Paradox of plenty: India's problem is how to manage food surplus. And ensure millions don't go to bed hungry.

A typical wheat mandi in India. While arrivals are heavy, no place to keep these stocks. 

Nothing can explain this strange and criminal paradox of plenty. More than 45 years after Green Revolution began; India provides a unique spectre of overflowing godowns and rotting grains on the one hand while millions go to bed hungry. Having the largest population of hungry in the world, India ranks 66 among 105 countries in the 2012 Global Hunger Index. That too at a time when there is no shortage of food within the country.

To get rid of the huge stocks, India has aggressively resorted to food exports. While rice exports have touched 10 million tonnes, making India the world’s biggest rice exporter, close to 9.5 million tonnes of wheat has also been exported this fiscal. And yet, grain stocks remain unmanageable.

With over 44 million tonnes of wheat expected to be procured once the procurement season begins officially from April, India will be saddled with a massive and unprecedented food grain (rice and wheat) stock of over 100 million tonnes. Already, as on March 1, Food Corporation of India was holding 62.8 million tonnes of grains – 27.1 million tonnes of wheat and 35.7 million tonnes of rice – good enough to meet the country’s food requirement for another year. Storing an additional 44 million tonnes is simply going to be a nightmare. While the all-time high production and procurement is a historic milestone, it provides an equally daunting task for the government agencies to store it, and store it safely.

“We are looking for space in sugar mills, yards and even in rice mills. It’s going to be very tough,” a visibly worried D S Grewal, principal secretary in Punjab’s food and civil supplies department, told a newspaper. Against an expectation of 14 million tonnes of wheat to be purchased, Punjab has space to keep only 6 million tonnes. Although Punjab has a total food storage space for 23 million tonnes, including 12 million tonnes on open plinths, the grain silos are bursting at the seams with food stocks from the purchases made in the previous year’s lying in the open. 

In Madhya Pradesh, fast emerging as the next wheat bowl of the country, there is space only for about 50 per cent of the expected 13 million tonnes that is likely to be procured by official agencies. “We are looking at even school premises and some government buildings for stocking wheat. We have no other option,” said a senior state official. Since wheat harvests begin early in central India, procurement is already in full swing in over 2,770 purchase centres that have been set up in the state. Not only Punjab and Madhya Pradesh, heavy arrivals are expected from Haryana, Uttar Pradesh, Rajasthan and Bihar.

Nothing can explain this gross food mismanagement. For almost 30 years now, successive governments have failed to accord any priority to food storage and distribution. As early as in 1979, under a ‘grow more food’ campaign launched by the Ministry of Food and Civil Supplies, the need for setting up 50 grain silos across the country was envisaged. The underlying objective was to reduce the burden for stock holding of wheat by the producing states by building a network of grain storage capacity across the country, which would also be used for effective distribution among the poor.

It’s all a question of priority. Food has never been on the top of the national agenda. In the past few years, the UPA has made massive investment in building 250,000 panchayat ghars. These panchayat structures have been provided with a computer link-up and are also being dotted with solar power. Isn’t it strange that while the government has the resources to build panchayat ghars, it has no money to construct warehouses across the country? Still worse, since 2004-05, UPA has doled out Rs 32 lakh-crore by way of tax exemptions to the Corporate, trade and business. These exemptions are clubbed under the category ‘revenue foregone’ in the budget documents. For 2013-14, the ‘revenue foregone’ is Rs 5.73 lakh crore.

The entire food production and distribution system therefore needs an urgent overhaul. If only the government was to focus on agricultural production, procurement and distribution in a decentralized manner, much of the agrarian crisis would disappear. Also, no country can claim to be a super power with millions living in hunger. Therefor the need is to follow a three-pronged approach:

1) Set up a wide network of mandis and temporary purchase centers across Bihar, eastern Uttar Pradesh, West Bengal, Odisha, Assam and the other northeastern states. Extending the Green Revolution to northeast has already increases rice production, but farmers are resorting to distress sale getting about 20 to 30 per cent less because of the absence of procurement centers. 

2) Madhya Pradesh has shown that providing a bonus of Rs 150 per quintal over the procurement price of Rs 1350 a quintal has provided an incentive to farmers to produce more. A higher minimum support price for wheat and rice, and also extending it to pulses, millets and fodder would shift focus to other crops essential for maintaining nutritional security.

