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Archive for May 2013

A Jekyll and Hyde food price index

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FAO's usual winsome twosome, the food price index and food commodity price index charts.

FAO’s usual winsome twosome, the food price index and food commodity price index charts.

Why does the perversity of international food price monitoring continue when all evidence tells us food price inflation is raging just as it was in 2007-08? Here is an example of how persistent this perversity is.

Maize in Malawi at 280%, maize in Tanzania at 110%, maize in Mozambique at 60%, maize in Zambia at 50%. Wheat in Tajikistan and in Russia at 55%, wheat in Kyrgystan and Afghanistan at 40%, rice in Myanmar at 35%. Maize in Haiti at 55%, maize in Honduras at 40%, wheat and rice in Brazil at 30%, maize in Nicaragua at 30%, rice in Bolivia at 25%.

Those are the annual increases in the prices of these cereals in the countries named. The estimates come from the charts found in the FAO Global Food Price Monitor for 2013 May (which has prices for up to April). The charts however are at the end of the Monitor. On the first page, the Monitor offers very short summaries. Like this one:

“In Eastern Africa, maize prices mostly strengthened for the second consecutive month following seasonable patterns. However, prices stabilized or started to decline in some countries where new harvests are about to start.” Is that what is being described with a 110% increase in Tanzania?

Or this one:

“In Asia, domestic prices of rice and wheat generally weakened with the arrival of the 2013 early season rice and winter wheat harvests.” Is that what is being described with a 35% increase in Myanmar?

Or even this one:

What FAO's own charts tell us about rising food prices for staples worldwide. These are from the FAO Global Food Price Monitor for 2013 May.

What FAO’s own charts tell us about rising food prices for staples worldwide. These are from the FAO Global Food Price Monitor for 2013 May.

“In Central America, maize prices strengthened in April with the onset of the lean season and in some countries were at high levels. Bean prices remained low, pressured by abundant supplies from bumper crops in the 2012-13 cropping season.” Is that what is being described with a 40% increase in Honduras?

Who are these summaries really for and why does FAO persist in releasing to the public these misleading pictures of food prices (when it means export prices), and especially when its own price monitoring tools tell us very clearly that many many people are struggling under crushing inflation in the prices of food staples?

To take the food price opera further, this is what the FAO Food Price Indexwhich is one of the world’s primary indices and referred to thousands of times a day by planners, the food industry, policy-makers, bankers (always bankers), commodity traders, foreign exchange brokers, bond market artists and rogues, warehousing tycoons, the purveyors of genetically modified seed, the cigar-smoking CEOs of grain trading companies, and the smarmy corrupt political cronies of all of the above – says about cereals:

“The FAO Cereal Price Index averaged 234.6 points in April, down 10 points (4.1%) from March, but nearly 11 points (4.9%) above the corresponding period last year. Most of the decline in April was triggered by weaker maize prices on expectation of higher closing stocks and favourable 2013 crop prospects. Wheat prices changed little, as the downward pressure stemming from expectation of larger inventories was offset by the upward pressure resulting from concern over the poor growing conditions and spring crop planting delays in the United States. Rice prices were marginally down …”

Read that again, 4.9% above the corresponding period last year. The smallest of the annual percentage increases in the second paragraph of this posting is five times as much as 4.9% which is why we must ask FAO, again and again, who the beneficiaries of this large international effort to collect and distribute food prices really are.

Not the populations of Mzuzu, Kampala and Milange or Jalalabad, Yangon and Sughd, or Tegucigalpa, Sao Paulo and Jacmel, all of whom must find their own means of measuring the burdens of food price increases, and who have in the last year, cut down on health care and perhaps even the education of their children, only to not go hungry too often, too painfully.

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The poverty of suburban America

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The Brookings study said that poor residents in cities and suburban poor residents resemble one another demographically and economically. Similar shares of poor residents in cities and suburbs are working age, worked full- or part-time in the past year, held a bachelor’s degree, or lived in deep poverty (with incomes less than half the poverty line).

The Brookings study said that poor residents in cities and suburban poor residents resemble one another demographically and economically. Similar shares of poor residents in cities and suburbs are working age, worked full- or part-time in the past year, held a bachelor’s degree, or lived in deep poverty (with incomes less than half the poverty line).

