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Ground Reality - Devinder Sharma | Homa Farming

Ground Reality - Devinder Sharma

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Understanding the politics of food, agriculture and hunger
Updated: 11 min 50 sec ago

World Bank deliberately underestimates poverty

Tue, 04/15/2014 - 17:05

 Dhravi slum in Mumbai -- National Geographic 
The business of poverty actually extends to sweeping the poor under the carpet. Over the years I find that while most governments across the world have failed to stem poverty (except in countries like China), the international financial institutions are bending backwards to demonstrate that economic liberalisation helps in reducing poverty, and often drastically. This is being achieved by tampering with statistics, and often providing social indicators that don't actually measure up. One such classic example is the dollar a day measure adopted by the World Bank to define the percentage of the population living in extreme poverty.

Global empirical evidence is now emerging challenging the World Bank's deliberate underestimation of poverty. Recent studies (ECLAC 2002, 2011) have conclusively shown that in Latin America for instance actual poverty rates are twice than what the World Bank had projected. More recently, on April 11, 2014, a study by the University of Bristol published in the Journal of Sociology concludes that the World Bank is painting a 'rosy' picture by keeping poverty too low due to its narrow definition. Dr Christopher Deeming of the Bristol University's School of Geographical Sciences is quoted as saying: "Our findings suggest that the current international poverty line of a dallar a day seriously underestimates global poverty."

He further states: "If the World Bank had in fact used a poverty line grounded in basic needs, rather in its present artificial one which only looks at one monetary measure, the total number of poor people in the world would increase substantially, perhaps by as much as 30 per cent." (The report can be read here: http://jos.sagepub.com/content/early/2014/04/09/1440783314523867.full.pdf+html).  This is exactly what I have been saying over the years. Take the case of poverty line in India. The stringent poverty measures that the Planning Commission has been adopting for decades actually only estimate the extent of starvation (India's poverty line is actually a starvation line. http://devinder-sharma.blogspot.in/2009/12/indias-poverty-line-is-actually.html).

Following the same prescription, India too has shown that its poverty has come down from 37 per cent to 22 per cent. This shameless demonstration of 'inclusive growth' comes at a time when the Arjun Sengupta committee had in 2007 worked out that 77 per cent of the population or roughly 834 million people were able to spend not more than Rs 20/day (roughly 30 US cents). Even in the United States, poverty is growing with estimates pointing to 1 in 7 living in poverty.  

Unless the World Bank makes an immediate correction, all projections of removing 'extreme poverty' by 2030 would be as farcical as its earlier target set in 1973 to remove 'absolute poverty' in low and middle income countries by the end of the century i.e. the year 2000.  But will the World Bank do this? Your guess is as good as mine. After all, it pays to keep poverty low. Only then you can justify the faulty economic policies.

Further reading: How to keep poverty low
http://www.huffingtonpost.com/devinder-sharma/how-to-keep-poverty-low_b_838329.html

What utility crop insurance of it cannot compensate farmers for his crop losses?

Fri, 03/21/2014 - 13:26
Perpetually at the mercy of nature. 
There is nothing more gruesome for any farmer than to see before his own eyes his lush green standing crop flattened by the vagaries of nature. All his hopes and aspirations from a bountiful harvest are grounded in a matter of few minutes. Not only the crop, but his life too is flattened.

As many as 24 lakh hectares of land in Madhya Pradesh and another 18 lakh hectares in have been hit by a series of frequent hailstorms in the past three weeks or so. Extensive damage has also been reported from parts of Punjab, Haryana, Rajasthan, Uttarakhand, Uttar Pradesh, Karnataka and Tamil Nadu.

It is easy to call this a natural calamity. It is easy for Union Agriculture Minister to say crop losses from excessive rain and hailstorm are not unusual, and, therefore, appeal to to show courage. But for millions of small who toil endlessly to tend the crops in the hope that the harvest will feed their families for a few months, all is lost. For those who didn’t commit suicide, such natural disasters push back their household economy by at least three years. Already reeling under debt, life becomes as tall as a mountain for them. They know they have no one to curse except their own fate. This is an agricultural emergency.

With 43 committing suicide in the region and another 37 taking their own lives in (and still counting) ever since the freak hailstorms with a severe magnitude lashed central India in the past three weeks, the extent of damage caused to the standing crops is all evident. Such has been the severity of the storm that as many as 900 cattle have also reportedly perished.

While Agriculture Minister Pawar says unusual rains and hailstorms are not uncommon and wants to demonstrate courage, he appears more concerned with the damage done to sugarcane. Even before the expert teams have been formed to assess the damage, he has already announced that 15 percent of the standing cane crop has been damaged and has even worked out the loss to the sugar mills. But for the rest of the affected community, his advice is to brave this grave loss collectively. A Group of Ministers has been constituted, which is expected to meet next week. 

Although both and Madhya Pradesh each have demanded a Rs 5,000 crore relief package to be provided immediately, the loss estimates will swell by the time estimates flow in from other states. But if past experience is any indication, crop loss compensation is hardly going to be any relief. 

We have had in the past examples of Rs 1 to Rs 20; Rs 95 to Rs 1,470; and Rs 3,000 to Rs 5,000 being provided as relief. After months of waiting, when the get a cheque that is not even worth presenting before a bank, it only shows the contempt and cruelty by which the class is treated. I am not expecting the situation to be any different this season. It is a matter of few days before the first phase of polling begins on 10 April and will disappear from the political radar once the election campaigns peak.

It was in 2007 that the world’s largest weather-based crop insurance programme was launched. By 2012-13, it had expanded to 15 states, covering some 12 million . Prior to this, a number of crop insurance schemes were launched beginning 1972. While all these schemes remained almost at the pilot project stage, these crop insurance schemes do not eliminate risk, but only manage to spread risk over time and space. These schemes only provide compensation based on an index rather than the actual damage, and are also based on an average over a demarcated area, often a block, rather than compensate for the actual loss.

I don’t know what utility these crop insurance projects are serving. Way back in 1920, expert JS Chakravarti had written: “No insurance authority could ever maintain a supervising agency, which would be able to watch and enforce that every insured field receives the required amount of care and attention at the hands of the cultivar. Unless some method is devised by which this great difficulty is minimised, a system of crop insurance would indeed be impossible.” Isn’t it a reflection of our lost priorities that even after 100 years of knowing this, crop insurance continues to be riddled with the same problems and the same level of inefficiency?

I have never understood why crop insurance agencies or companies can’t be made to assess the actual loss a farmer suffers. If every individual can be insured for his life, and that includes people living in remote villages, why isn’t the same system extended to cover crops as well? If an individual house can be insured against theft or fire or a natural disaster, why can’t a crop field be insured in the same manner? Why should the insurance agency be allowed to follow an area approach in the case of crops?
Well, the answer is very simple. The governments are not keen.

Imagine, if the 18 lakh hectares that has been hit by hailstorm in was insured? Farmers wouldn’t have been a worried and harried lot. No farmer would have opted to kill himself. I have a few suggestions on how to achieve this.

First, the government must make it mandatory for the insurance companies to insure all for their standing crops. This can begin especially by making it compulsory for the foreign insurance companies that are lobbying to raise the cap from the existing 26 to 49 percent. These companies should only be allowed to invest, provided they give an undertaking that they would provide individual crop insurance. If they can’t, don’t allow them in.

At the same time, all existing crop insurance schemes should be reworked to achieve the goal of providing compensation based on individual loss.

Secondly, the government must step in to provide at least two-third of the insurance premium. Even in the US, it is the government that provides the bulk of the premium share as specified under the provisions announced under the Farm Bill 2014, which is applicable for another 10 years. In India too, state governments actually end up paying a higher compensation year after year for crop losses than what could have been the premium outgo. At the same time, it will be helpful to seek ’ suggestions to make the crop insurance schemes really effective. The State Farmers’ Commissions should be entrusted with the task to come out with models in wider consultations with , civil society and experts.

Somehow we have come to believe that crop insurance based on individual approach is totally impracticable. Unless this feeling is rectified, I don’t see any glimmer of hope for the . It is easy to tell to pick up courage at times of natural calamities but just imagine if ever your own house or company is destroyed in a fire or an unforeseen disaster, would you have the courage to stand the loss suffered? It is difficult to rebuild affected livelihoods unless, of course, the loss is covered through insurance. Farming is no exception.

Published in: Tehelka Magazine, Volume 11 Issue 13, Dated 29 March 2014

Elections 2014: Spare a thought for farmers.

Mon, 03/10/2014 - 11:30
Elections 2014 is around the corner. And when elections draw nearer, the Government suddenly wakes up and thinks of its duties towards the people. This year is no exception. Whether it is the one-rank-one-pension for the retired defence personnel or the legal monthly entitlement of 5 kg of wheat/rice/millets for the poor households under the national food security act or the announcement of a 7th pay commission along with a DA installment for the central government employees or reservation for jats, the list is endless.

