जैसे-जैसे 2013 का बजट नजदीक आ रहा है, मैं यह बात रोज सुनता हूं कि गरीबों को दी जा रही सब्सिडी खत्म होनी चाहिए। एक ओर जहां बहुसंख्यक आबादी की सामाजिक सुरक्षा को 'फ्री लंच' के तौर पर देखा जा रहा है, वहीं शायद ही कोई पैनेलिस्ट या अखबार के लेखक इंडस्ट्री को साल-दर-साल दिए जा रहे 'फ्री मंथली राशन' की कभी बात करते हों। फर्क सिर्फ इतना-सा है कि अमीरों को दी जा रही रियायत सब्सिडी नहीं कहलाती। इन्हें विकास के लिए इंसेंटिव्ज कहा जाता है। सब्सिडी एक बुरा शब्द बन गया है, जबकि इंसेंटिव सम्मान के साथ बोला जाता है।
शायद ही ऎसा कोई दिन गुजरता हो, जब अखबारों के पहले पन्ने पर, टीवी कार्यक्रमों में गरीबों को दी जाने वाली सब्सिडी कम करने के तर्क और स्टोरी सुनने-देखने को न मिलती हों। मुझे मिट रोमनी के उस दावे की याद आती है, जिसमें उन्होंने कहा था कि 47 फीसद अमरीकी कर नहीं देते, इसलिए उन्होंने समझा कि रिपब्लिकन को उनके बारे में चिंता करने की जरूरत नहीं है। वर्ष 2012-13 में जहां कुल बजट खर्च 14.9 लाख करोड़ था, सब्सिडी के लिए 1.78 लाख करोड़ रूपये रखे गए थे और दुहाई यह दी जा रही है कि राजकोषीय घाटे को कम करने के लिए सब्सिडी में कटौती की जाए।
गौरतलब है कि इन सब्सिडीज का एक बड़ा हिस्सा भोजन, फर्टिलाइजर और पेट्रोलियम को जाता है। पिछले कुछ महीनों से केंद्र सरकार ने पेट्रोलियम सब्सिडी से लगातार हाथ पीछे खींचे हैं। पहले पेट्रोल को नियंत्रण मुक्त किया गया और अब हाल ही में डीजल को आंशिक तौर पर नियंत्रण मुक्त किया गया है। रियायती एलपीजी सिलेंडरों पर दी जाने वाली सब्सिडी भी कम कर दी गई है। केरोसीन पर सब्सिडी अभी बची हुई है। फूड और फर्टिलाइजर की बात करें, तो डायरेक्ट कैश ट्रांसफर समेत सभी तरह की तिकड़म प्रस्तावित हैं। रेल किराये में बढ़ोतरी की जा चुकी है। सरकार को किराया बढ़ाने के बाद सालाना 66 सौ करोड़ रूपये आने की उम्मीद है। इसलिए सभी प्रकार के 'फ्री लंचेज', जैसा कि प्रमुख अर्थशास्त्री और कंसल्टेंसी फर्म एग्जीक्युटिव टेलीविजन पर लगातार कहते हैं, धीरे-धीरे कम किए जा रहे हंै।
लेकिन जब बात इंडस्ट्री की हो, तो न सिर्फ 'ब्रेड एंड बटर', बल्कि पूरे महीने भर का राशन मुफ्त मुहैया कराया जा रहा है।
फर्क सिर्फ इतना-सा है, जैसा कि मैंने पहले भी दोहराया कि इन्हें मिलने वाली रियायत को सब्सिडी नहीं, बल्कि 'इंसेंटिव्ज फॉर ग्रोथ' का नाम दिया जाता है। यानी अमीरों को बहुत चतुराई के साथ ग्रोथ की आड़ में सब्सिडी परोसी जा रही है। मैं एक हालिया उदाहरण देना चाहूंगा। प्रधानमंत्री के मुख्य आर्थिक सलाहकार सी. रंगराजन ने यह प्रस्ताव दिया कि भारत में 'सुपर-रिच' लोगों पर मौकाूदा 30 फीसद की दर की बजाय 40 फीसद की उच्च दर से कर वसूलना चाहिए। उनके यह कहने के बाद बवाल-सा मच गया। इंडिया इंक और बिजनेस टीवी चैनल व अखबारों के लेखकों ने एक लय में 'सुपर-रिच' तबके को उच्च कर स्लैब में न लाने के लिए अभियान छेड़ दिया। इसके बाद एनआरआई अर्थशाçस्त्रयों ने भी भारतीय अखबारों में भागीदारी दिखाते हुए अपने कॉलमों के जरिये कॉरपोरेट मंत्र का राग अलापा।
अगर आयकर की सीमा को 'सुपर-रिच' तबके पर बढ़ा दिया जाए, तो सरकार को सालाना 22 हजार करोड़ का राजस्व प्राप्त होगा। अभी कुछ दिनों पहले स्टॉक मार्केट 20 हजार के आंकड़े को पार कर गया, क्योंकि सरकार ने 'गार' को 2016 तक के लिए टाल दिया। अकेले इस कदम से मॉरीशस जैसे टैक्स स्वर्ग जैसे देशों से आने वाले काले धन पर लगाम लग जाती। फिक्की और सीआईआई के अध्यक्ष समेत बड़े बिजनेस घरानों के मुखिया साफ तौर पर खुश दिखाई दिए कि गार को टाल दिया गया है।
दूसरे लफ्जों में कहें, तो विदेशी संस्थागत निवेशकों द्वारा आ रहे निवेश पर कर छूट जारी रहने से वे बड़े खुश हुए। मेरा मानना है कि अगर इसका क्रियान्वयन हो जाता, तो और कुछ नहीं तो यह 50 हजार करोड़ से ज्यादा का सफाया कर देता। लेकिन अमीरों को मुफ्त मासिक राशन मिलने तक तो यथास्थिति कायम ही रहेगी। वैसे, यह अमीर जमात ही है, जो कर कानूनों में से गलियां निकालकर जायज कर चुकाने से बचती है। केंद्रीय वित्त मंत्री पी. चिदम्बरम ने गुस्सा जाहिर किया था कि कर अदा करने वाले 3.5 करोड़ लोगों में से महज 14.6 लाख लोगों ने ही अपनी आय सालाना 10 लाख से ज्यादा दिखाई थी। यानी जाहिर है कि कर कानूनों को लेकर एक बड़ी अनियमितता है और कर कानूनों की पालना के लिए सभी प्रयास किए जाने बेहद जरूरी हैं। पर बड़ा सवाल है कि क्या अमीरों से पूरा कर वसूलने को लेकर गंभीर प्रयास हुए हैं? आपका अनुमान भी मेरे जैसा ही होगा।
नहीं, कभी नहीं... आखिरकार अमीरों को उनका मुफ्त राशन मिलते रहना जरूरी है। गौर करने लायक बात है कि 2012 के बजट में इंडिया इंक को 5.29 लाख करोड़ रूपये की कर छूट- जिसे 'इंसेंटिव फॉर ग्रोथ' कहा जाता है- मिली। यह राशि उस राजकोषीय घाटे को खत्म करने के लिए काफी है, जिसका रोना चिदम्बरम रोते रहे हैं। कर छूट के अलावा इनके द्वारा प्राकृतिक संसाधनों की लूट में भी सरकार सहायक रही है।
उद्योगों द्वारा जमीन हथियाने को लेकर सरकारें जिस तरीके से नियम-कानूनों को मोड़ती हैं, वह भी एक तरह की सब्सिडी ही है। यह सब कुछ उद्यमशीलता को बढ़ावा देने के नाम पर किया जाता है। अगर उद्योगपति उद्यमी हैं, तो क्या एक किसान, शिल्पकार, एक दुकानदार और संघर्षरत आम आदमी उद्यमी नहीं है? ऎसा कैसे हो सकता है कि उसे किसी सहारे की जरूरत नहीं है और सिर्फ एक अमीर ही सरकारी खजाने पर जीने का हकदार है?
Poor get 'Free Lunches", Rich get "Free Monthly Ration"
In the run up to Budget 2013, I hear it every day. Subsidies are doles to the poor, must be curbed. There are no 'free lunches'. While social security for a majority of India's population is being considered as 'free lunches', none of the TV panelists (and newspaper writers) ever talk of 'free monthly ration' that the industry is being given year after year. The only difference is that the doles to rich are not called subsidies, these are 'incentives for growth'. Subsidies have become the bad word, and incentive is lapped up.
"Boost Tax Mopup, Prune subsidies" screams a front page headline in The Economic Times (Jan 14, 2013). There is hardly a day when you don't see similar stories and arguments splashed all over the front page and the comments page. TV shows are repeatedly and nauseatingly holding discussions which invariably run down subsidies to the poor. This reminds me of Mitt Romney's claim that 47 per cent American don't pay taxes, and therefore he implied that the Republican's don't need to worry about them. No wonder, he lost to Obama.
