All elements of India's food security policy are today being dismantled। Starvation is the inevitable result of policies promoting a sudden withdrawal of the role of the State and reckless dependence on markets to bring food to the poor, writes VANDANA SHIVA.IN 1942, more than three million people died in Bengal and Orissa due to starvation. Nobel Prize winner Amartya Sen showed that it was not a lack of food but a lack of food entitlements and food rights which caused starvation deaths. And he also showed that famine did not occur in post-colonial India because people's rights were protected. The Constitution guarantees the right to life, and the right to food is at the heart of the right to life. The State has a related duty to ensure that no one goes hungry. Food for work programmes, the Public Distribution System (PDS), price regulation and anti-hoarding measures have been diverse policy components of ensuring that people's food entitlements are protected.All elements of India's food security policy are today being dismantled under pressure from the World Bank and the World Trade Organisation (WTO). Starvation is the inevitable result of policies promoting a sudden withdrawal of the role of the State and reckless dependence on markets to bring food to the poor.In 1995, in preparation for the World Food summit, civil society in India had drafted a People's Charter for Food Security in which we had anticipated today's starvation deaths and suicides.Trade liberalisation will result in the creation of a class of "redundant" humans, comprising mainly displaced landless rural agro-related communities, including artisans and fisherfolk, who will be doubly hit by the loss of their traditional markets and linkages with the agro-sector as well by loss of food entitlements. The food security of this new class of "dispensable" people with neither food entitlements nor purchasing power will be totally denied by an agri-business dominated agriculture.It is now time for the second food summit, just before the WTO ministerial meeting in Doha in November. The World Bank and International Monetary Fund (IMF) will meet in Washington this month end.The Government in denial modeFamine has returned to Orissa, Madhya Pradesh, Maharashtra, Gujarat and Andhra Pradesh. Between July 27 and August 28, twenty deaths were reported from Kashipur district, Orissa. Eleven children were reported dead in Udaipur, Rajasthan, over a week. Earlier, 800 of tribal children had died of starvation. On September 6, when the Chief Minister visited Kashipur, people pelted him with mango kernels, a starvation diet which they have been forced to depend on.Both the Central and the State Governments are making a deliberate attempt at dismantling the people's food security system through trade liberalisation and globalisation policies.These are, however, very direct and clear connections between the policies of "economic reform" and starvation deaths and suicides in rural India.The Bengal famine in 1943 forced intervention by the Government to ensure the supply of food. A rationing system was introduced. The first Foodgrains Policy Committee, appointed in 1943, recommended procurement of foodgrains from surplus areas, rationing for equitable distribution and statutory price control for checking the price rise.The foodgrains policy for independent India recommended abolition of controls and rationing and necessity of imports to maintain central reserves. Between 1957-58 and 1966-67, the PDS had become completely dominated by imports under PL 480.In 1965, the Food Corporation of India (FCI) was set up to procure and import foodgrains and service the PDS system. The FCI was part of the Green Revolution package of centralised food production and distribution.Two central bodies related to food production, procurement and distribution were established in 1965 on World Bank advice. One was the FCI. The other was the Agricultural Prices Commission (APC) which determined the minimum support prices for food grains, and through it, controlled cropping patterns, land use and profitability. Through food price and procurement, the Central Government now controlled the economics of foodgrain production and distribution. The profitability of foodgrain production in this centralised and enclavised form could not be maintained over time.In 1991, the same agency, the World Bank, that had designed the centralised system called for its dismantling through its Structural Adjustment Programmes (SAP) of the PDS system, the removal of the Essential Commodities Act, removal of price and inventory control and a total deregulation of agricultural trade.The revamped PDS (RPDS) was supposed to better target vulnerable regions and reduce public expenditure. However, all it did was create more hunger while increasing Government expenditure. In 1997, the RPDS was replaced by the Targeted PDS (TPDS) which provided 10 kg of wheat or rice per month to families below the Poverty Line (BPL) at highly subsidised prices, and withdrawal of all subsidies from families above the poverty line (APL). As a result, food prices increased, off take decreased, and stocks grew.There were major problems with the TPDS system. First, the BPL/APL