During the decade 2000-10 in the USA, for the first time the number of poor people in major metropolitan suburbs surpassed the number in cities. Between 2000 and 2011, the poor population in suburbs grew by 64% — more than twice the rate of growth in cities (29%). By 2011, almost 16.4 million residents in suburbia lived below the poverty line, outstripping the poor population in cities by almost 3 million people.

These are some of the grim findings of ‘Confronting Suburban Poverty in America’, a report by the Brookings Institution, and the implications of this report and its contents are that much more significant for Brookings is conservative in its outlook and advocacy.

The Brookings study has explained that some of the rapid growth, over the last decade, of suburban poverty in America’s cities is a result of changing demographic trends. One factor proposed is that many impoverished workers and youth from the inner cities have been chased out by gentrification and the destruction of public housing over the preceding decades and were able to find relatively more affordable housing in the suburbs.

Another factor is the gutting of American manufacturing (the globalisation syndrome and the endless search by the capitalist class to exploit the lowest wage conditions to be found on the planet). This condition drove many to seek unskilled, low-wage work in the service industries (if those prisons of drudgery and mental sterility can be called ‘service’, for they are designed to reduce the mind and diminish the spirit).

During the 2000s in the USA, suburban poverty rose as regional economies declined, the housing market collapsed, jobs continued to sprawl outwards within metropolitan areas while job growth in lower-paying occupations was faster than middle-class job creation. Chart: Brookings

During the 2000s in the USA, suburban poverty rose as regional economies declined, the housing market collapsed, jobs continued to sprawl outwards within metropolitan areas while job growth in lower-paying occupations was faster than middle-class job creation. Chart: Brookings

Suburban poverty has grown steadily in the USA over the last decade, given a sharp impetus by the housing market plunge and subsequent economic crisis. According to the authors of the Brookings study, nearly 75% of home foreclosures have occurred in the suburbs of America. As the website of the International Committee of the Fourth International (ICFI) has pointed out, the steep fall in property values has had devastating effects for working and even middle class families: last year, a Federal Reserve report revealed that the median net worth of US families had plunged nearly 40 percent between 2007 and 2010.

Workers’ wages, which stagnated throughout 1980s and 1990s, have been under concerted attack through the financial crisis, even as the stock market has recovered and reached new heights. The growth of social misery revealed in the report explodes the myth – widely peddled over previous decades by whichsoever political grouping occupied the White House – that the population living in US suburbs is uniformly complacent and economically secure.

The study has shown that the biggest increase in suburban poverty has occurred in the South and Southwest of the USA. Poverty in the suburbs of Phoenix, Arizona rose by 134.2%; Las Vegas, Nevada by 139.3%; Austin, Texas by 142.5%; and Atlanta, Georgia by 158.9%. However, there were a number of other cities spread throughout the country, many in former industrial areas, which also saw increases in poverty of 100% or more, including Detroit, Michigan (114.7%), Minneapolis, Minnesota (127.9%), Boise, Idaho (129.7%), Denver, Colorado (138.2%), and Salt Lake City, Utah (141.7%).

An inequality chasm is fracturing Europe, warns the OECD

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April in Berlin, Germany. A homeless man sat begging for euros or food in the entrance of an S-Bahn station.

April in Berlin, Germany. A homeless man sat begging for euros or food in the entrance of an S-Bahn station.

Deepening inequalities in income between the richer and poorer families, greater relative income poverty in recent years compared with earlier, a greater burden borne by children and young people than before because of their being relatively poor – these are some of the stark conclusions contained in the OECD briefing, ‘New Results from the OECD Income Distribution Database’.

This is the picture of Europe today (and of the non-European members of the OECD). “Looking at the 17 OECD countries for which data are available over a long time period, market income inequality increased by more over the last three years than what was observed in the previous 12 years,” observed the new briefing, which is sub-titled ‘Crisis squeezes income and puts pressure on inequality and poverty’.

Annual percentage changes in household market income between 2007 and 2010, by income component. Chart: OECD

Annual percentage changes in household market income between 2007 and 2010, by income component. Chart: OECD

The figures and data show that many of the countries recording the most dramatic increases in inequality are European countries which have been subjected to punitive austerity measures by the European Union and International Monetary Fund. The OECD report singles out Spain and Italy, where the income of “the poorest 10 percent was much lower in 2010 than in 2007”.

