By Devinder Sharma
Devinder-sharma.blogspot
Thursday, Mar 3, 2011
Quotes from article:
"Every global crisis provides an opportunity for business. Multinational
giants are quick to grab it. In the days to come, I am sure political
leadership across the world, with USAID backing, will welcome the
initiative not realising that it is the industrial farming model that
has created the global food crisis in first instance -- soil health
devastated, excessive mining of groundwater has dried aquifers and
chemical pesticides have contaminated the food chain."
...
"Let us be very clear: the second Green Revolution has no place for farmers."
Egypt paid the price, so will we if we ignore the Mahatma’s prescription: production by the masses, not for the masses
The unexpected has happened. Rising food prices and high unemployment
have triggered an unprecedented uprising in the Arab world. The fire
that began from Tunisia had quickly spread across the desert sands.
Egypt, Jordan, Yemen, Sudan and Algeria were faced with a political
turmoil. (Egypt has already got rid of its autocrat of 30 years – Hosni
Mubarak.)
Unlike the 2008 global food crisis, when 37 countries faced food riots,
ousting the Haiti president in the process, spiralling fuel and food
prices, especially since September 2010, have been more piercing this
time resulting in a strong political tsunami. It all began when Russia,
faced with extended drought and widespread wildfires, brought in an
export ban till the next year’s wheat harvest, thereby propelling global
prices to an unreasonable hike.
Deadly food riots were witnessed in September in Mozambique, killing at
least seven people. According to news reports, anger was then building
up in Pakistan, Egypt and Serbia over rising prices. In the first week
of January, Algeria faced food riots. A few days later, Tunisia sounded
the first bugle, ousting its president, and Egypt followed.
As early as in September, Financial Times had reported that wheat
futures had taken advantage, and that wheat prices internationally had
gone up by 70 percent since January 2010. This happened at a time when
there was neither shortfall in production nor any appreciable rise in
demand. Egypt, which imports nearly 50 percent of its food requirement,
was hit badly when Russia decided to ban wheat exports. Many believe
that the Switzerland-based food major Glencore actually forced the
Russian government, which had enough wheat reserves, to impose a ban on
exports thereby sparking a killing in the futures market.
The social and political unrest that has swept the Arab hinterland is a
pointer to a grave crisis ahead. Although Dominique Strauss-Kahn, the
head of the International Monetary Fund (IMF) agrees that the rising
food and fuel prices in recent months are the major factors behind the
massive anti-government protests, he suggests more of the same
prescription: “As tensions between countries increase, we could see
rising protectionism – of trade and of finance.”
Not drawing any lesson from the debacle of the dominant economic model
of growth, business leaders from 17 private companies announced at the
World Economic Forum at Davos in the last week of January the launch of a
global initiative -- New Vision for Agriculture -- that sets ambitious
targets for increasing food production by 20 percent, decreasing
greenhouse gas emissions per ton by 20 percent, and reducing rural
poverty by 20 percent every decade.
The 17 agribusiness giants include Archer Daniels Midland, BASF, Bunge
Ltd, Cargill, Coca-Cola, DuPont, General Mills, Kraft Foods, Metro AG,
Monsanto, Nestlé, PepsiCo, SABMiller, Syngenta, Unilever, Wal-Mart and
Yara International.
All such initiatives are, of course, backed by the USAID, the main
driving force for promoting an industrial takeover of global
agriculture. “We are witnessing an unparalleled opportunity right now
for innovative, large-scale private sector partnerships to achieve
significant impact on global hunger and nutrition,” USAID Administrator
Rajiv Shah said at Davos. “USAID is committed to creating new
public-private partnerships in Feed the Future focus countries to
advance their national investment plans.”
Well, this shouldn’t come as a surprise. Every global crisis provides an
opportunity for business. Multinational giants are quick to grab it. In
the days to come, I am sure political leadership across the world, with
USAID backing, will welcome the initiative not realising that it is the
industrial farming model that has created the global food crisis in
first instance -- soil health devastated, excessive mining of
groundwater has dried aquifers and chemical pesticides have contaminated
the food chain.
Green Revolution has already run out of steam, leaving behind a trail of
misery and terrible human suffering. Over the years, an unjust world
trade has pushed farmers out of agriculture. In the past 30 years or so,
including the years of World Trade Organization, 105 of the 149 third
world countries have already become completely dependent on food
imports. With food prices manipulated through commodity trading and the
entire food chain gradually slipping into the hands of a handful of
agribusiness giants, the North will soon emerge as the world’s bread
basket. The South is being reduced to a begging bowl.
How is this related to Indian agriculture? Well, let me begin by the
latest pronouncements first. Economist Raghuram Rajan, a professor of
finance at the Chicago Booth School of Business, and an honorary
economic advisor to the prime minister, said the other day: “Thinking
that India will remain a country where more than 60 percent of people
will remain in agriculture is just a pipe dream. The people dependent on
agriculture should be brought down to five percent over years.” This is
in tune with what prime minister Manmohan Singh has been asking for a
number of years now. At least 70 percent of farmers need to be moved out
of agriculture.