3) At least Rs 1 lakh crore be taken out of the ‘revenue foregone’ category, and invested in setting up a network of grain silos, warehouses and godowns across 50 places spread throughout the country. All this is doable provided food is accorded utmost priority in national thinking and planning.    

How does the modern financial-economic-banking system works. An effort to demystify the little understood operations.

Global financial systems follow very mysterious way of operations. I know there is something terribly wrong but have never been able to nail their lies. Not being an economist perhaps make it still difficult to comprehend what goes wrong and how. Nevertheless, whatever little I can understand I have been sharing with my readers. 

Last week I received a letter from one of my readers. Being a banker himself, S/he has a better inside grip over  how the financial systems work. S/he explained to me how the system thrives on government subsidies, and receives a 'backup' support from the policy makers to make it look for competitive and economical. To illustrate, s/he has used the example of rural cottage industries which have been systematically killed for reasons we think are linked to pure economics. 

Over the next few weeks, I would be seeking more details with examples and analysis. To begin with, certain issues that many of us have been pondering over, have been thrown up. I am pasting the letter below (and of course keeping the writer's identity anonymous) for you to think over. Perhaps it will give you some food for thought. If you have any questions, please do write and we can then deliberate.   

Here it is:      

I am following your writings for some time. I share and appreciate your concerns about the matters related to impending food crisis, the danger of GM foods, the wicked designs and propaganda of MNCs above all the state and plight of rural economics.

So I presume you must be having some interest in the matters of finance and economics particularly the economics of rural India. Sir, I have done some deep research work in the field of “Banking, Finance & Economics” and I think that it may be of interest to you and some like-minded people. The finding of my work is quite revealing and shocking in the sense as to how the so-called “Modern Financial Economic System” actually functions.  Sir, if one sensible person is to actually know as to how in reality the Modern Financial Economic System works he will get a shock of his life. In fact the modern financial-economic system is a parasite that survives by sucking the rural sector. The so-called Modern Financial Economic system sucks and destroys the rural India.

Sir, you would agree that the India (or as a matter of fact every country in the world) can emerge as a self-reliant and stronger nation only after our RURAL COTTAGE INDUSTRIES are invigorated. Once this happens we don’t have to do much to strengthen our populace. In fact looking at the impending environmental disasters like Global Warming and Ecological destruction all around the world, we need to go back to the era of rural-cottage industries. As against the modern industries that are inimical to our ecology and environment, the rural-cottage industries are in fact quite eco-friendly. So one wonders why our rural economic system got extinct. There is an argument in favour of Modern Industries is that they are cost-effective and the Modern Industries defeated the rural-cottage industries in open market competition!!! Sir this is perhaps one of the biggest propaganda in entire human history!! I will come to that a little later. 

Sir, the Modern Banking & Financial system is nothing but a pure fraudulent design. To understand the fraudulent nature of this system one needs to understand the Banking system. Without understanding the banking-financial system we cannot understand the modern economic system.  Even the Professors and other educationists too have read the fabricated propaganda in their own student life therefore they don’t have the vision the see the truth; they have been “programmed” to disseminate the propaganda that they have received as student. What they have been taught by their teachers, they simply pass-on the same to their students. It is the standard mechanism of disseminating any false propaganda.

In following paragraphs I would give you some examples of the lies/deception about the Modern financial economic system. From this you can well understand as to how vicious the propaganda is. Here I am giving only some facts without getting into any analysis (due to space constraint). For the start I would give you only three cases:-  

1.  The conventional wisdom, as per books of economics, is that the factory system (i.e. the industrial economic system) triumphed over the traditional cottage industries (particularly the textile industry) due to so-called economy of scales. In simpler words it is touted in the books of economics that factory system of producing (i.e. Mass Production System or MPS from now onwards) the textiles was/is cheaper than traditional cottage industry of textiles therefore in an open market competition MPS triumphed over traditional cottage textile industries. In reality it is one of the biggest lies disseminated in entire human history. Sir, the MPS was and it still is at least 4 to 5 times costlier that traditional cottage industries of textile making. It is a part of well documented historical facts (I can give you unquestionable references regarding this) and even at present it can be proved mathematically. How the industrialisation (MPS) succeeded is quite a saga in itself. I am not giving much details about that due to space constraint; but it is sufficient to say that industrialisation basically succeeded due to unfair and brutal suppression of the cottage industries (particularly of India) by British colonial powers. Had this unfair and brutal suppression not been given to Indian cottage industries by British colonial regime the British factories would have not even came into existence. For the present scenario it is sufficient to say that on an average per meter of cloth manufactured in MPS industries gets an approximate (but hidden) subsidy of, hold your breath, Rs.1000 per meter!!! In fact almost entire “MPS Economy”—other industries too—run on massive subsidies. In other words the so-called Modern Industries are white elephantsthat survive on subsidies. If this subsidy is not given to MPS industries; our rural cottage industries will wipe out the factories of mass production within no time. In other words the rural economy will surge.