Five percent falls in income (per year) amongst the poorest 10 percent were also recorded in Greece, Ireland, Estonia, and Iceland. The only non-European nation with a comparable level of income decline was Mexico. The report also stated that over the same period, poor families in the United States, Italy, France, Austria and Sweden all recorded income losses in excess of the OECD average.

Indeed the ‘New Results’ briefing has showed that across OECD countries, real household disposable income stagnated. Likewise, the average income of the top 10% in 2010 was similar to that in 2007. Meanwhile, the income of the bottom 10% in 2010 was lower than that in 2007 by 2% per year. Out of the 33 countries where data are available, the top 10% has done better than the poorest 10% in 21 countries.

This is the OECD picture till 2010. Since then, recession has been the companion of inequality. With an average growth of -0.2 per cent in the first quarter (against -0.1 per cent in the EU as a whole) and hardly better prospects for the whole rest of the year (-0.7 per cent), according to Eurostat, the dreaded “double dip” has become a reality. The press attributes the result largely to the austerity policies.

Gini coefficient of household disposable income and gap between richest and poorest 10%, 2010: Chart: OECD

Gini coefficient of household disposable income and gap between richest and poorest 10%, 2010: Chart: OECD

“Eurozone sets bleak record of longest term in recession,” reported the Financial Times. The daily noted that “this latest dismal record came after unemployment hit 12.1 per cent in the bloc, its highest level,” and that this data “is likely to add to pressure on the European Central Bank to take further action after cutting interest rates this month, and to revise down its economic forecast predicting a recovery later in the year.”

Moreover, relative income poverty – the share of people having less income than half the national median income – affects around 11% of the population on average across OECD countries. Poverty rates range between 6% of the population in Denmark and the Czech Republic to between 18% and 21% in Chile, Turkey, Mexico and Israel. Over the two decades up to 2007, relative income poverty increased in most OECD countries, particularly in countries that had low levels of income poverty in the mid-1990s.

In Sweden, Finland, Luxembourg and the Czech Republic, the income poverty rate increased by 2 percentage points or more. In Sweden, the poverty rate in 2010 (9%) was more than twice what it was in 1995 (4%). Relative poverty also increased in some countries, such as Australia, Japan, Turkey and Israel, with middle and high levels of poverty.

The OECD briefing has stated bluntly: “Households with children were hit hard during the crisis. Since 2007, child poverty increased in 16 OECD countries, with increases exceeding 2 points in Turkey, Spain, Belgium, Slovenia and Hungary.” The ‘New Results’ briefing added: “Since 2007, youth poverty increased considerably in 19 OECD countries. In Estonia, Spain and Turkey, an additional 5% of young adults fell into poverty between 2007 and 2010. In the United Kingdom and Ireland, the increase was 4%, and in the Netherlands 3%.”

Annual percentage changes in household disposable income between 2007 and 2010, by income group. Chart: OECD

Annual percentage changes in household disposable income between 2007 and 2010, by income group. Chart: OECD

Between 2007 and 2010, average relative income poverty in the OECD countries rose from 12.8 to 13.4% among children and from 12.2 to 13.8% among youth. Meanwhile, relative income poverty fell from 15.1 to 12.5% among the elderly. This pattern confirms the trends described in previous OECD studies, with youth and children replacing the elderly as the group at greater risk of income poverty across the OECD countries.

These results only tell the beginning of the story about the consequences of austerity, growing unemployment, the burden on children and youth, and burden on immigrant wage labour. The OECD data describes the evolution of income inequality and relative poverty up to 2010. But “the economic recovery has been anaemic in a number of OECD countries and some have recently moved back into recession”, said the briefing.

Worse, since 2010, many people exhausted their rights to unemployment benefits. In such a situation, the briefing has warned, “the ability of the tax-benefit system to alleviate the high (and potentially increasing) levels of inequality and poverty of income from work and capital might be challenged”. These are unusually blunt words from the OECD and their use reflects the depth and persistence of the crisis of modern, reckless, destructive capitalism in Europe.