While the total budget expenditure in 2012-13 was Rs 14.9 lakh crore, the subsidies have risen to Rs 1.78 lakh crore, and the clamour is for pruning the subsidies to reduce the fiscal deficit. Bulk of these subsidies go to food, fertiliser and petroleum. In the past few months, the govt has steadily withdrawn from providing petroleum subsidies by decontrolling petrol and lately by partially decontrolling diesel. Subsidised LPG supplies have also been curtailed. Kerosene subsidies remain. In case of food and fertiliser, all kinds of permutations and combinations are being proposed, including direct cash transfer.
Rail fares have been hiked. The Govt is expecting to realise Rs 6,600-cr every year from increased rail fares. So in a way, all "free lunches", as most economists and consultancy firm executives who appear on TV regularly say, are being gradually withdrawn.
But when it comes to industry, it is not only bread and butter but the entire monthly ration that is being provided free. The only difference, as I said earlier, is that these doles are not through the subsidies head, but 'incentive for growth,' which is a very clever way of camouflaging the dirty subsidies the rich get. Let me begin by citing the latest exemption. Mr C Rangarajan, the chief economic advisor to Prime Minister has recently proposed that the super-rich in India should be taxed at a higher rate -- 40 per cent, against the present norm of 30 per cent. All hell broke loose the moment he said this. India Inc and Business TV channels plus the newspaper writers have launched an orchestrated campaign to see that the super-rich are not brought under a high tax slab. And then, you of course have the NRI economists joining the chorus, most of them write columns in Indian papers, and chant the Corporate mantra unabashedly.
Raising the income tax limit for the super-rich will bring in Rs 22,000-cr revenue every year.
A few days back, the stock market went up because the Govt deferred the introduction of GAAR to 2016. This move alone would have curbed the inflow of dirty money (and often bloody money) coming from the tax haven of Mauritius. The FICCI chairman, the CII chairman, and everyone else was elated that GAAR has been deferred. In other words, they rejoice over continuing tax exemption to the FII investments flowing in. I am sure, if implemented, this move alone would have mopped up anything exceeding Rs 50,000-cr. But since it is a part of the monthly free ration to the rich, the Govt had to bend.
In any case, it is the rich who circumvent tax laws to escape paying the legitimate taxes. Out of the 3.5 crore people who pay taxes, only 14.6 lakh have shown an income exceeding Rs 10 lakh/year (Unrealistic tax realisation.. Economic Times, Dec 19, 2012. http://bit.ly/XuM9wF) Now this is certainly a gross understatement. But has there been any serious effort in recovering the taxes that are due from the rich? Well, your guess is as good as mine. There never would be any serious attempt to mop up tax revenue from where it is due. After all, the rich must continue to get their free ration.
On top of it, In 2012 Budget, under the 'revenue foregone' category, India Inc got a tax exemption, call it 'incentive for growth' of Rs 5.29 lakh crore, good enough to wipe out the entire fiscal deficit that Chidambaram keeps on crying about. This is in addition to all that is doled out to industries in the Budget itself. Since 2004-05, the 'revenue foregone' adds to more than Rs 27-lakh crore. And yet, the exports have not risen, the manufacturing sector is down, and the industry continues to slog. But despite the industrial stagnation and downturn that is visible all these years, the Corporates are sitting over a huge cash pile. By March 2012, Indian Inc had hoarded a cash surplus of Rs 9-lakh crore. So, it is quite obvious, that the free monthly ration is adding on to the bottom line of the companies.
Add to the tax exemptions, usurping of natural resources, including forests, mineral resources, water and land, aided and abetted by the Govt. The land grab that is taking place, and the manner in which laws are being formulated to benefit the industry, is also a covert subsidy. I have been saying for long that the industry actually thrives on subsidies. It is only that we don't want to see these subsidies or we are paid not to demystify these subsidies. Most of us are beneficiaries of the same system that subsidises the rich, and obviously we wouldn't like to cut the hand that feeds us.
All this is in the name of encouraging entrepreneurship. If the industrialists are entrepreneurs, isn't the farmer, the artisan, the petty shopkeeper and for that the struggling aaa aadmi also an entrepreneur? How come that he doesn't need any support, and it is only the rich would deserve to live on State exchequer?
Even the Armed Forces have discontinued the system of providing subsidised monthly ration to the families of the serving soldiers. When will this business of giving "Free Monthly Ration" to the rich, stop?
"Boost Tax Mopup, Prune subsidies" screams a front page headline in The Economic Times (Jan 14, 2013). There is hardly a day when you don't see similar stories and arguments splashed all over the front page and the comments page. TV shows are repeatedly and nauseatingly holding discussions which invariably run down subsidies to the poor. This reminds me of Mitt Romney's claim that 47 per cent American don't pay taxes, and therefore he implied that the Republican's don't need to worry about them. No wonder, he lost to Obama.
While the total budget expenditure in 2012-13 was Rs 14.9 lakh crore, the subsidies have risen to Rs 1.78 lakh crore, and the clamour is for pruning the subsidies to reduce the fiscal deficit. Bulk of these subsidies go to food, fertiliser and petroleum. In the past few months, the govt has steadily withdrawn from providing petroleum subsidies by decontrolling petrol and lately by partially decontrolling diesel. Subsidised LPG supplies have also been curtailed. Kerosene subsidies remain. In case of food and fertiliser, all kinds of permutations and combinations are being proposed, including direct cash transfer.
Rail fares have been hiked. The Govt is expecting to realise Rs 6,600-cr every year from increased rail fares. So in a way, all "free lunches", as most economists and consultancy firm executives who appear on TV regularly say, are being gradually withdrawn.
But when it comes to industry, it is not only bread and butter but the entire monthly ration that is being provided free. The only difference, as I said earlier, is that these doles are not through the subsidies head, but 'incentive for growth,' which is a very clever way of camouflaging the dirty subsidies the rich get. Let me begin by citing the latest exemption. Mr C Rangarajan, the chief economic advisor to Prime Minister has recently proposed that the super-rich in India should be taxed at a higher rate -- 40 per cent, against the present norm of 30 per cent. All hell broke loose the moment he said this. India Inc and Business TV channels plus the newspaper writers have launched an orchestrated campaign to see that the super-rich are not brought under a high tax slab. And then, you of course have the NRI economists joining the chorus, most of them write columns in Indian papers, and chant the Corporate mantra unabashedly.
Raising the income tax limit for the super-rich will bring in Rs 22,000-cr revenue every year.
A few days back, the stock market went up because the Govt deferred the introduction of GAAR to 2016. This move alone would have curbed the inflow of dirty money (and often bloody money) coming from the tax haven of Mauritius. The FICCI chairman, the CII chairman, and everyone else was elated that GAAR has been deferred. In other words, they rejoice over continuing tax exemption to the FII investments flowing in. I am sure, if implemented, this move alone would have mopped up anything exceeding Rs 50,000-cr. But since it is a part of the monthly free ration to the rich, the Govt had to bend.
In any case, it is the rich who circumvent tax laws to escape paying the legitimate taxes. Out of the 3.5 crore people who pay taxes, only 14.6 lakh have shown an income exceeding Rs 10 lakh/year (Unrealistic tax realisation.. Economic Times, Dec 19, 2012. http://bit.ly/XuM9wF) Now this is certainly a gross understatement. But has there been any serious effort in recovering the taxes that are due from the rich? Well, your guess is as good as mine. There never would be any serious attempt to mop up tax revenue from where it is due. After all, the rich must continue to get their free ration.
On top of it, In 2012 Budget, under the 'revenue foregone' category, India Inc got a tax exemption, call it 'incentive for growth' of Rs 5.29 lakh crore, good enough to wipe out the entire fiscal deficit that Chidambaram keeps on crying about. This is in addition to all that is doled out to industries in the Budget itself. Since 2004-05, the 'revenue foregone' adds to more than Rs 27-lakh crore. And yet, the exports have not risen, the manufacturing sector is down, and the industry continues to slog. But despite the industrial stagnation and downturn that is visible all these years, the Corporates are sitting over a huge cash pile. By March 2012, Indian Inc had hoarded a cash surplus of Rs 9-lakh crore. So, it is quite obvious, that the free monthly ration is adding on to the bottom line of the companies.
Add to the tax exemptions, usurping of natural resources, including forests, mineral resources, water and land, aided and abetted by the Govt. The land grab that is taking place, and the manner in which laws are being formulated to benefit the industry, is also a covert subsidy. I have been saying for long that the industry actually thrives on subsidies. It is only that we don't want to see these subsidies or we are paid not to demystify these subsidies. Most of us are beneficiaries of the same system that subsidises the rich, and obviously we wouldn't like to cut the hand that feeds us.
All this is in the name of encouraging entrepreneurship. If the industrialists are entrepreneurs, isn't the farmer, the artisan, the petty shopkeeper and for that the struggling aaa aadmi also an entrepreneur? How come that he doesn't need any support, and it is only the rich would deserve to live on State exchequer?