It is an election bonanza time. The more organized you are, and the bigger the vote base, the bigger is the largess. 
But for some strange reasons I find the farmers, comprising the largest chunk of the population, have remained largely ignored. With a 54 per cent share in the total population, and forming the biggest vote bank considering there are 60-crore farmers and landless farm workers, the farming community has not received anything more than lip sympathy. Not only the ruling UPA Government, even the major political parties have refrained from spelling out any economic measure to mitigate the terrible agrarian crisis that the country is faced with.
Although the election manifestos of political parties have still to be made public, the fact remains that farmers are not on the electoral radar of any political party. I have seen Narendra Modi talking about a higher sugarcane price when he addressed a political rally in Meerut; and at times talk of a Rs 5,000-crore Market Stabilisation fund that he believes will ensure that farmers get adequate market price for their crops. He has also been talking of cash crops, and replicating the Gujarat model of agriculture.
Congress leader Rahul Gandhi has not even acknowledged the presence of farmers in his speeches. He talks of the youth and the women but I have rarely seen him devote a major part of his speech on agriculture and farmers. In Punjab, Prakash Singh Badal has refused to tone down the agricultural subsidies. Knowing well that farmers constitute nearly half of the 1.92 crore voters, he has released 7,200 tubewell connections pending for over a decade. In addition, he has also agreed to pay pending compensation to the families of farmers who had committed suicide. This too happened after the farmers staged a massive sit-in for a week or so.
In Madhya Pradesh, Chief Minister Shivraj Singh Chauhan sat on a dharna demanding Rs 5,000-crore relief from the Centre for the crop losses suffered by farmers due to hailstorm and incessant rains. Similarly, some other State governments have been announcing timely relief measures to keep the farming flock satisfied with the amount of compensation. But for a long-term sustainability and overcoming the income inequality in agriculture, nothing is on the cards.
Although forming nearly half of the country’s roughly 82-crore voters, farmers have failed to make a difference. It is because as a community they remain divided, and prefer voting on political grounds rather than as a unified farming force, no political party takes them seriously. Much of the fault also lies with the current leadership of farmer unions and organizations. Most of them are themselves aspirant for tickets for the Lok Sabha and have been queuing up before the political leaders. In other words, it’s the farmer’s leaders who have failed the farming communities. They must accept responsibility for the failure of the farming population to emerge as a major political force.
At a time when the average monthly income of a farming family has been computed at a paltry Rs 2,115, and at a time when close to 2,500 farmers are quitting agriculture every day, all political parties should have seen the urgent need to revitalize agriculture. All the talk of making the country a super power in the next few years sounds hollow if two-third of the population lives in poverty and hunger. According to some recent studies, about 60 per cent of farmers in India go to bed hungry. A farmer sleeping hungry is a reflection of the terrible crisis that afflicts agriculture.
All is not lost yet. It is high time the farmers unions across the country come together and chart out a unified plan before the elections. They should make it abundantly clear that the farmers will only vote for those political parties which promise to support, endorse and put into action the major demands if voted to power. They should refrain from coming out with a 20-point charter of demand and instead narrow down their priorities that need immediate focus. Let me point to some of the priority areas they need to draw attention on.
1.Farmers need a guaranteed monthly income. It's therefore important to constitute a National Farmers Income Commission: At a time when WTO is challenging minimum support price being paid to farmers, also considering the fact that MSP benefits only 30 per cent of India’s farmers, the time has come when farmers need to be given a monthly assured take home income package. If Mayawati can provide a minimum monthly salary of Rs 18,500 for the safai karamcharis in UP, there is no reason why farmers should not get an assured income, DA, health and medical allowances and benefits of pension. 
2. Drawing from the experience of Punjab which has a wide network of mandis and link roads, and thereby is able to provide farmers with the procurement prices, a similar programme needs to be launched across the country for building mandis/markets where farmers can sell their produce at a remunerative price. In Bihar for instance, in the absence of mandis, farmers are duped and fleeced by trade year after year.
3. Excessive use and abuse of chemical pesticides and fertilizers have not only ruined the soil fertility, destroyed the natural resource base, polluted the groundwater, the industrial farming systems have also contaminated the food supply thereby creating health problems and lifestyle diseases. It is therefore time to launch a nationwide mission for sustainable farming based on what has been achieved in Andhra Pradesh. Over 35 lakh acres in AP is now under non-pesticides management, and farmers do not apply chemical fertilizers in 20 lakh hectares. Production is going up. And there are no farmer suicides in the areas where chemical pesticides are not been applied. 
4. No agricultural land should be allowed to be diverted for non-agricultural purposes. In India, massive land acquisition is underway in the false premise of growth through urbanization. Even foreign companies are being asked to acquire farmland. Some 31 such ventures/deals are underway. Given the requirement of a growing population, this will be catastrophic in the years to come. Even China is now rectifying the mistake it made in acquiring the farm lands. Agriculture should be made economically viable and sustainable in the long-term to ensure that farming remains the biggest employer. Killing jobs in agriculture and creating menial jobs in cities is not economic growth. #

The Forgotten Foods

Fri, 03/07/2014 - 12:24


Couldn't resist licking my fingers after tasting a millet-based cooked food displayed at the Adivasi Food Festival, Bissamcuttak, Odisha, Feb 25, 2014.
"Over the past 50 years, we are seeing that diets around the world are changing and they are becoming more similar -- what we call the 'globalised diet,'" Colin Khoury, a scientist from the Colombia-based Centre for Tropical Agriculture told the BBC. "This diet is composed of big, major crops like wheat, rice, potato and sugar. It also includes crops that were not important 50 years ago but have become very important now, particularly oil crops like soybean."

While wheat has long been a staple crop, it is now a key food in more than 97 per cent of countries listed in UN data. And from relative obscurity, soybean has become 'significant' in the diets in almost three-quarter of the nations. The study is published in the Proceedings of the National Academy of Sciences of USA. (http://www.pnas.org/content/early/2014/02/26/1313490111).

The decline in the crop diversity in the globalised diet limited the ability to supplement the energy-dense part of the diet with nutrient rich foods. Amid the crops recording a decline in recent decades were millets, rye, yams, sweet potatoes and cassava, reports BBC (Crop diversity decline 'threatens food security' (http://www.bbc.com/news/science-environment-26382067).

Well, this report is among the several others which have highlighted the threat food security as well as nutrition security faces from the 'globalised diet'. We are all responsible directly or indirectly for this decline. If I were to ask you to count the foods that you eat I bet you will not be able to name more than a few. Wheat, rice, tomato, cucumber, apple, banana … and you begin to reel out the names you know. Not many can name even twenty. Try a little harder, and you will end up probably with another ten. If you are a little more aware, you might struggle with a few more names. That’s it.
That’s how narrow and limited our food sense has come down to. The more we are urbanized, the chances are the less we know about our foods, and the rich food culture that prevailed in our country. The disconnect with the huge diversity of food over the ages has actually alienated the modern civilization from the virtues of the vast repository of biological wealth that existed. Modern living has snapped the symbiotic relationship that existed with nature. Not many know that India is a mega-diversity region with over 51,000 plant species existing, but with hardly a handful being cultivated.
When Laxmi Pidikaka, a tribal woman from southern Odisha explained to me the importance and relevance of each of the 1,582 food species that were displayed at the recently concluded Adivasi Food Festival held at Munda village in Rayagada district, I was left not only amazed with the richness of food around us, but came back with a feeling that how uneducated I was when it came to mankind’s basic requirement of food. Of the 1,582 food species (and that included different kinds of fish, crabs and birds that are part of the daily diet of some tribals), as many as 972 were uncultivated. Yes, you heard it right. Uncultivated foods. 
A dozen tribes living in Odisha, Madhya Pradesh, Chhatisgarh, Jharkhand and Maharashtra had gathered at the Adivasi Food Festival to celebrate their foods, which is basically an appreciation of the traditional food cultures linked to their age-old farming practices providing them nutritional security while protecting and conserving the nature’s bounty. Members from the Kondh, Koya, Didai, Santhal, Juanga, Baiga, Bhil, Pahari Korva, Paudi Bhuiyan and Birhor from more than 300 villages spread across the tribal heartland came to showcase their foods, and also spent the next day discussing how to protect the traditional farming system from the onslaught of the National Food Security Act that aimed at providing them with 5 kg of wheat, rice or millets.
“We don’t need your food security system,” Minati Tuika of Katlipadar village told me. “The more you open ration shops in our villages, the more you force us to abandon our own food security system built by our forefathers so painstakingly over the centuries. Please leave us alone.” But why was she so angry with what most policy makers and planners see as development? Don’t most educated elite think that tribals are uneducated and uncivilized, and therefore all out efforts must be made to bring them into the mainline?
“Don’t teach us what development is. We conserved and preserved our plants, our soil, our forests, and our rivers over the centuries. Now you want to take these away, and destroy them. And then you call it development.” Saying this, she hid her face. When I coaxed her to explain to me how the adivasis were living in tandem with the nature, and how the modern system was distancing them from their traditional cultures and the community control over resources, she agreed to first show me some plants that had multiple uses demonstrating the traditional skills of the community which preserved and used them without pushing them into the extinct category.
She showed me the Siali beans. Quite a big sized dry bean whose seeds are eaten after boiling or roasting, the branches are used to make ropes, and the leaves are used to make leaf plates. Kusum Koli leaves are used for fodder, fruits are eaten raw, wood is used as firewood, and oil is extracted from the seeds. The seed oil serves as a mosquito repellent and also treats certain skin diseases. Even the better know Mahuatrees have multiple uses. Leaves are used for fodder, flowers are used to make jaggery, liquor and porridge. Flowers are also consumed and often sold in the market, a kind of a curry is made from the fruits besides being used as fodder, and the seed provides cooking oil after extraction. All these are unfortunately classified as uncultivated plants in agricultural parlance, and therefore do not receive any attention.
Debjeet Sarangi of Living Farms, which organized the Adivasi Food festival, says it is aimed at deepening the communitarian ethos of the adivasi society and the shared knowledge systems. The event will highlight their sustainable way of growing food and its relationship with their ecology – land, plants, animals and forests. When I asked him whether this exercise didn’t aim at romanticizing the foregone, his response was curt: “That’s where we fault. These people are in complete harmony with their nature. Instead of brushing them as uncivilized, we have to learn from them. Whether we like it or not, the future of the humanity is hidden in these tribal cultures.”
I decided to take a walk to see the range of cooked foods displayed. At the entrance to the event itself participants were served a nutritious welcome drink. Made from ragimillet with a sprinkling of rice grains, the drink was certainly very tasty. Called Mandia jau in the local language, it is actually a ragigruel. Says Salome Yesudas: “I don’t know why people need to drink colas and other kinds of sodas when you have such healthy drinks available.” Considering that the sale of colas has been on a decline, it will be vertainly helpful if someone was to promote Mandia jau. The next time you visit my house, be prepared to taste this exotic drink.
I was at first a little apprehensive at tasting the cooked food displayed. More so, considering that I am a diabetic. But when Salome Yesudas, a nutritionist from Chennai, explained to me how most of these food dishes were based on different kinds of millets which are the preferred food for people suffering from lifestyle diseases, I couldn’t control dipping my fingers. Pancakes made from finger millet, foxtail millet, with a little jaggery; cakes from ragi and sesame, and then there were cooked dishes using sorghum, pearl millet, kodo millet, barnyard millet, red rice and with sprinklings of uncultivated fruits and seeds. Living Farms is now documenting the food recipes and has prepared a nutrition chart detailing the nutrition composition of uncultivated plants. They have also printed posters in English and Oriya on the vast varieties of foods available for a balanced diet, as well as for the summer and winter seasons.
Although the Adivasi Food Festival at Munda was not the first traditional festivals of food that I had visited but what makes me feel encouraged is the efforts being made by some civil society groups to bring back the lost traditions, including the culinary habits. It also clearly demonstrates that what India needs is not a centralized food security system but a multi-layered decentralized food security system based on the traditional practices in that particular region. Instead of providing the tribal populations with a monthly entitlement of 5 kg of wheat/rice/millets, the focus should be on strengthening the existing food system.
This is only possible if we are able to inculcate a feeling of pride in our traditional systems. The richness of our food culture, which is so intricately linked to the preservation of natural resources, is where it can all begin. I don’t know why our agricultural universities don’t talk about it; I don’t know why our food magazines and food shows never focus on the traditional foods; and I am certainly not surprised why our Planning Commission has no idea as to what the tribal cultures imbibe. #   

An abridged version of this article appeared in Tehelka, Mar 7, 2014. Issue 11 Vol 11
The Culture of Eating Right
http://www.tehelka.com/the-culture-of-eating-right/

HUNGER GAMES: "We are waiting for a food riot" -- My interview on food wastage.