2.  Even bigger “game” is the way in which the so-called modern economy (i.e. the Modern Industries) is “artificially sustained”!! You will shocked to know that despite getting huge subsidies the modern industries cannot sustain even for a moment if a “rear guard” action is not taken by Governments to “artificially boost” their sales. In other words the sales of the so-called modern industries are “artificially sustained” through a combination of government actions and banking system. Remember, that this is IN ADDITION to the hidden-subsidies provided to modern industries. For rural cottage industrial system there is NO NEED for artificially boosting the sales!! But our text books of economics don’t even mention this fact!! In fact the authors of those text books themselves are ignorant of this fact!! Now we should also know something about the pivot of modern industrial system—the Banking system.

3.   The banking system is yet another example of outright lying and heavy distortion of the facts. In fact to understand the Modern economics you ought to understand the Banking system without knowing the banking you cannot understand even an iota of Modern economics. Banking is the AXIS of evil in the context of Modern economic system. Banking, as we are told in the text books, is the CHANNEL between the savers and investors or lender and debtors. In other word it is touted that first money is “deposited” in the bank by the “depositors” and then it is given as “loans to debtors”. It can safely be said that this lie too is one of greatest “successful” bluffs of human history. Nothing can be farther from the truth. If the banking were to be really a CHANNEL there would have been nothing fraudulent about this!! But banking in its essence is a purely fraudulent exercise. If you are interested I will explain you later. But for the present I would explain only briefly. In reality banks are just “money creation machines”. In other words the loan that Banks give to the debtors is NOT the money that has been deposited in the bank by the depositors; rather the loan are made “out of thin air” i.e. by “creating money out of nothing” and once the money is brought into the existence by way of making the loan it is only then that it ends up as deposit in the banking system!! There is one more buffoonery also taught in text books of banking system:-The so-called “credit multiplier”. This too is a big propaganda that needs to be busted. Following comment on the banking system can be considered as final verdict on the Banking system.

Contrary to general belief—that it the depositors’ money that is given as loans to debtors—it is the money that is loaned into existence by BANKS ends up as deposit in the banks! First, the money is “created by making loans” and later this money ends up as deposit in the banks!!

Now just think as to what is the need (or rational) for offering interest for attracting the deposits by the commercial banks!! Sir, I have just stated some of the facts about modern financial-economic system but WITHOUT offering any analytical justification for the same. The reason is that these analyses cannot be covered in a short letter. 

Sir, I am writing these matters to you (1) to show as to how big a propaganda is taught in the name of economics where the teachers/professors themselves are utterly ignorant of the reality and (2) to indicate that Modern Industrial economic system is a fraudulent one and once this fraudulent support is withdrawn the so-called modern industrial economic system will collapse and rural cottage economic system will automatically emerge. The general public is fooled about the cost-competitiveness of modern industries. # 

Do tractors play a role in aggravating farm crisis?

Big and attractive tractors are increasingly in demand in Punjab. In this picture a farmer is looking at tractors lined up for sale. 

(Pic courtesy: www.frontlineonnet.com)

Every Monday, second hand tractors start arriving early in Kotkapura grain market in Punjab. By around noon, the grain market turns into a tractor mart. A large number of tractors, of different make and size, are available for a bargain. Many of these are procured by middlemen who market these second-hand tractors in Uttar Pradesh, Rajasthan and Bihar.  You may be thinking that most Punjab farmers are now fed up of tractors and that is why they are keen to dispose these four-wheelers.  No, the reality is that most of those who come to sell have actually acquired a new tractor, much bigger in size, and of course flashier. 

