There is something in India's decision making that I can never understand. For over a year, intense discussions have followed the proposals under the upcoming National Food Security Act. The Plan A included provisions of 35 kg of subsidised foodgrains per family for the below the poverty line (BPL) category and allowing those above the poverty line (APL) an entitlement of 15 kg at a relatively higher prices.
Feeding the hungry by providing them legal entitlements comes at a time when policy makers remained glued to opening up for FDI in retail. Amidst the continuing debate whether FDI in retail is good for India or not, US President Barack Obama throws his weight pitching for a new wave of economic reforms. After the TIME magazine came out with a cover story calling Prime Minister Manmohan Singh 'underachiever' (which ostensibly was to provoke the PM to go in for FDI in retail), it was surprising to see President Obama telling India what is good for us.
But then, President Obama knows what is in America's interests. He stopped outsourcing (even if it hit Indian companies) of jobs because he wanted to protect US jobs. And now since he goes into elections with nothing to show, he is actually banking upon India to bail him out of the terrible economic crisis that he is faced with back home. Manmohan Singh has therefore deputed Commerce Minister Anand Sharma to go around and build up a political climate in favour of FDI in retail. No one is surprised when Anand Sharma says that the opposition to multi-brand retail is less intense now (See the lead story in Economic Times, July 16, 2012 http://articles.economictimes.indiatimes.com/2012-07-18/news/32730673_1_russian-economic-entities-russia-s-sistema-investments).
Any sensible economist, and for that matter any nationalist, would ensure that the hungry in India are first well fed. What may appear to be a welfare activity, and is supported by government subsidies, also makes terrible economic sense. Feeding the hungry millions, on a war footing, is a sure recipe to an inclusive growth. I had thus expected the Indian PM to pitch in for an early implementation (and not wait for the 2014 elections) of the National Food Security Act. A news report in Indian Express (Food Bill: Govt looking at flexible plan, may exclude 33 % population; link - http://www.indianexpress.com/news/food-bill-govt-looking-at-flexible-plan-may-exclude-33-population/976392/) tells us that an alternative proposal is now being drafted, which will lower the food entitlement from 35 kg to 25 kg per family, and also do away with the two categories -- BPL (priority) and APL (general).
I don't understand how can the Plan B (as it is called) envisage an additional expenditure of only Rs 7,000 crore over and above the Rs 1.11 lakh crore of legally binding food subsidy. It should be much lower considering that 33 per cent of the population stands excluded, and the legal entitlement has been reduced for bulk of the hungry population. Nevertheless, jugglery with figures is something that the government regularly indulges in to keep the nation misinformed for all times to come. We as a nation rarely question the figures that are doled out to us.
I thought the Prime Minister would know what is crucial for India. Feeding the nation, and that too after we failed for 65 years, should be the sole priority. However, he doesn't mind excluding the percentage of population to be fed, by 33 per cent but has focused all his energies to bail out President Obama instead. he knows that by allowing FDI in retail he is actually going to add on to hunger by displacing lakhs of people working in the local stores. Such a magnitude of displacement will only add on to growing hunger.
But then, we are aware that Manmohan Singh knows what is good for America.
Feeding the hungry is not the only area where Indian Prime Minister is least interested. He would have given a damn to food security if it were not for the UPA President Sonia Gandhi's insistence. Earlier too, if you recall, when MNREGA was launched, Manmohan Singh, and the then Finance Minister P Chidambaram, had strongly opposed the move. If it were not for Sonia Gandhi, the poor unemployed wouldn't have got any relief in the form of a guaranteed employment even if it is only for 100 days.
Manmohan Singh is not the only bureaucrat-turned-politician who feels, and works for the American interests. Besides the ambitious-looking bureaucrats (who crave to join MNCs after they exit government service), economists and management consultants are of course on the payrolls. But what about the Indian media? Why is the Indian media playing to the American tune? Well, I don't have to explain it to you. You know it much better. It is all about money, my dear. Who cares for the hungry?
Brazil is the biggest exporter of Indian breeds of cows. Gir cow now records over 62 litres/day in Brazil..
This majestic cow is from Brazil. Belonging to the Gir breed of Gujarat, this cow -- named She-ra -- clocked 62.033 litres of milk in a 3-day milk competition at the 40th Expaja in Brazil, beating her own record of 59.947 litres.
On our visit to Malaysia, we were intrigued when we came across a cattle breed, which the farmers kept referring to as “the Brahman”. This was a complete mystery to us. Which Brahman came to Malaysia and named these cattle the Brahman?"