Even the Armed Forces have discontinued the system of providing subsidised monthly ration to the families of the serving soldiers. When will this business of giving "Free Monthly Ration" to the rich, stop?
Not crop diversification, Punjab needs to diversify from existing intensive farming system.
Several decades back, soon after economist Dr S S Johl had submitted his report on crop diversification in 1986, I asked late Dr Norman Borlaug, the Nobel laureate, during one of his visits to Punjab, as to what he thought about the debate on crop diversification. I remember vividly his reply: “This is a wrong move. Punjab is doing exceedingly well in wheat and rice, and this equilibrium should not be disturbed.”
“It is like in athletics,” He tried to explain. “If you have a sprinter who is a record–holder in let us say 100-metres dash, you don’t ask him to slow down and diversify into steeple chase and high jump. You expect him to better his record in race. ” His suggestion therefore was that instead of Punjab shifting to other crops, it will be much better if Madhya Pradesh, Bihar, Orissa and eastern Uttar Pradesh are encouraged to cultivate other crops.
That was some three decades ago. Meanwhile, reeling under over-exploitation of ground water, Punjab has enacted a ‘Contract Farming Act’ and announced a 5-year programme to diversify the cropping pattern. Chief Minister Prakash Singh Badal has urged the Centre to allocate Rs 5,000-crore for crop diversification in Punjab on the lines of the financial package doled out to eastern states for ushering in Green Revolution. But take a closer look at the strategy being proposed, and you will find that for the reasons that crop diversification is being desperately promoted, the new array of proposed crops suffer from the same problem but in a still bigger magnitude. In fact, most of the alternative crops that are being launched, except for pulses, are environmentally more damaging than rice.
In the backdrop of the shocking revelations tumbling out about the rise in cancer deaths all across the state, and the steadily rising graph of farmer suicides, I had expected a much greener programme that could restore soil health, help raise groundwater and turn farming into a profitable proposition. Unfortunately, the crop diversification programme fails to imbibe any enthusiasm. In my understanding, it will surely help the agri-business companies but leave behind dying fields and crying farmers. Therefore, before we exacerbate the existing farm crisis and taken it an unmanageable level, it is time to step back and rethink.
First, let us look at groundwater. A very interesting study by a Nawanshehar-based researcher Kuldip Singh Herian has shown the water requirement, based on the same parameters as quoted in several crop diversification reports, for paddy at 60,20,000 litres per hectare. Now let us look at the crops being suggested as alternatives. Sugarcane requires 1,60,00,000 litres, cotton 78,50,000 litres, sunflower 65,00,000 litres and winter maize 61,00,000 litres. In addition, kharifmaize requires 46,00,000 litres per hectare. It is therefore quite obvious that the alternative crops do not provide any saving on groundwater usage. Interestingly, his research shows that water requirement for producing 1 kg of rice comes to about 1,131 litres against 1,691 litres for kharif maize, 6,217 litres for cotton and 5,612 for sunflower.
Considering that rice gets an assured price every year, farmers are wise enough not to shift to any other alternative. Even though Chief Minister has appointed the Punjab State Warehousing Corporation to act as a nodal agency in procuring maize, undertaking scientific storage and set up mechanised drying units, I don’t see much possibility of an area shift. In any case, maize cultivation offers no incentive when it comes to water efficiency. It will however provide a huge market for sale of hybrid seeds for the private sector, which appears to be primary reason for the clamour for maize as replacement.
In case of chemical pesticides, I see no reason why Punjab cannot drastically cut down on pesticides usage on rice. Studies by International Rice Research Institute in the Philippines have conclusively shown that ‘pesticides use on rice in Asia was a waste of time and effort.’ Farmers in several parts of the Philippines, Vietnam, Bangladesh and India produce better rice crop without the application of pesticides. Wonder, why Punjab has never taken this advice seriously? In the case of bananas, olives and roses, the pesticide requirement is several times higher.
Similarly, there are several known methods of restoring soil health, inter-cropping and mixed cropping with leguminous crops being the common crop rotations to be followed. Crop rotation is the best way to get out of the monoculture that Punjab has lived with and thereby limit the damage to soil health and environment. All it needs is to redesign the package of practices. In other words, Punjab needs an urgent diversification of the existing farming systems – from highly intensive to more ecological -- to make it more viable and sustainable.
Is Palm Oil the Answer to India's Edible Oil Crisis?
Now this is getting too much. The chairman of the Commission for Costs & Prices (CACP) Dr Ashok Gulati has come out with another analysis which, if implemented, will take India from the frying pan into fire. That's what I feel. All through he has been shrieking at the top of his voice for cutting down on import duties on agricultural commodities. His argument has been that cheaper imports will make Indian farmers efficient, which in turn will improve crop productivity thereby increasing exports.
Nothing like that happened.
Writing in The Economic Times, he says in an oped article entitled: Oil palm: Answer to India's edible oil problem (ET. Jan 17, 2013. bit.ly/S5qtKS ) that India's edible oil import bill has crossed Rs 56,295-crore in the oil year, Nov 2011 to October 2012. "The projections of demand and supply of agri-products also shows that the biggest challenge of Indian agriculture will be in producing enough edible oils at globally competitive rates to meet its rising demand." Fair enough.
And then he very conveniently hides the fact that India had achieved near self-sufficiency in oilseeds production in 1993-94, many called it yellow revolution, after which the down slide began. From a near self-sufficiency status to becoming world's second biggest importer of edible oils is because it was after 1993-94 India had began to gradually reduce the import duties. As per WTO obligations, India is allowed to bound its import tariffs on edible oils at 300 per cent (except for soy oil where it has been pegged at 40 per cent, thanks to US pressure). But it was autonomous liberalisation that did the damage. At present, there is zero duty on crude edible oil and 7.5 per cent on refined edible oil. Now with import duties brought down to almost zero, what do you expect to happen?
Imports have been on an upswing. From Rs 14,709-crore in 2006-07, the import bill jumped to Rs 34,677-crore in 2009-10, and has further soared to Rs 56,295-crore in 2011-12.
You will agree that it is because of India's faulty policies that edible oils have turned into a big strain on the state exchequer. Obviously, the current account deficit will grow when imports increase and exports do not match. In fact, still worse, because we allowed cheaper edible oil to be imported, farmers abandoned cultivation of oilseed crops and shifted to other unremunerative crops (oilseeds are mainly grown in the harsh environs of drylands). At the same time, the domestic edible oil processing industry collapsed, in turn implying that it was a lost opportunity to create employment.
Just between 2006 and 2012, a period of six years, India has incurred Rs 2.02 lakh crore on edible oil imports. If India had continued with the oilseed self-sufficiency programme, as initiated by former Prime Minister Rajiv Gandhi, this entire amount would have remained within the country thereby helping farmers and the industry. Here also, people like Ashok Gulati were advising the successive governments on the dire need to open up imports. So first you the damage the country by encouraging imports, and then you try to inflict another bigger damage by campaigning for a crop which is known to be environmentally destructive.
While the Ministry of Agriculture is now contemplating a re-look at the import duties on edible oils (Govt to review import duty structure of edible oils. Business Line. Jan 15, 2013. bit.ly/SCVmrB ), Ashok Gulati is suggesting a shift to palm oil cultivation to meet the domestic demand. His suggestion is that India should bring 2 million hectares under palm cultivation in the next four to five years, for which he even advocates a compensation of Rs 4,000-crore to farmers as opportunity costs. CACP chairman doesn't want the wheat and paddy prices to be raised by even Rs 10/quintal but has no problem if the government was to shell out Rs 4,000-crore to farmers as compensation for palm oil cultivation!
Palm oil cultivation has a terrible socio-economic and environmental fallout (See this WWF report: Palm oil: Environmental impacts. http://wwf.panda.org/what_we_
Meanwhile, the Government today has raised the import duty on crude edible oil from existing zero to 2.5 per cent. Ministry of Agriculture had proposed a hike of 7.5 per cent, which also is very low. To make any appreciable dent in the sense that India returns back to the path of self-sufficiency, the import duties should have been raised by 150 per cent. But then, that's not the intention of this government.
Nothing like that happened.
Writing in The Economic Times, he says in an oped article entitled: Oil palm: Answer to India's edible oil problem (ET. Jan 17, 2013. bit.ly/S5qtKS ) that India's edible oil import bill has crossed Rs 56,295-crore in the oil year, Nov 2011 to October 2012. "The projections of demand and supply of agri-products also shows that the biggest challenge of Indian agriculture will be in producing enough edible oils at globally competitive rates to meet its rising demand." Fair enough.
And then he very conveniently hides the fact that India had achieved near self-sufficiency in oilseeds production in 1993-94, many called it yellow revolution, after which the down slide began. From a near self-sufficiency status to becoming world's second biggest importer of edible oils is because it was after 1993-94 India had began to gradually reduce the import duties. As per WTO obligations, India is allowed to bound its import tariffs on edible oils at 300 per cent (except for soy oil where it has been pegged at 40 per cent, thanks to US pressure). But it was autonomous liberalisation that did the damage. At present, there is zero duty on crude edible oil and 7.5 per cent on refined edible oil. Now with import duties brought down to almost zero, what do you expect to happen?
