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Posts Tagged ‘ADB

How ADB cooks the climate pot

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RG_ICP_pic_20140821

The Asian Development Bank has, amongst the world’s multilateral development banks, been a bit of a latecomer to the area of climate financing with the help of modelling. Its senior peers – the World Bank and the European Bank for Reconstruction and Development – have been at it for a while, with the World Bank being rather in its own league if one was to judge by the tonnage of reports it has printed. The ADB probably holds its own on the matter against the Inter-American Development Bank and the African Development Bank, but this latest effort, I think, pushes it ahead of the last two.

Not for any reason that would gladden a farmer or a municipal worker, for that is not the audience intended for ‘Assessing the costs of climate change and adaptation in South Asia’ (Asian Development Bank, 2014), which was released to the Asian world a few days ago. But the volume should immensely help the modelling crews from a dozen and more international agencies that specialise in this arcane craft. Providing the scientific basis around which a multilateral lending bank can plan its climate financing strategies will help the craft find a future. Rather less sunny is the outlook for states and districts, cities and panchayats, who may find an over-zealous administrator or two quoting blithely from such a report while in search of elusive ‘mitigation’.

Many reassuringly complex diagrams must only mean we need bigger loans?

Many reassuringly complex diagrams must only mean we need bigger loans?

In my view, this volume is useless. It is so because it is based on a variety of modelling computations which have their origin in the methods used for the IPCC’s Fourth Assessment Report (that was released in 2007). The permanent problem with all such ‘earth science’ modelling approaches is that it uses global data sets which must be ‘downscaled’ to local regions. No matter how sophisticated they are claimed to be by their inventors and sponsors, such models can only work with regular and large sets of well-scrubbed data that have been collected the same way over a long period of time and recorded reliably. This may serve a ‘global’ model (which is irrelevant to us in the districts) but in almost every single case of ‘downscaling’, a scaling down may make a smattering of sense if there is some comparable data relating to the region for which the scaling is taking place. And this correlation, I can assure you, is not possible 99 times out of 100.

But that doesn’t bother the ADB, because it is a bank, it must find a way for Asian countries to agree to taking loans that help them mitigate the effects of rampaging climate change, as this report tries to convince us about from 2030 to 2050 and 2080 (by which time those who have cashed in their climate technology transfer stock options will have passed on). Which is why the ADB has said its unimpeachable analysis is based on “a three-step modeling approach” and this is “(i) regional climate modeling (ii) physical impact assessment, and (iii) economic assessment”, the last aspect being what they’re betting the thermometer on.

The numbers that have emerged from the ADB’s computable general equilibrium model must be satisfyingly enormous to the bank’s thematic project directors and country directors. For the scenario modellers have provided the ammunition for the bank to say: “The region requires funding with the magnitude of 1.3% of GDP on average per annum between 2010 and 2050 under the business-as-usual-1 scenario. The cost could rise to up to 2.3% (upper range) of GDP per annum taking into account climate uncertainties. To avoid climate change impact under the business-as-usual-2 scenario, adaptation cost of around $73 billion per annum on the average is required between now and 2050.”

I could not, in this needlessly dense and poorly written volume, find a mention of which rice strains have been measured for their yields in the example given for India, when the ADB report makes some dire forecasts about how yields will be lowered or will plunge under several forecast conditions. Perhaps they were buried in some footnote I have overlooked, but considering that the International Rice Research Institute (one of the more dangerous CGIAR monster institutes) has in its genebank more than 40,000 varieties from India, and considering that rice conservationist Debal Deb cultivates 920 varieties himself, the ADB (and its modelling troupe) talking about rice ‘yield’ means nothing without telling us which variety in which region. And that sort of negligence naturally leads me to ask what sort of thermometers they consulted while assembling these models. [This is also posted at India Climate Portal.]

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A food policy pedlar’s annual derby

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IFPRI_GFPR_2012Evidence, investment, research, commitments and growth. You will find these reprised in the second Global Food Policy Report by the International Food Policy Research Institute (IFPRI, which, as I must never tire of mentioning, is the propaganda department of the CGIAR, the Consultative Group on International Agricultural Research, which, ditto, is the very elaborate scientific cover for control over the cultivation and food choices made especially by the populations of the South). And now, with the dramatis personae properly introduced, let me quickly review the plot.

The GFPR (to give this slick production an aptly ugly acronym) for 2012 follows the first such report and furthers its  claim to provide “an in-depth look at major food policy developments and events”. It comes equipped with tables, charts, cases, apparently authoritative commentary (many from outside IFPRI), and is attended by the usual complement of models and scenarios (can’t peruse a report nowadays without being assaulted by these).

In an early chapter, the GFPR 2012 has said:
“Evidence points to a number of steps that would advance food and nutrition security. Investments designed to raise agricultural productivity — especially investments in research and innovation — would address one important factor in food security.”
“Research is also needed to investigate the emerging nexus among agriculture, nutrition, and health on the one hand, and food, water, and energy on the other.”
“In addition, by optimizing the use of resources, innovation can contribute to the push for a sustainable ‘green economy’. Boosting agricultural growth and turning farming into a modern and forward-looking occupation can help give a future to large young rural populations in developing countries.”

The G20 in session

The G20 in session

Consider them one by one. Whose evidence? That of the IFPRI, the CGIAR and its many like-minded partners the world over (they tend to have the same group of funding donors, this institutional ecosystem). A round-up of food policy by any outfit would have ordinarily included at least some evidence from the thousands of studies and surveys, large and small, humble and local, that discuss policy pertaining to food and cultivation. But, you see, that is not the CGIAR method. What we have then is the IFPRI view which, shorn of its crop science fig leaf, is similar to that of the Asian Development Bank’s view, the World Bank’s view, the International Finance Corporation’s view or the European Bank for Reconstruction and Development’s view (raise your fist in solidarity with the working class of Cyprus for a moment). And that is why the GFPR 2012 ties ‘investment’ to ‘evidence’, and hence ‘research’ to ‘food security’.