For several decades now, tractor has been a status symbol for Punjab farmers. Unless they own a tractor, irrespective of the fact whether they need it or not, they don’t feel they too have arrived. With over 5 lakh tractors existing in Punjab, once the status symbol has now turned into a symbol of suicide. But still farmers have not given up of tractors. Like the neo-rich in the cities, farmers too have developed a fetish for latest brands. Not many regret the big wheels. The craze for big machines has in fact grown.  

Not everyone of course does it as a style statement. While a large number buy tractors as a necessity, there are some small farmers who often purchase tractors out of social compulsions as it comes in easy instalments and at affordable low interest rates. They buy tractors, even if costs Rs 5 lakh and more, and sell it in a few weeks and from the money they get they buy a small car to be given as dowry for their daughter’s marriage. Many others of course are lured by the marketing blitz and want to join the ranks of progressive farmers since tractor has been promoted as a symbol of pride.   

A tractor alone is not of much use to a farmer. It is the heavy implements, which comes as attachments that are important. So it is the total package -- implements, along with the tractor – that adds on to the growing indebtedness on the farm. In neighbouring Haryana, the subsidy for land leveller has been increased from Rs 50,000 to Rs 75,000; on multiple crop planter from Rs 10,000 to Rs 20,000; on happy seeder from Rs 25,000 to Rs 50,000; on straw reaper from Rs 40,000 to Rs 60,000 and on zero till machine from Rs 15,000 to Rs 20,000. More the expensive implements, means more indebtedness. But this does not mean I am against mechanisation on the farm. What I am asking is the justification in selling the expensive and sophisticated implements and machines to farmers who are already in economic crisis. 

With every second farm household in Punjab owning a tractor, and considering the average farm size is less than 4 acres, tractors have become uneconomical. But still worse, more than 20,000 tractors are being purchased every year. These new tractors are really big machines, ranging from 60-90 horse power, the kind of huge tractors that were available in erstwhile Soviet Union. Generally, the minimum land area required to ensure a tractor remains economically viable is 10 acres. But over the years, under pressure from the industry, governments have reduced the requirement to just 2 acres. Also, a few years back, P Chidambaram, in his earlier avatar as Finance Minister, had reduced sales and excise duty on tractors by 18 per cent making it more attractive for buyers.

It was sometimes in late 1980s that I had visited Cambodia (it was then called Kampuchea). I was appalled to find huge tractors from Soviet Union being used in the country which was devastated under the Pol Pot regime. Since Kampuchea was only recognised by the Soviet block then, the use of massive tractors in the otherwise small farms was therefore quite understandable. I remember having told the Indian Ambassador that it will be good if India could supply small tractors – in the range of 25 to 35 horse power – to Kampuchea as part of the diplomatic initiative to build goodwill among the Kampuchean farmers.

While Cambodia has meanwhile gone for small tractor, Punjab is going for big wheels on small farms. The arrival of huge tractors in Punjab therefore defies any economic logic. I am told some tractor manufacturers are now planning to bring in tractors with 105 horse power.  And so when you hear the next time a story of growing indebtedness on the farm in the frontline state of Punjab, just be sure a tractor is more often than not, the primary reason. 

The tragedy is that the continuing agrarian crisis in the country, which has taken a heavy human toll with 290,470 deaths reported from suicides in past 15 years, provides a huge market for selling machines. In Punjab, despite heavy mechanisation, two farmers are killing themselves every day. Somehow the feeling is that more machines you sell, more sanity would prevail on the farm. Agriculture is being viewed as a machine-deficit sector, and more the machines sell more will be the reduction in farmer suicides. At least, this is what is visible from the way State Governments are aggressively promoting machines for the trouble-torn farming sector employing 57 per cent of the country's workforce.

Interestingly, the price of tractors has gone up by more than 100 per cent in the past five years. Isn’t it strange that while the market price of cars and two-wheelers has not risen by more than 20 per cent (and that too despite the annual inflation), the price of tractors has been on an unprecedented upswing. In other words, who will ensure that the tractor manufacturers do not end up fleecing the gullible farmers? Moreover, I am surprised that the tractor manufacturers have now roped in the agriculture universities in southern parts of India to market tractors. Some universities have reportedly signed MoUs with tractor manufacturers.

I agree that the farm sector faces a terrible paucity of farm workers. But will aggressive sale of all kinds of implements and huge tractors take out farmers from the crisis? Has it helped Punjab farmers tide over agrarian distress? It hasn’t. So why is it that the State governments are blindly promoting tractors? Why can’t the Punjab and Haryana governments and for that matter other state governments instead urge the formation of cooperative societies which help in leasing farm implements to farmers? Why can’t the governments encourage formation of private companies for custom hiring tractors and farm machinery?