categories were arbitrary and the BPL beneficiaries who were to be targeted were artificially reduced. The whole exercise of targeting the BPL families was exposed as a farce when 12 States informed the Supreme Court that they could not identify people in the BPL category. Instead of targeting the poor, the World Bank driven policies made the poor end their food entitlements.The TPDS has artificially divided the population into those below the poverty line (BPL) and those above the poverty line (APL). It is common knowledge that those who access food from fair price shops are those who cannot buy it from the market. Those above the poverty line have been defined earning above Rs. 1,500 a month. Those in the APL category also have to bear 100 per cent of the procurement and distribution costs, which places the foodgrains far above their reach. In fact, the Government committee formulating the long-term grain policy has demanded that the price of grain for those APL be slashed by 25 per cent.Further, the quantum of allotment of 10 kg per family at best meets only 12 per cent of the nutritional requirement, forcing the poor to depend on high markets for 88 per cent of their requirements and eat less, thus reducing off take from the PDS. Table 1 shows how the targeted PDS has reduced food allotments to the poor to below survival levels.Growing starvation, growing stocksThe decline in off take is the main reason for increasing stocks. Fifty million tonnes of foodgrains are rotting while people cannot afford to buy food. Stocks of rice have increased from 13m tonnes to 22m tonnes, while wheat stocks have gone up from 872m tonnes to 2,411m tonnes.Spending more to starve the poorThe main justification for allowing food prices to increase was reducing Government expenditure on food subsidies. However, while more people are eating less due to the removal of food subsidies and consequent increase in food prices, Government expenditure has actually increased.Destruction of livelihood securitySince India is an agricultural society, food security for most people is ensured through livelihood security in agriculture. Agricultural livelihoods provide the entitlements that ensure access to food. Destruction of agricultural livelihoods lead to entitlement failure, and hence to food insecurity. It is little wonder that most areas, and most reports of starvation deaths come from the countryside. The famines of 1942 and 1877 were also reflections of food insecurity faced by peasants.The new threats to the food security faced by the poor especially food producers come from four sources that erode food entitlements.Increasing costs of inputsThe first is the shift from internal input sustainable farming systems to external purchased inputs like seeds, fertilizers, pesticides which drain farmers' incomes and lock peasants into debt. As the subsidies that made the Green Revolution have been withdrawn and the input sector has been deregulated, farmers expenditure on purchasing seeds and chemicals has increased, pushing peasants into debt and penury. The epidemic of farmers suicides is a reflection of this crisis of the rising costs of input.Decline in food productionThe second shift causing food security is the shift from staples to cash crops. From 1960-61 to 1998-99 the area under nutritious grains (called "coarse grains" because of the rice and wheat bias) has gone down from 45 million hectares to 29.5 million hectares, area under cotton has increased from 7.6 to 9.3m ha, and area under sugarcane has increased from 2.4 to 4.1m ha. Since the new economic policies were introduced in 1990-91, the area under foodgrains has declined by - 2 per cent, area under course grains has declined by - 18 per cent, area under non-food cash crops such as cotton and sugarcane have increased by 25 per cent and 10 per cent respectively. During 1999-2000 - 2000-2001, food production has gone down from 208.9 million tonnes to 196.1 million tonnes, a 12.8 per cent decline.The third source of decline of rural incomes and entitlements is related to decline in farm prices with the withdrawal of Government procurement and non-implementation of the Minimum Support Price. Under the Green Revolution model of Public Distribution, the Central Government through the FCI procures food grains. The FCI is increasingly stepping out of its procurement functions. The withdrawal of Government from procurement and hence the withdrawal of the Minimum Support Price will push farm prices down further. In Punjab, farmers had to protest to force the Government to procure their grain. Paddy was sold at Rs. 300-325 per quintal against the MSP of Rs. 540 per quintal due to withdrawal of FCI from procurement.Dumping of imported subsidised productsThe dumping of imported, subsidised commodities and the removal of import restrictions (Quantitative Restrictions) is another dimension of the erosion of entitlements of agricultural producers in India. Prices of coconut have fallen from Rs. 10 per piece to Rs. 2, coffee prices have collapsed from Rs. 68 per kg to Rs. 26 per kg, pepper prices have fallen from Rs. 19,055 per quintal to Rs. 10,550 per quintal. Kerala farmers have suffered a loss of Rs. 6,645 per quintal during 