Read this in consonance with what planning commission depty chairman
Montek Singh Ahluwalia says. He has invited Omani firms to farm in India
for producing crops that can be exported. At a time when food prices
have hit the roof, any measure to limit domestic production should raise
concerns. Undeterred, a few weeks ago, Ahluwalia also went a step
ahead. He supported the FICCI and CII demand for doing away with APMC
laws for horticultural crops. In other words, with fruits, vegetables
and grains (wheat and rice were already taken off the APMC Act through
an amendment in 2005) no longer required to be brought to mandis, the
procurement system is all set for a breakdown.
It doesn’t stop here. Not only the planning commission, economists,
scientists and bureaucrats are now clamouring for free markets –
commodity exchange, future trading and food retail – as the way to turn
farming economically viable. Coupled with land rental policies that have
promoted a surge in land acquisitions, setting up of special economic
zones, and by encouraging contract farming and commodity trading, India
is now getting ready to hand over agriculture to private companies.
Farmers have therefore become a burden on the society, and the
government is in a raging hurry to offload the burden. This is being
facilitated by tailoring domestic laws on seeds, fertilisers,
pesticides, mandis, biodiversity, biotechnology, water and land
acquisition to the needs of the industry. Let us be very clear: second
Green Revolution has no place for farmers.
What is worrying is that instead of drawing any lesson from the debacle
of the first Green Revolution, the government is on a fast track to
usher in the second Green Revolution, which will only compound the
existing agrarian crisis. This is being backed by an Indo-US Initiative
in Agriculture Research, Education and Marketing (KIA), an agreement
signed with the Bush administration in 2005, and which is expected to be
renewed with Obama Administration. India is committed to privatisation
of agriculture and vertical integration of farming to promote
“farm-to-fork” model, wherein farmers are not required.
This reminds me of what the World Bank had forewarned way back in 1996.
By the end of 2020, the Bank’s estimate was that 40 crore[1] people – close
to double the combined population of UK, France and Germany – would be
migrating from the rural to the urban areas in India alone.
Prime minister Manmohan Singh has already laid the ground rules for a
population shift. The biggest environmental displacement the world will
witness will therefore be in agriculture. Ironically, it is barely 44
years after Mrs Indira Gandhi launched Wheat Revolution (which later was
re-christened as Green Revolution) that pulled India out of the hunger
trap that the country is getting ready to return to the days of
‘ship-to-mouth’ existence when food came directly from the ships into
the hungry mouths.
A high growth trajectory and rising incomes do not provide any security
from social unrest. Let us not forget Egypt attained 5.6 percent rate of
growth in 2010 and has average income levels of $5,000 and yet faced
political turmoil when food prices went out of reach. For any country,
whether rich or poor, food self-sufficiency remains the hallmark of
national sovereignty. Mahatma Gandhi had rightly said that what we need
is a production system by the masses and not for the masses.
I thought Manmohan Singh would heed the warning that was sounded by
Jawaharlal Nehru just five years after India became a republic. In his
August 15 address to the nation, Nehru had said: “It is very humiliating
for any country to import food. So everything else can wait, but not
agriculture.” With limited option of absorbing the displaced rural
population, the socio-economic and even the political fallout from the
deliberate destruction of the farming base, is too difficult to fathom.
It defies all plausible raesons to find India dismantling the strong
foundations of self-sufficiency and resulting food security.
Simultaneous to major economies, including India, removing all the
protectionist measures to allow free trade in agriculture, rich
countries have already moved in to grab fertile land in the developing
world. These ‘food pirates’ come with bag full of foreign direct
investment and are moving swiftly where land is available, investing in
crops that can be shipped back home. Already an area which exceeds the
size of France has either been leased out or out-rightly purchased. Much
of this is in Africa, Latin America and Asia.
We are, therefore, entering a phase when even if you have money food
will not be available in the international markets. This is primarily
the reason why companies from rich countries have invested in developing
countries to meet the domestic requirement back home. Add to it the
fact that food is now being branded as a hot commodity, the futures
market will continue to exploit. Unregulated commodity trading has
already multiplied from a mere $0.77 trillion in 2002 to over $7
trillion in 2007.
While people die from hunger or storm into the cities expressing anger
against the political leadership (not knowing that the real culprit is
the Wall Street), the investment banks and hedge funds quietly make a
killing from speculation. With the G-20, IMF/World Bank turning a blind
eye to curb food speculation, Hosni Mubarak may not be the last
political head to roll. If only Egypt had invested in attaining food
self-sufficiency, history probably wouldn’t have witnessed the march of
the million.
Note:
[1] 40 crore = 1 billion
Sharma is a distinguished food and trade policy analyst.
This article first appeared in Governance Now, New Delhi, March 1, 2011.
Devinder-sharma.blogspot
Print This
|