What research? Well, into “the emerging nexus among agriculture, nutrition, and health” naturally. This extends the CGIAR campaign that binds together cultivation choices for food staples, the bio-technology mittelstand which is working hard to convince governments about the magic bullet of biofortification (especially where cash transfers and food coupon schemes are already running), and the global pharmaceutical industry. It is really quite the nexus. As to food, water and energy, that is hardly an original CGIAR discovery is it, the balance having being well known since cultivation began (such as in the fertile crescent of the Tigris and Euphrates, about seven millennia ago, now trampled into sterility by ten years of an invasion, or as was well recognised by the peons of central America, an equal span of time ago, and whose small fields are being reconquered by the GM cowboy duo of Bill Gates and Carlos Slim).

What kind of ‘green economy’? Among the many shortcomings of IFPRI (in common with the other CGIAR components) is its studied refusal to incorporate evidence from a great mass of fieldwork that supports a different view. ‘Growth’, ‘modern’ and ‘forward looking’ are the tropes more suited to a public relations handout than an annual review of policy concerning agriculture and therefore also concerning the livelihoods and cultural choices made by millions of households. IFPRI’s slapdash use of ‘green economy’ reflects also its use by those in the circuit of the G20 and by the Davos mafia – they are the hegemons of politics and industry who force through decisions (they use sham consensus and gunpoint agreement) that have scant regard for climate change, biodiversity loss or dwindling resources. Hence the IFPRI language of “optimizing the use of resources”. The idea of unfettered growth as the way to end poverty and escape economic and financial crisis remains largely undisputed within the CGIAR and its sponsors and currently reflects the concept as found in ‘green economy’.

Food (trade and commodity) security.

Food (trade and commodity) security.

[The GFPR 2012 report and associated materials can be found here. There is an overview provided here. There are press releases: in Englishen Français and in Chinese.]

“Building poor people’s resilience to shocks and stressors would help ensure food security in a changing world”, the IFPRI GFPR 2012 has helpfully offered, and added, “In any case, poor and hungry people must be at the center of the post-2015 development agenda”. Ah yes, of course they must be, in word and never mind deed. “International dialogues, such as the World Economic Forum, the G8, and the G20, must be used as platforms to develop this concept, propose policy options, and formulate concrete commitments and actions to reduce poor people’s vulnerability to food and nutrition insecurity and enhance their capacity for long-term growth”.

To call the World Economic Forum, the G20 and the G8 ‘platforms’ and ‘dialogues’ is laughable, for there are no Southern farmers’ associations present, nor independent trade unions, nor members of civil society and community-based organisations that actually pursue, rupee by scarce rupee, the agro-ecological restoration of rural habitats in the face of migration, rural to urban, that occurs through dispossession, nor are there any of the myriad representatives of socialist and humanist groups whose small work has a restorative power greater than that of the CGIAR and its sponsors.

Never part of the CGIAR-IFPRI sonata that is played at these ‘dialogues’, there is ample evidence (since that is the theme) of locally articulated and politically wrested food sovereignty that can be held up as examples with which to reduce poor people’s vulnerability. In the past ten years, countries particularly in South America (we salute you, Hugo Chavez) have incorporated food sovereignty into their constitutions and national legislations.

In 1999 Venezuela approved by referendum the Bolivarian Constitution of Venezuela whose Articles 305, 306 and 307 concern the food sovereignty framework. In 2001 Venezuela’s Law of the Land concerns agrarian reform. In 2004 Senegal’s National Assembly included food sovereignty principles into law. In 2006 Mali’s National Assembly approved the Law on Agricultural Orientation which is the basis for implementation of food sovereignty in Mali. In 2007 Nepal approved the interim constitution which recognised food sovereignty as a right of the Nepalese people. In 2008 Venezuela enacted legislation to further support food sovereignty: the Law of Food Security and Food Sovereignty; the Law for Integrated Agricultural Health; the Law for the Development of the Popular Economy; the Law for the Promotion and Development of Small and Medium Industry and Units of Social Production. In 2008 Ecuador approved a new constitution recognising food sovereignty. In 2009 Bolivia’s constitution recognised the rights of indigenous peoples as well as rights to food sovereignty. In 2009 Ecuador’s Food Sovereignty Regime approved the Organic Law on Food Sovereignty. In 2009 Nicaragua’s National Assembly adopted Law 693 on Food and Nutrition Security and Sovereignty.

This is what true resilience looks and sounds like. For those unfortunate populations that continue to struggle under a food price inflation whose steady rise is aided and abetted by the CGIAR and its sponsors, the alternatives become clearer with every half percent rise in the price of a staple cereal, and with the loss of yet another agro-ecological farming niche to the world’s land grabbers.

Making sense of India’s credit rating palpitations

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The financial media in India and the mainstream English newspapers are sparing no effort to announce their alarm over the feint by a credit rating agency, Standard and Poor’s, to lower India’s sovereign credit rating. Standard and Poor’s (no, I don’t like the ampersand) is one of the three large agencies which the movers of global capital rely on to tell them where to move illusory money, the other two being Moody’s and Fitch.

As you can see from the tone and tenor of India’s craven business press – all of which are beholden to the country’s big corporations (cross-holdings are common) and which cheer every new sally in the direction of share bazaar capitalism made by the Ministry of Finance and Department of Commerce – their writers and columnists, their reporters and correspondents seem immobilised by rating fear.

The Business Standard reported: Global rating agency Standard & Poor’s on Monday cautioned India might become the first BRIC (Brazil, Russia, India and China) country to lose its investment-grade rating, unless growth issues were addressed immediately. The credit rating agency cited slowing GDP growth and political roadblocks in economic policy making as some of the factors that could lead to such an action.

The Mint commented: Some economists questioned the content and timing of the S&P report, titled Will India Be The First BRIC Fallen Angel?, which came some two months after the credit assessor lowered the outlook on India’s BBB- rating to “negative” from “stable”. The release of the report on Monday triggered a fall in the rupee and caused the benchmark index of BSE to slump. India was upgraded to investment grade in 2007. “In our view, setbacks or reversals in India’s path toward a more liberal economy could hurt its long-term growth prospects and, thus, its credit quality,” S&P analysts Joydeep Mukherji and Takahira Ogawa wrote in the research report dated 8 June.

