Apr 15, 2014

World Bank deliberately underestimates poverty

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

Mar 21, 2014

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

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

Mar 10, 2014

Elections 2014: Spare a thought for farmers.

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. #

Mar 7, 2014

The Forgotten Foods

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 Mahua trees 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 ragi millet with a sprinkling of rice grains, the drink was certainly very tasty. Called Mandia jau in the local language, it is actually a ragi gruel. 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

Mar 6, 2014

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

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 ghars in 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. 

Feb 12, 2014

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

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. 

2.What others are saying about the farm bill, Environment Working Group.

3.Finally, a Farm bill. Daryll E Ray and Harwood D Schaffer, University of Tennessee

Feb 10, 2014

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

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.