Imports have been on an upswing. From Rs 14,709-crore in 2006-07, the import bill jumped to Rs 34,677-crore in 2009-10, and has further soared to Rs 56,295-crore in 2011-12.
You will agree that it is because of India's faulty policies that edible oils have turned into a big strain on the state exchequer. Obviously, the current account deficit will grow when imports increase and exports do not match. In fact, still worse, because we allowed cheaper edible oil to be imported, farmers abandoned cultivation of oilseed crops and shifted to other unremunerative crops (oilseeds are mainly grown in the harsh environs of drylands). At the same time, the domestic edible oil processing industry collapsed, in turn implying that it was a lost opportunity to create employment.
Just between 2006 and 2012, a period of six years, India has incurred Rs 2.02 lakh crore on edible oil imports. If India had continued with the oilseed self-sufficiency programme, as initiated by former Prime Minister Rajiv Gandhi, this entire amount would have remained within the country thereby helping farmers and the industry. Here also, people like Ashok Gulati were advising the successive governments on the dire need to open up imports. So first you the damage the country by encouraging imports, and then you try to inflict another bigger damage by campaigning for a crop which is known to be environmentally destructive.
While the Ministry of Agriculture is now contemplating a re-look at the import duties on edible oils (Govt to review import duty structure of edible oils. Business Line. Jan 15, 2013. bit.ly/SCVmrB ), Ashok Gulati is suggesting a shift to palm oil cultivation to meet the domestic demand. His suggestion is that India should bring 2 million hectares under palm cultivation in the next four to five years, for which he even advocates a compensation of Rs 4,000-crore to farmers as opportunity costs. CACP chairman doesn't want the wheat and paddy prices to be raised by even Rs 10/quintal but has no problem if the government was to shell out Rs 4,000-crore to farmers as compensation for palm oil cultivation!
Palm oil cultivation has a terrible socio-economic and environmental fallout (See this WWF report: Palm oil: Environmental impacts. http://wwf.panda.org/what_we_
Meanwhile, the Government today has raised the import duty on crude edible oil from existing zero to 2.5 per cent. Ministry of Agriculture had proposed a hike of 7.5 per cent, which also is very low. To make any appreciable dent in the sense that India returns back to the path of self-sufficiency, the import duties should have been raised by 150 per cent. But then, that's not the intention of this government.
GAAR Deferred. Investors, stock markets, industry and media celebrate the induction of black money. Is India really against corruption?
Some years back, I was sitting with some family friends. For some reason, the topic of discussion shifted to henpecked husbands. The ladies were telling how bad they feel when they see a henpecked husband. While it was interesting to hear what each one had to say I was particularly amused to hear when one of them said: "I certainly don't like to see henpecked husbands, but I wouldn't mind if my own husband is henpecked." Everyone laughed.
When I see the nation's anger over corruption, I am reminded of that evening. Swami Ramdev and Anna Hazare have led from the front. The movement against corruption, the way it has mobilised the masses, certainly remains unprecedented in India's history. Everyone points a finger at other's corruption, the favourite whipping boy of course being the politicians. Commonwealth Games, 2G scam, Coalgate and everything else points to the politicians. But sometimes I wonder whether we are willing to look inwards, to see and evaluate how corrupt we are as individuals?
The same holds true for the business and industry, the foundation of India's growth story. Have India Inc every turned the mirror inwards to see how corrupt it is? Or like the lady the other evening, India Inc can't tolerate political corruption, but doesn't mind its own corruption?
Now, hold on. Before you think this is a subject that doesn't concern you, it is time to do a reality check. The Hindustan Times says: "The GAAR provisions, put forward in the budget for 2012-13, triggers howls of protest from global and domestic business leaders as it can potentially affect almost anybody, and everybody (Tax-Avoidance rules delayed by 2 years, Jan 15, 2013)." It then goes on to tell you how you can be impacted. "For instance, many companies, experts had said, would have been forced to restructure salaries of employees if taxmen concluded that these were structured only to avoid taxes."
In simple words, the market experts have created a fear psychosis. They have warned you to keep quiet since your job too is at stake. So that you too can become a willing party to corruption.
Only a few months back, and it wasn't long, when India had witnessed what many called as people's rising over mammoth corruption. Some even likened it to Arab Spring. Anna Hazare became the torch-bearer of the fight against rampant corruption. Everyone joined to point an accusing finger at the political system, holding it primarily responsible for prevailing corruption. If this was really true, I don't understand how could everyone now turn a blind eye to the Finance Ministry's controversial decision to provide a legal route for dirty money to flow in through the Mauritius route.
GAAR, introduced in Budget 2012-13 by the then Finance Minister Pranab Mukherjee with the aim of checking tax avoidance, was to come into effect from April 1, 2014.
Since nearly 40 per cent of the FII investments come through the tax haven route of Mauritius (as part of a treaty signed earlier), it clearly shows how the flow of black money has been formally allowed in the name of economic reforms. The next obvious question therefore: Is India's growth story based on black money? Is India's economic reforms actually driven by corrupt practices? If not, then how come the chairperson of the Federation of Indian Chambers of Commerce and Industry (FICCI) Naina Kidawi be very proudly welcoming the decision saying that the industry needs this investment at this critical juncture. Does it therefore mean that India Inc is growing on tainted money? Not only the FICCI chief, I am shocked that every other economic writer and (of course the newspapers/TV channels) and industry leader are visibly excited. There is a sense of relief over the continuation of corrupt practices. Sensex and Nifty have have already cheered the induction of more black money in the economy.
At a time when globally the sentiment is for improving governance and transparency, how can India Inc justify the continuation of corrupt practices in the name of economic reforms? Isn't GAAR a set of rules to check how FIIs are evading taxes? Will it not help to weed out black money that some FIIs bring? How can any sensible economist or a market analyst support the postponing of GAAR rules? Does it not mean that corruption runs deep in this country, afflicting the rich and the powerful more than anyone else? And business as usual, (which means continuing with corrupt business activities) is what the rich and the super-rich want?
So the next time you rally against corruption, don't only blame the politicians and the government. Be bold to point an accusing finger at Indian business and industry, market analysts, and also the media.
That brings me to the moot question. Is India really against corruption? #
Additional reading: Tainted money, Deccan Herald.
To save on global warming, why food is allowed to travel across continents? Why not popularise local products and local markets?
Some decades back I had written on how Pepsi was shipping its used PET bottles, used for packing soft drinks, to Chennai in India for recycling. These bottles would then again be shipped back to the US for use. Why Pepsi took this detour for recycling PET bottles was simply because recycling of plastic waste is not easily allowed in the US (it has very stringent norms) for health and environmental reasons, and that obviously adds on to the cost.
Later, in 1994, I remember reading an excellent report Food Miles produced by Sustain. It told us about the dangers of shipped food across the continents, processed and repacked elsewhere, and then shipped back to the same country from where it all started. There were several glaring examples, which should have woken up the policy makers and of course the economists who talk of everything but little sense. Food on an average travels 3,000 miles before it reaches your plate. This itself was such a startling revelation that should have made consumers to rethink, but somehow it did not. The report is now updated and republished and you can have a copy (click this link to know more about http://www.sustainweb.org/
Yesterday, Zac Goldsmith forwarded a tweet, which reminded me of the hidden cost of the global food transport system. The Sunday Times, London, had several years back reported how British prawns were being shipped to China for hand-shelling, and then shipped back to UK for the consumers. Supermarkets are excelling in globe-trotting for food products, taking advantage of the cheap processing costs (and also taking advantage of the massive fuel subsidies) and remain unmindful of the carbon footprint they generate in the process.
Take this example. The tradecraft coffee that supermarket chain Sainsbury sells in its stores is grown in Bukoba, Tanzania. The coffee beans then travel 656 kms to Dar-es-Salaam from where it is shipped to Vijaywada in Andhra Pradesh. Vijaywada is about 3,250 miles from Dar-es-Salaam. In Vijaywada, the beans are packed. It is again shipped to Southampton in UK, which is about 5,000 miles. From Southampton, it goes to Leeds from where it is redistributed to Sainsbury stores worldwide. I am sure with the approval granted to FDI in retail in India, Sainsbury will find it convenient to ship the packed coffee from Leeds to New Delhi (You can read the news report here: http://www.airportwatch.org.
Isn't it time therefore to do a serious rethink of our international trade policies? I have been saying for long that World Trade Organisation (WTO) and Climate negotiations actually work at cross-purposes. While WTO will push for more of such trade, it doesn't pay any heed to the resulting carbon footprint such trade generates and the impact it has on global warming. Similarly, Climate negotiators are not calling for restricting such unwanted trade as a precursor to climate control standards.
