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Archive for September 2012

India 2012 foodgrain estimate is 257 million tons

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What is still quaintly called an “advance estimate” (the fourth of four that are released by the brobdingnagian agricultural bureaucracy in India) has been made public.

This gives us estimates of the expected production of foodgrain and commercial crops for India in 2012. As usual, the new data release adds to the series I have been providing since the 2008-09 crop year – this now includes the sequential advance estimates for 2008-09, 2009-10, 2010-11 and 2011-12. [Get the spreadsheet here.]

Highlights from this data release:
1. Rice 104.32 million tons, wheat 93.90 mt and coarse cereals 42.01 mt for a combined cereals total of 240.23 million tons. Add 17.21 mt of pulses for a total foodgrains estimate of 257.44 million tons for 2011-12.
2. A total for nine oilseeds of 30.01 million tons (groundnut, castorseed, sesamum, nigerseed, rapeseed and mustard, linseed, safflower, sunflower and soyabean). Sugarcane is 357.66 million tons. For fibres, cotton 5.98 mt, jute 1.96 mt and mesta 0.12 mt.

What about the effect of the poor 2012 monsoon on sowing and harvests, and have the drought conditions and water scarcity in over 300 districts been factored into these numbers? I don’t know. The agri and crop and food babus in India (just like ‘mandarins’ and ‘eurocrats’ elsewhere) aren’t telling.

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Written by makanaka

September 24, 2012 at 15:21

The government that sold India

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On 14 September, India’s ruling political coalition, the United Progressive Alliance, of which the Congress (the Indian National Congress is its full name) is a dominant member, decided to allow foreign investment into a number of sectors. These include what is called ‘multi-brand retail’ and aviation. This government in taking this decision has ignored and overlooked the views and fears of tens of thousands of small shopkeepers, small traders associations, consumer groups and citizens – representing the will of several millions of households – who have publicly expressed in many fora their opposition to permitting foreign control (or consolidated, large domestic control) of the processes of aggregating and selling food products.

The decision, which has been raucously welcomed by the three major industry associations (CII, Ficci and Assocham) and which has been uncritically hailed by the Indian (English-language) business press, represents the whole gamut of neo-liberal policies which have been pursued by the Congress-led UPA government since coming into office in 2004 (and since 2009, when its current term began).

In their shrill and utterly partisan acclaim of the foreign investment decision, the business and financial press – in particular the newspapers Economic Times, Business Standard, Financial Express and Mint – have further underlined their role as propaganda sheets for the industrial-political class and their global partners in the project to loot India.

There has been a differential impact of the more than 20 years of economic liberalisation on the various classes of Indian society. Inequalities have grown rapidly, and there are some sections who have been more adversely impacted. Some sections of the middle class have benefited, at the cost of rural landless labour and the urban poor. Under this neo-liberal regime a large section of the working class is now in the unorganised and informal sector. Those who are on contract work and other irregular forms of employment constitute the bulk of the urban poor. There is also a large section of self-employed persons in the services sector who eke out a subsistence living.

In India, there are substantial classes and sections of society most affected by the policies of liberalisation and the intensified exploitation in the countryside. Landlords, big farmers who are politically well-connected, contractors, moneylenders and regional politicians (those in state assemblies) constitute the rural rich and have intensified the exploitation of the peasantry, agricultural workers and the rural poor. It is this tendency that has deepened India’s agrarian distress, contributed to the food and agricultural crisis – and it is in these chronic circumstances that this Congress-led government has allowed the inflow of foreign investment into food retail, fully aware of all the consequences that decision will heap onto the struggling rural and urban poor.

To illustrate some of these, the Communist Party of India (Marxist) in its Political Review Report in early 2012 had commented: “The issue of land acquisition has acquired a new dimension after the onset of the neo-liberal regime. As part of the capturing of natural resources the corporates and the real estate companies are out to grab land cheaply with the aid of the State apparatus. The peasantry, particularly the small peasantry sees this as a serious threat to its livelihood and especially when corporates and real estate speculators are going to make huge profits out of such lands.”

Can there be an alternative? As far as economic policies are concerned, most of the regional parties adhere to the policies of liberalisation. These regional parties represent mainly the interests of the politically astute and opportunist rural rich, the district bourgeosie who see themselves as brokers of every description to fit ‘reform’ decisions of every prescription. That is why most regional parties take no stand against the ‘liberalisation’ (or ‘reform’, to use the notorious International Monetary Fund-World Bank term) policies which have benefited regional rich too.

The very logic of neo-liberal reforms leads to and perpetuates the rapid growth of a labour force that is increasingly relegated to what is called the unorganised sector. The conversion of regular employment into casual and contractual labour, apart from generating higher profits, is part of the programme to ensure that working class unity remains divided. Larger and larger numbers – from the affected districts, such as the 320 drought-affected districts of 2012 – are joining the ranks of casual, temporary and self-employed workers, with few rights, uncertain wages, in the face of galloping food inflation, with no collective representation or honest political representation. These are the circumstances so ruthlessly exploited by India’s current government to usher predatory forces into our agriculture and food sector.