The Economic Times commented: In an unusually direct reference to what it perceives to be poor quality of the nation’s political leadership, S&P has expressed concerns that ballooning government expenses, widening trade deficit and political vacuum could lead to protectionist policies. Prime Minister Manmohan Singh, whom the agency described as “unelected”, a reference to Singh’s membership of the Rajya Sabha, is battling more with party colleagues over policy than with cantankerous allies often blamed for policy paralysis, the rating agency said. It fears that government policies, which in some instances are aimed to benefit what the report refers to as “politically well-connected firms”, could result in a populist backlash against liberal economic policies. Heightened populism to counter the political fallout of corruption scandals could slow economic growth further, and weaken the already-battered fiscal position.

What do the credit rating agencies do for India? What do these three (and their counterparts in India) have remotely to do with the lives and well-being of the 800 million rural Indians (there are 355 districts whose populations are over a million), or the urban poor in India’s 53 million-plus cities? They are among the tools with which ‘reform’ is grafted onto a country in order to further immiserate the poor and annex natural resources for a global upper middle class whose ranks are being swelled by India’s new rich. They are among the staunchest advocates of ‘austerity’ in the belief (backed by kilogrammes of elegantly designed working papers from the International Monetary Fund and the World Bank, and yes the Asian Development Bank too) that such measures revive investor confidence. Credit rating agencies are the canaries of this intangible called investor confidence, and it ought to be seen as an intolerable affront to India that our people and our myriad economies are to be encapsulated – absurdly and so irrelevant – by the meaningless equations of Standard and Poor’s and its cousins.

“It is a hallmark of the crisis, that every effort the government makes to end it, within “neo-liberal” framework, will only succeed in worsening it,” said Prabhat Patnaik in ‘The End of the “Shine”‘ (People’s Democracy, 10 June 2012). The role of these agencies is to legitimise the enticement of finance back into an economy to keep its bubble spherical. Hence the worried tones of India’s business press, because far more worrying to them (as it is to the 5% of urban Indians who are the audience for this media, who control the flows of money and commodities and who exercise political power) is the spectre of a collapsed bubble being beyond recovery. That is why, every effort on the part of the government to tighten monetary policy in the belief that this would curb inflation and revive ‘investor confidence’ (currently viewed by the ruling alliance with more reverence than it accords to India’s Constitution) will hasten the economy’s downturn.

These are not uncoordinated gambits. In the latest issue of the IMF’s journal, Finance and Development, an article has discussed how “the relatively low-hanging fruit has been picked, and the harder, more exacting, job of addressing tougher problems lies ahead”. (The language sounds neutral but is loaded with violence.) The article goes on to outline an incomplete reform list: “identifying and building tools — still in the early stages of development — to mitigate systemic risk; improving the ability of the authorities to deal with the aftermath if the tools designed to prevent systemic events fail; and providing a framework for financial intermediation (the transfer of savings to investments) to assist in strong and stable economic growth, without overly prescriptive regulation.”

The IMF likes credit rating agencies; they are invaluable for the Fund’s agenda. Their work allows borrowers “to access global and domestic markets and attract investment funds, thereby adding liquidity to markets that would otherwise be illiquid”. The IMF’s Global Financial Stability Report 2010 (Chapter 3), ‘Sovereigns, Funding and Systemic Liquidity’ (2010 October), had said that these ratings “influence market prices, and that downgrades through the investment-grade barrier trigger market reactions… shows that their market impact is associated not only with new information, but also with a ‘certification’ role, though this is most evident through their use of ‘outlooks’, ‘reviews’, and ‘watches’ (pre-rating change warnings) rather than actual rating changes”.

Not content with the sophistication of the regime denoted by the alphabetic identifiers such as AAA, AA or BBB  and the pluses and minuses appended thereunto or removed therefrom – or more likely anticipating that the means used to ‘tend’ bubbles by the agencies was as likely to be used as political ammunition as it was to be cunningly exploited by the commodity traders and their money market partners – India’s Ministry of Finance this year developed an index of relative ratings of sovereigns. This it has called the Comparative Rating Index of Sovereigns. What will such an index serve? “Given that existing ratings do not give an idea of the inter se rankings of various economies with respect to the performance of the others, this index addresses an important conceptual lacuna,” the paper has explained. “The results reveal major changes in relative ratings of various countries, driven largely by the rapid downgrades of some European economies following the global financial crisis.”

And so we have the ‘Comparative Rating Index for Sovereigns (CRIS): A Report Based on “The Relativity of Sovereigns: A New Index of Sovereign Credit Ratings and an Analysis of How Nations Fared over the Last Six Years’ (2012 March). This is the ‘let’s pat ourselves on the back regardless of what the rating agencies say’ argument, and it is a sorry effort to lend an ephemeral shine to the old India Shining metaphor (insubstantial as that was, overused as it came to be). That is why the outcome of this indigenised index is that “India’s Comparative Rating Index for Sovereigns has improved over the six years from 2007 to 2012 by about 2.98% while its rank moved up from 61st to 55th… The US has gone from the top of the chart to the 13th position though it still improved its CRIS score by 2.12%… Some of the largest falls were among European economies and Japan. Greece fell by 71 positions, Ireland 68, Iceland 61, Portugal, 53, Spain 36 and Japan 21. BRICS economies show continuous improvement and the global financial crisis does not seem to have impacted them adversely in terms of CRIS scores”.

A counter index to nullify the unattractiveness of the credit ratings own indices – ratings that are meaningless to Bharat and its people. If we needed more evidence that our major ministries are populated by lotus-eaters – as is the Planning Commission and its opulent toilets – this is it.

Four points higher, the FAO Food Price Index for 2012 January

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In the first major indication of the way food prices will move in 2012, the UN Food and Agriculture Organization (FAO) has announced that its Food Price Index rose by nearly 2% or four points from December 2011 to January 2012. This is the Index’s its first increase since July 2011. A close look at the FAO Food Price Index shows that prices of all the commodity groups in the index have risen (oils increasing the most). At its new level of 214 points, the index is about 7% lower than what it was in January 2011 (when it reached 231).