"On our visit to the government’s Department of Veterinary Services in the state of Selangor we saw photographs of the Grey Brahman, the Red Brahman and the Nellore—all part of a poster on cattle breeds of Malaysia. Not to mention that the Jamunapari goat also featured in the poster as a goat breed of the country. This intrigued us even further, but none of the veterinary officers could explain how the Nellore from Andhra Pradesh and the Jamunapari from Uttar Pradesh happened to figure in a poster on the breeds of Malaysia."
She came back and researched. "Brahman breed is a product of biopiracy of several Indian breeds, which occurred over 100 years ago, when India was a colony of the British Empire, when “pirates” of today’s “Empire”—and modern day “Brahman”, the US—spirited out a nucleus of approximately 266 bulls and 22 females of several Bos indicus (Indian cattle), imported them to the US between 1854 and 1926, and developed the breed.
According to the literature, the Brahman is the progeny of four Indian cattle breeds: the Kankrej and Gir from Gujarat, the Ongole (earlier known as the Nellore) from Andhra Pradesh, with the fourth breed being the “Gujarat”. But no such breed exists in the list of Indian cattle breeds.
The Brahman has become the most popular beef cattle breed in the southern parts of the US and in South America, Asia, and Australia because of its excellent adaptability to sub-tropical climates and its production abilities.
Brahman-type cattle were, in fact, imported to Australia from the US, and today the Australian Brahman is the mainstay of the northern beef industry of Australia. The Brahman in Malaysia has primarily been imported from Australia, which has a virtual monopoly in exporting the breed to several south-east Asian countries. So much so that Malaysia’s beef cattle industry is completely dependent on continued import of the Brahman from Australia [You can read the full article The loss of our breeds, Down to Earth, 2012-7-15. http://www.downtoearth.org.in/
This brings me back to the question I have been asking again and again. When will we begin to recognise our desi breeds of cows? Why is it that planners are averse to our own domestic breeds?
What is also little know is the fact that Indian cows and buffaloes produce a more nutritious milk than the exotic breeds like Jersey and Holstein-Friesian. A recent study by Karnal-based National Bureau of Animal Genetic Resources (NBAGR) showed Indian cows have a rich A2 allele gene which helps them produce healthier milk. The frequency of this A2 allele in Indian breeds is 100 per cent whereas in exotic cattle breeds it is less than 60 per cent. Imported breeds posses A1 allele, which is considered to be associated with diabetes, obesity and cardiovascular diseases [Indian Cow, Buffalo breeds give healthier milk. http://news.outlookindia.com/items.aspx?artid=725938]. Why do we want the future generations to be sick with lifestyle diseases?
Delayed monsoon keeps the country on edge.
Once again the rain gods are playing truant. With 31 per cent shortfall in June, and with an expectation of only 70 per cent of the predicted 96 per cent rainfall for the July- August months, crucial for farming operations, kharif crops face a real threat.
In June alone, Ministry of Agriculture has calculated the shortfall in paddy transplanting to be around 26 per cent in the frontline agricultural states of Punjab and Haryana. Sowing of maize, bajra, jowar have been much low in Rajasthan, Madhya Pradesh, Maharashtra and Karnataka. Although the Ministry claims that the sowing of pulses, oilseeds and sugarcane has been near normal, any further delay will have a serious repercussion on kharifproduction. Even in Uttar Pradesh, Chhatisgarh, Odisha and Andhra Pradesh, the standing crop is coming under pressure with every passing day.
If the rains get delayed by another week or so, all estimates will go topsy-turvy. It will then be time to press the panic button.
Agriculture Minister Sharad Pawar is trying his best to play down fears of an impending drought. Coming at a time when the annual growth has slipped to 6.5 per cent, any indication of an expected shortfall in agriculture production will send the markets soaring. While any loss in production following the dry spell will further hit the growth story, it will also push up food inflation thereby inviting a lot of drubbing for the government. “We are fully prepared to meet any rainfall deficiency situation, and all states have been directed to be ready with the farm ministry’s contingency plans,” he said.
What makes the monsoon forecast a matter of concern is the prediction that El Nino – warm ocean currents in the Pacific region that causes severe droughts in Australia, Southeast Asia and India – might appear in September. The US-based International Research Institute for Climate and Society as well as the Australian Bureau of Meteorology has predicted the possibility of El Nino striking in the latter half of the year. Our own meteorological department thinks the chances of El Nino appearing in September is around 36 per cent. If that happens, it will mean a drier September which would certainly result in production loss at the time of grain formation in standing crops.