I have never understood the logic of allowing apples to be imported all the way from New Zealand and Chile into India while there are no takers for apples from Himachal Pradesh and Kashmir. Similarly, what is the logic behind allowing Washington apples to be exported to India, while Chinese apples travel all the way to the US, controlling roughly 45 per cent of the US market. The food globe-trotting is happening because the aviation fuel is damn cheap. Many have said that aviation fuel actually works to be cheaper than Coke !
Creating and popularising local markets is perhaps the only viable alternative to the madness of making food travel across the globe. Consumers have a very important role to play here. Try to avoid being lured by products which claim to have brought you the same processed stuff from far away which otherwise is grown in your neighbourhood. Keep a close watch. Why go for processed orange drink from Chile or from US, when you have much fresh and tasty juice available in your local market? Make such sensible choices. And your would have played your small but effective part in limiting global carbon foot print.
Later, in 1994, I remember reading an excellent report Food Miles produced by Sustain. It told us about the dangers of shipped food across the continents, processed and repacked elsewhere, and then shipped back to the same country from where it all started. There were several glaring examples, which should have woken up the policy makers and of course the economists who talk of everything but little sense. Food on an average travels 3,000 miles before it reaches your plate. This itself was such a startling revelation that should have made consumers to rethink, but somehow it did not. The report is now updated and republished and you can have a copy (click this link to know more about http://www.sustainweb.org/
Yesterday, Zac Goldsmith forwarded a tweet, which reminded me of the hidden cost of the global food transport system. The Sunday Times, London, had several years back reported how British prawns were being shipped to China for hand-shelling, and then shipped back to UK for the consumers. Supermarkets are excelling in globe-trotting for food products, taking advantage of the cheap processing costs (and also taking advantage of the massive fuel subsidies) and remain unmindful of the carbon footprint they generate in the process.
Take this example. The tradecraft coffee that supermarket chain Sainsbury sells in its stores is grown in Bukoba, Tanzania. The coffee beans then travel 656 kms to Dar-es-Salaam from where it is shipped to Vijaywada in Andhra Pradesh. Vijaywada is about 3,250 miles from Dar-es-Salaam. In Vijaywada, the beans are packed. It is again shipped to Southampton in UK, which is about 5,000 miles. From Southampton, it goes to Leeds from where it is redistributed to Sainsbury stores worldwide. I am sure with the approval granted to FDI in retail in India, Sainsbury will find it convenient to ship the packed coffee from Leeds to New Delhi (You can read the news report here: http://www.airportwatch.org.
Isn't it time therefore to do a serious rethink of our international trade policies? I have been saying for long that World Trade Organisation (WTO) and Climate negotiations actually work at cross-purposes. While WTO will push for more of such trade, it doesn't pay any heed to the resulting carbon footprint such trade generates and the impact it has on global warming. Similarly, Climate negotiators are not calling for restricting such unwanted trade as a precursor to climate control standards.
I have never understood the logic of allowing apples to be imported all the way from New Zealand and Chile into India while there are no takers for apples from Himachal Pradesh and Kashmir. Similarly, what is the logic behind allowing Washington apples to be exported to India, while Chinese apples travel all the way to the US, controlling roughly 45 per cent of the US market. The food globe-trotting is happening because the aviation fuel is damn cheap. Many have said that aviation fuel actually works to be cheaper than Coke !
Creating and popularising local markets is perhaps the only viable alternative to the madness of making food travel across the globe. Consumers have a very important role to play here. Try to avoid being lured by products which claim to have brought you the same processed stuff from far away which otherwise is grown in your neighbourhood. Keep a close watch. Why go for processed orange drink from Chile or from US, when you have much fresh and tasty juice available in your local market? Make such sensible choices. And your would have played your small but effective part in limiting global carbon foot print.
Rabobank promotes hybrid rice. Aimed at helping Monsanto, Syngenta, Pioneer, Dow Agro Science and Bayer Crop Science sell more seed.
For years, farmers have been complaining. "You tell us to keep domestic breeds. But banks only provide me credit if I purchase a crossbred cow," farmers would tell me at many a places. If you have wondered why farmers did not fancy desi breeds of cows, this is one of the major reasons. I have raised this at various platforms, and am still not sure whether banks have rectified their flawed policy to provide credit only for 'improved' technology.
This malice has gone on and on. In fact, in lot many way I find the banks are primarily responsible for the prevailing agrarian crisis. They have always supported the industrial-driven farming systems and thereby knowingly led agriculture on the path to disaster. One reason perhaps is that the agriculture staff in banks is stuffed with people who have little exposure to the ground realities. They literally go by text books, and have drawn development policies in consultation with firms like Ernst&Young, Tata Consultancy Services, among others. One can cite a number of examples, but then let's keep that to another day.
The situation has worsened after the private banks got foothold in the Indian market. The latest is Rabobank. The bank has done a study wherein it calls for investing in hybrid seeds to increase rice production by some 15-20 per cent (Hybrid seeds will help raise rice productivity: Study. Business Standard, Jan 9, 2013. http://bit.ly/TJbtBH). At present, hybrid rice seed is cultivated in only 3 per cent of the total area, and since seed giants like Bayer Crop Sciences, Dow Agro Sciences, Pioneer, Monsanto and Syngenta's commercial interests are involved, how can Rabobank not make promotional bid?
It is primarily for the same reason that Ministry of Agriculture is also aggressively promoting hybrid rice seeds through the Rashtriya Krishi Vikas Yojna. Subsidies are being provided for hybrid seed purchase. Interestingly, while the RKVY objective is to increase production, the State which produces the largest rice surplus -- Punjab -- is launching a crop diversification programme planning to take out 12 lakh hecatres from rice cultivation and shift to other crops. At the same time, India is saddled with huge rice stocks and is therefore reluctant to procure more rice. It is thinking of capping food procurement to limit the burden on the Food Corporation of India.
Under such conditions, why do we need to raise production by 15-20 per cent? Well, you guessed it right. Because it will help seed multinationals to market more seed. This in turn will raise their stock value. Since hybrid seeds have to be purchased every year, look at the huge market available. Punjab is also worried about depleting groundwater from excess pumping out of water for rice cultivation. Rabobank should have known that hybrid seeds pull out at least 1.5 times more water than the high-yielding varieties (HYV). This in turn will require more fertilisers and pesticides thereby adding on to the send-generation environmental impacts and also fan global warming. But the bigger question is when will the policy makers hold banks accountable if their policies acerbate the agrarian crisis? Isn't it time to hold social and environmental audit of bank policies and approaches?
The answer is: Only when people like you and me raise their voice.
This malice has gone on and on. In fact, in lot many way I find the banks are primarily responsible for the prevailing agrarian crisis. They have always supported the industrial-driven farming systems and thereby knowingly led agriculture on the path to disaster. One reason perhaps is that the agriculture staff in banks is stuffed with people who have little exposure to the ground realities. They literally go by text books, and have drawn development policies in consultation with firms like Ernst&Young, Tata Consultancy Services, among others. One can cite a number of examples, but then let's keep that to another day.
The situation has worsened after the private banks got foothold in the Indian market. The latest is Rabobank. The bank has done a study wherein it calls for investing in hybrid seeds to increase rice production by some 15-20 per cent (Hybrid seeds will help raise rice productivity: Study. Business Standard, Jan 9, 2013. http://bit.ly/TJbtBH). At present, hybrid rice seed is cultivated in only 3 per cent of the total area, and since seed giants like Bayer Crop Sciences, Dow Agro Sciences, Pioneer, Monsanto and Syngenta's commercial interests are involved, how can Rabobank not make promotional bid?
It is primarily for the same reason that Ministry of Agriculture is also aggressively promoting hybrid rice seeds through the Rashtriya Krishi Vikas Yojna. Subsidies are being provided for hybrid seed purchase. Interestingly, while the RKVY objective is to increase production, the State which produces the largest rice surplus -- Punjab -- is launching a crop diversification programme planning to take out 12 lakh hecatres from rice cultivation and shift to other crops. At the same time, India is saddled with huge rice stocks and is therefore reluctant to procure more rice. It is thinking of capping food procurement to limit the burden on the Food Corporation of India.
Under such conditions, why do we need to raise production by 15-20 per cent? Well, you guessed it right. Because it will help seed multinationals to market more seed. This in turn will raise their stock value. Since hybrid seeds have to be purchased every year, look at the huge market available. Punjab is also worried about depleting groundwater from excess pumping out of water for rice cultivation. Rabobank should have known that hybrid seeds pull out at least 1.5 times more water than the high-yielding varieties (HYV). This in turn will require more fertilisers and pesticides thereby adding on to the send-generation environmental impacts and also fan global warming. But the bigger question is when will the policy makers hold banks accountable if their policies acerbate the agrarian crisis? Isn't it time to hold social and environmental audit of bank policies and approaches?
The answer is: Only when people like you and me raise their voice.
When dairy farming becomes unprofitable.