In 2010 July, the Food Price Index has begun a steep upward climb it maintained for 7 months until 2011 February, from 172 to 237. Now, this 4 point jump in a month is the sharpest since the rise from 231 in 2011 January to 2011 February. “There is no single narrative behind the food price rebound – different factors are at play in each of the commodity groups,” said FAO’s Senior Grains Economist Abdolreza Abbassian. “But the increase, despite an expected record harvest and an improved stocks situation, and after six months of falling or stable prices, highlights the unpredictability prevailing in global food markets,” he added. “I can’t see that the usual suspects – the value of the dollar and oil prices – were  much involved in January. But one reason is poor weather currently affecting key growing regions like South America and Europe. It has played a role and remains a cause for concern,” he concluded.

What FAO is seeing and saying is routinely misunderstood or deliberately miscast by the mainstream business and financial press. An example of this can be seen in a recent opinion found on Forbes, the business magazine, which links “a slowing UN FAO food price index” and “falling commodity prices” to the global economic slowdown. This, the magazine has said, is “putting further downward pressure on food inflation”. Of course this is completely untrue, as wage labour, informal sector workers and middle class residents in many cities and towns of the South know.

Thus the ‘market’ view is that global demand for agricultural products appears to be slowing. This view exists because this sort of media represents the interests of its owners – the 1% targeted by the Occupy movement. Ever since 2011 July, when the FAO Food Price Index ceased its steady upward march, organs and media representing the interests of the global money markets and the interests of the speculators have attempted to leaven their crooked discussion of the matter by saying that the global dynamic in food and commodity markets took a structural turn. Their insistence on linking “quantitative easing in the USA” and what they call “emerging market demand” (meaning mainly China and India) for food staples has been a consistent feature of this disinformation.

What we are seeing is that the FAO Cereal Price Index averaged 223 points in January, up 2.3% (5 points) from December. International prices of all major cereals with the exception of rice rose, with maize gaining most, 6%. Wheat prices also gained, though less significantly. Prices mostly reflected worries about weather conditions affecting 2012 crops in several major producing regions. Fears of decline in export supplies in the Commonwealth of Independent States also played a part.

[The FAO Food Price Index data sheet is available here (xls).] [The FAO Deflated Prices data sheet is available here (xls).]

According to FAO’s latest forecast world cereal production in 2011 is expected to be more than sufficient to cover anticipated utilization in 2011-12. Production is expected to reach 2,327 million tonnes – up 4.6 million tonnes from the last estimate in December. That would be 3.6% more than in 2010 and a new record. FAO lowered slightly from December 2011 its cereal utilization forecast for 2011-12, to nearly 2,309 million tonnes, still 1.8% higher than in 2010-11. That would put cereal ending stocks by the close of seasons in 2012 at 516 million tones, 5 million tonnes above FAO’s last forecast.

A sober note has been sounded in the Jakarta Globe. The Indonesian newspaper reported the Asian Development Bank warning that Indonesia and other nations in Southeast Asia should be prepared for a possible rise in food prices, which might stoke inflation. Changyong Rhee, chief economist at ADB, is reported by the newspaper as having said the global financial turmoil, marked by the euro zone debt crisis and a possible slowdown in the US economy, might increase the volatility of prices for food and other commodities. According to the ADB, research funding [in agriculture] is being depleted amid climate change, making it difficult for food production to keep up with growing demand. “Food price increases have become more persistent than in the past,” he said in Jakarta. “It has a major impact on food security for millions [of people].” The Jakarta Globe reported that the FAO Food Price Index has risen by 50% in the last four years, compared with a 16% increase from 1991 to 2006.

The carefully constructed mirage of the ‘green economy’

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Not a week goes by nowadays without one high-profile institution or high-powered interest group directing us all to be part of the ‘new, green economy’. That’s where the next jobs are, where innovation is, where the next wave of financing is headed, where the best social entrepreneurship lies. There are the big inter-governmental organisations telling us this: United Nations Environment Program, UNCTAD, OECD, International Energy Agency, the big international lending agencies like the World Bank and Asian Development Bank. There are big think-tanks telling us the same thing – backed up by hefty new reports that are boring to read but whose plethora of whiz-bang charts are colourful. There are big companies, multinationals and those amongst the Fortune 500, also evangelising the new green economy and patting themselves on the back for being clean and green and so very responsible.

Artisanal blacksmith and his family, Maharashtra, India

What on earth are they all talking about? Does it have to do with us average, salaried, harassed, commuting, tax-paying types who are struggling with food inflation and fuel cost hikes and mortgages and loans that break our backs? Are they talking to our governments and our municipalities, who are worried about their budgets and their projects and their jobs too?

Here are a few answers from working class Asia. Let’s start with restating a couple of trendlines. One, the era of growth in the West is over. Growth is Asia is what is keeping the MNCs and their investors and bankers and consultants interested, and this means China and India (also Brazil, Russia, South Africa, Indonesia). Two, the environmental consciousness which began in the 1970s to spread quickly in the West led to many good laws being framed and passed. These were responses to the industrial and services growth in the Western economies. As globalisation took hold, people in less industrialised countries – ordinary citizens – saw what had happened in the West and learnt from their experiences with industrialisation. Green movements took root all over Asia and South America, protests were common, confrontations just as much, and global capital found itself being questioned again, even more fiercely.

These are the two major trends. The forces of production want to move much further into what used to be the ‘developing’ world, but want to meet much less resistance. That’s why they appeal to the consumer minds of China, India and the other target countries – you need jobs, homes, nice cars, big TVs, cool vacations, credit, aspirations, and lifestyle is what the messages say, whether they’re from telecom companies or condominium salesmen. But it’s hard to market all this stuff – real stuff, virtual stuff – to people who are still struggling to make ends meet.