2000 and to the price fall in major plantation crops such as coconut, rubber, pepper, arecanut, coffee, tea and cardamom. This exploitation of incomes translates into declining food entitlements.The destruction of food entitlements by dumping is an unfair trade practice which is totally legal in the asymmetric and unbalanced W.T.O. rules. For example, U.S. soyabeans are cheap not because of cheap production but because of subsidies. The price of soyabeans is $155 a ton. And this low price is possible because the U.S. Government pays $193 a ton to these farmers, who would not otherwise be able to stay in production given the low commodity prices. This Government support is not really a farmer subsidy, it is an indirect corporate subsidy. As heavily subsidised soyabeans flooded India's domestic market, prices crashed by more than two-thirds. The local oil processing industry, from the small scale ghanis to larger mills, started to close down. Domestic oilseed production declined and domestic edible oil prices crashed. Groundnut prices went down by 30 per cent from Rs. 48 per kilogram to Rs. 37 a kilogram. Meanwhile some farmers protesting against the collapse of their markets were killed.The dumping of subsidised soya, wheat, rice, sugar on Indian markets is called "competitiveness" by magazines such as Business India which have suggested that Indian farmers should be allowed to be destroyed by opening markets because they are not "competitive". Sharad Joshi who claims to be a farm leader and chaired the Prime Minister's Committee on W.T.O. and Agriculture has actually recommended that the Government implement an EXIT policy for peasants and farmers. It is this mindset of our elite which sees the rural poor as dispensable and disposable which is causing starvation deaths, even as grain rots in our godowns.While the conditionalities from global trade and financial institutions are preventing the Government from supporting the poor to have access to adequate and nutritious food, they are promoting the diversion of subsidies from people to corporations. While people have been forced to buy wheat and rice at Rs. 11.30 per kg., because of the withdrawal of subsidies, export corporations such as Cargill are getting wheat and rice at highly subsidised prices. Using the artificially created surpluses as justification for exports, the Government will be exporting five million tonnes of wheat and three million tonnes of rice during 2001. While people pay Rs. 7,000 per tonne for wheat, exporters are getting it at Rs. 4,300 per tonne, a subsidy of Rs. 13.5 billion. While people pay Rs. 11,300 per ton for rice, exporters are getting at Rs. 5,650 per tonne, a subsidy of Rs. 60 billion. Exports increase while people starve. Corporations are subsidised while people's food subsidies are withdrawn. This is how globalisation is causing hunger and starvation in the Third World.While people are being denied food, on grounds of cutting back public expenditure, the Government is committing higher public investment on airports and superhighways. The poor in India do not need airports - they need food.(The writer is Director, Research Foundation for Science, Technology and Ecology, NewDelhi.)
Tuesday, 23 October 2007
INDIA CANNOT AFFORD RURAL FAILURE
The crisis of India’s farmers has the potential to derail the country’s exceptional economic ग्रोथ
Mira KamdarYaleGlobal, 20 April 2007NEW DELHI: In foreign media reports India is shining। Even India’s biggest English daily has begun a campaign called India Poised. But India’s leaders know that a deepening crisis facing India’s multitude of farmers threatens to spoil the party in Mumbai and Bangalore. India’s Minister of Finance Palaniappan Chidambaram put agriculture at the center of India’s latest budget.1In his speech on the budget, Chidambaram quoted Nehru: “Everything else can wait, but not agriculture.” Agriculture represents much more to India than a mere slice of economic pie – it is the very lifeblood of the country, the source of livelihood for 115 million farming families and 70 percent of the country’s population, the base upon which the entire edifice of the nation rises.With annual growth in manufacturing and in services each topping 11 percent, agriculture’s 2.3 percent growth rate lags stubbornly behind the 4 percent target India must hit if it is to push overall growth – now at 9.2 percent – into double digits. The government’s challenge is to implement policies that promote growth but also provide relief to India’s stressed small-scale farmers, or else the country will have to reckon with much more than a missed growth target.The social, political and economic threats to Indian agriculture are numerous.India struggles with a worsening water crisis that includes plummeting water tables. Global warming increasingly threatens both the annual monsoon rains essential to life on the subcontinent and the Himalayan glaciers and snows long considered eternal. The vast majority of India’s farmers exploit land holdings smaller than 5 acres and as small as half an acre. They have had difficulty coping with the opening of India’s agricultural sector to market forces and the elimination of price supports for crops such as