I am not suggesting setting up another State cooperative agency, but am seeking encouragement for social entrepreneurship. It is here that I would like to provide the example of Zamindra Farm Solutions in Fazilka in Punjab. It provides big machines as well as farm implements on lease. Over the years, its membership has grown to over 4,000 farmers. Similarly, I know of several small village cooperatives in Punjab which provide implements for a rent. It is time such initiatives are aggressively promoted and encouraged. It is time to save farmers from getting deeper and deeper into a debt trap. #  

The Rs 6.5 lakh crore farm credit swindle that no one is talking about. And it has been happening every year !

Finally, the Comptroller & Auditor General (CAG) report on Rs 60,000-crore farm loan waiver (which was subsequently raised to Rs 74,000 crore) has been tabled before Parliament. The farm loan waiver, announced in the 2009 budget with a lot of fanfare, have come under a cloud. Roughly 8-10 per cent of the beneficiary farmers, which means no less than 35.5 lakh farmers’ did not get any advantage of the loan waiver, and similarly a large number of undeserving farmers walked away with the exemption to repay.

But there is a much bigger farm credit scam which still remains to be exposed. 

The loan waiver exposure comes at a time when questions are being asked about who benefits from the significant increases in farm credit being provided for in every budget. In 2012-13, a budgetary provision of Rs 5,75,000-crore for farm credit was made. A year earlier, in 2011-12, Rs 4,75,000-crore was provided. According to Reserve Bank of India, between 2000 and 2010, farm loans increased by 755 per cent. Certainly this is a mammoth growth, and it provides all the reasons to cheer.

This year, Finance Minister P Chidambaram further enhanced the budgetary allocation for farm credit to Rs 700,000-crores. This is certainly a quantum jump. It gives an impression as if such large availability of farm credit is serving the small and marginal farmers very well, and that all is well on the farm front. But somehow the growth in the disbursement of farm loans does not match with the real performance on the ground. With over 2.90 lakh farmers committing suicide in the past 15 years, and with another 42 per cent farmers wanting to quit agriculture if given a choice, the continuing agrarian crisis on the farm front does not justify the intake of massive farm credit year after year. 

The outlay is not matching the outcome. If institutional credit is not reaching farmers, where is it going?

Time and again we have heard that agricultural credit plays an important role in improving farm production, productivity and mitigating farmer’s distress. Such exuberance in loan disbursal comes at a time when in a recent study on "Farm Credit" , the industry association ASSOCHAM analysing the disbursement of credit over the last decade, has listed misdirection in farm loans, increase in proportion of indirect credit by banks, misuse of interest rate subvention for diverting credit to other sectors, imbalances in quantity of credit in relation to size of the farm and crops they raise, and virtual exclusion of small and marginal farmers from institutional credit as some of the major problems besetting this sector.

As I mentioned in an earlier blog post, a damming news report in a Hindi daily brought out the startling reality. According to the report, a confidential document available with the Ministry of Finance categorically states that despite the increase in farm credit by over 2.5 times in past five years, less than 6 per cent of the total institutional credit is made available to small and marginal farmers. Ironically, the Prime Minister, Finance Minister, Agriculture Minister and the ruling party along with its army of economists and planners never get tired of telling the nation of the remarkable strides taken in reaching credit to small and marginal farmers.

In other words, less than Rs 50,000-cr of the Rs 7 lakh crore provided for farm credit will actually benefit small farmers. Remaining amount of Rs 6.5 lakh crore at 4 per cent interest will be misappropriated by agribusiness companies, warehousing corporations and state electricity boards. Why can’t Finance Minister therefore segregate the farm credit to tell us how much of it actually goes to farmers, and how much in the name of farmers to other allied activities?

In 2007, of the total credit of Rs 2,29,400-crores advanced by banks, small farmers share was a mere 3.77 per cent. In other words, 96.23 per cent of the farm credit disbursed in 2007 was actually cornered by big farmers or agribusiness companies. In 2011-12, while total farm credit had swelled to Rs 5,09,000-crore (against a target of 4,75,000-crore) small and marginal farmers got only 5.71 per cent. It is therefore obvious that despite knowing where the fault is the government had deliberately supported agribusiness companies (an increase in indirect credit by banks by enlarging the definition of agriculture) in the name of small and marginal farmers.