This was after all the old 'green economy'. A late 19th century painting in a maritime museum near Mumbai, India

That’s where the ‘new, green economy’ tagline and its earnest-sounding philosophy comes in. “The main challenges to jump-starting the shift to a green economy lie in how to further improve these techniques, adapt them to specific local and sectoral needs, scale up the applications so as to bring down significantly their costs, and provide incentives and mechanisms that will facilitate their diffusion and knowledge-sharing,” said one of these recent reports. Look at the text which contains all the right buzzwords – ‘scale up’, ‘jump-start’, ‘applications’ (that’s a favourite), ‘knowledge-sharing’, ‘local’.

This makes the ‘old economy’ sound good but changes nothing substantial on the ground, or on the factory shopfloor or for the tens of thousands of little manufacturing units that do small piecework jobs for the bigger corporations up the chain. The world’s business philosophy has changed drastically even without the impact of environment and energy. To drive home this point, it has been a long time since we heard anything like ‘industrial relations’, and that alone should tell us how far the dominance of capital has reached, when labour, whose organisation gave the West its stellar growth rates in the 1960s and 1970s, has now become all but ignored. This is because the dominant interests associated with capital have insisted, successfully for investors and for pliant governments, that the manufacturing firms break loose from the industrial relations moorings they had established. The restructuring of firms to emphasise leaner and meaner forms of competition – as the ruthless management gurus and greedy consulting agencies instructed – was in line with market pressures that are viewed by the powers-that-be as crucial to the revitalisation of the economy.

Read their greenwash carefully and the control levers are revealed. “Further innovation and scaling up are also needed to drive down unit costs. Technologies will need to be ‘transferred’ and made accessible, since most innovation takes place in the developed countries and private corporations in those countries are the main owners of the intellectual property rights covering most green technologies.” So says ‘World Economic and Social Survey 2011: The Great Green Technological Transformation’ (UNESCO, Department of Economic and Social Affairs). Rights and access are built in from the start, as you can see.

And yet it is this very system of production, of the arrangement of capital and of the effort to weaken working regulations that is now talking about the ‘green economy’. Why do they even imagine we should believe them? They are the ones who have remained locked into the fossil fuel economy and who have partnered the enormous influence of the finance markets, who have followed every micro-second of the way the dictates of capital flows and what the market investors want in their endless quest for greater profits in ever-shorter cycles of production. For the major business of the world, ‘green economy’ is yet another route to super-profits and the consolidation of both forces of production and masses of consumers. The difference between now and the 1970s is that today they are able to successfully enlist the apparently authoritative inter-governmental organisations with their armies of economists and social scientists and engineers, to support this new profiteering. Only now, the cost is planetary.

How the OECD dislikes poor Indians but covets their economy

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No you don't. Get your destructive sophistry away from my village and my community.

The OECD (Organisation for Economic Cooperation and Development) has just released its Survey of India, and has said that “India now has the opportunity to move towards sustained and socially inclusive double-digit growth if the right policies are put in place”. The OCED survey said India’s economy has ranked among the best performers over the past decade, and poverty has been falling faster than in many other emerging economies. Pending a detailed reading of the report I can’t see how “best performer” and “falling poverty” can be applied to India, but the social and environmental dimensions of India’s so-called eocnomic growth may not be within the OECD’s scope in such a survey.

OECD Secretary-General Angel Gurría presented the Economic Survey of India in New Delhi and there said: “Policymakers are to be commended on the remarkable catch-up achieved in recent years, making India one of main driving forces of the global economy. The priority given to more socially inclusive economic growth is appropriate and further reforms are needed to achieve it.” There are more such conceptual conundrums here – catch up with who? And for what? What “socially inclusive” growth is Gurria talking about – India has the world’s largest population of malnourished children and the world’s largest population of hungry people. This has been so for the entire period that the OCED said India was “catching up”.

To ensure strong growth continues and is sufficiently inclusive, the government needs to target public expenditure better on the poor, the OECD has said. “Although high growth has reduced poverty, progress could have been faster. Hundreds of millions of people still live below the official poverty line. Malnutrition and poor health are still widespread.” Evidently the OECD India Survey 2011 team saw no contradiction between what they have praised and what exists. Against this backdrop, the report advocates a strengthened welfare system and improved access to health care. “Government spending on health is only around 1% of GDP – among the lowest rates in the world. Private health care provision is increasing but quality is highly variable. Better regulation and oversight is needed.” This is true, but the Survey’s objectives lead all solutions away from more and better public healthcare.

The irrelevance of the GDP squiggle to most Indians goes unnoticed by the OECD

The report said that around 9% of GDP is spent on energy and other subsidies, most of which fails to reach the poor, and that diesel subsidies should be phased out. For other energy products, such as kerosene and LPG, susbidies should be transformed into cash payments targeted to the poorest people in society. The government needs to ensure that its plan to shift kerosene and fertiliser subsidies into direct cash transfers is implemented quickly. Here the roll-out of a Universal Identity Number will help ensure payments go to the right people.

The recommendations in this para are full of threat. A quick look at the full Survey itself shows that there is special mention made of the fuel subsidy and the targeted public distribution of foodgrain. If the free marketeer reformists were to have their way, these would both be scrapped overnight, to be replaced by a weekly or monthly dole, transferred electronically and validated by a new national identification number which is in theory supposed to prevent fraud and exclusion. This is dangerous for the poor, because it makes them directly vulnerable to the worst symptoms of profiteering and corruption – already rampant despite safeguards – and because it removes the responsibility from the state for providing good quality and cheap social services and provisions of daily living. In this, the OECD Survey sounds exactly like the IMF.

So tell me, OECD boys and girls, what do you know about guavas and cane?

The OCED report has otherwise welcomed the planned introduction of a nationwide goods and services tax and suggested that in order to keep the overall rate low, the base should be as wide as possible (there go more paisas from the cash transfer to the poor). “Further fiscal consolidation is also called for, making more funds available for private investment” – which means more cutting of the health, education and rural development programmes. “Cutting red tape for businesses and further lowering barriers to trade and investment will help both companies and households. The report also notes that while progress has been made to improve infrastructure, even greater investment in this area is necessary to boost growth.”

