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Archive for September 2010

India foodgrain and commercial crops data

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Here in one convenient Excel file is the annual data from the release of Advance Estimates of crop production for India. This is from the Ministry of Agriculture, Government of India, and is usually posted on the website of the Department of Agriculture and Cooperation.

The file contains the annual estimates for 1997-98 to 2006-07, two advance estimates for 2007-08 and the full four advance estimates for 2008-09 and 2009-10. The Ministry, just to make things more interesting for the toiling masses, posts the data as a grubby two-sheeter pdf image. I’ve been careful about the numbers.

These estimates are for all major crops covered by the Ministry and in rabi and kharif where applicable: rice, wheat, jowar, bajra, maize, ragi, small millets, barley, coarse cereals, cereals, tur, gram, urad, moong, pulses, kharif, rabi, groundnut, castorseed, sesamum, nigerseed, rapeseed, mustard, linseed, safflower, sunflower, soyabean, oilseeds, cotton, jute, mesta and sugarcane.

Chronic hunger persists, says FAO, but doesn’t tell us why

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The Food and Agriculture Organization (FAO) has released new estimates of the number of chronically hungry in the world. The numbers themselves are quite terrifying, because the fact that there are so many chronically hungry even while the CGIAR assures us that global wheat stocks are a comfortable 175 million tons, means quite simply that food is being inequitably distributed, with terrible consequences.

It is this reason that seems to compel the FAO to speak in two voices in its current set of briefings. On the one hand, the organisation must call attention to the widespread nature of hunger and its persistence. On the other, it refuses to describe honestly the economic conditions and market influences that make the distribution of food inequitable.

That is why in his statement on 14 September 2010, FAO Director-General Jacques Diouf said “In this regard, stable and effective policies, regulatory and institutional mechanisms and functional market infrastructures that promote investment in the agricultural sector are paramount” instead of also recognising the food and price inequalities that exist in the seven countries in which two-thirds of all undernourished people live.

Mr Diouf knows the numbers, surely he knows the reasons those numbers are there? But no, instead he said, “The reformed Committee on World Food Security (CFS) which will meet next month opens new opportunities for dialogue and coherence in policy and action among all relevant actors in the fight against hunger. We should not miss such opportunity.” This month, next month, this year, next year. With respect, Mr Diouf, your organisation has already missed the opportunity.

Still, the FAO’s release is worth posting. Here are the main points:

At close to one billion, the number of undernourished people in the world remains unacceptably high in 2010 despite an expected decline – the first in 15 years. This decline is largely attributable to a more favourable economic environment in 2010 – particularly in developing countries – and the fall in both international and domestic food prices since 2008. The recent increase in food prices, if it persists, will create additional obstacles in the fight to further reduce hunger.

(The bit about “decline is largely attributable to a more favourable economic environment” needs some elaboration.)

FAO estimates that a total of 925 million people are undernourished in 2010 compared with 1.023 billion in 2009. That is higher than before the food and economic crises of 2008-2009 and higher than the level that existed when world leaders agreed to reduce the number of hungry by half at the World Food Summit in 1996.

Global cereal harvests have been strong for the past several years, even as the number of undernourished people was rising. The overall improvement in food security in 2010 is thus primarily a result of better access to food due to the improvement in economic conditions, particularly in developing countries, combined with lower food prices.

(The bit about “overall improvement in food security in 2010” needs some explanation.)

In parallel, international and domestic cereal prices have declined from their 2008 peaks, reflecting two consecutive years of record yields. While production in 2010 is forecast to be lower, the overall supply situation is considered as adequate. However, food prices in most low-income food-deficit countries remain above the pre-crisis level, negatively affecting access to food by vulnerable populations.

(The bit about “negatively affecting access to food by vulnerable populations” – think food riots and desperation, as happened in Mozambique two weeks ago.)

The analysis of hunger during crisis and recovery brings to the fore the insufficient resilience to economic shocks of many poor countries and households. Lack of appropriate mechanisms to deal with the shocks or to protect the most vulnerable populations from their effects result in large swings in hunger following crises.

Developing countries account for 98 percent of the world’s undernourished people. Two-thirds live in just seven countries (Bangladesh, China, the Democratic Republic of the Congo, Ethiopia, India, Indonesia and Pakistan) and over 40 percent live in China and India alone.

(The bit about “resilience” and “shocks” needs elaboration, especially since the world’s undernourished have had no role to play in the designing of an economics of shock and hunger.)

The people and forests of the Niyam Raja

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Timi Vadakka, a Dongria Kondh woman in Khambesi village, district Rayagada

Timi Vadakka, a Dongria Kondh woman in Khambesi village, district Rayagada

This is a further extract taken from the document, ‘Report of the four member committee for investigation into the proposal submitted by the Orissa Mining Company for bauxite mining in Niyamgiri’, dated August 16, 2010, by Dr N C Saxena, Dr S Parasuraman, Dr Promode Kant, Dr Amita Baviskar. Submitted to the Ministry of Environment & Forests, Government of India. The pictures accompanying this post are also taken from the same report.

“Kutia Kondh and Dongria Kondh – The two communities believe that that the hills are sacred and that their survival is dependent on the integrity of this ecosystem. The proposed mining lease site is among the highest points in the hills and is considered especially important as a sacred site. The proposed mining lease (PML) area is used by both Dongria and Kutia Kondh for their livelihoods as well as religious practices. Their customary use of the area, including for grazing and the collection of forest produce, is well documented.