Thu, 03/06/2014 - 17:44
The unprivileged sleeping hungry, the rich wasting food, government schemes not making much of a difference and farmers committing suicide! India, despite all the newly acquired progress and prosperity, seems to be deep in the middle of what one can only call Hunger Games. On the crease are the million-dollar dream-boy, the Food Security Act and the lets-shop in-malls Foreign Direct Investment (FDI). The bowler is the aam aadmi, not the political one but the one striving hard for his bread and butter. And no, strangely there are no fielders who could contain the damage collateral or otherwise! With all the food first grown at the cost of the environment and then wasted out of sheer short sightedness, the verdict is out hit wicket. 

Unable to comprehend the bizarre scenario, we asked a third umpire, an expert food analyst. to demystify the scenario. Agri scientist Devinder Sharma has earned the sobriquet Green Chomsky, for his work in the area of food trade and policy. He talked at length to ECO about past mistakes, present confusion and future uncertainty when it comes to food security. Food loss, he said, was the tipping point at which most of the planning and policy really toppled. Excerpts.
ECO: There has been a constant cry for quite some time now that agriculture needs to be throttled up, that we will face a food crisis due to the deficiency of crops. What do you think? 
Sharma: I think we need to clear the air first. Out of the planets total population of 7.2 billion, according to the FAO, roughly 900 million go to bed hungry. So, the entire focus has been to increase productivity in order to maintain the food requirement in the year 2050. I think this is a totally wrong direction to work on. The US Department of Agriculture calculated that the food produced globally in 2012 was enough to feed 13.5 billion people. That means we are already producing food for double the existing population. At the same time we are being told that the population would rise to 9 billion by 2050 and therefore we need to produce more. Population is expected to be around 11 billion by the end of this century. But are we not at present producing food for 13.5 billion people? So where is the crisis on the food production front? Lets be therefore clear. There is no shortage of food. The world is in fact saddled with double the quantity that we need.  
But then what do you make of the millions of hungry people? 
Food mismanagement! At present, around 40 per cent of the worlds food is lost or wasted. If that loss is minimized, we will have food for each and every one. So, food loss is where the thrust should be, globally as well as nationally. The entire focus is on the wrong side when it should be about minimizing food loss. 
How threatening is the food scenario since 40 per cent of all food is reportedly lost in India? 
Who said that? Thats not correct. Everywhere in the media, people say food loss is 40 per cent. Its not according to me. Parliament had asked the Indian Council of Agriculture and Research (ICAR) to do an analysis on the post harvest losses in various crops.  The  ICAR  entrusted  this project to the Central Institute of Post Harvest Engineering and Technology (CIPHET). They came up with the report which says that in case of cereals, the post harvest loss is less than 6 per cent. Similarly, among the vegetables, the highest loss occurs in tomatoes which is around 12 per cent. In case of fruits, guava suffers the most with loss of around 24 per cent throughout the Food Supply Chain (FSC). However, in case of milk there hasnt been any wastage recorded, which is not amazing. 
Well, in that case, where in the supply chain does food loss occur extensively? 
With regard to food loss, there is something that hasn't been observed from a wider outlook. And that is the wastage at the level of processing. That is where the crux lies and nobody wants to talk about it. Because that is industrial wastage, I mean a wastage which everyone is OK with! Maximum food that I find being wasted is in the processing sector. And weve been given to believe that this sector will help minimize food loss. 
If we look at the United States, more than 40 per cent of the food loss happens at the level of processing. And we believe that if FDI happens in our country, food loss will be minimized. But studies show that 50 per cent of fruits and vegetables rot in the American supermarkets! 
With reference to India too, the Agriculture and Food Processing Minister went on record stating 0.6 per cent of the food stored has been wasted during storage. Thats a pretty arguable and a non-realistic figure. But it would surprise you to know that private food distribution companies such as Cargill and ADM waste 3 per cent of their stored food on an average. That means even they are not efficient, contrary to the general belief. 
Now with FDI coming in the food market, are we looking at a significant improvement? 
Improvements? Are you kidding me? Are they successful in their own backyards? I know there are problems in the storage sector and transportation in India. But the impression that I have been getting is that unless FDI retail comes to India, things will not improve. What rubbish? In America, FDI retail is not maintaining the backend processes; neither in Europe. Their government is doing that. Moreover in India, we have this wonderful system of milk co-operatives thats famous around the world for its efficiency. If the milk co-operatives can build up a highly efficient food value chain for a perishable product like milk, without the help of America or Europe, why cant we do the same for agriculture in India? 
And its not that retail stores are new to us. For quite some time now, organized retail chains have been in operation in India. We have Reliance Fresh, Fair Price, Big Bazaar, Easy Day and so on. Their argument was the same. They also promised the same quality of infrastructure and transportation facilities that these foreign chains are now boasting. None of them has been able to develop that type of infrastructure. Theyre not interested; they only wanted to earn money. 
But, going by the hype, there must be some ways in which the country will benefit from FDI? 
Why do you think these foreign investors are lined up to invest in the country? So that we Indians can benefit? These retail chains havent been able to do wee bit of improvements in their country. How can you expect them to do anything here? In America, Walmart has completed 50 years now. And I think more than 60 per cent of the consumer products and agriculture products are being sold or procured or marketed by Walmart. That means the farmers over there should be thriving and prosperous. But thats not what it looks like. Studies show that before Walmart came in, for every dollar of produce that the farmer would sell, his income would be 70 cents. In 2005, the income came down to 4 cents. The income should have gone up now that they were no middlemen. Truth is Walmart in itself is the biggest middleman! American agriculture survives not because of Walmart but because of massive federal subsidies. Same goes for Europe. About 145 billion Euros have been provided to agriculture under the common agriculture policy. In a nutshell, if foreign organized retail comes to India, food loss will break records, farmers would get a lower price, food quality will go down and knowing that processed food is largely unhealthy, Indians  will suffer.
Lets start from the first level of Food Supply Chain. At the ground level, how can farmers contribute and ensure that there is no food loss? 
The only food loss that happens at this stage is during drying and threshing. Farmers leave their harvested crops to dry up under the sun. Thats where some wastage occurs. Washing, threshing and cutting are some more phases but you cannot compare them with the massive loss that happens in the processing sector. And if you ask me the reason for food loss at the farmers level, its because of the policies that devoid the farmer of any progress. Unites States develops some technology, Indian policymakers blindly implement the machines on our Indian farmers. Why do you force some foreign machines or technology on the Indian small farmers? These technologies were not developed for small farmers. Why cant you listen to what the small farmers need and then develop you own mechanisms that would help him? Instead we first develop a technology and then want the farmer to fit into it. 
The government has never paid heed to the woes of farmers. Rather they have looked forward to the benefits of big companies. In Punjab, farmers have been lured in to buy tractors that have no commercial viability for most of them. For a tractor to be commercially viable, one needs at least 10 hectares of land. Now, the government has reduced that figure to 2 acres. Result is, every other farmer is buying tractors on loan from these companies in order to cultivate his small piece of land, which really does not require a tractor. Every second farmer in Punjab owns a tractor. Tractor has now become a symbol of suicide. Tell me what kind of policy is this? Instead of this, tractors should be leased out to farmers for their cultivating season at a reasonable price. 
There are three organizations responsible for food storage in India, the Food Corporation of India, the Central Warehousing Corporation and the State Warehousing Corporation. Still, were left with millions worth rotten food grains every year. Why is that? 
See, setting up of a warehouse is not rocket science. Unfortunately, we see it as a highly technical thing. Planning teams from India have gone to Argentina to understand how they store food. What rubbish! In 1979, a programme was launched by the Indian Government named Save Grain Campaign in order to prevent damage of food grains after the successful Green Revolution. The programme suggested that 50 major warehouses be set up in the country in different states. Imagine if that programme  would  have  been implemented, there would have been no need to bring grains from different states and spend on transport. Food grains could have been distributed locally from the respective warehouse. But food storage has never received any priority. Well, even now there is apparently no priority. Its just glib talk. 
Two three years back, the government had decided to construct Panchayat gharsin each of the roughly 265,000 panchayats. Now, this is ridiculous. Panchayats have always been known to operate from open premises. Instead of this, had they converted these panchayat ghars into food godowns, much of the food storage and distribution problem would have been solved by now. Then there would have been local production, local procurement and local distribution. This shows that there is no emphasis on food storage. 
The media has shaken the thinking of the average person by showing images of food rotting owing to bad storage. But I doubt if this will even remotely affect the policymakers. Instead of stocking food grains in unhygienic places where they will eventually rot, they could have distributed the grains among the poor! But they did not. The policy makers are waiting for a food riot to happen! Only then, their conscience will wake up from its slumber! 
What are your views on the Food Security Act? Is there any provision in it to combat food loss? 
In my understanding, the Food Security Act is an opportunity lost. After 66 years of independence, the government finally decided to bring in a legal mechanism to provide food for the hungry. But in my understanding the National Advisory Council drafted a lousy bill; its faulty.  This Food Security Act is only good for the dustbin. Why? Well, one-third of the worlds hungry people live in our country of 1.25 billion people. They are not hungry because there is shortage of food. They are hungry because there is a grave problem with food access and food distribution. 
The bill aims at providing food to poor people for all times to come. If you make people dependent on a food dole, then you are not empowering them. Will the government go on providing subsidized food to these hungry people throughout their lives? Why not develop a system wherein the people can themselves become self-reliant in ensuring their food security? The question that needs to be asked is that out of the estimated 6.5 lakh villages in India, 5 lakh produce food. Why is it that the same food producing villagers live in hunger? 
It would have been a better option to have two different programmes under the Act, one for rural areas and another for the urban parts. See, in a country like India, one size is not going to fit all.  Time and again, the government is banking upon the same Public Distribution System (PDS) to deliver. The system had failed earlier. 
If the government opted for something more sustainable, like a food grain bank, it would have been much better. This system was in operation on a large scale before the British came. A cluster of villages would have their own community controlled food grain bank system which would prevent prospective starvation. There are many villages in India where such community driven grain banks operate. There is no hunger in these villages. Why cant we operate this community driven grain bank scheme on a large scale? This is the only way to ensure that people become responsible for their own food security and this, in turn, will also boost local production and distribution. 
At a time when 2,500 farmers quit agriculture daily and 3 lakh farmers have committed suicide in the last 17 years, this Food Security Act is nothing more than a vote security bill. On the one hand, farmers are dying and on the other, a huge population goes to bed hungry. Most of the hungry are in fact farmers. Am I the only one who thinks there is something seriously wrong? After all, providing subsidized food to the poor and hungry farmer is not the solution. 
Roughly sixty per cent of the hungry in India are farmers; the government needs to make agriculture sustainable and economically viable for the farmers so that they he can first become food secure. In a country which has 60 crore farmers, the only way out is to link up agriculture with food security. Driving them out of agriculture and ensuring food security by food imports is a suicidal policy. India needs to do what Mahatma Gandhi had suggested. It needs a production system by the masses and not for the masses. #
Source: ECOEarthCare. Mar 2014. http://www.ecoearthcare.com/storyd.asp?sid=1032&pageno=2

$ 1 trillion US Farm bill 2014: Business as usual. Subsidising Corporate welfare in the name of farming

Wed, 02/12/2014 - 18:00

An overview of the 2014 US Farm bill
After a lot of dilly-dallying, the US has finally passed the US Farm bill 2014. The earlier Farm bill 2008, which makes budgetary provisions for agriculture and food security, had expired in September 2012. Anyway, with US President Obama putting his signatures on Feb 7, the bill has come into existence. Probably to tide over the push and pulls from political opponents (backed by Corporate interests), this time the bill is for 10 years. The 2014 Farm bill makes a budgetary provision of almost $ 1 trillion ($956 billion to be exact), which includes $ 756 for food security programmes. 