The Survey has said that strengthening the financial system and promoting access to financial services is essential for strong and inclusive growth. (We’re quite sick and tired of hearing about ‘inclusive growth’ when the Indian government and its foreign advisers do all they can every single day to prevent it.) The report noted that many Indians still lack access to bank accounts although microfinance is improving opportunities in many communities. “The financial sector proved resilient during the global downturn but there remains scope for greater competition.” Hear, hear.

The Survey has said that education has been given high priority by India’s central and state governments and enrolment continues to grow fast – we call them degree factories for the globalisation mill. The report recommends more effective government regulation and funding. Incentives and professional development opportunities for teachers need to be strengthened while student loans for higher education should be more widely available.

Now I expect the usual round of endorsement, referencing and studious quoting to begin. Within a few months, the recommendations of the OCED India Survey 2011 will assume an oracular hue, never mind the reactionary and anti-poor real nature of its advice. The multilateral lending institutions – the World Bank, the IMF and the Asian Development Bank – will cite the Survey repeatedly. So will state governments in India and the central government. The armoury of those who assault the poor and the marginalised of India has been strengthened by a new weapon – this is the OECD contribution to the people of India.

Grain and poverty, Russia and India, yet another UN talkfest, and those damned bankers

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Many young male adults have left their villages in search of subsistance means after the poor raining season in 2009 prevented them from harvesting. In the village of Garin Dagabi, north of Tanout in Southern Niger, the population at the beginning of 2010 was mainly made of old people, women and children. Photo: © Anne Isabelle Leclercq/IRIN

Many young male adults in Southern Niger have left their villages in search of subsistance means after the poor raining season in 2009 prevented them from harvesting. Anne Isabelle Leclercq/IRIN

At the United Nations headquarters in New York, USA, a large gathering of country representatives and other interested folks is the signal that another interminable, obfuscatory, filibustering, mostly spineless and generally pointless meeting is under way.

It is called the 19th Session of the UN Commission on Sustainable Development. The well-coiffeured ladies, impeccably suited gentlemen, minor potentates and ‘development’ celebrities there will be arguing endlessly about the grammar and construction of the declarations they finalise so as to ensure that no-one commits to anything and that they all meet again as soon as possible to check on their progress at doing nothing noisily.

Naturally, they are beatifically unconcerned about nuisances such as rising food prices and crippling food inflation all over the world. If you want to punish yourself by wading through portentous paragraphs of high-minded gibberish, and get a taste of the UN’s legendary core competency – wasting our money on pomp and prolix puffery – go here.

Now that we can see the difference between the posers at UN HQ and the rest of the toiling masses, here are some indicators of the way the world food, agriculture and prices are moving in the summer of 2011.

Agriculture in Africa. Photo: FAOThe Wall Street Journal has said that expectations of surplus grain in Russia and India are driving speculation that the two producers might resume exports, as wheat prices soar. But deteriorating prospects for US and European wheat crops mean even the return of exports from Russia and India to world markets this year would be unlikely to lower prices.

Grain dealers in Russia are starting to move stocks to ports in the hope that the government will allow exports as early as July. The Kremlin banned exports last year after the worst drought in a century slashed Russia’s grain harvest by about a third to about 63 million metric tons, but hopes that farmers may reap as much as 90 million tons this year have prompted calls for an end to the embargo.

Even if the exports from these producers happen, said the WSJ report, they are unlikely to make up for a fall in output in the US and Europe. The impact of weather on wheat supplies has been fueling prices for the past 10 months, with the latest concerns about dryness stressing crops in the ground and excessive rainfall hindering planting in the world’s two largest exporters. Wheat prices have rallied more than 60% on the Chicago Board of Trade since June 30.

Thou Market, southern Sudan. Across the Sahel, women generate income from balanites seeds, which are about half oil and a third protein. After processing at home, they can be turned into many tasty items, including roasted snacks and a spread not unlike peanut butter. They also supply a vegetable oil that is a prized ingredient in foods as well as in local cosmetics. (From 'Lost Crops of Africa: Volume III: Fruits', The National Academies Press. Photo: Caroline Gullick)

Thou Market, southern Sudan. Across the Sahel, women generate income from balanites seeds, which are about half oil and a third protein. After processing at home, they can be turned into many tasty items, including roasted snacks and a spread not unlike peanut butter. They also supply a vegetable oil that is a prized ingredient in foods as well as in local cosmetics. (From 'Lost Crops of Africa: Volume III: Fruits', The National Academies Press. Photo: Caroline Gullick)

World rice production is forecast to rise 3% this year, according to a Bloomberg report quoting the FAOs’ Rice Market Monitor. This is based on expected better weather and government support for farmers. The 2011 rice harvest is estimated to climb to 720 million metric tons from 699 million tons, or 480 million tons on a milled basis compared with 466 million tons a year earlier, the FAO has said in report. Price gains for rice, a staple for half the world, have trailed those of other grains. Thai grade-B white rice has gained 6% in the past 12 months, compared with a 56% gain for Chicago wheat prices.

A business report in the Huffington Post highlights the conclusions of a very readable piece of journalism in the magazine Foreign Policy (written there by Frederick Kaufman). The primary danger of the indexes is that they fundamentally alter the food market by transforming key stapes into a financial asset that performs more or less like a stock. “The money tells the story,” the Foreign Policy article explained. “Since the bursting of the tech bubble in 2000, there has been a 50-fold increase in dollars invested in commodity index funds. To put the phenomenon in real terms: In 2003, the commodities futures market still totaled a sleepy $13 billion. But when the global financial crisis sent investors running scared in early 2008, and as dollars, pounds, and euros evaded investor confidence, commodities — including food — seemed like the last, best place for hedge, pension, and sovereign wealth funds to park their cash… In the first 55 days of 2008, speculators poured $55 billion into commodity markets, and by July, $318 billion was roiling the markets. Food inflation has remained steady since.”