How serious is the impact of El Nino factor can be gauged from the fact that the previous five droughts in India were all because El Nino had appeared in a significant form. Globally, if you examine the meteorological data of past 110 years, of the 21 major droughts 15 were caused by El Nino. The fury and intensity of El Nino cannot be simply glossed over.
It isn’t easy to make correct long-term predictions about the behaviour of monsoon. Not only the Indian Met department, even internationally the predictions have not been sharp and correct. This year the predictions by some of the best known institutes abroad for monsoon range from complete failure to normal. Over the years, the IMD has moved away from the statistical method to a more improved dynamic model but to expect that the predictions will hit the bull eye is still far away. In fact, the Met Dept has not been able to predict drought in the past 130 years.
In 2009, the country faced one of the worst droughts in recent times. The Met Department had predicted 96 per cent rainfall in the long-term average. The actual rainfall was short by a whopping 23 per cent resulting in a loss in paddy production to the tune of 12 per cent. This year too, the Met Department has predicted monsoon to be in the range of 96 per cent, and there has already been a delay of about a fortnight in over 70 per cent of the geographical area.
Even if the deficient monsoon turns into a drought, the redeeming factor is that the country is saddled with a record 82.4 million tonnes of wheat and rice. There is no danger of an impending famine in case production slumps from an impending drought. With such comfortable food stocks, the government should be able to judiciously distribute it among needy states and at the same time make open-market releases so as to bring price rise in staple food under control. Also, there will be no need to look for food imports considering the sufficient stocks lying within the country. In any case, international wheat supplies too is expected to slump following a severe drought in the midlands region of US, comprising the wheat production belt.
This is why India must spurn the G-20 directive which makes it obligatory for member countries to export any surplus food. Although the G-20 objective is to ensure that the global food prices don’t harden in wake of short supplies, India cannot afford the luxury considering its huge population and the need to maintain enough foodstocks at all times for precariously balancing its food security needs. Domestic policies therefore have to take precedence over international obligations. Allowing the export of skimmed milk powder just a month before the monsoon begins too is not a worthwhile decision knowing well that milk production drops in summers. A prolonged dry spell is first going to hit dairy production. #
Good news: World is getting into a recession again.
Finally the cheering news. Swaminathan Aiyar, the cheerleader for economic reforms, which in reality is an euphemism for privatisation, has admitted that the world is sliding into a new recession (see Bad news: World sliding into a new recession TOI. He calls it bad news. I can understand why he says so. Not satisfied with $ 20 trillion that were pumped in after the 2008 economic meltdown (it was actually an economic collapse, and not meltdown. But to keep the predatory economic system alive, it was called meltdown), in the days to come you will see the demand for a still bigger bailout package will become louder and louder. As someone said, it tantamount to "privatising the profits, and socialising the costs." To ensure private profits do not dip, we will be forced to pump in huge amounts of public money.
In my understanding, there can be nothing more cheering than the news that world is sliding into a new recession. At a time when global warming is taking the world closer to the tripping point; when the oceans and air have been tremendously polluted, the groundwater ruthlessly mined and contaminated, and the natural land resources exploited to the hilt, the news of an impending economic recession couldn't have come at an more appropriate time. If in the last 60 years or so global poverty has only increased, hunger and malnutrition has grown (including in the US, Canada and EU), disease and squalor has multiplied and above all economic disparities have multiplied with each passing year, what is the use of that economic system.
What started off as the Eurozone crisis (which we all know has its roots in the US economy) is now likely to spread far and wide. At the Rio+20 UNCSD conference held at Rio, what amazed me was that poverty eradication should still be the world's top most economic priority. At G-20 summit, held a few days earlier in Mexico, the leaders of the world's top 20 economies however did not focus on poverty, but on economic growth (and on how to bailout the four PIGS countries reeling under a tremendous recession). If only these leaders had ensured that the $ 20 trillion economic bailout package given primarily to erring banks in 2008-09 was instead used to fight poverty and hunger, I can bet poverty and hunger would have been history by now. Of the $ 20 trillion, at least $ 10 trillion could have been spared to create additional employment.