[Other posts on the Dongria Kondh and their struggle: Who the Dongria Kondh are, what Niyamgiri is to them, A victory for the Dongria Kondh, India’s unseen Niyamgiris, Images of Niyamgiri, The last stand of the Dongria Kondh]

Dongria Kondh women at the market in Muniguda, district Rayagada

Dongria Kondh women at the market in Muniguda, district Rayagada

Mining operations will have significant adverse impacts on the livelihoods of these communities. Mining will destroy significant tracts of forest. According to the assessment of the Wildlife Institute of India in its 2006 study, as many as 121,337 trees will have to be cut if the mining lease is granted. Of these, 40% will be in the PML area and the remaining 60% would have to be removed to make the access road and other planned activities. Since the Kutia and Dongria Kondh are heavily dependent on forest produce for their livelihood, this forest cover loss will cause a significant decline in their economic well-being. It must be noted that the Vedanta proposal assumes that no displacement will be caused by the mining project whereas there is overwhelming evidence that mining will not only result in widespread resource displacement but may well permanently undermine the survival of the Dongria Kondh.

Dongria Kondh girls, Lakpadar village, district Rayagada

Dongria Kondh girls, Lakpadar village, district Rayagada

While both Kutia and Dongria Kondh communities will be adversely affected by mining in the area, the likely negative impacts on the Dongria Kondh are a particular cause of concern. The Niyamgiri hills are the sole and unique habitat of this tiny community. Any major disruption of their relationship with their environment is not only a serious violation of their rights under the Indian Constitution and forest laws, but also a grievous threat to their cultural integrity and their ability to survive as a distinct social group. The Committee found convincing evidence that mining will destroy Dongria Kondh livelihoods and culture.

Data collated from the DKDA (Dongria Kondh Development Agency, a government body) and the Forest Department shows that, of the total Dongria population of the 7,952, at least 1,453 Dongria Kondh live in villages in and around the Forest Blocks of the proposed mining lease area. Their cultivated lands lie in close proximity to the PML area. Mining-related activities such as tree-felling, blasting, removal of soil, road building, and the movement of heavy machinery will deny them access to lands that they have used for generations.

Dongria Kondh prayerhouse showing the triangular motif signifying the Niyamgiri hills, in Kurli village, district Rayagada

Dongria Kondh prayerhouse showing the triangular motif signifying the Niyamgiri hills, in Kurli village, district Rayagada

Further, these activities will also adversely affect the surrounding slopes and streams that are crucial for their agriculture. Given the almost total dependence of these villages on the eco-systems of the Niyamgiri hills, mining operations will severely threaten the livelihoods and basic survival of the Dongria Kondh. In addition, the influx of migrant workers and the demands that their presence will make on the landscape will entail major disruptions in the economic and social well-being of these small and self-contained groups.

If permitted, mining will directly affect a substantial section — almost 20% — of the Dongria community. An impact on such a significant fraction of the population of the community will have repercussions for the overall viability of the group and its biological and social reproduction. All the 104 Dongria Kondh villages are linked by marriage, since the member of a clan must seek a spouse from another clan. The circulation of women and bride-price between villages is essential for maintaining the social and economic integrity of the community as a whole. It is clearly indicated that if the economic and social life of one-fifth of Dongria Kondh population is directly affected by the mining, it will threaten the survival of the entire community. All the Dongria Kondh that the Committee spoke to stressed that mining would destroy their economic, social and cultural life: “Niyam Raja has given us everything. If they take the dongar away, we will die.”

Dongria Kondh women with mushrooms collected from the forest, near Parsali, district Rayagada

Dongria Kondh women with mushrooms collected from the forest, near Parsali, district Rayagada

Anthropologists who have conducted research among the Dongria Kondh are of the view that they are unique community whose distinctive identity is evident in their language, kinship relations, expertise in agro-forestry, and customary practices. For example, Dongria Kondh speak two languages, called Kuyi and Kuvi, with a proto-Dravidian structure and vocabulary which is unrelated to Oriya, the state’s official language. Their religious practices anchor them in the landscape of the Niyamgiri hills and any severance or disruption of that relationship will be a grievous blow to the community’s self-identity as well as material well-being. As a Primitive Tribal Group the welfare of the Dongria Kondh is mandated for special protection by the government. It is clear that the government is responsible for protecting their rights and that mining in this region would seriously undermine the fulfilment of this responsibility.”

Cereals grown on forest fields by Kutia Kondh in Kendubardi village, district Kalahandi

Cereals grown on forest fields by Kutia Kondh in Kendubardi village, district Kalahandi

Prasanna Kumar Nayak of the Utkal University, Orissa, has written on tribal development in Orissa for the newsletter of the International Institute for Asian Studies (IIAS). This is a postdoctoral research centre based in Leiden and Amsterdam. His account provides a contrast to the effort made, around 30 years ago, towards providing the tribals of Orissa health and education infrastructure without disturbing their identity. Nayak’s article is titled ‘The rise and fall of tribal development in Orissa’.

“Already in the early 1970s, at a time when tribal development received new impulse from the Indian government’s Fourth Five Year Plan, many development activities in the field of horticulture, animal husbandry, agriculture, health and education, as well as the construction of roads, buildings and dug-wells were undertaken in rapid succession in the tribal areas of Orissa. Political will for making tribal development a priority continued with the Fifth Plan, from 1974 onwards, with activities reaching a peak in the early nineties, the end of the Seventh Plan.

