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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.

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.

Agriculture, nutrition, health: the new global focus begins

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I am attending the “Leveraging Agriculture for Improving Nutrition and Health” conference under way in New Delhi. Organised by the International Food Policy Research Institute (IFPRI), this is a sprawling conference with over 900 international participants from all three sectors.

What’s it all about? “Agriculture is much more than just producing food and other products. It is linked to people’s well-being in many ways, and it has the potential to do much more to improve their nutrition and reduce their health risks. But to accomplish this, we need to re-imagine agriculture,” said Shenggen Fan, director general of IFPRI.

The gathering is meant to examine ways in which agriculture can enhance the health and nutritional status of poor people in developing countries. To work toward this goal, said IFPRI, they have brought experts together (I’m civil society, and there are very few NGOs/CBOs here) from all three sectors “to take stock of current knowledge, share information and best practices, and build consensus on the actions most needed to move forward”.

Here’s the IFPRI rationale. Agricultural scientists have traditionally focused on developing more productive crops and livestock and on reducing their susceptibility to disease. IFPRI and the conference sponsors (list below) say that by incorporating nutrition as a goal, researchers and breeders could provide farmers with a wide range of healthier products. For example, breeding crops with higher levels of micronutrients like vitamin A and iron can potentially reduce death and disease, especially among women and children.

“Increasing crop productivity overall is not enough. A new paradigm for agricultural development is needed, so that agricultural growth leads also to improved nutrition and health,” said Fan. The CGIAR (the Consultative Group on International Agricultural Research) and the conference sponsors say that improvements in other factors such as land distribution, women’s status, rural infrastructure, and health status, can have a positive effect on nutrition, the paper contends. “Complementary investments in rural roads, nutrition programs, and other targeted interventions can make a huge impact.”

IFPRI's agriculture, nutrition and health logo

The development community needs to be conscious of the entire “value chain” – which is a central concept running through the discussions and presentations here. This is defined as including production, storage, transportation, marketing, and consumption, “as all of these have implications for health and nutrition”. Moreover, “after harvest, there are opportunities for improving health and nutrition, from better storage and transport to stronger nutritional marketing from retailers”.

The conference features heavyweights in the international agricultural research sector and representatives from the major UN agencies involved in these sectors. The proceedings were inaugurated by India’s Prime Minister Manmohan Singh. M S Swaminathan was there; John Kufuor (former president, Ghana), David Nabarro, UN Special Representative on Food Security and Nutrition, and Montek Singh Ahluwalia, head of India’s Planning Commission were all there.

The conference concludes on 12 February and it will take me a few days to put my thoughts together on the themes and what they represent – the implications beyond the powerpoint world and what is driving this new focus.

The sponsors: Asian Development Bank; Bill & Melinda Gates Foundation; Canadian International Development Agency; Technical Centre for Agricultural and Rural Cooperation (CTA) (ACP-EU Cotonou Agreement); Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ); International Fund for Agricultural Development (IFAD); Indian Economic Association; International Development Research Center, Canada / Le Centre de recherches pour le développement international (IDRC-CRDI); Irish Aid; PepsiCo; UK Department for International Development (DFID); United States Agency for International Development (USAID); Feed the Future Initiative; The World Bank.

The race to own India’s water

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Image courtesy 'UN-Water Global Annual Assessment of Sanitation and Drinking Water (GLAAS) 2010', World Health Organization (WHO) and UN-WaterWater privatisation in India today comes in a wide range of what are called “solutions” by the votaries of public-private partnerships. There is water-related engineering and construction (such as earth-moving activities, alteration of river courses, artificial linking of rivers, building of dams and pipelines, etc), water and wastewater services, and water treatment, which affect both nature and communities. What remains outside the ambit of “solutions” – only until the victims can be persuaded to pay – are the impacts of the micro-scale geoengineering. Every impact damages people and the environment. Impacts can be categorised as: ecological (effects on natural ecosystems), social (related to rights of human beings and communities, health, cultural norms, attitudes, belief systems), economic (affecting livelihoods, well-being, and access to basic services) and even legal and institutional.

We are now seeing increasing pressure for private sector development in India – and the rest of Asia-Pacific. Manthan Adhyayan Kendra, an independent research unit concerned with water in India (they are based in Madhya Pradesh) says that this pressure is being mounted mainly by two influential international financial institutions: the World Bank and its regional partner, the Asian Development Bank. The World Bank gives funds, advice, training and technical assistance to governments and the private sector to implement privatisation.

Courtesy, The Economist, special report on water, 22 May 2010Four entities allow the World Bank to undertake various functions. The International Finance Corporation (IFC) lends directly to the private sector and can even purchase equity in private companies. The Public Private Infrastructure Advisory Facility (PPIAF) seeks to improve the quality of infrastructure through private participation. The Multilateral Investment Guarantee Agency (MIGA) insures the private sector against commercial and political risk. The International Court for Settlement of Investment Disputes (ICSID) takes charge of disputes between investors and states. The Bank also has some other mechanisms that promote its activities in India including Water and Sanitation Program (WSP), Water and Sanitation for Urban Poor (WSUP), Water for Asian Cities (WAC) and others. The World Bank’s funding partners include the JBIC, AusAid, GTZ, USAID, DFID, UN-Habitat and the ADB.

More growth in large cities and towns, and urbanisation becoming a dominant land use pattern in more districts of India mean that the industrial, residential and municipal demands for water are rising quickly. India’s Central Pollution Control Board (an agency of the Ministry of Environment and Forests, Government of India) has released its ‘Observation on trend of Water Supply, Wastewater Generation in Cities and Towns’. Here are its main comments and highlights. I’ve left the language as it is – the import is what counts.

