ रुपये की छूट दी गई है। यह लाभ बिक्री कर, उत्पाद कर, आय कर और अन्य करों में छूट के रूप में दिया गया है। वार्षिक बजट करीब 11 लाख करोड़ रुपये का है। जिसका मतलब है कि सरकार बजट में प्रावधान के अतिरिक्त करीब आधी रकम उद्योग को छूट के रूप में दे रही है। मेरा सुझाव है कि उद्योगों को दी जाने वाली इस छूट में से तीन लाख करोड़ रुपए तुरंत वापस ले लिए जाएं। इससे देश की भूखी जनता को भोजन उपलब्ध कराया जाए। साथ ही इससे स्वच्छ पेयजल भी उपलब्ध कराया जा सकेगा और देश भर में सीवर लाइन का जाल भी बिछ जाएगा।

किंतु यह तभी संभव है जब उन नीतियों को बदला जाए जो दीर्घकालीन टिकाऊ खेती पर जोर न देती हों और प्राकृतिक संसाधनों का निजीकरण और भूमि अधिग्रहण की पक्षधर हों। इनके स्थान पर ऐसी नीति लोगू की जाए जो सभी के लिए भोजन सुनिश्चित करे। इसी में सम्मिलित विकास निहित है। भूखी जनता आर्थिक भार है। प्रस्तावित राष्ट्रीय खाद्यान्न सुरक्षा बिल भारत के आर्थिक नक्शे को इस तरह से पुनर्निर्धारित करने का अवसर प्रदान करता है कि भारत में भूख इतिहास बन जाए।

[देविंदर शर्मा: लेखक कृषि एवं खाद्य मामलों के विशेषज्ञ हैं]

Apr 7, 2010

Grameen Bank uses the poor to bail out Adidas from its financial crisis

Nobel laureate Muhammed Yunus is planning a joint venture with German sports apparel maker Adidas to provide cheaper shoes for the poor. Bangladesh's newspaper Daily Star reported on March 21: The two sides have signed a memorandum of understanding and are working together on how to bring the products into market tentatively by the year-end, said officials of Yunus Centre, the hub of his social business activities. At a meeting at Yunus Centre, Yunus was quoted as saying: "The shoes will be cheap and affordable for the poor. It will protect people from diseases."

Appears to be a laudable objective. But just pause, and think.

I admire Muhammed Yunus for his ability to use the poor so effectively in promoting the commercial ventures of internationally known brands, which are faced with a serious economic crisis. Adidas is one such company, which recently faced a money-laundering probe, and has had its net profits falling by a whopping 97 per cent to just US $ 6.7 million. According to news reports, "Adidas has announced a major restructuring of its operations that would include the elimination of regional headquarters in Europe and Asia and was expected to generate more than €100 million in annual savings."

Adidas would remain eternally grateful to Muhammed Yunus for providing it an assured market that it was desperately looking for. Any shoe company would grab an opportunity where it can sell its shoes continuously for years, in bulk. In other words, Grameen Bank will end up bailing out Adidas from its present crisis of survival. Even if the market was for cheaper shoes (in any case, these shoes have often been allegedly manufactured in 'sweat-shops'), Adidas ends up making enough money to keep it afloat.

Ever since I was a child, I always felt outraged to see the poor walk barefoot. In my own village in Himachal Pradesh, this was quite a usual sight till recently. In many other parts of the country, more so in the tribal and poverty-stricken areas, poor people walk barefoot for miles. I even see women walking barefoot to collect drinking water, fuel and fooder. Most people do understand that walking barefoot makes them vulnerable to several ailments and diseases. But it is because of their economic inability, they can't afford a pair of shoes or chappal.

Providing the poor with cheaper shoes certainly looks to be a pious initiative. I am sure Grameen Bank will soon link up sales of shoes with its loan repayment plans. In other words, poor will become an assured market for Adidas shoes.

I am sure many of you would agree that if the poor were given micro-credit at a lower rate of interest than what the Grameen Bank is doing at present, they would be left with more money in their hands from which they can buy not only shoes but also a decent pair of clothing that Muhammed Yunus is now trying to sell. Interestingly, you first squeeze out every penny from the pocket of the poor in the name of empowerment, and then you show benevolence by selling them a pair of shoes!