Sikoka Lodo, Sikoka Budhga and other Dongria Kondh men from Lakpadar village, district Rayagada

Sikoka Lodo, Sikoka Budhga and other Dongria Kondh men from Lakpadar village, district Rayagada

At that time, I was making frequent trips to different tribal areas in the north, south and west of Orissa. What impressed me most during my extensive field visits was the host of activities pursued by the field officers and staff of development agencies and the schoolteachers in residential tribal schools, and their concern for and commitment to the tribal people. Added to that, the frequent supervision and monitoring of the activities and assessment of progress by government officials was really quite noteworthy. Despite lapses and many shortcomings in the execution of the development schemes it remained satisfying to observe that there was discipline in the government machinery of development administration.

Among the tribal development success stories in Orissa from that period are the orange, lemon, ginger and banana plantations, as well as the high yielding rice cultivation in Ramgiri-Udaygiri areas, home to a large population of Lanjia Saora. The orange, ginger, banana and pineapple plantations in the Niyamgiri areas where mostly members of the Dongria Kondh tribe live were also very successful development schemes. The same can be said of the cultivation of vegetables in the hills which gave people the opportunity to earn cash in addition to pursuing their traditional subsistence agriculture on the hill slopes.

Kutia Kondh women in Kendubardi village, district Kalahandi

Kutia Kondh women in Kendubardi village, district Kalahandi

Cash crops and vegetables were also encouraged among the tribal villager’s adept at plough cultivation on the plateaus, plains and terraced fields. They were also trained to raise bovine animals. Orissa’s tribal schools were well managed, and provided a congenial environment for their pupils. Teachers worked hard at teaching and shaping these children with a spirit of dedication.

The children responded with good performances and examination results were satisfactory. Although there were severe public health issues in most of the tribal areas, primary health centres (PHCs) were established and free medical services were available for tribal people. At the same time, road networks were developed at a rapid pace, facilitating the communication and transportation of development input to many villages.

Dongria Kondh girls, Lakpadar village, district Rayagada

Dongria Kondh girls, Lakpadar village, district Rayagada

Dug- and tube wells were installed in most of the villages and many families availed themselves of the benefits of irrigating their land. It can certainly be argued that the quantum of infrastructure work and economic development activities undertaken during the seventies and spilling over into the early eighties resulted in significant progress and lasting development in the tribal areas of Orissa.

Initially, the pursuance of economic development programmes and the modus operandi of the development agencies were in no way disruptive to the socio-cultural and community life of the tribal people. Instead, development personnel were enthusiastic about their development goals and engaged with local people when problems arose. Politically, these tribal areas were relatively quiet. The development policy plan, the project personnel, people and politics seemed to be in harmony with each other! The result of the development activities undertaken in tribal areas was a slow and steady progress with tangible results and lasting effects.”

Global farmland grab and the shadow of the Soviet kolkhozes

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Peasant girl with rake, 1930s, Simon Fridland

Peasant girl with rake, 1930s, Simon Fridland

The World Bank has just released an interesting document called ‘Rising Global Interest in Farmland: Can it Yield Sustainable and Equitable Benefits?’. It is presented as a response to the global farmland grab, reviews global trends of land expansion as well as empirical evidence on land acquisitions in 14 countries between 2004 and 2009: Brazil, Cambodia, Democratic Republic of Congo, Ethiopia, Indonesia, Liberia, Lao PDR, Mexico, Mozambique, Nigeria, Peru, Sudan, Ukraine, and Zambia. (I’ll post more on the study as soon as I can read it fully.)

The inclusion of Ukraine is interesting, primarily because of the country’s long history (as a Soviet republic) of collective farming, and also because of the horrific famine that engulfed Ukraine, the northern Caucasus, and the lower Volga River area almost 80 years ago, in 1932-1933, was the result of Joseph Stalin’s policy of collectivisation. This is also part of the region which suffered in the July 2010 fires that traumatised Russia.

The Bank’s study contains a few paras about the Soviet farming system which are worth reading closely, for they help explain the current wheat shortage in Russia and the responses of both Russia and Ukraine to the continuing wheat crisis.

Woman Collective Farmer, 1932, Simon Fridland

Woman Collective Farmer, 1932, Simon Fridland

Eastern European countries have undergone major transitions from the former Soviet system of collective and state farms to new agrarian structures (says the Bank’s section on Russia). These transitions have unfolded in many ways depending on countries’ factor endowment, the share of agriculture in the overall labour force, infrastructure, and the way the reforms were implemented. In areas of low population density, where collectives were divided into small plots allocated to members, the plots were quickly rented back by companies with access to finance and machinery.

These companies were often created from former collective farms whose managers could more easily consolidate land parcels and shares. Services, institutions, and logistics were geared to large-scale production, so smallholder grain production was never viable option. Where farms were land- and capital-intensive, corporate farming was the dominant organisational structure. On the other hand, many countries where land was split up into smallholder farms also performed well. The diversity is illustrated by the share of area under corporate farms 10 years after the transition, ranging from 90 percent in Slovakia, 60 percent in Kazakhstan, 45 percent in Russia, to less than 10 percent in Albania, Latvia. and Slovenia.