You made the fish disappear, you rob the bones of our ancestors

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About 200 indigenous people on the Xingu, Tapajós and Teles Pires rivers began an occupation of the largest construction site of the Belo Monte Dam, demanding the withdrawal of troops from their land and the suspension of dam construction. Photo: Ruy Sposati / Agência Raízes

About 200 indigenous people on the Xingu, Tapajós and Teles Pires rivers began an occupation of the largest construction site of the Belo Monte Dam, demanding the withdrawal of troops from their land and the suspension of dam construction. Photo: Ruy Sposati / Agência Raízes

Powerful and searing, this statement from a people pushed to the brink by their own state, Brazil, and who have begun an indefinite protest at the main construction site of the Belo Monte Dam, which is in the Xingu and Tapajós river basins:

“We are the people who live in the rivers where you want to build dams. We are the Munduruku, Juruna, Kayapó, Xipaya, Kuruaya, Asurini, Parakanã, Arara, fishermen and peoples who live in riverine communities. We are Amazonian peoples and we want the forest to stand. We are Brazilians. The river and the forest are our supermarket. Our ancestors are older than Jesus Christ.

“You are pointing guns at our heads. You raid our territories with war trucks and soldiers. You have made the fish disappear and you are robbing the bones of our ancestors who are buried on our lands.

“You do this because you are afraid to listen to us. You are afraid to hear that we don’t want dams on our rivers, and afraid to understand why we don’t want them.

“You invent stories that we are violent and that we want war. Who are the ones killing our relatives? How many white people have died in comparison to how many Indigenous people have died? You are the ones killing us, quickly or slowly. We’re dying and with each dam that is built, more of us will die. When we try to talk with you, you bring tanks, helicopters, soldiers, machine guns and stun weapons.

“What we want is simple: You need to uphold the law and promote enacting legislation on free, prior and informed consent for indigenous peoples. Until that happens you need to stop all construction, studies, and police operations in the Xingu, Tapajós and Teles Pires rivers. And then you need to consult us.

“We want dialogue, but you are not letting us speak. This is why we are occupying your dam-building site. You need to stop everything and simply listen to us.

More at International Rivers.

Written by makanaka

May 11, 2013 at 09:16

Retail therapy and speed money merchants in urban India

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How India's retail sector is divided. Chart: Reuters

How India’s retail sector is divided. Chart: Reuters

Foreign direct investment (FDI) has been rolling into India at a steady pace, whether in banking and finance,whether in insurance (general insurance and health), pharmaceuticals, automobiles (particularly automobiles), information technology, food and beverages (very much so), and engineering and manufacturing. And then there is retail, which has so incensed all those who have firmly believed that India and Bharat need none of this and that the swadeshi and swarajya of the Independence movement are, 66 years on, needed even more than they were in the 1920s and 1930s. And I count myself amongst those so incensed.

It comes as a surprise then to read about the ‘brake on the economy’ that low-level corruption is in India, as a recent Reuters report has put it. The report is well done, and is right to probe the methods of corrupt underlings, but I find it bordering on the absurd that these practices – in short, hand over the moolah for the licence you want – are treated as hindering India’s ‘growth story’ (as the country’s finance minister monotonously calls it, ignoring the ecological idiocy of desiring more growth, unmindful of the millions of new deprivations his story has no place for).

Reuters has reported: “India is the next great frontier for global retailers, a US$500 billion market growing at 20% a year. For now, small shops dominate the sector. Giants from Wal-Mart Stores Inc to IKEA AB have struggled merely for the right to enter, which they finally won last year.”

This breathlessness, well captured by Reuters, is part of P Chidambaram’s favourite fairy tale. But of course, real life in curbside India is full of smoke and mirrors. Reuters said that a “daunting array of permits – more than 40 are required for a typical supermarket selling a range of products – force retailers to pay so-called ‘speed money’ through middlemen or local partners to set up shop”.

All that mall space unused, built atop what were once green fields. Chart: Reuters

All that mall space unused, built atop what were once green fields. Chart: Reuters

Speed money is a colourful term, and suited to the technicolour life and times of the retail business in India. Reuters sounds prudish when it reported, citing interviews with middlemen and several retailers, that the “official cost for key licenses is typically accompanied by significant expenses in the form of bribes”. The added cost, said Reuters, erodes profitability in an industry where margins tend to be razor-thin, and “creates risk for companies by making them complicit in activity that, while commonplace in India and other emerging markets, is nonetheless illegal”.