Charting food price shock, and the World Bank’s economy with truth

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Chart source: World Bank (2011), ‘Responding to Higher and More Volatile World Food Prices’ Development Committee Paper prepared by the Agriculture and Rural Development Department using data from FAOSTAT for net cereal imports as a share of consumption and the USDA for food share in household expenditures.

The World Bank’s Food Price Watch for 2012 August has been released (it is a part of the Poverty Reduction and Equity Group’s Poverty Reduction and Economic Management Network). The Watch has in its overview mentioned prices of internationally traded maize and soybeans reaching all-time peaks in July. The rise in prices of wheat – comparable to the 2011 peaks – and the relative stability of the prices of rice have also been mentioned.

The Watch has said: “World Bank experts do not currently foresee a repeat of 2008; however negative factors — such as exporters pursuing panic policies, a severe el Niño, disappointing southern hemisphere crops, or strong increases in energy prices — could cause significant further grain price hikes such as those experienced four years ago.” This idea – of no repeat of 2008 – is plain wrong. The food price spike crisis of 2007-08 did in fact never go away, it subsided for some months, and has this year entered a new phase of pain for consumers particularly those in rural districts and the urban poor, wherever they may be.

As the chart (whose implications ought to be more seriously considered by the Watch, especially since the chart is a World Bank device itself) shows, countries in the Middle East and North and Sub-Saharan Africa are most vulnerable to this global shock. “They have large food import bills, their food consumption is a large share of average household spending, and they have limited fiscal space and comparatively weaker protective mechanisms,” the Watch has said.

Ideas such as ‘fiscal space’ and ‘protective mechanisms’ are not automatically translatable into household terms, and thus have no meaning for those who bear the food inflation burden first and the most. The Watch indeed has said that “domestic food prices in these regions have also experienced sharp increases even before the global shock due to seasonal trends, poor past harvests, and conflict”. Naturally, local circumstances determine how high domestic prices will be pushed from much higher international prices.

In addition to their effects on prices, previous droughts in developing countries have had severe economic, poverty and nutritional impacts, turning transitory shocks into lifetime and inter-generational perils, the 2012 August Food Price Watch has said, and this is certainly painfully true. The problem with the World Bank view (and practice) is when it becomes visible in the Watch with a statement like: “In such contexts, investments in drought-resistant crop varieties have provided large yield and production gains.” No, we do not want to see “investments in drought-resistant crop varieties” which only means thrusting GM seed into the fields of bullied smallholder farmers and GM food into the shops from which low-income households must buy their daily food basket.

Libya, the USA and blowback

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In early July 2012, an article titled ‘Libya’s Militia Menace’ attempted to explain some of the instability in Libya, from an American point of view and which, in my view, is the result of the oil-driven aggression that was a ‘regime change’ (coined for Iraq under Saddam Hussein) which ended in the lynching of Muammar Gaddafi and the further immiseration of the Libyan people, in whose name so much violence and rapine was done.

The Foreign Affairs article said: “The strategy of trying to dismantle the regional militias while simultaneously making use of them as hired guns might be sowing the seeds for the country’s descent into warlordism. It has also given local brigades and their political patrons leverage over the central government.”

An interview in the Council on Foreign Relations sounds as confused about the realities of the region – in this case concerning the anti-USA action is Egypt. It is a worrying sign that this specialist think-tank sounds as confused as the welter of USA-based media outlets attempting to drum up outrage over the latest bloody retort, in Benghazi, to American ambitions in North Africa. Here is an example: “It’s really hard to understand why the Egyptian government is not acting in a more responsible manner right now. The United States has condemned efforts to offend Muslims’ sensibilities. The U.S. flag was taken down and destroyed. The embassy compound, which is considered American territory, was violated. This is a serious breach of diplomatic practice.”

The sequence of events in Benghazi remains murky, undoubtedly because of the difficulty in ascertaining the real puppet-masters behind these maniacal militia. Initial reports attributed the attack to a militia known as the Ansar al-Sharia brigade, but the group has denied involvement. Libya’s deputy interior minister, Wanis al-Sharif, tried to pin the blame on supporters of Gaddafi, but also suggested that the Americans were responsible for their own fate for not heeding previous warnings of attacks by Al Qaeda. “It was necessary that they take precautions,” he told AFP. “It was their fault that they did not take the necessary precautions.”

The killing of Ambassador Christopher Stevens is the first such killing of a US envoy since the death of Washington’s ambassador to Afghanistan in 1979. See the full briefing from the US Department of State here.

Written by makanaka

September 13, 2012 at 11:06