A cursory look at what the bill contains clearly shows that the emphasis once again is on the faulty industrial agriculture. It replaces old subsidies with new ones, raises the minimum price growers receive for certain crops, and of course has cut down the food stamps programme. While signing the bill, Obama said: "This bill helps to clamp down on loopholes that allowed people to receive benefits whether they were planting crops or not. And it saves taxpayers hard-earned dollars by making sure that we only support farmers when disaster strikes or prices drop. It's not just automatic.

But not everyone agrees. Dan Sumner, an economist at the University of California at Davis said: "Those programs could create problems. That’s the kind of assurances that the U.S. government is willing to provide that most farmers in the world, in fact, don’t have access to. With the backing of the government US farmers can produce more and export more. Ultimately, that drives down world prices and it’s a little tougher for farmers in developing countries to compete with that." (New US Farm bill reaps controversy, Voice of Americahttp://www.voanews.com/content/new-us-farm-bill-controversy/1847016.html).  

Bulk of the budgetary allocation is actually for Supplemental Nutrition Assistance Programme (SNAP) that goes to provide food security to an estimated 47 million hungry. Although the SNAP budget has been cut by $ 8.7 billlion from what was earlier proposed, it still shows how crucial is this safety net in a country which calls itself the Mecca of market economy. $756 billion is proposed to be spent in the next ten years on feeding the hungry. Interestingly, the US had objected to India's paltry food security assistance of about US $ 20 billion a year at the recently concluded Bali WTO Ministerial. US finds nothing wrong in its own $ 75.6 billion/year support in the name of food security, but finds the Indian food security initiative to be WTO incompatible !


Regarding the farm incomes, the bill allows farmers to choose between Agricultural Risk Coverage (the Senate Program variable support levels) and Price Loss Coverage (the House program with fixed support levels) on a crop-by-crop basis. According to Daryll E Ray and Harwood D Schaffer of the Agricultural Policy Analysis Centre of the University of Tennessee "If prices remain high for the next 5 years, the ARC will provide most grain farmers with a superior level of coverage. On the other hand, if prices fall and remain there for a sustained period of time, the PLC will provide farmers with the best coverage. For both programs base acres and yields can be updated."

Accordingly "Reference prices for the PLC program are wheat, $5.50/bushel; corn, $3.70/bushel; grain sorghum, $3.95/bushel; barley, $4.95/bushel; oats, $2.40/bushel; long grain rice, $14.00/hundredweight (cwt).; medium grain rice, $14.00/cwt.; soybeans, $8.40/bushel; other oilseeds, $20.15/cwt.; peanuts $535.00/ton; dry peas, $11.00/cwt.; lentils, $19.97/cwt.; small chickpeas, $19.04/cwt.; and large chickpeas, $21.54/cwt.

"It is interested to note that in the previous counter-cyclical program, the target price for corn, barley, and grain sorghum were all the same—$2.63 per bushel. Now the reference price for corn is $3.70 while grain sorghum is $3.95, and barley is $4.95. Not coincidentally grain sorghum is important in House Agricultural Committee Chair Frank Lucas’ state of Oklahoma, while barley is important to House Agricultural Committee Ranking Member Colin Peterson’s northern tier farmers." #
Further reading: 1.New farm law is bad for Taxpayers and the Environment, Environment Working Group. http://www.ewg.org/release/new-farm-law-bad-taxpayers-and-environment
2.What others are saying about the farm bill, Environment Working Group.http://www.ewg.org/agmag/2014/02/what-others-are-saying-about-farm-bill
3.Finally, a Farm bill. Daryll E Ray and Harwood D Schaffer, University of Tennesseehttp://agpolicy.org/weekcol/706.html

Why can't US Fed print more money to remove global poverty? Just $ 120 billion more.

Mon, 02/10/2014 - 13:40

Is there any hope for the world's poor? Can poverty be made history? 
Every high-level Summit ends up with a call to remove poverty. The World Economic Forum too has been talking about removing poverty, and more recently it campaigned for removing hunger in our lifetime. A few weeks back at Davos in Switzerland the UN Secy Gen Ban Ki-Moon in fact led those who signed on a Zero Hunger campaign. Well, if everyone is so concerned, why is that hunger and poverty continues to grow despite all the global efforts being made to hide the realities (and play down the embarrassing statistics).

The answer is simple. The political leadership is not honest in addressing hunger and poverty.

An Oxfam International report: The cost of inequality: how wealth and income extremes hurt us all (See the pdf here: http://www.oxfam.org/sites/www.oxfam.org/files/cost-of-inequality-oxfam-mb180113.pdf) tells us that the world's top richest 100 people earned enough money in 2012 to end global poverty four times over. This comes to $ 240 billion they earned in 2012.

More recently, the TIME magazine had a report entitled: One State to destroy your faith in humanity: The World's 85 richest people own as much as the 3.5 bullion poorest (See the link here: http://business.time.com/2014/01/20/worlds-85-wealthiest-people-as-rich-as-3-5-billion-poorest/). Based on a report prepared by Oxfam, it said that the world's richest shared a wealth of 1 trillion Pound Sterling which is what the poorest 3.5 billion, half the world's population, has. What is more startling is the despite such statistics that obviously destroy our faith in humanity and also in political and economic leadership that does nothing to curb such "power grab" by a handful of wealthy families, empty slogans of fighting hunger or removing poverty are thrown at us unabashedly.

All this is happening at a time when the US Fed has decided to taper its bond-buying programme by another $ 0 billion. Beginning Feb 2014, US Fed will now be purchasing bonds worth $ 65 billion now. This tapering of its little understood Quantitative Easing programme actually began in January when it reduced bond purchases by $ 10 billion. Earlier, for 15 months, US had gone in for a QE programme which meant that the US Fed was buying bonds worth $ 85 billion every month. In other words, in 15 months, US Fed had made available US $ 1,275 billion to its investors before it began the tapering exercise.

Now what is Quantitative Easing? Now don't get bogged down by this largely unexplained phrase and give me an economic description. It's all a play of sophisticated vocabulary. Put simply it means US was on a dollar-printing exercise. By February 2014, US Fed had actually been buying extra dollars that have been printed all these months, and if you include the taper figures since Jan 2014, it had actually flooded the market with a surplus $ 1,415 billion.

How much money did the Oxfam International say that is required to remover poverty four times over? It said $ 240 billion. Now this figure actually is for removing poverty four times over. I think it will be fair to seek investments that can remove poverty twice at least. I think this is a fair calculation considering a lot of overlapping and hidden costs.

If poverty disappear I am sure you will agree that hunger will be completely wiped out. With hunger disappearing, and poverty becoming history the world not only head towards an egalitarian state but also see the economics of happiness coming into play. It's extreme poverty, hunger, disease and squalor that still shames the humanity.

And this makes me wonder if the US can simply print $ 1,415 billion to prop its own sagging economy, why can't it print another $120 billion that is required to wipe out poverty twice over? Well, that's not difficult. Surely, and I believe President Barack Obama has a dream of a world free of hunger and poverty. On Jan 9, 2014 he had named five economically challenged areas of the country that will receive a series of tax incentives and government grants as part of his efforts to combat poverty across the country. His concern for the poor is certainly evident. But what perhaps he doesn't realise it that with a little more effort he can probably lead the world in making poverty history.

Yes, he can.

My appeal to you Mr President is very simple. Please extend your Quantitative Easing programme and give an additional $ 120 billion to a group of international organisations (with backing from G-20) to launch a time bound programme to remove poverty. We all know that the biggest stumbling block in fighting poverty has been the availability of resources. Now we know it is possible. US Fed has shown that availability of money is not such a big problem as we envisaged earlier. Simply print some more money.

This is your opportunity to carve your name permanently in history, Mr President.We don't have to wait for our lifetime to remove poverty. We can certainly do it in the next few years.

Prime Minister ignores the facts. Openly bats for dangerously risky GM crop technology.