In Russia, Ukraine, and Kazakhstan, the transition was associated with a 30 M ha decline in area sown, with most of that area returning to pastures or fallow. Large farms were better able to deal with the prevailing financing, infrastructure and technology constraints. Aided by the phasing out of an inefficient meat industry and the associated demand for grain as feed, the region turned from a grain deficit of 34 mt in the late 1980s to exports of more than 50 mt of grain and 7 mt of oilseeds and derivatives. In light of the scope for transfer of available technology, Russia, Ukraine and Kazakhstan, the region’s three land-abundant countries, have an opportunity to establish themselves as major players in global grain markets, especially if ways to effectively deal with volatility are found.

Farmer's first Spring. The Soviet region of Nizhnegorodsk's District, 1929, Arkadi Shishkin

Farmer's first Spring. The Soviet region of Nizhnegorodsk's District, 1929, Arkadi Shishkin

Given the slow development of markets, mergers to integrate vertically to help acquire inputs and market outputs led to the emergence of some very large companies. For example, in Russia, the 30 largest holdings farm 6.7 million ha, and in Ukraine, the largest 40 control 4 to 4.5 million ha. Many of the agricultural companies are home grown, though often with significant investment from abroad. Several have issued IPOs.

Some Western European companies have also invested directly in large-scale farming in the region. For example, Black Earth, a Swedish company, farms more than 300,000 ha in Russia. With greater demand and better logistics, there remains substantial potential for intensification and in some cases for area expansion. Cereal yields increased 38 percent from 1998-2000 to 2006-2008 but are still far below potential. For example, Ukraine’s cereal yields are 2.7 t/ha, some 40 percent of the Western European average. The potential to transfer technology and relatively cheap land has been one of the major motivations for foreign direct investment in the region.

In Russia land is either leased or owned, and in Ukraine. where private land sales are not allowed, all land is leased. usually for 5-25 years. But throughout the region, land rents are still very low relative to land of comparable quality in other parts of Europe. Competitive markets for land shares have yet to emerge. and in many situations imperfections in financial and output markets preclude own-cultivation as a viable option. So the bargaining power of landowners is often weak, suggesting that rental rates are low and that owners receive few of the benefits from large-scale cultivation.

Making sense of OECD’s new ‘interim’ assessment

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Chart from OECD interim assessment of economic outllok, 2010 September

What's all the ruckus about then? We know the economy's broke.

With its customary fence-sitting and misplaced political correctness in times of trouble, the OECD (Organisation for Economic Co-operation and Development, all of 33 members strong now) has released its ‘Interim Assessment’ of the economic outlook for OECD countries.

The material and pontifical tone is attributed to Pier Carlo Padoan, OECD Chief Economist and Deputy Secretary-General, whose opening salvo is enough to put you off interim assessments for the rest of the year: “Recent high-frequency indicators point to a slowdown in the pace of recovery of the world economy that is somewhat more pronounced than previously anticipated. Against this background and according to the OECD short-term forecasting models, growth could slow in the G7 economies to an annualised rate of about 1.5% in the second half of the year. There is nevertheless great uncertainty in the outlook arising from a combination of weaknesses and strengths.”

Shorn of the absurd caution with which tenure economists of the neo-classical persuasion litter their pronouncements, here is what the esteemed Mr Padoan has said: households are becoming broke, the recession has had a lot to do with their becoming broke, there are not enough jobs for the members of these households, the jobs that they do have are by no means secure, and that’s why they’re being very very careful with spending.

The “interim assessment” put it differently in what purports to be Anglais: “Private consumption growth may be constrained by additional adjustments by households to the balance-sheet losses suffered during the recession and in response to housing market developments, should house prices weaken further. In addition, uncertainty about unemployment could put a damper on the expansion of private consumption. A weak economy and uncertainty in sovereign debt markets might also affect adversely the financial system and private demand gowth through deleterious feedback mechanisms.”

Losses, deleterious, uncertainty, unemployment, damper, weak, debt – these are the keywords. You’ll get the hang of it.

From miscalculation to emergency, the wheat crisis of 2010

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Wheat trade, CBOT

Wheat trade on the CBOT, 2009 April to 2010 September. Chart from CME

The wheat supply and price crisis from June 2010 onwards has meant that consumers, producers and food industry processors are now struggling with price increases of as much as 90%. The wheat problem of 2010-11 is lurching from crisis to miscalculation to emergency at all scales. And even then, some big international commodities traders are counting windfall profits.

In the first week of August, Reuters reported that Russia’s worst drought on record has devastated crops in parts of the country and caused international grain prices to spike as markets placed bets that without shipments from one of the world’s leading exporters, global supplies would be restricted. Soon thereafter, Bloomberg reported that the share prices of US agricultural companies including Archer Daniels Midland, Monsanto and Potash Corp of Saskatchewan rose in New York trading amid speculation that US wheat exports will jump as importers seek alternatives to Russian grain.

According to the average estimate of analysts surveyed by Bloomberg, the US Department of Agriculture (USDA) will forecast that global wheat stockpiles before the 2011 harvest will drop to 171.09 million metric tons, from 193.97 million tons a year earlier. That will be smaller than the USDA’s 174.76 million ton estimate last month. The USDA has cut its estimates every month since May, when it predicted stockpiles at 198 million tons.

Photo: USDA, Amber Waves, 2010 SeptemberFarmers in Russia, the world’s third-largest wheat grower last season, lost between 50% and 60% percent of crops in the drought-stricken central and Volga River regions this year, Deputy Agriculture Minister Sergei Korolyov has told a conference in Moscow.