Muhammed Yunus and his brand of Micro-Finance Institutions (MFIs) all over the developing world charges the poorest of the poor with a very high interest rate varying between 24 to 36 per cent on an average. I don't think even former US President Bill Clinton, a strong votary of micro-finance, himself pays a 24 per cent rate of interest like what the poorest of the poor are made to shell out.

Since the loan recovery is on weekly basis, the poor end up paying still higher interest, anything between 35 to 50 per cent. No wonder, in several parts of India (and also in Bangladesh) poor loanees are being driven to commit suicide.

Micro-finance is an organised money-lending.

Imagine if the poor were to repay at the rate of 4 to 5 per cent rate of interest, which increasingly is being offered to farmers in India, the entire economic activity for which they receive the small credit, would become profitable. I have always been saying that if the poorest of a poor woman in a village were to get credit at 4 per cent interest for buying a goat, she would be probably be driving a Nano car at the end of the second year.

Yunus is only talking about providing the poor with a pair of cheap shoes. I am talking about Nano car (I don't have to sign an MoU with Tata's to market Nano for the poor). I am sure if he (and his fellow MFI partners) were to start charging only 4 per cent interest on the small credit that is made available, poverty would banish much sooner than what is projected to be achieved under the Millennium Development Goals (MDGs). But then, the problem is who will sustain the livelihood of MFI employees? How can the MFIs then turn into big Empires?

The MoU with Adidas benefits everyone except the poor. Grameen Bank gets the accolades from the urban elite for an imaginative business deal. The business and industrial chambers in Bangladesh (and also in India) would be delighted since these are the kind of business activities that can keep them afloat. Adidas of course will get a breather that it is desperately looking for. Economists would be very happy because the GDP will go up.

Grameen Bank tie-up with Adidas is a classic case of how the well-to-do in our society gangs up to exploit the poor.

Long live the poor!!

Apr 6, 2010

Safe Food: People's initiative to fight food adulteration

I haven't yet met someone who can say that he/she is not a victim of rampant food adulteration. Despite a number of official bodies looking into food adulteration, and the constitution of a National Food Safety and Standards Authority in 2006, the menace of food adulteration has only grown. Everyone complains, but no one is willing to do anything. Somehow, we have accepted it as in inevitable reality, howsoever damaging it may be for our family, that we have no option but to live with.

Jitender Agarwal, a resident of Meerut in Uttar Pradesh, is certainly not among them. For almost two years he has been chasing me, and accosting me with the need to do something. I would listen to him patiently, and urge him time and again to take on the responsibility of creating a wider awareness. He wasn't content with only my words of encouragement, and finally roped me to head a registered society -- Safe Food.

Safe Food was formally launched at Meerut on April 4. This is purely a citizen's initiative, and the overwhelming response that I witnessed at the launch gives me strength and hope that people are now willing to take the bull by the horn. Local leaders, from different segments of society and religion, stood up to extend support in any way -- moral, physical and financial.

Speaking at the launch ceremony of Safe Food at Meerut on April 4, 2010

After the launch ceremony was over, I had invited those who feel concerned and outraged, and feel the need to do something, to stay back and join us in a strategy session. I knew this was not something that people who attend and participate in seminars/conferences or even launch ceremonies are used to, however the response was not only encouraging but gives me tremendous hope. We were able to plan for a number of activities with attached timelines, and also people came forward to take on responsibilities voluntarily.

I will have something to share with you after April 30. By that time, various team leaders would be able to work out an activity roadmap. Meerut in many ways is the epicenter of food adulteration. It is therefore not only symbolic but significant that the movement aginst food adulteration has also begun from the same city.

While the people's initiatives are being worked out, Safe Food is simultaneously getting ready to petition the Allahabad High Court. At the same time, Safe Food is looking to network with similar organisations and civil society initiatives in different parts of the country, region and also internationally. I am sure that Safe Food will extend its reach and activities to various parts of the northern region, and gradually emerge as a rallying force throughout the country.

I have always believed in people. I know once they take control, they will end up cleansing the rotten system. Let us all join hands to remove this cancerous growth from our midst. You don't have to wait for any doctor to come and advise you, it is hightime you took on the responsibility yourself. Together we can fight food adulteration, and ensure that what we and our children eat is safe and healthy.

Safe Food can be contact at campaign.safefood@gmail.com You can also reach Jitender Agarwal at +91-9897619265.