Whether we like it or not, world's entire economic thinking and approach is being determined by the Corporates. All governments, whether democratic or dictatorial, are simply pawns in the invisible (and sometimes visible) hands of the Corporates. Academic institutes and the mainline media have also been bought over by the Corporates. Together -- the executive, academics and the media -- have unleashed a propaganda in favour of policies that only add to the profits of the Corporates. Speculation, financial misappropriation, monopoly control, free trade, future trading in food and natural resources are some of the ways to worsen the global plight. While the poor continue to suffer as a result, the rich go on expanding their wealth in a geometric proportion. Consolidation of wealth in the hands of a few helps increase GDP, and it is shown as if the per capita income of the every national is going up. In India, where 77 per cent population is unable to spend more than 0.50 dollar a day, the per capita income is on a steady rise !
Such a flawed economic system must go. I know it is easier said than done, but history does create conditions making it suitable for a change. I think that stage is fast approaching. If we fail this time, we fail for ever. But if we make a concerted effort -- bringing together all global movements, be it Occupy Movement, Anti-corruption wave, farmers movements and the people's struggle the world over against the usurping of natural resources -- I think we can make a dent. The public discourse must shift to the inability of the present economic system to sustain the world. After all, how long can the poor go on bailing out the rich? How long can we go on tolerating the theft and robbery of our natural resources in the name of development? How long can we live in hunger and poverty to ensure that a handful of people world over live in perpetual luxury? It is time we, the people decide.
In my understanding, there can be nothing more cheering than the news that world is sliding into a new recession. At a time when global warming is taking the world closer to the tripping point; when the oceans and air have been tremendously polluted, the groundwater ruthlessly mined and contaminated, and the natural land resources exploited to the hilt, the news of an impending economic recession couldn't have come at an more appropriate time. If in the last 60 years or so global poverty has only increased, hunger and malnutrition has grown (including in the US, Canada and EU), disease and squalor has multiplied and above all economic disparities have multiplied with each passing year, what is the use of that economic system.
What started off as the Eurozone crisis (which we all know has its roots in the US economy) is now likely to spread far and wide. At the Rio+20 UNCSD conference held at Rio, what amazed me was that poverty eradication should still be the world's top most economic priority. At G-20 summit, held a few days earlier in Mexico, the leaders of the world's top 20 economies however did not focus on poverty, but on economic growth (and on how to bailout the four PIGS countries reeling under a tremendous recession). If only these leaders had ensured that the $ 20 trillion economic bailout package given primarily to erring banks in 2008-09 was instead used to fight poverty and hunger, I can bet poverty and hunger would have been history by now. Of the $ 20 trillion, at least $ 10 trillion could have been spared to create additional employment.
Whether we like it or not, world's entire economic thinking and approach is being determined by the Corporates. All governments, whether democratic or dictatorial, are simply pawns in the invisible (and sometimes visible) hands of the Corporates. Academic institutes and the mainline media have also been bought over by the Corporates. Together -- the executive, academics and the media -- have unleashed a propaganda in favour of policies that only add to the profits of the Corporates. Speculation, financial misappropriation, monopoly control, free trade, future trading in food and natural resources are some of the ways to worsen the global plight. While the poor continue to suffer as a result, the rich go on expanding their wealth in a geometric proportion. Consolidation of wealth in the hands of a few helps increase GDP, and it is shown as if the per capita income of the every national is going up. In India, where 77 per cent population is unable to spend more than 0.50 dollar a day, the per capita income is on a steady rise !
Such a flawed economic system must go. I know it is easier said than done, but history does create conditions making it suitable for a change. I think that stage is fast approaching. If we fail this time, we fail for ever. But if we make a concerted effort -- bringing together all global movements, be it Occupy Movement, Anti-corruption wave, farmers movements and the people's struggle the world over against the usurping of natural resources -- I think we can make a dent. The public discourse must shift to the inability of the present economic system to sustain the world. After all, how long can the poor go on bailing out the rich? How long can we go on tolerating the theft and robbery of our natural resources in the name of development? How long can we live in hunger and poverty to ensure that a handful of people world over live in perpetual luxury? It is time we, the people decide.
Food stamps: How the US benefits the Corporations
So as to ensure that food reaches the needy and the hungry across the country, the government has launched a series of steps to streamline the public distribution system (PDS). Among several initiatives being planned, especially in the light of the National Food Security Act under preparation, a scheme to provide food coupons is being tested on a pilot basis in Delhi, Bihar and Uttar Pradesh.