A typical dairy farm in India
Dairy farmers in India are in crisis. High input prices and declining milk prices have pushed them to the wall. But the consumer prices remain firm, showing no signs of declining.
When NCP leader Praful Patel said in Parliament during the debate on FDI in retail how in Baramati in Maharashtra, agriculture minister Sharad Pawar had ensured that dairy farmers got a minimum prices of Rs 20 per litre for milk, I was amused. This is not a fair price, but a depressed price being paid to farmers. All cooperatives and private plants are paying around the same to mil producers.
Saddled with huge stocks of skimmed milk powder, and with a weak export demand, the dairy industry is trying to minimise its losses. It is therefore passing on the losses to primary producers. Now such a situation is not peculiar only to India. Let us therefore try to understand how the international community reacted to a dip in prices.
In 2009, about 20 per cent of 1,800 dairy farms in California, for instance, had shut down unable to survive at times of higher feed and transportation costs. Similarly, in 2009, when international milk prices had dipped to a low, the European Union defied the World Trade Organisation (WTO) and reintroduced milk subsidies. It provided Rs 3,600 crore in subsidies to its dairy farmers to offset the losses incurred.
While US/EU have always made efforts to rescue their dairy farmers, I have never understood the rationale of letting domestic dairy farmers shut down when farm prices fall for no fault of theirs. With private and cooperative dairy industry reducing the milk prices to Rs 20.50 a litre, it is certainly uneconomical to maintain a dairy herd. In Punjab, Gujarat, Maharashtra and Rajasthan, quite a large number of dairy farmers have opted out.
Let us see how Europe coped up with the crisis. In European Union, there are 10 lakh dairy farmers.Collectively, they produce more milk than what is produced in India or for that matter in America. As per WTO norms, EU was supposed to have phased out its burgeoning dairy subsidies. But who cares when it comes to domestic interests. EU reinstated subsidies to support milk production as well as for export when it was hit by economic recession. By doing so it has been able to capture 32 per cent of the global market for dairy products by volume.
According to the Dairy Farmers of Canada (DFA), EU dairy farmers receive subsidies to the tune of Rs 3.96 lakh crore every year.
These massive subsidies insure dairy farmers against the volatility of the markets, and at the same time enable them to dump subsidised milk onto developing countries. Looking for an export market, EU is flexing its muscle and under the proposed EU-India Free Trade Agreement (FTA) it wants milk tariffs to be slashed by 90 per cent. EU is seeing India as a big market for its milk and milk products, and all indicators are that India will open up its domestic dairy market for EU imports.
Lesser number of farms
In America, on the other hand, the number of dairy farms has come down by 61 per cent since 1992, and only 51,480 dairy farms now exist. These farms received subsidies worth Rs 27,500 crore since 2009, which in other words means a third of its milk price is subsidised. These subsidies come under several programmes: milk income loss contract payment; market loss assistance; milk income loss transitional payment; dairy economic loss assistance programme; milk marketing fees; dairy disaster assistance; and dairy indemnity.
Interestingly, cash subsidies in the US are doled out under Dairy Export Incentive Programme. EU on the other hand subsidises nearly 50 per cent of its dairy exports.
Let me also dispel another commonly held notion. In an era of market economy, it is generally believed that American/European farmers are dependent entirely on the private supply chain. It’s not so. After March 2009, EU had restarted buying surplus butter and milk from dairy farmers at an intervention price of Euro 2,218 and Euro 1,698 per tonne, respectively. In America, milk price support programme ensures that the government buys any surplus amount of cheese, butter and non-fat dry milk at a minimum price. In addition, since 2002, it has introduced a programme to distribute cash subsidies to milk producers when prices fall below a set limit. I see no reason why state governments cannot provide such subsidy support to its dairy farmers when prices fall.
It’s not as if state governments do not have resources. Punjab, for instance, had made available Rs 1250 crore in interest free loan spread over five years and on top of it gave a 15-year tax holiday to steel tycoon Laxmi Mittal for investing in the Bathinda refinery. I see no reason why it cannot rescue small dairy farmers who are gradually sinking.
Therefore, to begin with, state governments should consider subsidising the cooperatives to raise the milk procurement price to at least Rs 25 per litre. Secondly, it should also reduce the bank interest on loans taken from existing 12.5 per cent to 7 per cent.
The Centre and the state government should consider measures to rescue milk producers before they start giving up the sector leading to serious shortages and forcing India to become an importer of this vital commodity.
Source: Milk crisis looming, Deccan Herald, Jan 5, 2013.
http://www.deccanherald.com/
Change that mindset.
A Warangal woman farmer who was an early adopter of Bt cotton hand-waters her recently planted seeds. Normally hand-watering is unheard of, but like most early adopters, she lavished extra-ordinary attention on the field with the expensive Bt cotton seed. Such field was then reported by economists as evidence that Bt cotton has an inherent "yield advantage" (Smale, et al. 2010; Smale, et al. 2006; Stone, 2011).
This is so true. But it didn't strike me till I read Prof Glenn Stone's blog Hold that Thought. Glenn Stone is a professor of sociocultural anthropology and environmental studies at Washington University in St. Louis. Reading him, I now realise how correct he is in his observation, and assessment. I have seen this happening around me. Farmers tend to take more than adequate care of anything that is expensive. Why only farmers, even at our homes, we tend to be more careful and protective of anything that comes from a distant land (and of course is more expensive). It deserves special attention. This is how it has been, and still continues to be.
I have often been asked as to why is that the Indian cattle breeds are less productive than the exotic breeds or crossbred. When desi breeds can be doing so well in Brazil (which is the biggest exporter of Indian breeds of cows), how come they are low producers in India? The answer is hidden in that mindset brought out to so clearly by Glenn Stone. I find farmers showering all the care on exotic breeds and neglecting the native cows. Just look around and observe silently, you will find the imported breeds being tended like a child while its poor cousin -- the desi breed -- is left to fend for itself. No wonder, I see native cows roaming on the streets in urban India.
For the same reason, the Brazilians accord utmost care to Indian breeds, which are exotic for them. Pure bred Gir cow from Gujarat has clocked 62.3 litres of milk yield in Brazil.
Food produced globally is enough to feed almost double the existing population, Mr Mark Lynas
Pardon my ignorance. After all the ruckus over the 'switching-over' of environmentalist Mark Lynas into the folds of GM industry, I had to make an effort to find who we are talking about. It took me some time to Google search. I now know what the fuss is all about.
I must acknowledge that I had never heard his name before nor have I ever read him. Likewise, I am sure he has never heard of me. That's fair enough.
What drew my attention was the heat generated at the Oxford Farming Conference. Speaking at the conference, Lynas was quoted as saying "research published in the Proceedings of the National Academy of Sciences suggested the World will require 100 per cent more food to feed the maximum projected population adequately.." This is a common argument that has been doing the rounds ever since the first GM tomato was released in the market.
Well, what population projections are we talking of? The planet today hosts 7 billion plus people, and all estimates point to a population of 9 billion in 2050.
Now, let us look at how much food is available. Only a day before I looked at the USDA calculations. It annually prepares what is called as World Agricultural Supply and Demand Estimates. If you read the 2012 estimates (here is the link: http://www.usda.gov/oce/
In other words, the world food production today is good enough for double the present population. So where is the crisis on the food front? Aren't we scaring people unnecessarily or with an ulterior motive?
The real problem no one wants to address is the problem associated with food management, its access and distribution. It is true that while the West is overfed (because of the conversion through animal protein), much of the developing world remains hungry. While one part of the world is eating more, the rest of the world is left to starve. What makes it still worse is that more than a third of the food that is produced every year goes waste. In United States, Canada and Europe, 40 per cent food is wasted. For example, Americans waste $ 165 billion worth of food every year. Food wasted in Italy, if saved, can feed the entire population of hungry in Ethiopia. (See my article: The wastage myth. http://www.deccanherald.com/
It doesn't require any 'discovery of science' to know where the real problem lies, Mr Mark Lynas. The problem is not with food production. The problem is, as I said earlier, on the distribution front. If the world were to save the food that is going waste, and distribute it judiciously, we would probably have enough food available every year to meet the needs of the population in the mid of the next century. The international leadership as well as the biotech industry should instead put all their efforts in cutting down on food wastage. And believe me, this will keep a cap on global warming, and also help in restricting any further damage to the soils, water and the environment.
Additional Reading: Do GM Crops Increase Yield? The Answer is No.
URL: http://bit.ly/r0Owbr
I must acknowledge that I had never heard his name before nor have I ever read him. Likewise, I am sure he has never heard of me. That's fair enough.
What drew my attention was the heat generated at the Oxford Farming Conference. Speaking at the conference, Lynas was quoted as saying "research published in the Proceedings of the National Academy of Sciences suggested the World will require 100 per cent more food to feed the maximum projected population adequately.." This is a common argument that has been doing the rounds ever since the first GM tomato was released in the market.