cotton. Many have borrowed money at usurious rates from private lenders to pay for more expensive hybrid and genetically modified seeds, which has plunged them into debt they cannot pay off. Arable land is shrinking as urban expansion and manufacturing gobble up thousands of acres of farmland. During the past decade that brought prosperity to so many in India, more than 25,000 Indian farmers committed suicide. An emboldened Maoist insurgency continues to expand its influence, staging violent attacks and assassinations with impunity.While farmers struggle, agricultural production cannot meet demand. Rising food prices are fueling inflation, causing real suffering among the 850 million Indians who struggle to live on less than $2 per day. One of the ironies of democratic India is that it is the poor who vote. 2 The current government has many reasons for placing agriculture at the center of the new budget.India, long one of the most productive agricultural regions of the world, could not meet its basic need for food grains during the early years of the nation’s independence. The Green Revolution of the 1960s and 1970s dramatically improved yields in India. With considerable national pride, India boasted that it had achieved not only self-sufficiency in food grains, but had become a grain-exporting nation. In 2006, however, for the first time since the Green Revolution, and in part because of changes in agricultural policy, India had to import wheat. India will again have to import food grains in 2007.The new budget presented by Chidambaram includes a smorgasbord of specific remedies to India’s complex agricultural crisis, with increased allocations for irrigation and groundwater recharge, farm credit, rural education, farm-extension services, roads and power, and for the National Rural Employment Guarantee Scheme, which offers 100 days of guaranteed employment to one family member of impoverished rural households.The need is great. Last year, I traveled to villages in the Vidarbha region of eastern Maharashtra state, hard hit by a spate of farmer suicides. In the village of Barshi Takli, I sat with a mother who cried for her 20-year-old son who had killed himself a few days after the family’s sugarcane crop failed. Their well had gone dry, and they couldn’t afford to dig it deeper. With no access to irrigation, they depended on erratic rains, and when these failed, so did their crop.Desperate for income, they had put all their land into a cash crop, borrowing money to purchase the inputs they needed and neglecting to set aside a portion of land to grow their own food. The family’s son, carrying the burden of the household, had no way to repay the local moneylenders from whom he’d borrowed at usurious rates of interest. I visited family after family in similar straits.The expansion of farm credit and investment in irrigation promised in the new budget, while essential to larger-scale farms, would not have saved most of these families. Their farming operations are too small to qualify for bank loans, even those guaranteed by the government. Large-scale government irrigation schemes won’t reach them.Credit and irrigation measures scaled to the limited resources and critical needs of small family farms could make a difference to these farmers. The expansion of micro-credit opportunities as well as low-cost micro-irrigation systems such as those being manufactured and sold in India by International Development Enterprises (IDE), a company supported by the innovative social-venture Acumen Fund, could make a critical difference. Designed for small plots of land and expandable with investment increments, as little as $45, IDE systems can increase water efficiency by 50 percent and improve yields by 30 percent. 3 Small-scale systems such as these not only can save crops, they can literally save farmers’ lives.Large-scale industrial agribusiness will not work in India. Indian farmers have little hope of finding employment elsewhere. They must be able to earn a decent living on their land. And they must be able to do this in a way that is environmentally sustainable. The Green Revolution’s increased yields were achieved in part by huge inputs of synthetic fertilizers and pesticides, both of which have inflicted massive damage on India’s stressed environment.Chidambaram admits that his government’s true challenge is not only to come up with the right policies and programs but “to deliver the intended outcomes.” The success India achieved with its IT-led service and now manufacturing industries made it a poster child for globalization. This could be eclipsed by the rural failure. The Manmohan Singh government cannot afford to do what its predecessors have done – let rural India languish. The best strategy it can embrace is one where farmers’ needs dictate innovative solutions from the bottom up and where social entrepreneurship can flourish along with an increasingly empowered and prosperous rural population. Mira Kamdar, an associate fellow of the Asia Society and a senior fellow at the World Policy Institute based in New York, is the author of "Planet India: How the Fastest Growing Democracy Is Transforming America & the World," published by Scribner in 2007.