Several researchers had supported the idea. Kaushik Basu, Chief Economic Advisor to Government of India, had also backed the proposal saying “the subsidy should be handed directly to the poor household instead of giving it to the PDS shop owner with the instruction it is transferred to the poor. This can be done by handing over food coupons to BPL households, which they can use as money to buy food from any store. The store owner can then take the coupon to any bank and change it back for cash.” On the face of it, it looks to be a more sensible and effective mechanism to deliver food to the hungry. But is it really so?
Basu’s thesis was based on the American experience with food stamps. In fact, food stamp is an idea which originated from the United States, and is now being followed in several other countries with varying degrees of success. India too is trying to borrow the scheme from America, as an answer to the massive pilferage of foodgrains from the PDS. Several studies have shown that more than 40 per cent foodgrains meant for the poor are pilfered on the way. Much of the foodgrains finds its way to neighbouring Nepal, Bangladesh and Burma. Rampant corruption in public distribution erodes the very basic purpose of ensuring food and nutrition security.
Much has been said and written about the efficiency of the food stamp programme in the United States. I am not sure on what basis were these studies compiled, and whether someone had really gone and closely scrutinised the food distribution programme. The Supplemental Nutrition Assistance Programme (SNAP), as it is called in the US, uses food stamps to reach 46 million hungry – one in every seven Americans. And this year, like everywhere else, the US government too has slashed the financial allocation for the food stamps programme by $4.5 billion.
Nevertheless, what we are looking here is how effective has the food stamp programme been in ensuring nutritional security. California-based organisation ‘Eat, Drink Politics’ has in a recent report come out with some startling revelations providing an insight into how the hunger programme adds to the profits of some of the big corporations and banks. Several giants like Coca-Cola, General Mills, Wal-mart and banks like JP Morgan Chase have reaped windfall from the food stamps programme.
Several researchers had supported the idea. Kaushik Basu, Chief Economic Advisor to Government of India, had also backed the proposal saying “the subsidy should be handed directly to the poor household instead of giving it to the PDS shop owner with the instruction it is transferred to the poor. This can be done by handing over food coupons to BPL households, which they can use as money to buy food from any store. The store owner can then take the coupon to any bank and change it back for cash.” On the face of it, it looks to be a more sensible and effective mechanism to deliver food to the hungry. But is it really so?
Basu’s thesis was based on the American experience with food stamps. In fact, food stamp is an idea which originated from the United States, and is now being followed in several other countries with varying degrees of success. India too is trying to borrow the scheme from America, as an answer to the massive pilferage of foodgrains from the PDS. Several studies have shown that more than 40 per cent foodgrains meant for the poor are pilfered on the way. Much of the foodgrains finds its way to neighbouring Nepal, Bangladesh and Burma. Rampant corruption in public distribution erodes the very basic purpose of ensuring food and nutrition security.
Much has been said and written about the efficiency of the food stamp programme in the United States. I am not sure on what basis were these studies compiled, and whether someone had really gone and closely scrutinised the food distribution programme. The Supplemental Nutrition Assistance Programme (SNAP), as it is called in the US, uses food stamps to reach 46 million hungry – one in every seven Americans. And this year, like everywhere else, the US government too has slashed the financial allocation for the food stamps programme by $4.5 billion.
Nevertheless, what we are looking here is how effective has the food stamp programme been in ensuring nutritional security. California-based organisation ‘Eat, Drink Politics’ has in a recent report come out with some startling revelations providing an insight into how the hunger programme adds to the profits of some of the big corporations and banks. Several giants like Coca-Cola, General Mills, Wal-mart and banks like JP Morgan Chase have reaped windfall from the food stamps programme.
I am therefore not surprised to see the Ministry for Food and Consumer Affairs trying to push for inclusion of private companies in public distribution in India under the garb of public-private partnership. Sooner than later, we will see private companies getting into food distribution on the American pattern in India. It is therefore important to know how the private companies, and that includes Affiliated Computer services, a subsidiary of Xerox, have exploited the hunger programme to its benefit.
According to the report, “States are seeing unexpected increases in administrative costs, while banks and other private contractors are reaping significant windfalls from the economic downturn and increasing SNAP participation. Although a full national accounting of these contracts is not available from the US Department of Agriculture (which administers SNAP), we know that a handful of corporations fight doggedly for these deals, and they are not in the charity business.” The worst part is that the profits these companies reap is kept hidden from the public.