Well, what population projections are we talking of? The planet today hosts 7 billion plus people, and all estimates point to a population of 9 billion in 2050.
Now, let us look at how much food is available. Only a day before I looked at the USDA calculations. It annually prepares what is called as World Agricultural Supply and Demand Estimates. If you read the 2012 estimates (here is the link: http://www.usda.gov/oce/
In other words, the world food production today is good enough for double the present population. So where is the crisis on the food front? Aren't we scaring people unnecessarily or with an ulterior motive?
The real problem no one wants to address is the problem associated with food management, its access and distribution. It is true that while the West is overfed (because of the conversion through animal protein), much of the developing world remains hungry. While one part of the world is eating more, the rest of the world is left to starve. What makes it still worse is that more than a third of the food that is produced every year goes waste. In United States, Canada and Europe, 40 per cent food is wasted. For example, Americans waste $ 165 billion worth of food every year. Food wasted in Italy, if saved, can feed the entire population of hungry in Ethiopia. (See my article: The wastage myth. http://www.deccanherald.com/
It doesn't require any 'discovery of science' to know where the real problem lies, Mr Mark Lynas. The problem is not with food production. The problem is, as I said earlier, on the distribution front. If the world were to save the food that is going waste, and distribute it judiciously, we would probably have enough food available every year to meet the needs of the population in the mid of the next century. The international leadership as well as the biotech industry should instead put all their efforts in cutting down on food wastage. And believe me, this will keep a cap on global warming, and also help in restricting any further damage to the soils, water and the environment.
Additional Reading: Do GM Crops Increase Yield? The Answer is No.
URL: http://bit.ly/r0Owbr
When human food is cheaper than cattle and poultry feed.
The clamour for freezing the wheat procurement price is not dying down. Ironically, it is being spearheaded by the same organisation that is supposed to economically work out the procurement price in the first place -- the Commission for Costs and Prices (CACP). In an editorial, The Economic Times (Wheat Mess, Jan 8, 2013) calls the decision to hike the wheat price by Rs 650 per tonne as 'ridiculous and inane'. It of course draws its opinion from the "wise men of the Commission for Costs and Prices", as it acknowledges.
Wheat procurement price is Rs 1350 per quintal for the 2013 marketing season. Paddy procurement price is Rs 1250 per quintal for the ordinary varieties.
While pro-market economists are aggressively pursuing for a policy shift that forces the government to withdraw the support prices, it is interesting to see prices of cattle feed going up through the roof of the cattle sheds in the past one year. Isn't it strange that while the price of foodgrains -- human food -- remains almost static (if you were to adjust for inflation), the price of cattle feed is skyrocketing?
Cattle feed is in fact more expensive than human food !
The Progressive Dairy Farmers Association says: "prices of deoiled rice bran jumped from Rs 700 per quintal in June to Rs 1,050 a quintal; while price of mustard cake shot up from 1,500 per quintal to Rs 2,100 a quintal. Similarly, cost of deoiled mustard cake and soybean jumped to Rs 1,800 and 4,200 per quintal in just one month, he added. Farmers even accused solvent plant owners and big hoarders of stocking cattle feed ingredients which fuelled the prices." The Tribune (Nov 24, 2012) quotes a dairy farmer Sukhdev Singh of Baroli in Punjab as saying: "The Milk cooperatives purchases milk at Rs 20.50 per litre and sells it for Rs 34 a litre. Feed alone costs Rs 21 per kg as against Rs 14 per kg last year. How will we survive?"
Let us now look at the poultry industry. In a report in The Tribune (Cold conditions lead to increase in poultry prices, Jan 9, 2013), G S Bedi, President of Amritsar Poultry Industry Association, says because the price of maize (which constitutes 60 per cent of the feed) has gone up from Rs 1100 to Rs 1580 per quintal, and with the price of soya also increasing, the cost of production has gone up by 25 per cent. The news report states that the prices of poultry feed has risen by almost 50 per cent over the last year's price.
This brings me to the basic question. Why is that the Commission for Costs and Prices has no problems with the rising cost of cattle and poultry feed? I am sure it will project the unexplained hike in cattle and poultry feed prices as a reflection of economic growth. But when it comes to the price for human food -- wheat and rice, farmers don't deserve any profit over the cost of production. A price incentive to farmer (forgetting that he also lives in times when inflation is soaring all around him), is something that is projected as anti-growth !
Wheat procurement price is Rs 1350 per quintal for the 2013 marketing season. Paddy procurement price is Rs 1250 per quintal for the ordinary varieties.
While pro-market economists are aggressively pursuing for a policy shift that forces the government to withdraw the support prices, it is interesting to see prices of cattle feed going up through the roof of the cattle sheds in the past one year. Isn't it strange that while the price of foodgrains -- human food -- remains almost static (if you were to adjust for inflation), the price of cattle feed is skyrocketing?
Cattle feed is in fact more expensive than human food !
The Progressive Dairy Farmers Association says: "prices of deoiled rice bran jumped from Rs 700 per quintal in June to Rs 1,050 a quintal; while price of mustard cake shot up from 1,500 per quintal to Rs 2,100 a quintal. Similarly, cost of deoiled mustard cake and soybean jumped to Rs 1,800 and 4,200 per quintal in just one month, he added. Farmers even accused solvent plant owners and big hoarders of stocking cattle feed ingredients which fuelled the prices." The Tribune (Nov 24, 2012) quotes a dairy farmer Sukhdev Singh of Baroli in Punjab as saying: "The Milk cooperatives purchases milk at Rs 20.50 per litre and sells it for Rs 34 a litre. Feed alone costs Rs 21 per kg as against Rs 14 per kg last year. How will we survive?"
Let us now look at the poultry industry. In a report in The Tribune (Cold conditions lead to increase in poultry prices, Jan 9, 2013), G S Bedi, President of Amritsar Poultry Industry Association, says because the price of maize (which constitutes 60 per cent of the feed) has gone up from Rs 1100 to Rs 1580 per quintal, and with the price of soya also increasing, the cost of production has gone up by 25 per cent. The news report states that the prices of poultry feed has risen by almost 50 per cent over the last year's price.
This brings me to the basic question. Why is that the Commission for Costs and Prices has no problems with the rising cost of cattle and poultry feed? I am sure it will project the unexplained hike in cattle and poultry feed prices as a reflection of economic growth. But when it comes to the price for human food -- wheat and rice, farmers don't deserve any profit over the cost of production. A price incentive to farmer (forgetting that he also lives in times when inflation is soaring all around him), is something that is projected as anti-growth !
Punjab suicides: Those who are responsible for the agrarian crisis are being asked to provide solutions.
In a recent interview with this newspaper, agricultural scientist MS Swaminathan rightly warned,”If agriculture goes wrong, nothing else will go right.” With over 2.9 lakh farmers ending their lives across the country in the past 15 years, and now with reports of about two farmers committing suicide every day in Punjab, we are staring at a grave crisis on the farm front.
The problem has now extended its deadly reach to Punjab, India’s food bowl. Amid reports of a record harvest of wheat and rice, the state increasingly faces a terrible agrarian crisis. The paradoxical situation is reflected in an alarming rate of farm suicides. A study jointly conducted by Punjab Agricultural University, Ludhiana, Punjabi University, Patiala, and Guru Nanak Dev University, Amritsar, estimates that more than 7,000 farmers and farm workers have taken their lives in the past 10 years.
While farmers are being blamed for low crop productivity, which is leading to distress, in Punjab it is just the opposite. Despite high productivity, heavy mechanisation and a massive application of chemical fertilisers and pesticides, farmers are at the receiving end. Strangely, suicides are happening in a state which has more than 95% cultivable area under assured irrigation. There is something terribly wrong here.
Like elsewhere in the country, mounting indebtedness has been cited as the main reason. While input prices have risen tremendously over the past two decades, farm prices have more or less remained stagnant, if one were to adjust for inflation. The United Nation’s Food and Agriculture Organisation (FAO) data shows that farmgate prices internationally have remained frozen for the past decade. Under such harsh economic conditions, it is futile to expect intensive farming, based on high application of external inputs, to turn profitable for farmers.
Heavy mechanisation has remained the bane of Punjab’s agriculture. It crossed the threshold level long ago. Acute paucity of farm labour is visible but to promote sophisticated and expensive machinery to address the labour shortage problem has not paid off well. Take, for instance, the case of tractors. There was a time when the tractor was a symbol of pride. Today it has turned into a symbol for suicide. At a time when every second farmer household owns a tractor, about 20,000 big tractors, now of 60-90 horse power, are sold every year. Instead of setting up small farmers’ cooperatives and companies for custom hiring, the thrust is on subsidising expensive machines for individual farmers to buy.