The Russian government’s ban left some of the world’s largest wheat importers scrambling to secure alternative supplies. Typically, Cargill, one of the world’s biggest grain agglomerators and foodgrain logistics companies, attacked Russia’s ban, saying that this amounted to “trade barriers”. Cargill’s cynical and profit-driven reaction indicates the rush to profit from what is clearly a foodgrains disaster in Central Asia and which has major implications for foodgrains importing countries in developing Africa and Asia.

Wheat trade, CBOT

Wheat trade on the CBOT, 2010 June to 2010 September. Chart from CME

Still, over a 3-6 month period, rising wheat prices will probably pinch foodgrains suppliers (who also take powerful positions in the international agricultural commodities trade) because they have signed contracts to supply wheat at lower prices than are prevailing in September. But, since the beginning of July 2010, wheat prices have jumped straight up. Increasing demand from important regions of the world and other supply problems beyond Russia’s drought, such as floods in Canada, crop failure in Ukraine and foodgrains storage and movement problems in India will substantially add to the 2010-11 global wheat crisis.

The uncertainty has also spread to corn. Reuters has reported crop forecaster Informa Economics stating that the USDA report will show the corn yield at 164.8 bushels per acre, below the USDA’s August estimate of 165 bushels. Informa also told clients that the USDA’s final yield estimate for 2010 was likely to be significantly lower at 158.5 bushels per acre. Informa’s estimate of the USDA’s likely final yield count helped propel Chicago Board of Trade corn futures to their highest level in nearly two years.

Photo: USDA, Amber Waves, 2010 SeptemberEarlier last month (August 2010) the World Agricultural Supply and Demand Estimates (WASDE) monthly report, which provides USDA’s comprehensive forecasts of supply and demand for major global crops, said that global wheat supplies for 2010-11 are “reduced sharply with world production lowered 15.3 million tons, mostly on reductions for FSU-12 (former Societ Union) and EU-27 (European Union) countries”. It said production for Russia is lowered 8.0 million tons as continued extreme drought and record heat during July and early August have further reduced summer crop prospects. Kazakhstan production is lowered 2.5 million tons reflecting the same adverse weather conditions as in Russia. Ukraine production is lowered 3.0 million tons as heavy summer rains damaged maturing crops and hampered harvesting in western and southern growing areas.

WASDE also said EU-27 production is “lowered 4.3 million tons with yields reduced for northwestern Europe on untimely heat and dryness”. Yields are lowered for southeastern Europe as heavy rains from the same weather pattern that affected Ukraine reduced output. Production is also lowered for Algeria, Brazil, Uruguay, Belarus, and Croatia. Partially offsetting are increases for India, the United States, Australia, and Uzbekistan.

Why drought and hunger in Africa spells opportunity for global agri-tech

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Agriculture in Africa. Photo: FAOClimate change is leading to more intense drought conditions in Africa. Small and marginal farmers, pastoralists and nomadic communities are the most vulnerable and the hardest hit. Already. aid agencies have warned that 10 million people are already facing severe food shortages, particularly in the landlocked countries of Chad and Niger, after a drought led to the failure of last year’s crops. As many as 400,000 children are at risk of dying from starvation in Niger alone, according to Save the Children.

The Independent of Britain has reported that unusually heavy rains have washed away this year’s crops and killed cattle in a region dependent on subsistence agriculture. Organisations including Oxfam and Save the Children say that the slow international response to the emergency means that only 40 per cent of those affected are receiving food aid. As many as four out of five children require treatment for malnutrition in clinics.

Against this grim new news, the global agri-technology networks are readying plans to use possible food shortages to push new structures of seed, funding and conditions onto countries looking for quick fix solutions. One such programme ia the Comprehensive Africa Agriculture Development Programme (CAADP) which has announced that it received a major boost as several countries have begun drawing on funds from a US$22 billion pledge made by the G8.

Agriculture in Africa. Photo: FAOUnder CAADP, African governments are committed to increase their national budget expenditure on agriculture to at least 10 percent. The Programme, agreed by heads of state at the 2003 summit of the African Union, expects a six percent growth rate in agriculture every year. What part of this growth will meet the needs of the drought-hit people in Chad and Niger is not discussed.

Close behind is the International Maize and Wheat Improvement Center (known by its Spanish acronym CIMMYT, one of the CGIAR centres) which has used the alarming food situation news as a prop on which to announce a study which it says “finds widespread adoption of recently developed drought-tolerant varieties of maize could boost harvests in 13 African countries by 10 to 34 percent and generate up to US$1.5 billion in benefits for producers and consumers“. Who will these producers and consumers be?

The study was conducted as part of the Drought Tolerant Maize for Africa Initiative (DTMA) implemented by CIMMYT and IITA with funding from the Bill & Melinda Gates Foundation and the Howard G. Buffett Foundation. CIMMYT and IITA have said they “worked with national agriculture research centers in Africa to develop over 50 new maize varieties that in drought conditions can produce yields that are 20 to 50 percent higher than existing varieties”. There is no mention of Africa’s immense wealth of traditional cereals or the communities that have guarded and used old growing knowledge in difficult times.

Agriculture in Africa. Photo: FAOFinally, from August 30 to September 4, Namibia hosted the annual Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN) Regional Food Security Policy Dialogue, where over 200 policymakers, farmers, agricultural product dealers, scientists and non-governmental organisations from across Africa and the world gathered “to address African priorities on climate change and its impacts on food security, agricultural development and natural resource management”.