In just one year, Wal-mart received more than $ 33 million for nine supermarket centres in the province of Massachusetts, which is four times the money spent at farmers markets across the nation under the same programme. It also got half of the $1 billion spent in Okhalama state. ‘Eat, Drink Politics’ was unable to obtain data of the total money claimed by Wal-mart for feeding the entire country. JP Morgan Chase has been one of the biggest recipients of the financial allocations. In Florida alone, Chase has a five-year contract worth $ 83 million.
The US Department of Agriculture did not divulge how much money was paid to Coca-Cola and General Mills. But the researchers conclude that food corporations and industry giants have been lobbying hard to include junk foods like candy and soft drinks in the supplemental nutrition programme. Despite nine states restricting junk food purchases, these giants have been exerting pressure to allow the sales of unhealthy products.
Isn’t it therefore amusing to learn that Kaushik Basu had even provided details of the approaches needed to plug the loopholes in the coupon distribution and had suggested its integration with UID programme. If in the US, the food stamp programme ends up adding profits to the corporate balance sheets, isn’t it time that India looks at how to make it more effective in own ingenious way rather than blindly aping the US experience? Whether it is the PDS or the food stamps programme, what has become crystal clear is that it is either big business or the corrupt middlemen in the distribution chain who laugh all the way to the bank.
When farmers are convicted. The strange case of an American farmer.
At a time when the entire economic growth model is built on greed, you cannot expect the farmers to be left behind. In their quest to make quick money, and harbouring aspirations like anyone else to join the ranks of the high-net individuals (HNIs), they too resort to unlawful activities. In India, farmers have sprayed crops with dangerous pesticides cocktails and other harmful chemicals often drenching their standing crop with pesticides. They know this is not permissible, and goes beyond the recommendations. The heavily pesticide-laden crop is for the market. But for their own consumption, they keep the plot free of pesticides and even chemical fertiliser. Isn't that morally and ethically wrong?
Some call it as 'moral hazard'.
But often this goes far. How do you explain when some farmers inject oxytoxin hormone to get a much healthier (and big in size) looking veggies? How do you explain when some dairy farmers (and middlemen) adulterate milk with urea, caustic soda and detergents knowing well it is extremely harmful? What about those farmers who throw buckets of water on to the paddy heaps in mandis to add on to the weight of the produce? Such instances are not rare. These are surely 'moral hazards' that the farming community continues to grapple with. I am not blaming the entire farming community, but you will agree there are elements who do all this and still get away with. It is very rare that you find the law swooping on them and holding them accountable. Even in such cases where a conviction is made, the court case continues to drag for years.
This does not happen only in India. It happens also in the United States and elsewhere. But the difference is that in the US the chances are that the convict will get immediate punishment.
I bring to you a shocking and perhaps an interesting case (depends on how you want to view it) from the United States. Daryll Ray and Harwood Schaffer of the Agricultural Policy Research Cenre at the University of Tennessee have quoted this in their latest Policy Pennings #620. Here it goes:
According to an article in the Asheville Citizen-Time, “[Robert Gardner] Warren, 64, was convicted in July 2004 of conspiracy to defraud the Federal Crop Insurance Corp. [FCIC] and conspiracy to commit money laundering. He was sentenced the following year to 76 months in federal prison. His wife, Viki Warren, pleaded guilty to conspiracy to defraud the FCIC and mail fraud and got 66 months….
“The Warrens owned R&V Warren Farms, which at one time was the largest vine-ripened tomato grower in the eastern United States and employed about 200 people….
“Warren Farms filed fake crop reports claiming losses that never happened. Prosecutors said employees threw ice cubes onto a tomato field, beat the plants with sticks and photographed the results to simulate hail damage to back up insurance claims. 'The employees also threw ice cubes into the air while other employees took pictures to support the claim of a hailstorm,’ an indictment stated.
“The Warrens began the scheme in 1997 to defraud the FCIC and insurance companies reinsured by the agency of millions of dollars, obtaining crop insurance by creating false records purporting to show a history of high tomato production.”
Wow ! Isn't that amazing. Some farmers surely can be imaginative. But what is significant in this particular case is that the law was quick and firm. This farmer was convicted in July 2004, and the following year he was sentenced to 76 months in jail. His wife was sent to jail for 66 months. When do we see the judicial system in India becoming so pro-active?
Some call it as 'moral hazard'.