Thu, 02/06/2014 - 12:50


In the 20 years since the first GM crops was introduced in US, there is a spurt in diseases. There is certainly no evidence of a direct link but there is also no evidence that this may not be somehow linked. Why not have a scientific investigation? 
Prime Minister Manmohan Singh stirred a hornet's nest when he warned against succumbing to ‘unscientific prejudices’ against genetically modified (GM) crops. Speaking at the 101st Indian Science Congress at Jammu. He claimed that biotechnology has great potential to improve yields and his government remains committed ‘to promoting the use of these new technologies for agricultural development’.
Prime Minister’s statement lauding the controversial GM technology has not come as any surprise. Two environment ministers – Jairam Ramesh and Jayanthi Natarajan – have been eased out in the recent past essentially because of their opposition to GM crops. Jairam Ramesh was responsible for imposing a moratorium on Bt brinjal which if approved for cultivation would have opened up flood gates for the introduction of many more GM food crops; and his successor Jayanthi Natarajan who is generally believed to have resisted industry pressures to allow field trials of GM crops.
The day after Prime Minister openly came out in support of the dangerously risky GM technology, Monsanto stocks rose by 5.45 per cent. 
The stakes are therefore very high. For the multi-billion dollar industry, India’s refusal to accept GM crops can spell a death knell. Considering that many State governments have refused permission for holding field trials of GM crops, and the swelling opposition from Parliamentary Standing Committee on Agriculture and subsequently the Supreme Court appointed Technical Expert Committee (TEC) the industry has been mounting pressure through the back channels. But let's first understand how true the so-called ‘scientific’ claims of the industry are; and whether GM crops are actually safe for human health and environment.
Prime Minister says that GM technology has great potential to improve yields. This has been claimed by the industry too. But the fact is that it is now 20 years since the first GM crop was introduced in the United States, and there is still no GM crop that increases crop productivity. US Department of Agriculture’s own studies show that the yields of GM corn and Soybean are less than that of conventional varieties.  Even in India, the Central Institute for Cotton Research (CICR) Nagpur, which monitors the cotton crop, has admitted: “No significant yield advantage has been observed between 2004-2011 when area under Bt cotton increased from 5.4 to 96 per cent.”
The argument that the world needs to produce more for the growing population by the year 2050, and therefore it needs GM crops therefore does not hold true. But let’s look at it. Is there a shortage of food in the world? According to the USDA estimate for 2013, the world produced food good enough to feed 14 billion people. In other words, the world produces food for twice the existing population. The real problem lies in food wastage. Nearly 40 per cent of the food produced is wasted. In the US alone $ 165 billion worth of food is wasted, enough to meet the food requirement of the entire sub-Saharan Africa.
In India, which has close to 250 million people going to bed empty stomach, appalling hunger is not because of any shortfall in food production. In June 2013, India had a record food surplus of 82.3 million tones. It has already exported 20 million tonnes out if it, and there are plans to export another 20 million tones so as to reduce the carrying cost of stored food. Instead of increasing food production, the Food Ministry is planning to reduce food procurement and also use the huge stocks with the Food Corporation of India for commodity trading.
The promise of reduction in pesticides usage has also fallen flat. According to Washington State University researcher Charles Benbrook, between 1996 and 2011, farmers in US are applying an additional 181million litres of chemical pesticides. In 2012, on an average 20 per cent more pesticides were applied by GM farmers. This is now expected to go up by 25 per cent with the introduction of the next range of GM crops which will use a cocktail of herbicides including the deadly broad-spectrum chemicals.
In Argentina, the application of chemical pesticides has risen from 34 million litres in the mid-1990s when the GM soybean crops were first introduced to more than 317 million litres in 2012, roughly a ten times increase. On an average, Argentine farmers use twice the quantity of pesticides per acre than their American counterparts. In Brazil, which has recently taken over Argentina as far as the spread of GM crops is concerned, pesticides use has gone up by 190 per cent in the past decade. 
The Chinese farmers are spraying 20 times more pesticides to control pests. In India, the story is no different. Regardless of what the industry claims, the fact remains that the usage of pesticides too has gone up in India. In 2005, Rs 649-crore worth of chemical pesticides was used on cotton in India. In 2010, when roughly 92 per cent area under cotton shifted to Bt cotton varieties, the pesticides usage in terms of value increased to Rs 880.40 crore. 
Equally more worrisome is the emergence of hard-to-kill weeds, called ‘super weeds’. Estimates show that in US over 100 million acres is now infested with super weeds. Besides using a cocktail of chemical pesticides to control it, some US States are going in for hand weeding since chemicals are no longer effective. In neighbouring Canada, more than 1 million acre is infested with super weeds. Studies show that 21 weeds have now developed resistance after GM crops came. Insects too are now developing immunity against GM crops. In India, Monsanto has already accepted that bollworm pest is becoming resistant.
With no benefits accruing as far as increasing crop yields is concerned or reducing pesticides applications and thereby protecting the human health and environment, I don’t know what promise the Prime Minister sees in GM crops. In fact, all evidence now points to an end of the era in industrial agriculture. With soils poisoned, underground water mined ruthlessly, and with the entire food chain contaminated by chemical pesticides and fertilizers leading to more greenhouse gas emissions, the focus is now shifting to ecological agriculture. 
In Andhra Pradesh, nearly 3.5 million acres today is being cultivated without the use of any chemical pesticides. Out of which, farmers do not use even fertilisers in 2.0 million acres. Production is steadily rising, pollution has come down, soil fertility is rising, farmer’s income has gone up and there are no suicides. Isn’t it a model of farming that the Prime Minister should be advocating? If it can be done in 3.5 million acres I see no reason why it cannot be practiced in 35.0 million acres? That’s where the future lies. #

Further reading: 

1. Time to sow the seeds of sustainable farming. Hindustan Times, Feb 10, 2014. http://bit.ly/1bDlyG8

2. Shifting to organic breeding. Deccan Herald. Feb 7, 2014. http://www.deccanherald.com/content/385133/shifting-organic-breeding.html

Are Indian farmers children of a lesser god?

Mon, 02/03/2014 - 13:29

For the Indian farmers, it is hoping against hope  -- Daily Mail picture
Some days back I read an interesting news report. A national general secretary of a political party told the striking sweepers in Punjab that BSP supremo Ms Mayawati had regularised the services of the safai karamcharis in Uttar Pradesh. They are now provided with a basic salary of Rs 18,500 per month. This is certainly good news. A few weeks later, the ruling UPA Govt announced a 10 per cent hike in dearness allowance (DA) for 5 million central govt employees and another 3 million pensioners beginning Jan 1 2014. This was a second double digit hike in a row. It is expected that this time, 50 per cent of the DA hike will be merged with the basic pay. Another good news.

It doesn't end here. A front page news report in Economic Times Feb 3 2014 (Aam Aadmi out of hand, UPA to now woo workers http://bit.ly/1im7A0s) says more sops are likely to be showered on workers in the days to come. Call it election bonanza, but the fact remains that several employment benefits like gratuity, provident fund, bonus and healthcare are now being enhanced. What is on the card includes: 1) Minimum monthly pension of Rs 1,000 for 8.87 crore EPF account holders 2) Raising monthly ceiling for mandatory PF contributions from Rs 6,500 to Rs 15,000 3) Salary ceiling for gratuity contributions may be raised to Rs 15,000 a month 4) Parity in benefits for contract workers and regular employees 5) Minimum guaranteed bonus for workers even if the employer is making losses.

In addition, the report says the ceiling cap for Employees State Insurance Corporation (ESIC) health benefits is also expected to be increased from the existing Rs 15,000 per month to Rs 25,000 per month. This would bring an additional 5 million employees to be the beneficiary of the health security. For the workers in unorganised sectors, constituting 82 per cent of the total workforce of about 40-crore plus, the plan is to increase the health insurance slab to Rs 30,000 per household. Yes, this too is good news.

I still don't have the figures for how much the financial burden would be on the State exchequer. But I am sure you will agree that it would be quite substantial.

Now while all kinds of financial sops are being thrown at the employees and no one is cribbing about the fiscal deficit anymore, I wonder why no one is talking of the dire need to provide immediate financial help to country's 60-crore farmers (which effectively comes to 9.5 crore families). When it comes to farmers, Govt says it can't provide any financial support to such a large population. And that makes me ask a question: Are farmers the children of a lesser god?

Further reading: Farmers need direct income support
http://devinder-sharma.blogspot.in/2009/02/farmers-need-direct-income-support.html

India beats China in environmental destruction. India ranked 155th in the 2014 Global Environmental Performance Index.

Mon, 01/27/2014 - 11:18


New Delhi wrapped in a thick blanket of smog. 
"China has long insisted other countries refrain from meddling in its domestic affairs. Now it appears even its smog is sacrosanct. Foreign embassies that issue air pollution readings are actually illegal and interfering in its internal business, a senior official warned on Tuesday." This is what The Guardian had reported sometimes back (China warns foreign embassies smog readings is illegal, June 5, 2012. http://www.theguardian.com/world/2012/jun/05/china-embassies-smog-readings-illegal).Well, six-month later China began telecasting sunrise and sunset on big screens in the capital city of Beijing. No, this had nothing to do with advertisement for any brand, but the Chinese Govt was trying to show o the smog hit residents of Beijing what the sun looked like on that particular day. (China starts televising the sunrise on giant TV screens because Beijing is so clouded in smog, The Daily Mail, Jan 17, 2014. http://www.dailymail.co.uk/news/article-2540955/Beijing-clouded-smog-way-sunrise-watch-giant-commercial-screens-Tiananmen-Square.html).  

What is happening in China will soon begin to happen in India. After all, a country that is desperately trying to ape China in industrial growth will also face similar problems sooner than later.

To tell you the truth. It is already happening. Despite Beijing's widespread reputation of having some of the most polluted air of any major city in the world, an examination of daily pollution figures collected from both cities (New Delhi included) suggests that New Delhi's air is more laden with dangerous small particles of pollution, more often, than Beijing's. Lately, a very bad day in Beijing is about an average one in New Delhi. (Delhi's air quality is worse than one of the world's most polluted cities Beijing, Data shows. The Times of India. Jan 26, 2014. http://bit.ly/1d3Mgrd).

In other words, India has already surpassed China in the track record to save environment. According to the 2014 Environmental Performance Index prepared jointly be researchers at the Yale and Columbia Universities in collaboration with the World Economic Forum, India is ranked 155th in a list of 178 countries. It ranks much below China (118th rank), Brazil (77th rank) and South Africa (72nd rank). In fact, India's performance doesn't even match that of its neighbours Nepal (139 rank) and Pakistan (148th).

It's time to celebrate. Isn't it? After all, India has surpassed China in environmental destruction !

This dismal performance has however not caused any national outrage. To the Corporate-funded mainline media the only ranking that makes any sense is India's ranking in the global growth chart. Nor are the policy makers interested. Strangely even those TV channels and print media reporters covering the WEF at Davos are quiet on the Environmental Performance Index report.

Forgetting the Himalayan Tsunami that struck the hill State of Uttarakhand last year, the Prime Minister's office has already directed opening up 25 per cent of forests that were previously listed as 'no go' areas. This will allow fast-track 'development' of some of the industrial projects languishing for some time. In fact, still worse is the way industrial corridors are being allowed with complete disregard for environmental safeguards. Take the Kolkata-Amritsar industrial corridor as well as the Delhi-Mumbai corridor, India will soon witness a massive destruction of its environment and that too in the name of economic growth.

With almost all its major river highly polluted, forests being cut at an alarming rate, hills being chopped off for mining, and the cultivable soils poisoned with excessive use and abuse of  chemical fertilisers and pesticides, I don't know whether economists and planners have ever given a thought to the birds, the butterflies and the earthworms. No, I am not being a romantic, but unless you considered the survival of these inmates of ours you cannot save the environment from an imminent collapse. In our quest for a higher economic growth we have lost the vision for a sustainable living.

But why only blame the planners and the economists? What about us, the common people. Do we care?