Mira KamdarYaleGlobal, 20 April 2007NEW DELHI: In foreign media reports India is shining। Even India’s biggest English daily has begun a campaign called India Poised. But India’s leaders know that a deepening crisis facing India’s multitude of farmers threatens to spoil the party in Mumbai and Bangalore. India’s Minister of Finance Palaniappan Chidambaram put agriculture at the center of India’s latest budget.1In his speech on the budget, Chidambaram quoted Nehru: “Everything else can wait, but not agriculture.” Agriculture represents much more to India than a mere slice of economic pie – it is the very lifeblood of the country, the source of livelihood for 115 million farming families and 70 percent of the country’s population, the base upon which the entire edifice of the nation rises.With annual growth in manufacturing and in services each topping 11 percent, agriculture’s 2.3 percent growth rate lags stubbornly behind the 4 percent target India must hit if it is to push overall growth – now at 9.2 percent – into double digits. The government’s challenge is to implement policies that promote growth but also provide relief to India’s stressed small-scale farmers, or else the country will have to reckon with much more than a missed growth target.The social, political and economic threats to Indian agriculture are numerous.India struggles with a worsening water crisis that includes plummeting water tables. Global warming increasingly threatens both the annual monsoon rains essential to life on the subcontinent and the Himalayan glaciers and snows long considered eternal. The vast majority of India’s farmers exploit land holdings smaller than 5 acres and as small as half an acre. They have had difficulty coping with the opening of India’s agricultural sector to market forces and the elimination of price supports for crops such as cotton. Many have borrowed money at usurious rates from private lenders to pay for more expensive hybrid and genetically modified seeds, which has plunged them into debt they cannot pay off. Arable land is shrinking as urban expansion and manufacturing gobble up thousands of acres of farmland. During the past decade that brought prosperity to so many in India, more than 25,000 Indian farmers committed suicide. An emboldened Maoist insurgency continues to expand its influence, staging violent attacks and assassinations with impunity.While farmers struggle, agricultural production cannot meet demand. Rising food prices are fueling inflation, causing real suffering among the 850 million Indians who struggle to live on less than $2 per day. One of the ironies of democratic India is that it is the poor who vote. 2 The current government has many reasons for placing agriculture at the center of the new budget.India, long one of the most productive agricultural regions of the world, could not meet its basic need for food grains during the early years of the nation’s independence. The Green Revolution of the 1960s and 1970s dramatically improved yields in India. With considerable national pride, India boasted that it had achieved not only self-sufficiency in food grains, but had become a grain-exporting nation. In 2006, however, for the first time since the Green Revolution, and in part because of changes in agricultural policy, India had to import wheat. India will again have to import food grains in 2007.The new budget presented by Chidambaram includes a smorgasbord of specific remedies to India’s complex agricultural crisis, with increased allocations for irrigation and groundwater recharge, farm credit, rural education, farm-extension services, roads and power, and for the National Rural Employment Guarantee Scheme, which offers 100 days of guaranteed employment to one family member of impoverished rural households.The need is great. Last year, I traveled to villages in the Vidarbha region of eastern Maharashtra state, hard hit by a spate of farmer suicides. In the village of Barshi Takli, I sat with a mother who cried for her 20-year-old son who had killed himself a few days after the family’s sugarcane crop failed. Their well had gone dry, and they couldn’t afford to dig it deeper. With no access to irrigation, they depended on erratic rains, and when these failed, so did their crop.Desperate for income, they had put all their land into a cash crop, borrowing money to purchase the inputs they needed and neglecting to set aside a portion of land to grow their own food. The family’s son, carrying the burden of the household, had no way to repay the local moneylenders from whom he’d borrowed at usurious rates of interest. I visited family after family in similar straits.The expansion of farm credit and investment in irrigation promised in the new budget, while essential to larger-scale farms, would not have saved most of these families. Their farming operations are too small to qualify for bank loans, even those guaranteed by the government. Large-scale government irrigation schemes won’t reach them.Credit and irrigation measures scaled to the limited resources and critical needs of small family farms could make a difference to these farmers. The expansion of micro-credit opportunities as well as low-cost micro-irrigation systems such as those being manufactured and sold in India by International Development Enterprises (IDE), a company supported by the innovative social-venture Acumen Fund, could make a critical difference. Designed for small plots of land and expandable with investment increments, as little as $45, IDE systems can increase water efficiency by 50 percent and improve yields by 30 percent. 3 Small-scale systems such as these not only can save crops, they can literally save farmers’ lives.Large-scale industrial agribusiness will not work in India. Indian farmers have little hope of finding employment elsewhere. They must be able to earn a decent living on their land. And they must be able to do this in a way that is environmentally sustainable. The Green Revolution’s increased yields were achieved in part by huge inputs of synthetic fertilizers and pesticides, both of which have inflicted massive damage on India’s stressed environment.Chidambaram admits that his government’s true challenge is not only to come up with the right policies and programs but “to deliver the intended outcomes.” The success India achieved with its IT-led service and now manufacturing industries made it a poster child for globalization. This could be eclipsed by the rural failure. The Manmohan Singh government cannot afford to do what its predecessors have done – let rural India languish. The best strategy it can embrace is one where farmers’ needs dictate innovative solutions from the bottom up and where social entrepreneurship can flourish along with an increasingly empowered and prosperous rural population. Mira Kamdar, an associate fellow of the Asia Society and a senior fellow at the World Policy Institute based in New York, is the author of "Planet India: How the Fastest Growing Democracy Is Transforming America & the World," published by Scribner in 2007.
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