But often this goes far. How do you explain when some farmers inject oxytoxin hormone to get a much healthier (and big in size) looking veggies? How do you explain when some dairy farmers (and middlemen) adulterate milk with urea, caustic soda and detergents knowing well it is extremely harmful? What about those farmers who throw buckets of water on to the paddy heaps in mandis to add on to the weight of the produce? Such instances are not rare. These are surely 'moral hazards' that the farming community continues to grapple with. I am not blaming the entire farming community, but you will agree there are elements who do all this and still get away with. It is very rare that you find the law swooping on them and holding them accountable. Even in such cases where a conviction is made, the court case continues to drag for years.
This does not happen only in India. It happens also in the United States and elsewhere. But the difference is that in the US the chances are that the convict will get immediate punishment.
I bring to you a shocking and perhaps an interesting case (depends on how you want to view it) from the United States. Daryll Ray and Harwood Schaffer of the Agricultural Policy Research Cenre at the University of Tennessee have quoted this in their latest Policy Pennings #620. Here it goes:
According to an article in the Asheville Citizen-Time, “[Robert Gardner] Warren, 64, was convicted in July 2004 of conspiracy to defraud the Federal Crop Insurance Corp. [FCIC] and conspiracy to commit money laundering. He was sentenced the following year to 76 months in federal prison. His wife, Viki Warren, pleaded guilty to conspiracy to defraud the FCIC and mail fraud and got 66 months….
“The Warrens owned R&V Warren Farms, which at one time was the largest vine-ripened tomato grower in the eastern United States and employed about 200 people….
“Warren Farms filed fake crop reports claiming losses that never happened. Prosecutors said employees threw ice cubes onto a tomato field, beat the plants with sticks and photographed the results to simulate hail damage to back up insurance claims. 'The employees also threw ice cubes into the air while other employees took pictures to support the claim of a hailstorm,’ an indictment stated.
“The Warrens began the scheme in 1997 to defraud the FCIC and insurance companies reinsured by the agency of millions of dollars, obtaining crop insurance by creating false records purporting to show a history of high tomato production.”
Wow ! Isn't that amazing. Some farmers surely can be imaginative. But what is significant in this particular case is that the law was quick and firm. This farmer was convicted in July 2004, and the following year he was sentenced to 76 months in jail. His wife was sent to jail for 66 months. When do we see the judicial system in India becoming so pro-active?
Behind the economic sob story: RBI Governor calls the bluff.
It is heartening to see Reserve Bank of India governor D Subbarao calling government and industry's bluff on rupee depreciation as well as inflation. By doing so, he has categorically exposed the faulty assumptions behind which the Prime Minister, Manmohan Singh, the chief economic adviser, Dr Kaushik Basu, and several chieftains of the Indian industry have been hiding their own failures. Prime Minister and the chief economic adviser have repeatedly blamed policy paralysis (under Coalition compulsions) to be the reason for the slowing of the economy, while the PM goes to shift the blame even to the Eurozone crisis.
"Europe alone cannot be blamed for the rupee's woes and inflation isn't merely due to supply-side constraints but has a structural element to it. I don't think this blame game can go on," Dr Subbarao on Tuesday addressing the Indian Merchants Chamber in Mumbai (RBI guv calls govt's bluff on Re, inflation http://bit.ly/NPZjG8). This is a significant statement coming from the RBI chief who should know what he is talking about. What upsets me more is that even the business journalists, who I thought were knowledgeable enough, refrained from coming out with the truth. None of the Business TV channels (and of course the business papers) had the courage to call a spade a spade. Except for an editorial or two, the business media only echoed what the industry wanted.
Prime Minister Manmohan Singh used the G-20 platform to reiterate what he has been saying earlier. "Our growth rate in 2011-12 declined to 6.5 % from the level of 8.4% in the previous year. This may look like a reasonable figure, given growth rates being experienced in the rest of the world, but or public is impatient for a return to high growth and faster jobs creation," he said at the Los Cabos in Mexico. Interestingly, RBI governor D Subbarao demolishes this argument. The Times of India says Subbarao struck out at those who argued that India at 6.8% was faster than the West. "We must remember that we are a low-income country with a per capita income of less than $1500. India is a supply constrained economy and should grow faster to bridge the income gap."
Well, the PM will need another smokescreen to hide.
Moving away from the growth rate obsession, I would also like to draw your attention to a misleading headline that I find are splashed across the media. 'Global investment seem less bullish on India after a series of policy flip flops by the government sapped confidence', reads the introduction to a news report (see Times of India, June 20, 2012: FDI inflows dip 8% this year). It is misleading because it very cleverly blames policy paralysis for the decline in FDI during the period Jan-April 2012. The RBI data shows that FDI had actually increased, compared to last year, in Jan and Feb, and thereby declined in Mar-April. Overall, against the inflow of $8.5 billion in 2011, it is $7.8 billion this year. But what remains hidden is that the decline in Mar-April is because of the Eurozone crisis when the entire world is witnessing an investment decline. It is not because of any policy flip flop within the country.