Commonplace and illegal as much as underpaying workers in the USA, I presume, which is what the retail capitalists do. See this report about workers at McDonald’s, Wendy’s, Yum! Brands, Burger King, Domino’s Pizza and Papa John’s going on strike in New York City demanding wages that are twice the current $7.50 an hour, which is described as impossible to live on. As for Walmart, it’s rankly exploitative imprisoning of its workers, paying them just above minimum wage but denying them freedom of association (the USA is a member state of the ILO, the International Labour Organisation) and medieval working conditions can hardly, in any country, make it a paragon or corporate virtue.

But the Reuters report, useful as it is in explaining the very broad-based and low-level graft that layers our cities like a fog, cannot venture into the area of the demands of international finance capital led neo-liberalisation. This seeks to prise open our economy – aided eagerly by the astoundingly greedy political class in India (Delhi, Bombay, Bangalore, Hyderabad, Ahmedabad, Calcutta and every other large city) – for profit maximisation. Never mind the few bleating complaints about streetfront corruption repeated by Reuters, there is optimism aplenty amongst financiers, business people, bankers, commodity brokers, the realty sector, the automobile and FMCG sectors, all fed by the fact that the United Progressive Alliance government of India is more than willing to bend, break and jettison wholesale regulations that favour the proletariat in order to satisfy international capital and Indian big business.

Only last December (2012) both the houses of Parliament in India were told that there would be an inquiry following media reports concerning the submission made by the global retail giant Walmart to the US senate that it had spent around Rs 125 crore (Rs 1.25 billion or about US$23.2 million) during the last four years on its lobbying activities, including the issues related to “enhance market access for investment in India”. Now, really, what’s a bit of ‘speed money’ compared to a sum like that? Or compared to the US$100 million (about Rs 455 crore) that Walmart is reported to have funnelled into India (to its Indian partner Bharti Enterprises) and at a time when multi-brand retail was not permitted?

Census 2011, the first big numbers release

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Census2011_logoThe Census of India has released the first batch of the primary census abstract. This is the heart of the gigantic matrix of numbers that describes India’s population (to be correct technically, India’s population as it was in 2011 March). The PCA, as it is fondly known amongst the tribe that speak its arcane language, is the final and corrected set of numbers of the populations of India’s states, districts, blocks and villages – this corrects, if such correction was required, the data used in the Census 2011 releases between 2011 and now, which were officially called provisional results.

This release of the PCA is detailed down to district level, and that means the block- and village-level releases are to follow. This gives us the rural and urban populations, the number of children between 0 and 6 years old and what gender they are, and it gives us the number of workers and dependents. Within workers, the PCA tells us who the ‘main’ and ‘marginal’ workers are (a distinction based on how much of the year they are employed). What is of great importance to our study of food and agriculture is that the data tell us how many cultivators and how many agricultural labourers there are.

Well then, without further ado, here is where you’ll find this new forest of numbers. First, there is a very good overview provided by the Office of the Registrar General and Census Commissioner of India (that’s the official title of the organisation that carries out the world’s largest census operation, yes yes, there is one larger enumeration but this is the most detailed census in the world) and you can download it here (a big ppt of about 9MB). Then there is the page on which the PCAs of the states and union territories can be found, which is here.

If you’ve hurried over to that last page you will have found that the xls files that correspond to each state and union territory are coded. That is the state code, and in my work I have found it far more useful to have a set of xls files that are named with both the state (or UT) 2 or 3 character forms and their Census codes. So, here they are, in alphabetical order:

Andaman and Nicobar Islands, Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chandigarh, Chhattisgarh, Dadra and Nagar Haveli, Daman and Diu, Delhi, Goa, Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir, Jharkhand, Karnataka, Kerala, Lakshadweep, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Puducherry, Punjab, Rajasthan, Sikkim, Tamil Nadu, Tripura, Uttar Pradesh, Uttarakhand, West Bengal. There, that’s all 35 – do let me know if any of these links are empty or pointing to the wrong file.