In a report titled ‘Food Price Hike Worsens Poverty in Asia’, IPS news has reported that an annual meeting of Asian finance ministers and central bank governors in Hanoi is set to address the fate of 64 million people in the region on the brink of extreme poverty. They are the worst affected by soaring food prices, which have hit record highs in the first two months of this year. “The issue of food price inflation and food security will indeed be one of the key topics of discussion at the Asian Development Bank’s 44th annual meeting,” says Xianbin Yao, director general of the regional and sustainable development department at the Manila-based international financial institution. “(We hope) to focus our discussions on the long term structural adjustments that are needed to secure food supplies.

“If left unchecked, the food crisis will badly undermine the recent gains in poverty reduction made in Asia,” he said in an interview to IPS. “We estimate that a 10% rise in domestic food prices in developing Asia could push an additional 64 million people into poverty, based on the 1.25 (dollar) a day poverty line.” In a report released ahead of the annual meeting in the Vietnamese capital, to be held May 3-6, the Asian Development Bank (ADB) warned that this ascent of prices among many Asian food staples is “likely to continue” a threat to the continent’s nearly two billion people who live on less than two dollars a day.

Three conclusions for agricultural commodities, says European Commission

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A Syrian family receives food aid at a WFP distribution point. Photo: WFP/John Wreford

A Syrian family receives food aid at a WFP distribution point. Photo: WFP/John Wreford

Here’s the latest punditry from the European Commission.

“Despite remaining uncertainties, based on the outlook for agricultural commodities established by several organisations, including the latest Commission medium term projections, three conclusions are clear for agricultural commodities:

  • Agricultural commodity prices  are expected to stay higher than their historical averages, reversing their long-term downward trend, at least for the foreseeable future.
  • Price volatility is also expected to remain high, although uncertainties with respect to its causes and duration persist.
  • The level of input prices used in agriculture is also likely to remain higher than its historical trends.”

These three conclusions are contained in the document, ‘Tackling the Challenges in Commodity Markets and on Raw Materials’, issued as a Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. (These Eurocrats need urgent lessons in how to be brief and clear.)

The ‘Communication’ has also said:

“While higher global prices could stimulate  agricultural production, price transmission mechanisms are often imperfect. In many developing countries, commodity markets are often disconnected from world markets or, at best, world price signals are transmitted to domestic markets with considerable lags so that a domestic supply response is often delayed. Several analyses by the Food and Agricultural Organisation, OECD, Commission and others have focused on supply and demand developments, exacerbated by short-term economic and policy factors (including restrictions on exports) that explain part of the observed extreme price volatility, including factors specific to financial markets that may have amplified price changes.”

A food crisis in northern Burundi’s Kirundo province – the result of failed rains – has prompted many women to make a long daily commute to neighbouring Rwanda, where a day’s work in a field earns them just enough money to feed their family for a day. Photo: IRIN/Judith Basutama

A food crisis in northern Burundi’s Kirundo province – the result of failed rains – has prompted many women to make a long daily commute to neighbouring Rwanda, where a day’s work in a field earns them just enough money to feed their family for a day. Photo: IRIN/Judith Basutama

There are several errors in this statement. One, in many developing countries, commodity markets are extremely closely tied to world markets quite simply because they are buying staple foodgrain from world markets. Two, domestic supply responses are not delayed – the structural adjustment in agriculture is preventing them from taking place. Three, the “restrictions on exports” mantra is being repeated as often as possible by all multilateral development banks (World Bank, IMF, ADB, IADB, AfDB) and by financial markets and commodities analysts who collaborate to spread this misinformation. Four, why are the “factors specific to financial markets” not spelt out?

“The combination of the above factors implies that higher prices for agricultural commodities will not necessarily result in higher incomes for farmers, especially if their margins are squeezed by increased costs. In addition, potential problems for net food importing countries and more generally for the most vulnerable  consumers are evident, stemming from price impacts on food inflation. While a certain degree  of variability is an intrinsic part of agricultural markets, excessive volatility does not benefit producers neither users.”

The contradictions between what the EU thinks it ought to say to the finance + markets constituency and what it thinks it ought to say to critics of neo-lineral economics at home is clear from this paragraph. The EU is admitting there is a profiterring taking place between the higher prices for agri commodities and the “not necessarily” higher incomes for farmers. Higher costs are mentioned too. Food importing countries have “potential problems’! (Seriously, are the people who wrote this completely unaware of the events in North Africa and the reasons behind them?)

‘Do or die’ year for agriculture

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“If we don’t take steps to address the serious ecological, economic and social crises facing our farm families, we will be forced to support foreign farmers, through extensive food imports.”
“This will result in a rise in food inflation, increase the rural-urban and rich-poor divides and allow the era of farmers’ suicides to persist.”
“On the other hand, we have a unique opportunity for ensuring food for all by mobilizing the power of Yuva and Mahila Kisans and by harnessing the vast untapped yield reservoir existing in most farming systems through synergy between technology and public policy.”
“2010 is a do or die year for Indian agriculture.”

An increased number of residents of the terai are now food insecure as a result of unusually heavy rains earlier this month

An increased number of residents of the terai are now food insecure as a result of unusually heavy rains earlier this month

So says Prof M S Swaminathan, India’s best-known agriculture scientist, who established the M S Swaminathan Research Foundation in 1988. Chastened by the limitations of the ‘green revolution’, the MSSRF’s mission is the conservation and enhancement of natural resources, and generation of agricultural, rural and off-farm employment with a particular emphasis on the poor and the women.

Swaminathan made these points in a blunt, hard-hitting and no-nonsense convocation address at the Punjab Agricultural University in Ludhiana on 10 February 2010. The content of his address should have attracted national attention, because of the urgency of his tone and also because of the specific, very feasible institutional transformations his suggestions will need. He talked about adaptation to climate change and explained that a group of scientists led by the MSSRF have undertaken studies during the last five years in Rajasthan and Andhra Pradesh on climate change adaptation measures. The districts chosen were Udaipur in Rajasthan and Mehabubnagar in Andhra Pradesh. The approach adopted was to bring about a blend of traditional wisdom and modern science through farmer participatory research.