FDI in retail: The myths around what it can achieve

Wed, 01/22/2014 - 10:26
There is a popular advertisement on TV. A child is running and falls down in the mud. His mother comes running, picks up the child, dusts his clothes and says: "Beta, get up. Don't worry, Surf Excel hai naa!"
In a country where nearly three lakh farmers have committed suicide, farm incomes are plummeting, where rural infrastructure is in shambles, middlemen rule the roost, and there is jobless growth, FDI in retail is being promoted as yet another Surf Excel. An impression is being created that once FDI in retail is in place, it will not only address all the ills plaguing the food and agriculture sector, but also take care of employment.
In the mid-1980s, when Pepsico came up with a proposal to bring in a second horticultural revolution in Punjab, it too was hailed as a path-breaking initiative that would put an end to the continuing distress on the farm. It was expected to usher in the latest technology, improve farm research and extension, create supply-chain infrastructure, and provide marketing linkages from farm to the fork. I remember the kind of excitement that prevailed all around. Politicians, bureaucrats, economists, agricultural scientists and even the Bhartiya Kisan Union (BKU) joined the chorus.
Some 15 years after the project was approved, Pepsico's horticultural revolution is all but forgotten today. Agriculture has gone from bad to worse. The food bowl of the country has also become a major hot spot for farmer suicides.
Arvind Kejriwal's scrapping of FDI in retail in Delhi has renewed the debate over one of the most contentious of policy issues. Commerce Minister Anand Sharma has expressed displeasure saying that the Delhi government's decision will send a wrong signal to foreign investors. On the other hand, FDI in retail will lay out back end infrastructure, bring in a chain of cold storages and improved transportation thereby reducing crop losses, remove middlemen who rob the farmers of profits, and thereby provide him higher prices and bring in improved technology to help in crop diversification. Of course, it will also create millions of jobs.
Let us now examine how true these claims are, or at least how likely. Wal-Mart, Tesco, Sainsbury, Carrefour and a host of other big retail players are expected to increase farm incomes. But in the US, where Wal-Mart has completed 50 years, if farmers had indeed been getting better income, what reason would there have been for the farming population to plummet to less than one per cent of the total population?
In the US too, 40 per cent of food is wasted and much of it after processing, where Wal-Marts should in fact have played a more important role. If big retail failed to reduce food wastage in the US, why do we expect them to do a miracle in India?

 •  FDI: Just the facts, please
 •  A stimulus package for farmers?Farmers in US survive on the farm not because of Wal-Mart but the massive subsidy support they get, which includes direct farm income. Between 1997 and 2008, Rs 12.60 lakh crore was provided as income support to farmers. An UNCTAD-India study shows that if these subsidies, classified as Green Box in WTO parlance, are removed, American agriculture will collapse.In Europe, despite the dominance of big retail, one farmer quits agriculture every minute. Europe provides the highest amount of subsidies, including direct income support. But because 74 per cent of these subsidies are cornered by Corporations and big farmers, small farmers are quitting the sector. In France, farm income has come down by 39 per cent in 2009. In OECD, the richest trading block comprising 30 countries, Rs 14 lakh crore was the farm subsidy support in 2009 alone. It is not big retail, but direct income support that keeps farmers in agriculture.
Studies show that in America, some 50 years back when farmers sold their produce for one dollar, their income was 70 cents. In 2005, this had fallen to 4 per cent. With middlemen wiped out, one would have expected the farmer's income to go up. But now it is a new battery of middlemen . quality controller, standardiser, certification agency, processor etc - who walk away with the farmer's profits. The number of middlemen, operating under the same hub, actually increases.
Take the example of an earlier Walmart-Bharti tie-up for wholesale marketing in Punjab. Baby corn is bought by Bharti-Walmart at Rs 8 per kg, sold at Rs 100/kg in wholesale by big retail, and ultimately the consumer price hovers around Rs 200/kg. It's a clear example of how the middlemen squeezes farm incomes and fleeces the consumers. This is not an isolated case. Much of the farm produce is bought at very low prices across the globe. Primarily for this reason, dairy farmers in UK are quitting on a large scale. They are urging the British government to set up a fair price mechanism that big retail should be directed to adopt.
There is no evidence that big retail creates back end infrastructure either. In US and Europe, rural infrastructure has been created through government support which came in the form of agricultural subsidies again. To say that 40 per cent of agricultural food that goes to waste in India will be drastically reduced by the influx of FDI in retail is also an illusion. In US too, 40 per cent of food is wasted and much of it after processing, where Wal-Marts should in fact have played a much more important role. More than 50 per cent of vegetables/fruits rot in supermarket stores. If big retail failed to reduce food wastage in the US, I wonder why do we expect them to do a miracle in India?
Regarding employment generation and poverty alleviation, lessons need to be drawn from a 2004 study by Stephen Goetz and Hema Swaminathan of Pennsylvania State University, which showed how higher poverty prevailed in areas where Wal-Mart stores had come up, compared to those states where big retail was absent. In any case, in a market with a turnover of $450 billion, Wal-Mart employs only 2.1 million people. In contrast, for an estimated $460-billion market, Indian retail employs 44 million people. If Wal-Mart is allowed to come in, what has to be understood is that for every job it creates, it is most likely to displace at least 20 workers.
Yes, there is a need to improve rural infrastructure, provide a sophisticated supply chain, and provide better income to farmers. The milkman of India, late Dr Verghese Kurien, had shown us the way. The cooperative dairy structure, which led to the evolution of the Amul brand, is the right approach. If he could do it for milk, which is a highly perishable commodity, there is no reason why it cannot be replicated for fruits, vegetables and other agricultural commodities. A solution to the plethora of problems on Indian farms does not lie in the west, but in our own backyard. There is no need to look for a Surf Excel. #
Source: FDI: Neither necessary, nor sufficient
India Togetherhttp://www.indiatogether.org/2014/jan/dsh-fdiretail.htm

All those who stand up for the people are very conveniently called anarchists.

Tue, 01/21/2014 - 15:02

At the Seattle WTO Ministerial in 1999
When I protested along with hundreds of people on the streets of Seattle at the WTO Ministerial in 1999, I was called an anarchist; when I question the economics of G-20 or G-8 and defy the police cordon, I am again called an anarchist; when I raise pointers to the flawed economic policies of Govt of India, I am labelled as being anti-development; when I oppose GM crops I am called luddite; and when I lead the people's protest against an unwanted land grab through a Petro SEZ at Mangalore, I am called a naxalite. In others words, if you stand and talk for the rights of the people, you are a threat to the nation, you are an anarchist. I don't mind whatever tag is bestowed as long as I am convinced that justice is not being done. If at the end of all these we are now told that the economic wealth of 85 people is more than that of 3.5 billion, please tell me where was I wrong? If the rich are becoming richer and the poor are being driven to the wall, please tell me how was I wrong? If the soils are poisoned, oceans polluted, rivers run dry, human health compromised, and the planet is warming up at an unmanageable pace, please tell me why shouldn't I be asking the right questions? If economic growth only means ruthlessly exploiting the natural resources to fill the pockets of the wealthy, please tell me how am I an anarchist? 

Regardless of what you call me, my fight for justice will go on.

Anti-austerity protests in Rome 2012


People protest against land grab in Cambodia, 2012

How to kill farmers

Mon, 01/20/2014 - 09:29
At the AICC meeting in New Delhi, Rahul Gandhi made a mention of how he had asked his Congress chief ministers to exempt fruits and vegetables from the Agriculture Produce Market Committee (APMC) Act.  As per his directive, most Cong chief ministers had already removed fruits and vegetables, which have contributed much to raging food inflation, from the APMC Act by January 15. But has it helped reduce food inflation?
The prices had already come down in December much before Rahul Gandhi’s directive could make a difference. But what is more important is to understand whether the APMC Act is the villain of the story or whether the fault lies somewhere else. Let’s take a deeper look.
A day after Parliament approved FDI in multi-brand retail in Dec 2012, a newspaper report highlighted how the big retail was exploiting both the farmers as well as the consumers. The wholesale cash-n-carry Bharti-Walmart enterprise was buying baby corn from contract growers in Punjab at Rs 8 per kg, selling it in wholesale at Rs 100/kg and finally the consumers were paying Rs 200/kg. In other words, a farmer got only 4 per cent of the end price the consumer paid.
Take the case of paddy in Bihar, which is the only State to have repealed the Agriculture Produce Marketing Committee (APMC) Act way back in 2006. It had freed farmers from what many pro-reform economists call as an ‘archaic provisions of a socialist era’ thereby allowing farmers the freedom to sell their produce to whomsoever they like. Against the procurement price of Rs 1,310 per quintal that Punjab farmers got this year, Bihar farmers have somehow managed to sell paddy at something around Rs 800-900 per quintal. This is nothing but a distress price, a classic example of ruthless exploitation by the private trade.
Ironically, the Commission for Agricultural Costs and Prices (CACP) which is supposed to ensure remunerative prices to farmers lists Bihar as the top ‘market-friendly’ State as far as agriculture is concerned. Punjab, which has a network of mandis and provides an assured price to farmers year after year, is at the bottom of the chart. At a time when being market-friendly is the new mantra, CACP is asking the Punjab government to disband the APMC Act and allow markets to operate freely. In other words, it wants Punjab farmers to go the Bihar way.
What probably Rahul Gandhi has never been told is that only about 30 per cent of India’s farmers get the benefit of procurement prices. Rest 70 per cent farmers are in any case dependent upon the markets. If the markets were so helpful for these 70 per cent farmers, encouraging entrepreneurship and thereby improving livelihoods, I am sure by now the farmers in the food bowl of the country – Punjab and Haryana – would have demanded repeal of the APMC Act.
But it didn’t happen. The reason is obvious. APMC Act, despite all its flaws, provides an assured price and market to farmers. It is primarily for this reason that Punjab farmers are refusing to diversify from wheat and rice cultivation in the absence of an assured price mechanism for other crops. Madhya Pradesh this year is expected to take over Punjab in wheat production, not because of leaving farmers to the tyranny of the markets but providing them with a bonus above the procurement price.
I am amused when some economists blame APMC for the monopolistic market structure that restricts the entry of free trade and competition thereby denying farmers an economic price for his produce. This is completely wrong an assumption. Under the APMC Act, farmers bring produce to the designated mandis where the private trade is first allowed to make purchases. It’s only when there are no private buyers left that the Food Corporation of India (FCI) or the State procurement agencies step in to lift whatever is available at the minimum support price.
This is what irks the private trade. It doesn’t want to pay the minimum support price to farmers. If it can get paddy at Rs 800-900 per quintal in Bihar for instance why should it shell out Rs 1,310 per quintal to Punjab farmers? While I say this, the Gurgaon Chambers of Commerce and Industry have already asked the Haryana government to remove the APMC Act completely which will allow them to procure cheaper raw materials for the industry.
To say that market structures do not permit the entry of new players who want to set up cold chains and invest in other infrastructures is all bunkum. In seven years after repealing the APMC Act Bihar has seen any revolution in agricultural marketing. Farmers have been left in the lurch. Nor is the private trade interested to make investments. In fact, the industry wants to exploit the already existing supply networks in the frontline agricultural states like Punjab and Haryana.
Prior to the Green Revolution, and before the Agricultural Prices Commission was set up, farmers were free to sell their produce to anyone who offered them good prices. It was known to be an exploitative system wherein the trade squeezed the profit margin of farmers at the time of harvest. It was only when procurement prices were introduced that farmers got an assured price for their produce, and that is what encouraged them to produce more. An assured price and an assured market formed the very foundations of the Green Revolution. Procurement prices help farmers realise a fair and better price for their produce. This system needs to be improved and strengthened, not dismantled. 
There is no denying that over time some aberrations have cropped up in the way the mandis (as the public grain markets in India are known) operate. The APMC laws have the provisions to effectively regulate these mandis. But rarely has the government ever stepped in, and in fact it is because of the political cover to the powerful middlemen coterie that the entire mess has generated. For instance, why do the State Governments make a political appointee as the chairman of the APMC committee? 
But to take away horticultural produce from the purview of the mandis, and that too after the 2005 amendment in the APMC Act had allowed the private buyers to bypass the mandis and purchase wheat and rice directly from the farmers, is primarily aimed at killing the procurement system. This is the first step. More will soon follow. In other words, knowingly or unknowingly Rahul Gandhi is very cleverly suggesting destruction of the very foundations of food self-sufficiency built so assiduously over the past four decades. #
An abridged version appeared in The Hindustan Times, Jan 20, 2014.Leaving farmers to reap the bitter harvest 
Read also: Cartels cause runaway inflation. DNA Mumbai, Dec 30, 2013.dnai.in/bXsg 