The tone and tenor is astonishingly upbeat, especially considering the dreadful food situation and climate change news that’s now coming out daily from central, eastern and north Africa: “Increasing the collaboration between public and private sector organisations can also help build infrastructure, secure better access to natural resources, improve the distribution of agricultural inputs and services, and share best practices. The Farming First coalition is a successful example of farmers, scientists, engineers, industry and agricultural development organisations coming together to push for improved agricultural policies which benefit farmers while safeguarding natural resources over the long term.”

FANRPAN has cited two reports by consulting firm McKinsey and Company which have (1) estimated that Africa produced only 10 percent of the world’s crops despite representing a quarter of land under cultivation and (2) noted that 60 percent of the world’s uncultivated arable land lies in Africa with the potential for African yields to grow in value more than three-fold by the year 2030, from US$280 billion today to US$880 billion.

Agriculture in Africa. Photo: FAOThose extraordinarily large sums may explain why FANRPAN is currently working in partnership with the Rockefeller Foundation “to improve food security throughout sub-Saharan Africa by promoting the understanding of climate change science and its integration into policy development and research agendas”. FANRPAN said it is also working with the International Food Policy Research Institute (IFPRI) – a study cell based in Washington, USA, whose research objectives have tended towards international agricultural trade in recent years. A recent collaboration is called ‘Strategies for Adapting to Climate Change in Rural sub-Saharan Africa: Targeting the Most Vulnerable’ which says it recognises the interrelated impact of climate change on household poverty, hunger and food security.

No doubt, but these high-minded statements of objectives come bundled with some decidedly commercial conditions. As IPS news reports, there are conditions attached to how countries will be accessing CAADP funds. Countries will need to have gone through the CAADP process, which includes designing a “national investment plan” which contains detailed and fully-costed programmes and signing a “CAADP compact”. This is nothing but an agreement between the government, regional representatives and “development partners” for “a focused implementation of the programme”. Moreover, the investment plans will have to undergo “an independent technical review” and the plan should also “have been tabled before a high-level CAADP business meeting” before funds are allocated. Which simply means that there are only so many ways the money can move.

Agriculture in Africa. Photo: FAOFor all these noble programmes, the countries in their sights are: Angola, Benin, Ethiopia, Ghana, Kenya, Malawi, Mali, Mozambique, Nigeria, Tanzania, Uganda, Zambia and Zimbabwe. The aid agencies on the ground are warning again what they have said last year, the year before, five years ago, a decade ago. “After six months without proper nutrition, these children have little resistance to disease,” said Severine Courtiol, Save the Children’s Niger manager. “There is little children can do to avoid coming into contact with this contaminated, disease-ridden floodwater. That’s why it’s critical we make sure they get enough food so they are strong enough to fight off and recover from sickness.”

Robert Bailey, Oxfam’s west Africa campaigns manager, said that some food was available in marketplaces in Niger, but was too expensive for ordinary households to afford. As a result, many were reduced to eating leaves and berries. Chad and parts of Mali were also affected, he added. “The international donor response has been too little too late. We estimate that 7.9 million people are affected by food shortages in Niger, with only 40 per cent receiving international aid. The other 60 per cent are dependent on the government and NGOs [non-governmental organisations]. But the government has no food.”

Economic impacts of Pakistan floods

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A flooded Thatta suburb, Pakistan. Photo © Jaspreet Kindra/IRIN

A flooded Thatta suburb, Pakistan. Photo © Jaspreet Kindra/IRIN

For hundreds of thousands of Pakistanis forced by the floods to abandon their homes, food is a primary concern. IRIN news reports that some families have gone days without a meal. Frances Kennedy, a World Food Programme (WFP) spokesperson, told IRIN: “We are very concerned about the nutritional situation. About 2.8 million people have been reached, but there are others in need. Camps are crowded and people are sleeping on sides of the roads.” WFP has been supplying “dry rations” (family rations for a month), made up of wheat flour fortified with vitamins and minerals, cooking oil and high-energy biscuits.

“This allows us to reach more people, more quickly… These distributions are at different points across the flood zone – both in camps and other locations identified through our assessments and where partners have been able to set up distribution sites,” Marcus Prior, a WFP spokesman, told IRIN. Currently about 4.8 million people are without shelter, “although we believe this may have gone up considerably with the latest developments in Sindh,” said Maurizio Giuliano, a spokesman for the UN Office for the Coordination of Humanitarian Affairs.

The immediate impact on the population is truly staggering — 20 million people affected with 8 million in need of water, food, and shelter; 1,500 to 2,000 killed; 4 million left homeless; and 15 million displaced. The devastation has hit virtually all sectors of the economy. The Pakistan government estimates total economic damage to be near $15 billion, or about 10 percent of GDP. Damage to infrastructure alone (roads, power plants, telecommunications, dams and irrigation systems, and schools and health clinics) amounts to around $10 billion.

Mohsin S. Khan, senior fellow at the Peterson Institute for International Economics, and Shuja Nawaz, director of the South Asia Center at the Atlantic Council of the United States, have written about the economic impact of the Pakistan floods. They say that agriculture, which represents 25 percent of the Pakistan economy and provides employment to 50 percent of the workforce, was extremely hard hit. At least 30 percent of the cotton crop has washed away, which is bound to devastate the textile industry, the mainstay of Pakistani manufacturing and exports. Adding to this is the loss of wheat, rice, and maize crops, and about 10 million head of livestock. Altogether agricultural production this year could fall by as much as 15 percent. Even next year’s production is likely to show a further decline because the spring wheat crop that needs to be planted in October–December this year will not be possible.