It is primarily for this reason that small farmers have been left high and dry. They are left with no choice but to depend on the money lenders who charge exorbitant interests. No wonder, the serial death dance on the farms in the form of suicides show no signs of ending. It has a lot to do with the non-availability of institutional credit.

'Income support not MSP can help with farming woes'

IN A free wheeling talk with GOI Monitor, food and trade policy expert Devinder Sharma favours income support for farmers, attacks FDI and indicates that there is a smear campaign going on against the civil society

Tell us about the farmers' commission which the Karnataka government has decided to set up based on your recommendations.

Average monthly income of a farmer is just Rs 2,400 Pic:Sahaja Samrudha

To understand that, let's first talk about all the efforts that have gone into pulling farmers out of poverty. During green revolution, a common parlance gained ground that more you sow, more you produce and hence more your earn. The message found acceptance among farmers who invested a lot of money buying pesticides, fetilizers, seeds and the machinery. However, even after over 40 years of green revolution, the farmers are practically on the poverty line. The NSSO survey of 2003-04 tells us that the average income of a farming family of five members is Rs 2,115. There were only three states above this limit: Jammu and Kashmir, Punjab and Tamil Nadu. That was the first and last time the farm income was measured. I guess the government was too embarrassed with the results to repeat the exercise.

At today's price, the income calculated must be around Rs 2,400. But look at the contrast. The lady who comes to my house for cleaning gets a monthly payment of Rs 2,000 for two hours of daily work. Under the 6th Pay Commission, a peon in government service gets a minimum monthly salary of Rs 15,000. But a farmer plus his family who work much longer hours in their fields get just Rs 2,400 a month. The minimum support price (MSP), which was termed a classic way out, is only helping 30 per cent of the farming community because 70 per cent farmers don't have surplus to take to the mandis.  But even if they hardly have anything to sell, they at least produce food. Let's say tomorrow they stop producing, the country would be forced to import that much quantity of food. In other words, they are producing economic wealth for which they should be adequately compensated.

If you look at agriculture globally, on one hand there are highly subsistence farming in developing countries like India and on the other there is highly subsidised farming in rich countries like US, Japan etc. The only way to bail out subsistence farmers is to provide them with direct income support as is being done in the rich and industrialised countries. Former Karnataka Chief Minister B S Yeddyurappa took notice of these suggestions of mine and discussed the issue in detail. Now present Chief Minister Jagdish Shetter has announced the policy. The good thing is somebody has taken this initiative and now I am sure there will be a dynamo effect with farmers' unions mounting political pressure in other states too. In my understanding it will be a game changer which will be highly beneficial for the farmers. Also, this will lead to reverse migration thus reducing pressure on our cities.

What are the things the proposed commission needs to look into?

The farmers' commission has to sort out several things. The direct income defined should be location specific as agriculture cost varies according to areas and factors like size of land, soil quality, productivity et al. Also, the money should not be given for farmers to sit idle.All these factors have to be woven into before the direct income support is announced. This way when the consumer demands cheaper food, it won't impact the farmers. They will be insulated from the market demand.

You have been opposing FDI which is being widely promoted as something which will bail out farmers by removing middlemen.

This hope that with FDI in retail, middlemen will go and farmers' income will rise is just a mirage. Another concept now being promoted is commodity trading which is claimed to help farmers realise the price. However, if these two mechanisms were working, the farmers in US, which is the home for Walmart and commodity trading, would not have been paid Rs 12.50 lakh crore subsidy between 1995-2009. Let's take the example of cotton which is a major crop.  It's the income support, not walmart or commodity trading, that makes cotton farmers of US economically viable. A 2005 analysis tells us that the total production of cotton was worth 3.9 billion dollars but the farmers were paid support of 4.7 billion dollars. On top of it, textile industry was paid 187 million dollars to buy that subsidised cotton. So, the US farmers became “efficient farmers”. On the other hand, farmers in West Africa and India's Vidarbha region were priced out and became “inefficient farmers” not because of productivity but lack of subsidy. When Brazil took the US to World Trade Organization's dispute panel, US lost the case but instead of cutting down its domestic subsidies, it started providing 147 million dollars support to Brazillian farmers.

We are hearing divergent voices on the draft food security bill. What was the traditional system India had to deal with food insecurity?