Though now the focus is on shifting at least 12 lakh hectare land from paddy to maize and other cash crops in order to reduce pressure on groundwater, a ‘more of the same’ technological approach is unlikely to address the fundamental problem of growing unsustainability. It is well recognised that much of the crisis in sustainability is the outcome of excessive use and abuse of chemical fertilisers and pesticides, which cause irreparable damage to soil, water, the environment and human health. With the average consumption exceeding 6,900 tonnes per year, Punjab is the largest consumer of chemical pesticides in India. I have seen farmers growing crops without pesticides in a separate portion of their farms for personal consumption. But for the markets, they literally douse the crop in pesticides.
In a study, the International Rice Research Institute (IRRI) in the Philippines had sometime ago concluded that there was no need to spray pesticides in rice. Farmers in the Philippines, Vietnam, Bangladesh and India have produced better rice crops without using chemical pesticides. At least a beginning could have been made to reduce pesticide consumption in rice. Similarly, in the case of cotton, which consumes more than 50% of the total pesticides applied, the emphasis has remained on promoting the sale of genetically-modified Bt cotton seeds. Still, pesticide consumption is on the upswing.
Intensive farming has promoted excessive mining of groundwater. As a result, more than 4.5 lakh submersible pumps have been installed to pump out water from a depth below 300 ft. The alarm bells on drying aquifers have gone unheard. Till efforts are made to revisit the farming strategy and make corrective decisions based on the underlying promise of restoring sustainability and enhancing economic viability, I don’t see a bright future for farming in Punjab. The tragedy is that those who are responsible for the crisis are being asked to provide solutions.
Source: Sowing the seeds of an agrarian crisis, Hindustan Times, Jan 2, 2013. http://bit.ly/TIGNiZ
Did you notice? How India is being asked to discard food self-sufficiency?
For some weeks now, I am observing a concerted effort (or should I say a campaign) being launched through the media by the Commission for Costs and Prices (CACP) about the need to increase agricultural exports so as to reduce the current accounts deficit, and also to limit distribution of grain through the public distribution system in order to bring down the fiscal deficit. Simply put, CACP has been advocating removing safety nets in agriculture production and marketing, and letting the markets rule the game.
CACP flawed view is increasingly being lapped up by the media. I find several English language newspapers parroting the viewpoint, and this is terribly dangerous to only the national sovereignty but also to the future of this country. The Hindustan Times echoed this argument in the form of a lead editorial, captioned: Think beyond self-sufficiency (HT Jan 7, 2013, http://bit.ly/TUNPBf). In the editorial, the newspaper argued for a change in the mindset, stating: "Food security today is not about self-sufficiency, it is about recognising that food is a global commodity and being a major force in that market." To build up the argument it suggests that production of pulses, for instance, can be left to the vast stretches of Canada and Australia.
I have never understood the economic logic of letting farmers in Canada or Australia or for that matter in Myanmar produce pulses that India should import. Why can't we provide an assured price along with an assured procurement for pulses within the country? Instead of wasting resources on another illogical suggestion that was backed by Budget provisions -- setting up pulse villages, the effort should have been to procure pulses on a regular basis, the way wheat and rice is procured. Such an initiative would have turned India self-sufficient in pulses thereby reducing imports and in the bargain reducing the current account deficit. More importantly, it would have brought down the domestic prices and also given more income into the hands of farmers who farm in harsh drylands.
As I said earlier, the editorial draws heavily from the articles of being circulated by CACP. It says that in a globalised world, even food prices are determined by global benchmarks. And, then it makes a ridiculous suggestion: When India exports rice or sugar, it helps depress the world price, which, in turn, keeps down domestic inflation. This is completely a flawed hypothesis. It has seemingly dangerous for the food security of any nation, including India. Let us not forget, India has the largest population of hungry in the world, and even the Prime Minister has gone on record saying that he is ashamed of the extent of child malnutrition that prevails. Several studies have pointed to 47 per cent of children below 5 yrs being acutely malnourished.
I wonder why does the United States and for that matter Europe doesn't free its agriculture the way India is being asked to? Why isn't it profitable for farmers in US/EU despite the presence of big retail and futures trading? If freeing farmers from government-controlled procurement prices is the way forward, why does OECD provide US$ 374 billion as farm subsidy, including direct income support, to farmers every year? Well, you guessed it right. The basic idea behind such hidden lobbying efforts is to destroy the fundamentals of food self-sufficiency that India built so assiduously over the decades. By doing so, we are actually removing all hurdles in the spread of corporate control of agriculture in India. What happens to country's food security in the process is not the concern of lobbyists. By the time India turns into a Haiti (or Ethiopia), these economists would have retired and probably been inducted into the board of an agribusiness company.
Read also: A hungry nation exports food. it can happen only in a democracy.
http://devinder-sharma.blogspot.in/2012/05/hungry-nation-exports-food-it-can.html
CACP flawed view is increasingly being lapped up by the media. I find several English language newspapers parroting the viewpoint, and this is terribly dangerous to only the national sovereignty but also to the future of this country. The Hindustan Times echoed this argument in the form of a lead editorial, captioned: Think beyond self-sufficiency (HT Jan 7, 2013, http://bit.ly/TUNPBf). In the editorial, the newspaper argued for a change in the mindset, stating: "Food security today is not about self-sufficiency, it is about recognising that food is a global commodity and being a major force in that market." To build up the argument it suggests that production of pulses, for instance, can be left to the vast stretches of Canada and Australia.
I have never understood the economic logic of letting farmers in Canada or Australia or for that matter in Myanmar produce pulses that India should import. Why can't we provide an assured price along with an assured procurement for pulses within the country? Instead of wasting resources on another illogical suggestion that was backed by Budget provisions -- setting up pulse villages, the effort should have been to procure pulses on a regular basis, the way wheat and rice is procured. Such an initiative would have turned India self-sufficient in pulses thereby reducing imports and in the bargain reducing the current account deficit. More importantly, it would have brought down the domestic prices and also given more income into the hands of farmers who farm in harsh drylands.
As I said earlier, the editorial draws heavily from the articles of being circulated by CACP. It says that in a globalised world, even food prices are determined by global benchmarks. And, then it makes a ridiculous suggestion: When India exports rice or sugar, it helps depress the world price, which, in turn, keeps down domestic inflation. This is completely a flawed hypothesis. It has seemingly dangerous for the food security of any nation, including India. Let us not forget, India has the largest population of hungry in the world, and even the Prime Minister has gone on record saying that he is ashamed of the extent of child malnutrition that prevails. Several studies have pointed to 47 per cent of children below 5 yrs being acutely malnourished.
I wonder why does the United States and for that matter Europe doesn't free its agriculture the way India is being asked to? Why isn't it profitable for farmers in US/EU despite the presence of big retail and futures trading? If freeing farmers from government-controlled procurement prices is the way forward, why does OECD provide US$ 374 billion as farm subsidy, including direct income support, to farmers every year? Well, you guessed it right. The basic idea behind such hidden lobbying efforts is to destroy the fundamentals of food self-sufficiency that India built so assiduously over the decades. By doing so, we are actually removing all hurdles in the spread of corporate control of agriculture in India. What happens to country's food security in the process is not the concern of lobbyists. By the time India turns into a Haiti (or Ethiopia), these economists would have retired and probably been inducted into the board of an agribusiness company.
Read also: A hungry nation exports food. it can happen only in a democracy.
http://devinder-sharma.blogspot.in/2012/05/hungry-nation-exports-food-it-can.html
Ground Reality to change with times.
As we enter 2013, you will see Ground Reality in a new format. Some of you have sent me suggestions or spoken to me on phone asking for short and immediate comments on topical issues. I have pondered over it, discussed it among my colleagues, and agree that it is time to make it more relevant and therefore bring in quick short notes on events and developments that need immediate response/reaction/analysis. Usually I have been penning down longer essays and analytical articles, which also would continue but in addition you will have shorter notes/comments. Sometimes, it could also be more than one short comment in a day.
The idea of course is to make it more relevant and newsworthy. It would also provide an immediate reaction to some major developments which will have bearing on hunger and food security. For the journalists I am sure this will come in handy as a reaction, and also help remove doubts and confusions, if any. For the policy makers, academicians, economists, scientists and members of civil society the new format will hopefully be more informative and in many cases help clear the mist over the real intention behind the move.
This also draws inspiration from the blog Nobel laureate Paul Krugman writes. Sometimes he writes just two paras, but that is what is immediately needed. I am not trying to ape him, but feel motivated to make this blog more interactive and useful.
Happy reading.
The idea of course is to make it more relevant and newsworthy. It would also provide an immediate reaction to some major developments which will have bearing on hunger and food security. For the journalists I am sure this will come in handy as a reaction, and also help remove doubts and confusions, if any. For the policy makers, academicians, economists, scientists and members of civil society the new format will hopefully be more informative and in many cases help clear the mist over the real intention behind the move.
This also draws inspiration from the blog Nobel laureate Paul Krugman writes. Sometimes he writes just two paras, but that is what is immediately needed. I am not trying to ape him, but feel motivated to make this blog more interactive and useful.
Happy reading.
Subscribe to:
Posts (Atom)