The assault on dairy in India

Sun, 01/19/2014 - 11:34
The Indian dairy sector, comprising millions of small farmers who keep a few cattle herds along with tending crops, is under threat. It has been under threat for quite some time, but somehow the country had managed not to give in. But lately I find that the major dairy exporters -- European Union/United States/Australia/New Zealand -- are all eyeing the huge dairy market that India offers. China is another player waiting on the wings.

Here is my next video blog on the dairy assault on India: 
 
If this video doesn't start, click on this link: http://www.youtube.com/watch?v=xJnPqRtUze0 or visit my YouTube channel -- Devinder Sharma's Channelhttp://www.youtube.com/user/DrDevinderSharma 

Indian farmers are living in hunger

Sat, 01/18/2014 - 11:01
At a time when change is the buzzword on the political landscape, when cities are changing, and the villages are no longer what they used to be; when incomes are rising for an educated few, and when the bottom of the pyramid – those below the poverty line -- are showered with a series of freebies; perhaps the only segment of the Indian society which hasn’t seen a change all these years is the 60-crore strong farming community.
With nearly 3 lakh farmers taking their own lives in the past 17 years, and with more than 65 per cent farmers’ heavily indebted, agriculture has the dubious distinction of supporting the largest percentage of population with the lowest incomes. The fact that the share of agriculture in country’s GDP is relentlessly sliding, presently hovering at a little over 13 per cent, means that such a large population is living on a thin edge. No wonder, with agriculture becoming highly uneconomical, more than 60 per cent farmers are dependent upon MNREGA wages to make the two ends meet. In other words, the people who grow food for the country are themselves going to bed hungry.
Such is the plight of Indian agriculture that in the past seven years – between 2007 and 2012 – 3.2 crore farmers have abandoned farming and moved into the cities looking for menial jobs. According to census 2011, every day 2,500 farmer quit agriculture. Some other studies have shown that roughly 50,000 people migrate from a village (and that includes farmers) into a town/city every day. As per a NSSO study, 42 per cent farmers want to quit if given an alternative.
Those who leave agriculture, sell off their meager land holdings and trudge to the cities looking for a better livelihood, end up plying rickshaw or working as a daily wage earner in the booming construction activity. Economists and policy makers call this as a sign of economic growth. Moving people out of agriculture is the ultimate growth, claims Raghuram Rajan, the Reserve Bank of India chief. Pushing them out of agriculture and forcing them to join the ranks of landless workers is the new economic mantra.
Prime Minister Manmohan Singh says that 70 per cent farmers are not required, and should be moved out of agriculture. World Bank wants India to move 40-crore people from the villages into the cities by the year 2015. I have never understood the economic logic behind such a massive translocation of the population from the rural into the urban areas. These are people who are somehow driving their livelihood from farming or other related activities in the villages. They may be under-employed but to force them out of the villages so as to provide temporary cheap labour for the growing construction and real estate industry is no solution to the continuing agrarian crisis.
Agriculture is the biggest employer in the country. By creating conditions that makes agriculture economically unviable we are only adding to the jobless growth. Take another Planning Commission study. It showed that at a time when the country’s GDP was hovering between 8-9 per cent between 2005 and 2009, more than 1.40 crore farmers had left agriculture. Normally it is believed that these farmers would be employed in the manufacturing sector. But manufacturing sector too showed a negative growth, cutting down on 57 lakh jobs. So where did these millions go?  
In such a depressing scenario, moving people out of agriculture does not make any economic and political sense. In fact, it serves a double whammy for the poor farmers. They sell-off their meager land holdings and move into the cities. But when the economic growth slows down even the daily wage jobs in cities dry up. They are therefore forced back into the villages and in the absence of any land to fall back upon they are left with no choice but to become completely dependent upon MNREGA jobs or serve as a farm worker. According to a CRISIL study, 1.5 crore farmers are expected to be returning back to the villages between 2012 and 2014 because there is no work available even in the cities.
The push to move a significant proportion of the population from the rural to the urban areas is reflected in the economic policies. To me there is nothing more worrying than the inability of the mainline economists to understand the social, economic and political implications of such a massive demographic change. By the year 2030, may studies estimate that roughly 50 per cent of the population would be staying in the cities. This certainly will bring in tremendous pressure on the government to create more employment opportunities in the cities, which unfortunately will not happen because the economic growth paradigm is based upon jobless growth.
If any meaningful change has to happen, it has to happen in agriculture. But if you are looking at a change in the form of encouragement for contract farming and corporate agriculture coupled with land acquisitions, it’s not going to address the terrible agrarian crisis. It needs a different prescription which is beyond the scope of the economic textbooks. It has to come in the form of providing gainful employment in the rural areas with focus on revitalizing sustainable farming. Hibre Bazar village in Maharashtra has shown that it is possible. From a perennially drought-prone village, Hibre Bazar now boasts of 60 millionaires in the same village.
It all begins by restoring the community control over the natural resources. Gram Sabhas have to be accorded supremacy in decision-making, and the emphasis has to shift to making agriculture sustainable in the long run and also making it economically viable. Providing farmers with a guaranteed monthly income will ensure economic stability. Once agriculture becomes profitable, farmers will resist the pressure as well as allurements to sell-off their farm lands. This can only be possible if the Reserve Bank of India formulates macro-economic policies that shift the focus to rebuilding the village economy. Unfortunately, it is presently following the IMF/World Bank prescription that calls for a massive rural-urban population shift.
Agriculture has to be ploughed back as the mainstay of Indian economy. It has the ability to provide gainful employment to two-third of the population, maintain environmental balance, and ensure food security for the nation. And as Dr M S Swaminathan has often said the future belongs to not those countries which have weapons, but those which have food. Let’s not fritter away the nation’s future by killing agriculture. That’s the change that India needs

Indian farmers: Living on a thin edge

Thu, 01/16/2014 - 11:10

Will their fate ever change? 
In the coming months, about 1.5 crore farmers who quit agriculture in the past seven years, are likely to trudge back into the villages. In normal circumstances such a massive reverse migration – from the cities back to the villages – would have been a sign of inclusive growth. But economists are taking this U-turn as a sign of economic slowdown. A report by CRISIL put this as an indicator of the slowing economy as a result of which people are being forced to return to their villages.
I have never understood the economic rationale behind this. In the 7-year period between 2005 and 2012, an estimated 3.7 crore farmers quit agriculture. Economists view this trend as a sign of economic growth. In other words, while 50 lakh farmers are forced out of agriculture every year, growing farm unemployment is being considered as assign of economic growth. How can creating unemployment in the agriculture sector and then find an alternative employment to the millions displaced from agriculture constitute economic growth?
Nevertheless, we are told that an estimated 70 lakh jobs are created in the non-farm sector. Considering that most of the non-farm jobs are in construction, what is not being told is that these are menial jobs are temporary and do not carry any social security. Construction sector employs daily wage earner, and for the farmers who find employment in the construction industry, this is no stable employment.
All this is happening at a time when a bountiful monsoon has resulted in a record foodgrain production this year. In fact, agriculture is going to be the savior of the Indian economy in 2013-14. At a time when there is an all around doom and gloom -- industrial output failing to keep pace, manufacturing sector declining, joblessness growing, fiscal deficit mounted and the current account deficit grew to a worrisome level -- it is only agriculture that provides a glimmer of hope. And yet, all out efforts are being made to shift the population out of agriculture.
During the year, foodgrain stocks of wheat and rice soared to an all time high of 823 lakh tonnes. Grain exports increased to 200 lakh tonnes. India emerged as the world’s biggest exporter of rice, and the farm exports zoomed exponentially. And yet the fact remains that agriculture is the most neglected sector. Even Prime Minister acknowledges that India is faced with a terrible agrarian distress.
For the 60-crore farmers 2013 has been like any other year. Every time when the dawn of the New Year strikes, there is an expectation of a better year for the annadata but I have seen their plight worsening with each passing year. The year that has gone into history was no exception. In fact, at a time when the government employees have been promised a further pay rise from the 7th Pay Commission, farmers remain at the bottom of the pile, neglected and forgotten. On an average, 2,500 farmers quit farming every day to join the army of landless workers.
As I said earlier, I have never understood the economic logic behind this deliberate move to drive out farmers from their meager land holdings, which is their only economic and social security. Since agriculture sector happens to be the biggest employer why don’t the policy makers try to make agriculture a more productive and economically viable profession? Why can’t farmers be provided with a higher income so that they stay on the farm? Translocating a massive population from the rural to the urban areas is only leading to the collapse of the cities and at a time of jobless growth, these farmers are only providing cheap and readily available labour force for the real estate and construction industry.
With joblessness growing and the policy thrust on reducing subsidies for the poor and needy, the number of poor in absolute terms has been increasing. By reducing the poverty line to Rs 28 in urban areas, and Rs 24 in rural areas, the government can play around with figures but the fact remains poverty is on an upswing. Uprooting more people from agriculture will only add to more and more people to poverty, and lead to underemployment.
The enactment of the Food Security Act ensuring a monthly entitlement of 5 kg of rice/wheat/millets to 67 per cent of the population or 830 million people is not only aimed at offsetting the additional burden of the unprecedented price rise. But more importantly, it is aimed at minimizing the possibility of food riots that can erupt when a large section of the population is being deliberately displaced from an assured livelihood. Food security requirements can be met by food imports, and given the emphasis on land acquisition for the industry, real estate and highways, the task of producing food for the population will become more and more difficult. Already there are indications that India will turn into an importer of rice in the next three years.
From a high of 9.3 per cent two years ago, the GDP has fallen to less than 5 per cent in 2013. With agriculture growth expected to provide a push to GDP in 2013-14 financial year, the deceleration in growth is because of the poor performance of the industry and manufacturing sectors. With no jobs being created in the manufacturing sector, why should we deprive people from their only means of livelihood – farming.
A Planning Commission report released early this year underlines the contradictions in India’s growth story. At a time when GDP was galloping at 8-9 per cent between 2005 and 2010, the report shows 140 lakh people were displaced from agriculture. Generally it is believed that those who quit agriculture would be joining the workforce in the manufacturing sector. But the report showed that even in the manufacturing sector 57 lakh jobs were lost. A clear pointer to the jobless growth the country is witnessing.
Nothing has changed in 2013 to bring back the focus on creating employment. Let’s be very clear. More investments do not necessarily lead to more jobs. With the new land acquisition law coming into force, more people would be driven out of their meager land holdings and left to migrate to the cities looking for menial jobs. Agriculture too will not be able to sustain its role as the biggest employer in the country given the push to bring in corporate agriculture linked to foreign direct investment in multi-brand retail. There can be nothing more disastrous, both politically and socially, and I wonder when will growth economics be replaced by some sensible economics?  #
Part of this article appeared in Deccan Herald, Jan 16, 2014Living on a thin edge http://www.deccanherald.com/content/380743/living-thin-edge.html

Cartels cause runaway food inflation. Break cartels if you want to honestly address inflation.