The proposed food security law is just a political gimmick for the elections. It is an extension of the highly-inefficient public distribution system we already have. More of the same is not the answer. Instead we have to look out newer ways to check pilferage and also feed the hungry.

In 1996, when I was researching for my book 'The famine trap' I got to know about a cluster of villages in Kalahandi, Odisha, which had never seen hunger in last 20 years. Now Kalahandi, as we all know, is called the hunger and starvation belt of India but within this desert what I found was an oasis. The villagers were following a traditional system of 'sharing and caring', remnants of which can be found in several states of the country. In Bihar, it is called 'Gola' system. The villagers form a consolidated fund and buy grain from the farmers to be stored at one place.. Anyone in need of food can approach the committee and take the quantity of grain needed with the condition that he will return the amount plus a rate of interest during the next harvest when he would most likely get some manual labour work in the fields. The Kalahandi villages had this system running for last 18-19 years and they had a surplus of 200 quintal grains. There was no hunger and the neighbouring 20-25 villages had also picked up the concept. At the time of cyclone, these villages were not dependent on government rehabilitation. When M S Swaminanthan got to know about this, he also visited the villagers and the government took note. It adopted the idea but gave the supervisory powers to block development officers (BDOs) and the scheme flopped. That clearly shows how government can mess up a good programme.

Today we have 6.4 lakh villages out of which over 5 lakh villages produce food, rest being cash crop areas. However, we still have people going to bed hungry in these villages. India accounts for one third of world's hungry. This problem can be solved if we ensure that our villages become self reliant in food security through local production, local procurement and local distribution just like the Gola system. It will also reduce pressure on PDS which can then cater to more vulnerable areas hence requiring less expenditure and lesser corruption. However, our leaders don't want that to happen because if people learn to be self reliant, they won't require the government doles. And we all know, doles come handy for elections. This policy started at the time of Britishers who wanted everything in their hands so that people are always dependent on them.

Whenever we talk about India's policies, it is said they are dictated by international organisations like WTO and World Bank dominated by developed countries. Why have we not been able to strengthen our position over the years?

When World Bank gives you loan, it comes with 150 conditions which you or I won't get to see but the government has to address them. These conditions have led to the policies which the country is following now or since whenever we started taking loans. Besides World Bank, we also have WTO, IMF, groups like G20 and other international financial institutes. They are all part of the same design. If you go through past G20 declarations, you will see that what was prescribed there is what India is doing. At WTO, India is one of the countries taking a tough stand against the dominant powers because civil society back home is pushing for that. Otherwise India would have been sold out by now.

The civil society has most often been accused of taking extreme positions on policy matters. Do you agree that just like any other field, everything is not white with activism too?

The idea of civil society being always critical and always taking extreme position is a clever strategy to present an image to the public that civil society is not their supporter or fighting for their cause. But I can tell you by and large those standing against the system are doing it genuinely. They have odds stacked again them.  Now, when it comes to opposing policies of the government or the corporates, we do it only after a thorough research.

Take the example of agriculture. Punjab government has signed an MoU with Monsanto for setting up centres of excellence in the state. If we stand against this, we are labelled as “anti-farmers.” But tell me, if after 45 years of green revolution, Punjab's farmers are committing suicides, 19 people die of cancer daily, soil has been devastated beyond measures and water table has plummeted to dangerous levels, how can we term it development? Government and companies have vested interests which is why they will keep on promoting the same. Who should be paying a penalty for all the damage that has been done? An engineer is punished when a bridge build by him falls down, a doctor is punished for medical negligence, why can't we ascribe responsibility on agricultural scientists, corporates and economists because of whom people are dying. How can they get away for using bodies as stepping stones for growth?

There are definitely black sheep in civil society too like there are in every sector but we have to understand that civil society is not a homogeneous clout. There are several corporates which form foundations and they are also part of the civil society. But most of the time they are just doing a lip service. It's not easy to stick your neck out and those are braving it must be appreciated.

Source: http://www.goimonitor.com/story/income-support-not-msp-can-help-farming-woes
Date: Feb 3, 2013. 

Asking the Wrong Questions: GM crops claim to increase yields, but the problem is of access and distribution, not production

Speaking at the annual Oxford Farming Conference a few weeks back, the rebel environmentalist Mark Lynas, who went over to the all-powerful GM industry, was quoted as saying: "Research published in the proceedings of the National Academy of Sciences suggests the world will require 100% more food to feed the maximum projected population adequately."