MSS mentioned five particular points of adaptation:
1. Water conservation and sustainable and equitable use
2. Promoting fodder security
3. More crop and income per drop of water
4. Weather information for all and climate literacy
5. Strengthening community institutions

He said these interventions were supported by training and skill development and education and social mobilization. A training manual was prepared by MSSRF for training one woman and one male member of every Panchayat as Climate Risk Managers. Such local level Climate Risk Managers will be well trained in the art and science of managing weather abnormalities. The work has highlighted the need for location specific adaptation measures and for participatory research and knowledge management.

“The adaptation interventions have also highlighted the need for mainstreaming gender considerations in all interventions. Women will suffer more from Climate Change, since they have been traditionally in charge of collecting water, fodder and fuel wood, and have been shouldering the responsibility for farm animal care and post-harvest technology. All interventions should therefore be pro-nature, pro-poor and pro-women.”

Sujit Kumar Mondal and his wife Rupashi Mondal of Gopalgonj district in southern Bangladesh working in their floating garden.

Sujit Kumar Mondal and his wife Rupashi Mondal of Gopalgonj district in southern Bangladesh working in their floating garden.

“It is clear that to promote location specific and farmer-centric adaptation measures; India will need a Climate Risk Management Research and Extension Centre at each of the 127 agro-ecological regions in the country. Such centres should prepare Drought, Flood and Good Weather Codes what can help to minimize the adverse impact of abnormal weather and to maximize the benefits of favourable monsoons and temperature. Risk surveillance and early warning should be the other responsibilities of such centres. Thus the work done so far has laid the foundation for a Climate Resilient Agriculture Movement in India. The importance of such a Movement will be obvious considering the fact that 60% of India’s population of 1.1 billion depend upon agriculture for their livelihood. In addition, India has to produce food, feed and fodder for over 1.1 billion human, and over a billion farm animal population.”

It is a shared responsibility, said MSS, and one that the non-farming, urban population must recognise and help bear. “Urban and non-farming members of the human family should realize that we live on this planet as the guests of sunlight and green plants, and of the farm women and men who toil in sun and rain, and day and night, to produce food for over 6 billion people, by bringing about synergy between green plants and sunlight. Let us salute the farmers of the world and help them to help in achieving the goal of a hunger free world, the first among the U N Millennium Development Goals.”

These points are made at a time when India (or rather the central government and key ministries) still places economic growth as a priority rather than ecologically sustainable existence which is mindful of cultural traditions and which builds on extensive systems of traditional knowledge to take a human development route that is climate neutral. From 2007 onwards, there have been major intergovernmental and international studies on the impacts of climate change (including on agriculture). Several of these have shown that in South and East Asia, rice yields are affected. For most crops and regions, carbon fertilisation accentuates the positive impacts and mitigates the negative ones. However, there is considerable uncertainty about the true impact of carbon fertilisation. Among developing countries, the number of countries which ‘lose’ exceed the number of countries that ‘gain’, and their decrease in cereal production was greater than gains elsewhere.

Developing countries are worse off, where agriculture is concerned, said an OECD study in 2008 titled ‘Costs of Inaction on Key Environmental Challenges’. For example, the scenario with the highest CO2 concentration showed a 7% decline for developing countries. For developed countries, yields actually increased under all scenarios, but the global effect was always negative, or (at best) neutral. Not only was there significant variation across countries; the implications for the risk of hunger also varied greatly, depending on assumptions made about the fertilising effects of increasing CO2 concentrations.

“Assuming ‘no action’ is taken with respect to emissions, positive changes in yields (due to warming, precipitation, and crop fertilisation) in mid and high latitudes were predicted to be more than compensated by reductions in the lower latitudes, particularly in Africa and the Indian sub-continent. Changing crop yields (and demands) will affect market prices for agricultural output, as well as land prices. Decreases in agricultural yields in developing countries are likely to have significant implications for risk of hunger.”

Moreover, there has been evidence enough of the links between reducing poverty and strengthening agriculture. A paper produced by DFID (the British official aid agency, in 2004) emphasises the historically close correlation between different rates of poverty reduction over the past 40 years and differences in agricultural performance – particularly the rate of growth of agricultural productivity. There are links described between agriculture and poverty reduction through four ‘transmission mechanisms’: 1) direct impact of improved agricultural performance on rural incomes; 2) impact of cheaper food for both urban and rural poor; 3) agriculture’s contribution to growth and the generation of economic opportunity in the non-farm sector; and 4) agriculture’s fundamental role in stimulating and sustaining economic transition, as countries (and poor people’s livelihoods) shift away from being primarily agricultural towards a broader base of manufacturing and services.

Why is this so important to India and so important now? An ADB paper explains (‘A General Equilibrium Analysis of the Impact of Climate Change on Agriculture in the People’s Republic of China’, by Fan Zhai, Tun Lin, and Enerelt Byambadorj, Asian Development Bank, 2010). Despite rapid growth in recent decades, the People’s Republic of China (PRC) is no exception to the effects of climate change. It also faces a great challenge to meet increasing demand for agricultural products due to increasing population and income level in the coming years. In the PRC, agriculture accounted for 11.7% of the national gross domestic product (GDP) in 2006 and agricultural crop land occupied 157 million hectares. Agricultural production has enabled the country to feed a population of 1.3 billion people, more than a fifth of the world’s population, of whom 900 million live in rural areas, from an eighth of the world’s arable land.

“Global climate change could cause rises in temperature, redistribution of rainfall, and more frequent flooding and droughts, and do considerable damage to crop production and the agricultural sector in general,” says the ADB paper. “At the national level, overall impact on crop production, assuming there is no carbon dioxide (CO2) fertilisation, is an estimated 7 to 14% reduction in rice, 9 to 10% reduction in maize, and 2 to 9% reduction in wheat. Assuming an average drop of 7%, this means a reduction of almost 40 million metric tons of food grain, and 20% of the global grain trade. Such a loss would undermine food security in the PRC, with particular health consequences for the poor and women, as females are primarily responsible for feeding the family.”