While Khyber-Pakhtunkwa is inundated with water, there is very little that is safe to drink. Photo © Abdul Majeed Goraya/IRIN

While Khyber-Pakhtunkwa is inundated with water, there is very little that is safe to drink. Photo © Abdul Majeed Goraya/IRIN

“The overall growth of real GDP, which prior to the floods was projected to be in the 3 to 4 percent range for 2010, will now turn negative,” say Khan and Nawaz. “Estimates of the fall in real GDP are in the 2 to 5 percent range, although it is conceivable that the decline could be far greater as more information on the losses of both physical assets and production becomes available.”

“Reconstruction activity could provide some boost to the growth rate, but it is likely that any positive effects will only show up in 2011 and beyond, and even then it may not be sufficient to bring the growth rate back to the 2009 level of 4 percent for several years. Inflation, which is already in double digits, will rise with the increase in food prices and the destruction of the food supply distribution networks. Furthermore, the government will need to finance the reconstruction effort, and absent sufficient foreign assistance and the inability to divert domestic revenues toward reconstruction, the increased expenditures will necessarily widen the fiscal deficit.”

“The floods have dealt Pakistan a severe body blow while it was still reeling from the economic crisis, political infighting, and the war against terror. The diversion of resources and attention to the flood relief and reconstruction work will undoubtedly affect social spending and the drive against the Pakistani Taliban, whose fighters have been dislocated from their tribal bases in the Northwest Frontier region and have taken the war back into the Pakistani hinterland.”

The world according to philanthrocapitalism

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The philanthrocapitalist solution. If it doesn't deliver shareholder value, zap it.

The always eminently readable From Poverty To Power blog (by Duncan Green of Oxfam) has an entry about ‘philanthrocapitalsm‘. a neologism that sounds like a disastrous mash-up packaged as a convincing oxymoron. After all, philanthropy and capitalism are two quite different things, arn’t they. Yes and no, although my own view is, mostly yes.

Green writes: “I spoke earlier this week at an annual retreat of a very different kind of charity – ARK. Set up by a bunch of hedge fund managers (it prefers the term ‘alternative investment industry’), ARK raises a pile of money from glitzy gala dinners, and uses it to do what it calls ‘venture philanthropy‘. It focuses on education, child health (especially HIV and AIDS) and child protection and, like better known ‘philanthrocapitalists’ like Bill Gates, is fixated on measuring impact, hence the name, which stands for ‘absolute return for kids’.”

The usual approach, as Green says, is that when they enter the aid business, captains of industry and finance often act as if they regard all existing aid workers as utter imbeciles, who could easily achieve their small-time aims if only they adopted private sector practices.

Very true. For reasons that are obvious to us utter imbeciles but which mysteriously escape these captains of industry, this is staggering hubris. When they’re done savaging the NGOs and penniless do-gooders, and when they finally get to grips with some of the basic issues on the street (hunger, water, education, health) they face a learning curve that’s as good as vertical. It’s not the typical business school curve, and it’s infinitely more demanding. That’s when the captains (those of them who descended to the street) begin, dimly and fuzzily, to understand that the world is not made up of supply chains and shareholder value. The world’s ‘best’ companies are admired (in culturally bankrupt circles) for their skills at project management and prioritisation. The world’s ‘best’ companies have obviously never met the world’s best home-makers (women), who outnumber them by about a million to one.

When all you use is a mech-shovel, every problem looks like mud.

Put the captains and their bonus-driven crews into the development world, which has no clear bottom line of profit and loss, and they stumble around lost. Here, in the real world on the street with no name, process matters much more – it’s not just about the destination, but how you get there. Is it inclusive? Who’s shut out of the decision making? Development is about recognising the importance of power, and the way it is endlessly renegotiated and redistributed within society.

But still they try, and perhaps some get it. For those who do get it, they should steer clear of sanctimonious claptrap of the sort dished out by something called the Philanthrocapitalist Manifesto. Here’s a ripe sampling: “Thirty years of market reform has been good for Britain’s rich and our society has become more unequal. Yet populist bashing of the rich is a blind alley. Instead we need to rewrite the social contract between the rich and the rest. The winners of capitalism have a responsibility to the rest of society, not just to pay their taxes but to give back with their money and their skills. By doing so, they can be a dynamic, entrepreneurial source of innovation in our society and so build a more sustainable environment for wealth creation.”

In tones dripping with aspartame, this misbegotten manifesto continues: “The corporate world, too, is starting to realise that business can ‘do well by doing good’. The financial crisis has demonstrated that narrow-minded focus on short-term profits is bad for shareholders as well as society. Business needs to take a longer-term perspective on success, recognising that capitalism will only thrive if it sustains the society and the environment in which it operates. Before the crisis, some corporate leaders had started to lead the way towards a more responsible capitalism. After the crisis, the need is more pressing than ever.” Oh for heaven’s sake.

The philanthrocapitalist SUV, for getaways from tricky development questions.

One of the new purveyors of this oxymoron is Matthew Bishop, US business editor and New York bureau chief of The Economist, and co-author of a book named ‘Philanthrocapitalism: How Giving Can Save the World’. The Economist is a weekly compilation of jumbled opinion and pedantic misbelief masquerading as a journal, and survives only because of clever marketing and the abysmal ignorance of its corporate subscribers. My advice to you is, never waste money on a subscription, read it (borrow, don’t pay) only to understand what the more foolish captains are plotting next.