It's not the first time this argument has been used, but considering the emphasis Lynas laid on the capabilities of controversial genetic engineering technology to meet the growing demand for food, a flurry of articles and editorials appeared. The underlying argument is the same. The world needs to produce more for the year 2050, and therefore we need GM crops.

Well, what population projections are we talking of? The planet today hosts seven billion people, and all estimates point to population growing to nine billion by 2050. According to the Food and Agriculture Organisation of the United Nations (FAO), more than 870 million people were chronically undernourished in 2012, with almost 250 million of the world's hungry living in India.

These appalling statistics generate an impression of an acute shortfall in food production. At every conference, the same sets of statistics are flashed to justify the commercialisation of GM crops. But how much food is globally available? Is the world really witnessing a shortfall in food production? Or, for that matter, is there a shortage of food in India? These are the questions that have been very conveniently overlooked.

Let us therefore take a look at the performance of global agriculture in the year 2012. Despite the severe drought in the US and Australia, where wheat production is anticipated to fall by 40%, the US Department of Agriculture (USDA) estimates that the world still harvested 2239.4 millionmetric tonnes, enough to feed 13 billion people at one pound per day.

In other words, the food being globally produced today can feed twice the existing population. According to the International Assessment of Agricultural Knowledge, Science and Technology for Development (IAASTD), against the average requirement of about 2,400 calories per capita, what is presently available is 4,600 calories. So where is the crisis on the food production front? The crisis is in food (mis)management, which surprisingly is being ignored.

In the US, Canada and Europe, 40% food is wasted. For example, Americans waste $165 billion worth of food every year, which could very well meet the entire requirement of sub-Saharan Africa. Food wasted in Italy, if saved, can feed the entire population of the hungry in Ethiopia. According to the UK Institution of Mechanical Engineers, almost half the food produced globally is allowed to go waste. Studies show that 50% of fruits and vegetables stocked by supermarkets in US actually rot. If all the food wastage was to be appreciably reduced, hunger and malnutrition can easily become history.

In India too, it is not a crisis in food production. On Jan 1, India had 66 million tonnes of food stocks. As someone has said, if you were to stack all those bags of grain one over the other, you could climb up to the moon and back. That's the quantity of food that has been available almost every year since 2001.

While visuals of food rotting in godowns are fresh in the memory, the government has been merrily exporting the surplus rather than feeding its hungry millions. This fiscal, wheat exports are expected to touch 9.5 million tonnes; rice exports have already crossed nine million tonnes in 2011-12. Instead of propping up food procurement and distribution, the food ministry is actually toying with the idea of withdrawing from procurement operations and using surplus stocks in futures trading, leaving the hungry to be fed by the markets.

Meanwhile, GM crops are being promoted as the answer to growing food needs. In reality, there is no GM crop in the world that actually increases crop productivity. In fact, the yields of GM corn and GM soybean, if USDA is to be believed, are actually less than the non-GM varieties.

Nor has the promise of a drastic reduction in the usage of harmful pesticides proved to be correct. Charles Benbrook of the Washington State University has conclusively shown that between 1996 and 2011, the overall pesticides use in US has risen by a whopping 144 million kg. In addition, as much as 14.5 million acres is afflicted with 'super-weeds' — weeds that are very difficult to control. And such has been the contamination that 23 weeds now fall in the category of 'super-weeds'.

Regarding safety, a few months back the revelations by Giles-Eric Seralini, a molecular biologist at the University of Caen in France, shocked the world when for the first time he demonstrated long-term studies involving rats fed for two years with Monsanto's Roundup-Ready GM maize. The rats had developed huge kidney and mammary gland tumours, had problems with their body organs and showed increased mortalities.

Against the usual practice of such studies involving feeding rats with GM foods for 90 days, Seralini had for the first time ever experimented with rats for two years, which corresponds to the entire human lifespan. As expected, the shocking results, peer-reviewed and published in a respected scientific journal, have already created quite a furore internationally.

I therefore don't understand the need to take a huge risk with human health and environment when there is food available in abundance. The greater challenge is to curb wastage, provide adequate access and ensure judicious distribution of food.

The writer is a food and agriculture analyst.

Source: The Times of India, New Delhi; Feb 28, 2013.
http://bit.ly/13Y5Zo7