Nevertheless, what is not being mentioned is that between Jan-March 2012, India Inc had invested $ 8 billion overseas. This massive outgo is not because of policy mismatch within the country but the favourable conditions created by RBI allowing these companies to invest abroad. They have gone to greener pastures overseas. Therefore what is the use of crying over falling FDI when our own companies are investing heavily abroad? Mischievous reporting, isn't it?
I am glad RBI governor has made clear his views on inflation. He talked of the 'structural elements' that result in a higher inflation. This is what I have been stressing for several years now. At a time when there is no drop in agricultural output, including nutritious commodities like milk and eggs, I see no reason why the prices should be on an upswing. Huge cartelisation in the wholesale markets, followed by rampant exploitation by the retail traders, in the absence of any checks and control, has actually led to the present crisis. No economist wants to point out to this structural anomaly because any effort to bring the wayward trade under control would go against the tenants of the market economy, which they swear by. Also, they are paid to support the proposal of allowing FDI in retail, and so they go on singing the chorus. This is rather unfortunate. But that's how the realities are.
"Europe alone cannot be blamed for the rupee's woes and inflation isn't merely due to supply-side constraints but has a structural element to it. I don't think this blame game can go on," Dr Subbarao on Tuesday addressing the Indian Merchants Chamber in Mumbai (RBI guv calls govt's bluff on Re, inflation http://bit.ly/NPZjG8). This is a significant statement coming from the RBI chief who should know what he is talking about. What upsets me more is that even the business journalists, who I thought were knowledgeable enough, refrained from coming out with the truth. None of the Business TV channels (and of course the business papers) had the courage to call a spade a spade. Except for an editorial or two, the business media only echoed what the industry wanted.
Prime Minister Manmohan Singh used the G-20 platform to reiterate what he has been saying earlier. "Our growth rate in 2011-12 declined to 6.5 % from the level of 8.4% in the previous year. This may look like a reasonable figure, given growth rates being experienced in the rest of the world, but or public is impatient for a return to high growth and faster jobs creation," he said at the Los Cabos in Mexico. Interestingly, RBI governor D Subbarao demolishes this argument. The Times of India says Subbarao struck out at those who argued that India at 6.8% was faster than the West. "We must remember that we are a low-income country with a per capita income of less than $1500. India is a supply constrained economy and should grow faster to bridge the income gap."
Well, the PM will need another smokescreen to hide.
Moving away from the growth rate obsession, I would also like to draw your attention to a misleading headline that I find are splashed across the media. 'Global investment seem less bullish on India after a series of policy flip flops by the government sapped confidence', reads the introduction to a news report (see Times of India, June 20, 2012: FDI inflows dip 8% this year). It is misleading because it very cleverly blames policy paralysis for the decline in FDI during the period Jan-April 2012. The RBI data shows that FDI had actually increased, compared to last year, in Jan and Feb, and thereby declined in Mar-April. Overall, against the inflow of $8.5 billion in 2011, it is $7.8 billion this year. But what remains hidden is that the decline in Mar-April is because of the Eurozone crisis when the entire world is witnessing an investment decline. It is not because of any policy flip flop within the country.
Nevertheless, what is not being mentioned is that between Jan-March 2012, India Inc had invested $ 8 billion overseas. This massive outgo is not because of policy mismatch within the country but the favourable conditions created by RBI allowing these companies to invest abroad. They have gone to greener pastures overseas. Therefore what is the use of crying over falling FDI when our own companies are investing heavily abroad? Mischievous reporting, isn't it?
I am glad RBI governor has made clear his views on inflation. He talked of the 'structural elements' that result in a higher inflation. This is what I have been stressing for several years now. At a time when there is no drop in agricultural output, including nutritious commodities like milk and eggs, I see no reason why the prices should be on an upswing. Huge cartelisation in the wholesale markets, followed by rampant exploitation by the retail traders, in the absence of any checks and control, has actually led to the present crisis. No economist wants to point out to this structural anomaly because any effort to bring the wayward trade under control would go against the tenants of the market economy, which they swear by. Also, they are paid to support the proposal of allowing FDI in retail, and so they go on singing the chorus. This is rather unfortunate. But that's how the realities are.
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