Why am I saying so? This starry-eyed account in one of the business degree shops will explain. “Now you see a company like Wal-Mart embracing green products, working with vast numbers of non-profits to change the whole product range that it is offering to the American people and other parts of the world where it operates. And this is, in turn, changing the supply chains, changing the companies all around the world, particularly in China, that it works with. It is by no means creating perfection, but it’s substantially different to what we saw before. And you hear more and more companies starting to explore this, starting to work with the non-profit world to actually improve their game.” That’s an author yodelling on about philanthrocapitalism. Wal-Mart and green?? Sad but true.

Wheat sends food prices up, US agriculture exports to be $107.5 bn

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Surging wheat prices drove international food prices up 5% last month in the biggest month-on-month increase since November 2009, the Food and Agriculture Organization (FAO) has announced. The FAO Food Price Index (FFPI) averaged 176 points in August, up nearly nine points from July, FAO said in its latest update on the global cereals supply and demand situation. The 5% increase brought the Index up to its highest level since September 2008, but still 38% down from its peak in June 2008.

FAO Food Price Index

FAO Food Price Index, 2010 September

The FFPI surge mainly reflected the sudden sharp rise in international wheat prices following drought in the Russian Federation and the country’s subsequent restrictions on wheat sales. But other drivers included higher sugar and oilseed prices. FAO’s update said that the forecast for world cereal production in 2010 has been lowered by 41 million tonnes to 2,238 million tonnes from 2,279 million tonnes reported in June.

However, even at this lower level, world cereal output in 2010 would be the third highest on record and above the five-year average. Among the major cereals, wheat accounted for most of the cut, reflecting mainly smaller crops in the leading producers in the CIS due to adverse weather. Under the present forecast world cereal utilization would slightly exceed production in 2010-11. This would trigger a 2% contraction in world ending stocks from their 8-year-high opening levels and to a small decline in world cereal stocks-to-use ratio. At 23%, however, the ratio would still remain well above the 19.5% low witnessed in the 2007-08 food crisis period.

A further cut in the forecast for 2010 world wheat production since FAO’s last update on 4 August puts this year’s wheat crop at 646 million tonnes, down 5% from 2009 but still the third highest ever. The latest revision reflects a further cut in the estimate of this year’s harvest in the Russian Federation to 43 million tonnes (from 48 million tonnes in August) more than offsetting higher forecasts for crops in a number of other countries including the United States and China.

FAO Food Commodity Price Index, 2010 September

FAO Food Commodity Price Index, 2010 September

The forecast for world wheat ending stocks in 2011 was also lowered, to 181 million tonnes, down 9% from their 8-year high opening level. The stock-to-use ratio for wheat in 20010-11 was projected at 27%, down 3% from the previous season but still 5% higher than the 30-year low in 2007-08.

World production of coarse grains was forecast to reach 1 125 million tonnes, down 6 million tonnes from the previous forecast in June but up marginally from 2009 and the second highest on record. Maize production was heading towards an all-time high of 845 million tonnes, with expectation of record crops in China and in the United States. But world barley production was forecast to fall by 22% to a 30-year low of only 129 million tonnes in 2010, driven mostly by a sharp cut in production in the CIS and in the EU as a result of poor weather.

The forecast for global rice production in 2010 was also revised downward and now stands at 467 million tonnes, 5 million tonnes lower than the June 2010 forecast but still 3% more than in 2009 and a  historical record. Much of the revision was the consequence of Pakistan’s floods but it also stemmed from lower expectations in China, Egypt, India, Laos and the Philippines. The recent disturbances in  world cereal markets will be examined by delegates meeting at a special one-day session of FAO’s Intergovernmental Group on Grains and Intergovernmental Group on Rice convened for 24 September at FAO headquarters in Rome.

World Food Day 2010

16 October is World Food Day 2010

Industrial agriculture news sources such as Agweb are reporting the United States Department of Agriculture’s (USDA) agriculture products exports for financial year 2010, which have just been released. Increased exports of grain and feed at higher values along with increased livestock, poultry, and dairy product exports all helped to push up the forecast for US ag exports in fiscal year (FY) 2010. USDA has said the value of US ag exports for FY 2010 will be US$107.5 billion, up US$3 billion from their May forecast. And their first look at FY 2011 has the value of those shipments projected at US$113 billion, up US$5.5 billion from FY 2010 forecast.

On the import side, USDA now puts FY 2010 imports at a value of US$77 billion, up US$500 million from their May forecast. For FY 2011, USDA sees the value of US ag imports rising to US$81.5 billion. USDA now expects a slightly larger trade surplus for US agriculture for FY 2010 – US$30.5 billion, up US$2.5 billion from May, and for FY 2011 they expect the trade surplus will be US$31.5 billion. Analysts for USDA’s Economic Research Service (ERS) also included this caution:

“The three major threats to world growth in 2011 are the EU economy tanking due to their debt situation, the U.S. economy going into a recession, and a continuing widening of the Chinese trade surplus. A major near-term risk to the world recovery is a potential spillover of the crisis brought on by high government debt in Greece, Portugal, Spain, Italy, and Ireland.

“The consensus forecast for 2010 and 2011 is of continuing recovery in both the developed and developing economies, with a few regional rough patches. The case for moderate world growth for the rest of 2010 and solid growth for 2011 is based on low interest rates, increasing trade flows, and the willingness of central banks to keep financial assets on current balance sheets, encouraging easier private credit and strong growth in corporate profits. At this time, that scenario is much more likely than any or all of the downside scenarios.”