Mon, 12/30/2013 - 10:08

A typical organised vegetable and fruit market in India.  
Several years back, the late Nobel laureate Norman Borlaug had shared an interesting insight into the way Nobel prizes are awarded. At the peak of the solidarity movement in Poland, when Lech Walesa was leading a popular workers’ uprising, the Nobel prize committee decided to find out whether Lech Walesa deserved a Nobel Peace prize or not.
Borlaug told me that he was asked to lead a small team to Poland. After visiting a number of places, and meeting a cross-section of the stake-holders and others, he realized that the workers’ solidarity movement was actually fighting for cheaper food prices. But at no stage Walesa and other leaders of the popular movement showed any concern for the millions of farmers who were being asked to produce cheaper food for the workers. “What would happen to the livelihoods of those millions who produce food? If these farmers were expected to produce cheap food year after year, how would they and their families survive?”
For this reason alone, Borlaug said that Walesa didn’t deserve a Nobel Prize. But despite his team’s recommendation, the fact remains that Walesa was bestowed with Nobel Peace Prize.
Now you will ask me what has Lech Walesa’s Nobel Prize to do with the rising food inflation in India. Well, there is a strong correlation. There is hardly a day when I don’t find newspaper articles and comments on the need to do with the procurement prices to farmers. Corporate economists and free market lobbyists have been repeatedly telling us on the dire need to do away with the MSP for cereals like wheat and rice. The Commission for Agricultural Costs and Prices (CACP) too has been vociferously demanding the dismantling of the price support system for farmers, and letting the markets reign. 
So when the RBI governor Raghuram Rajan blamed the Agricultural Produce Market Committee (APMC) Act for the rising food prices, I wasn’t surprised. Unable to control the runaway inflation, propped up more by the rising food prices, the easier option is to shift the onus to the little understood role agricultural markets play in providing an assured price support to farmers.
At 7.2 per cent, the wholesale price index rose to its highest in the past 14 months ending November. The increase in inflation is being attributed mainly to the 15 per cent rise in food prices. Prices of vegetables had earlier shot up by 18.4 per cent in September, and the sharpest rise was seen in onion which had jumped by 323 per cent on a yearly basis. No sooner had the prices of onions come down the prices of eggs and meat has shot up. For the average consumers, rising food inflation is a more cruel form of indirect taxation.
Every year, the CACP recommends a minimum support price for about 24 crops. Out of these, primarily two cereal crops – wheat and rice – are procured by the Food Corporation of India (FCI) and on its behalf by some State agencies. This serves two purposes. First, the foodgrains that are procured by FCI serve as a buffer stock against any emergency and at the same time helps in meeting the food security needs of the poor. Whatever grain that comes into the mandis is first made available to the private trade to buy. It’s only when there are no buyers left that the FCI steps in to purchase it at the support price announced by the government, which in reality becomes an assured price for farmers.
What is little known is that only 30 per cent of the Indian farmers get the benefit of procurement prices. These are the farmers who have a marketable surplus which they are able to bring it to the nearest mandi. It is only in Punjab, Haryana, and parts of Uttar Pradesh, Maharashtra, Andhra Pradesh and Tamil Nadu (and now of course Madhya Pradesh) that a strong network of mandis operates. In the remaining 70 per cent of the country, farmers have to depend upon the private trade. And it is in these areas that farmers are ruthlessly exploited. For instance, while the paddy farmers in Punjab get an MSP of Rs 1310 per quintal, his counterpart in Bihar, where the private trade dominates, is able to sell at a distress price of around Rs 800 per quintal. Withdrawing price support for Punjab farmers will automatically bring them down to the level of Bihar farmers.  
A second explanation is that it is primarily because the farmer is not able to sell his produce directly to the trader (and routes it through the APMC mandi) that he doesn’t get a better price. This is an absurd argument considering that 70 per cent farmers have no access to mandisand therefore do not fall under the APMC Act. Isn’t it time to ascertain why the prices of cereals/vegetable/fruits are ruling high in areas where the farmers do not get the benefit of procurement prices? And as I said earlier, 70 per cent farmers are outside the ambit of the procurement system.
Not only vegetables, prices of egg and milk have also been on upswing. More recently, prices of eggs has shot up in Mumbai market to about Rs 60 per dozen. Milk prices too have been steadily rising. Since APMC Act has nothing to do with eggs and milk, why are the prices rising? The organized retail units like Reliance Fresh, Big Bazaar, Metro are allowed to purchase directly from farmers. Why these retail chains were unable to supply onions for instance at a cheaper price? Similarly, if I may be allowed to cite an example of a non-food sector, why are the air fares of airlines going up. You click three times on an air route and ticket price goes up. It is cheaper to fly to Bangkok and Kuwait than to go from Delhi to Goa.
The answer is simple. Whether it is food, egg prices or airline tickets, prices are being freely manipulated by strong cartels. In case of onions too, a very powerful cartel of a handful of traders had made a killing when there was only a 4.8 per cent shortfall in production. The APMC too is riddled with cartels. As past experience shows, even organized retail chains form cartels. Replacing one set of middlemen therefore with another is not the answer. The answer lies in breaking these cartels. 
Source: Cartels cause runaway inflation. DNA Mumbai, Dec 30, 2013.dnai.in/bXsg 

Agriculture was the saviour of Indian economy in 2013. But farmers live in misery. Will 2014 be the Year of Aam Kisan ?

Sun, 12/29/2013 - 09:54


With a bountiful monsoon, and a record foodgrain production, agriculture has been the savior of the Indian economy in 2013. At a time when there is an all around doom and gloom -- industrial output failing to keep pace, manufacturing sector refusing to look up, joblessness growing, fiscal deficit mounted and the current account deficit grew to a worrisome level -- it was only agriculture that provided a glimmer of hope.
Foodgrain stocks of wheat and rice soared to an all time high of 823 lakh tonnes. Grain exports increased to 200 lakh tonnes. India emerged as the world’s biggest exporter of rice, and the farm exports zoomed exponentially. While the value of India’s farm exports has nearly doubled from around Rs 12,000-crore in 2010-11 to Rs 20,000-crore in 2012-13, it is primarily because of meat exports. Basmati exports too have increased and farmers have realized a much better price this year.
But that is where the brightness ends. For the 60-crore farmers 2013 has been like any other year. Every time when the dawn of the New Year strikes, there is an expectation of a better year for the annadata, but I have seen their plight worsening with each passing year. The year that has gone into history was no exception. In fact, at a time when the government employees have been promised a further pay rise from the 7th Pay Commission, farmers remain at the bottom of the pile, neglected and forgotten. On an average, 2,500 farmers quit farming every day to join the army of landless workers.
With farm production looking up, and with no indication of any supply constraints, 2013 also witnessed an unusually high food inflation. With the Wholesale Price Index inflation of 7.4 per cent, and with Consumer Price Index remaining in double digits for most part of the year, all explanations to assuage the rising anger of the consumers failed. Reflected in the overwhelming debacle of the ruling party in the recently concluded State Assembly elections, failure to check runaway inflation cost the ruling party dear.
In fact, inflation dealt a big double-whammy. With a massive trade deficit of over $ 203.6 billion hovering on the horizon and a rising fiscal deficit, the government’s scissor fell on the employment programmes, along with rural infrastructure and agricultural investments. With joblessness growing and the policy thrust on reducing subsidies for the poor and needy, the number of poor in absolute terms has been increasing. By reducing the poverty line to Rs 28 in urban areas, and Rs 24 in rural areas, the government can play around with figures but the fact remains poverty is on an upswing.
The enactment of the Food Security Act ensuring a monthly entitlement of 5 kg of rice/wheat/millets to 67 per cent of the population or 830 million people is primarily aimed at offsetting the additional burden of the unprecedented price rise. The laudable objective of providing a legal entitlement of foodgrains every month without making adequate investments in agriculture clearly shows that the annadata will continue to go to bed hungry. Food security requirements can be met by food imports, and given the emphasis on land acquisition for the industry, real estate and highways, the task of producing food for the population will become more and more difficult. Already there are indications that India will turn into an importer of rice in the next three years.
From a high of 9.3 per cent two years ago, the GDP has fallen to less than 5 per cent in 2013. With agriculture growth expected to provide a push to GDP in 2013-14 financial year, the deceleration in growth is because of the poor performance of the industry and manufacturing sectors. At a time when non-performing assets of public sector banks have grown to Rs 6 lakh crore plus despite a tax exemption of Rs 5.73 lakh crores provided in 2013 budget, the fact remains that the Indian Corporates are slush with money. It only points to the poor performance of these sectors, and the tax exemptions coming in handy to add on to assets/profits. 
A Planning Commission report released early this year underlines the contradictions in India’s growth story. At a time when GDP was galloping at 8-9 per cent between 2005 and 2010, the report shows 140 lakh people were displaced from agriculture. Generally it is believed that those who quit agriculture would be joining the workforce in the manufacturing sector. But the report showed that even in the manufacturing sector 57 lakh jobs were lost. A clear pointer to the jobless growth the country is witnessing.
Nothing has changed in 2013 to bring back the focus on creating employment. Let’s be very clear. More investments do not necessarily lead to more jobs. With the new land acquisition law coming into force, more people would be driven out of their meager land holdings and left to migrate to the cities looking for menial jobs. Agriculture too will not be able to sustain its role as the biggest employer in the country given the push to bring in corporate agriculture linked to foreign direct investment in multi-brand retail. #