Courtesy, The Economist, special report on water, 22 May 2010

From The Economist's special report on water, 22 May 2010: Global water sources

“In decade of 90’s the growth of cities is observed is 33% while the growth of the decade in beginning of millennium is slowed down. Metropolitan cities is increased from 3 to 6 Nos. from 80’s to 2008. Class-I cities increase from 37 to 53 Nos. Class-II towns increase from 22 to 35. This trend indicates that all type of cities has grown in the decade of 90’s.”

Findings and Recommendations

  • Since the cities are growing, the population is enhanced from 30 million to 48 million.
  • Consequently water supply has been increased approximately twice in magnitude from 4,970 MLD (million litres per day) to 8,782 MLD.
  • Sewage generation has risen 38%.
  • Comparing the data of decades of 90’s to 2008, it is indicated that coastal cities and towns are not growing significantly.
  • Treatment capacity of sewage in comparison to decade of 80’s to until now has increased almost double (93%).
  • There are 498 Class-I Cities having population of 257 million and 410 Class-II Towns having population in India.
  • Total water supply including all class-I cities and class-II town in India is 48,093.88 MLD.

The CPCB says that wastewater generation from all class I cities and class II towns is 38,254 MLD whereas the installed treatment capacity is 11,787 MLD, which means that no more than a maximum of 31% of total sewage generated can be treated. (If the question is ‘where does the rest go?’, the CPCB answers that too in its report.) “This evidently indicates ominous position of sewage treatment, which is the main source of pollution of rivers and lakes,” warns the CPCB report. “To improve the water quality of rivers and lakes, there is an urgent need to increase sewage treatment capacity and its optimum utilisation.”

Image courtesy 'UN-Water Global Annual Assessment of Sanitation and Drinking Water (GLAAS) 2010', World Health Organization (WHO) and UN-WaterThe CPCB, which thankfully still has a reputation for straight talking, has advised India’s municipalities and town administrations to “set up a very thoughtful action plan to fill this gap in a minimum time frame”. The CPCB has suggested that large cities in which and from which the pollution problem is more severe, cities/towns whose effluents and sewage are polluting rivers and water bodies “will be required to be taken up on priority basis in first phase”. Why is the CPCB so insistent? Quite simply, it says there is an “urgency of preventing pollution of our water bodies and preserving our precious water resources”.

But even in the India of non-city and non-town landscapes, there are plans being hatched by the would-be water merchants. An indication of the mischief afoot comes from a report righteously entitled ‘Pro-Poor Financial Services for Rural Water: Linking the Water Sector to Rural Finance’. (If so many good deeds are ‘pro-poor’ nowadays how come the ranks of the do-gooders is only increasing?) Here is what it says: “Previous studies suggest that a considerable demand for pro-poor financial services for water in rural areas remains unmet. The number of potential microfinance clients in rural areas for investments in water supply is estimated to be 5.0 million in East/Southeast Asia, 10.3 million in South Asia, and 3.1 million in sub-Saharan Africa.” Those three numbers get to the heart of the matter.

The report continues: “Concerning microloans for rural sanitation, there are 17 million potential clients in East/ Southeast Asia, 30.8 million in South Asia, and 4.4 million in sub-Saharan Africa. In total, the potential demand for micro-loans in these three regions is estimated at US $ 1.5 billion in the case of rural water supply, and US $ 5 billion in the case of rural sanitation. The challenge is how to unlock this latent demand and turn it into an effective process.” The authors make no bones about it, the riches at the bottom of the water table is what they’re after. And who are the authors? The German Federal Ministry for Economic Cooperation and Development (BMZ), the Deutsche Gesellschaft für Technische Zusammenarbeit (well-known as GTZ in Asia, and which I was surprised to learn is a GmbH), the International Fund for Agricultural Development (IFAD) and of course the World Bank.

Courtesy, The Economist, special report on water, 22 May 2010

Cover of The Economist's special report on water, 22 May 2010

The water merchants have their cheerleading squad in place in the form of a pliant media, and The Economist has obliged by bringing out one of its typically characterless ‘surveys’, as it likes to call them. It is a special report on water (the 22 May 2010 issue) and the subject is dealt with in the sycophantic manner that the weekly reserves for the captains of industry. “Yet even if it takes two litres of groundwater to produce a litre of bottled water, companies like CocaCola and PepsiCo are hardly significant users compared with farmers and even many industrial producers.” (Hear, hear, who needs those pesky farmers anyway?) “PepsiCo has nevertheless become the first big company to declare its support for the human right to water. For its part, CocaCola is one of a consortium of companies that in 2008 formed the 2030 Water Resources Group, which strives to deal with the issue of water scarcity. Last year it commissioned a consultancy, McKinsey, to produce a report on the economics of a range of solutions.” This transatlantic weekly, once upon a time British, puts in a word for big dams too: “Dams and reservoirs certainly need constant repairs and careful maintenance and do not always get them, usually because the necessary institutions are not in place.”

Who are operating as water merchants and what do they want? There are several North American / West European companies now in India: Ondeo-Degrement, Veolia Environnement, Saur of France, RWE/Thames Water of Germany and the UK Bechtel, Enron (US), Compagnie Generale des Eaux (CGE). Indian companies are going to either compete with them, or join them – Tata subsidiary Jamshedpur Utilities and Services Company (JUSCO), IVRCL Infrastructures and Projects, Mahindra Infrastructure Ltd., IL&FS.

Surat, Gujarat, near the mouth of the Tapi river

Surat, Gujarat: Fishing boats near the mouth of the Tapi river

The foreign multinationals are involved in several projects across the country. Compagnie Generale des Eaux (CGE) is operating urban water supply project in Hubli-Dharwad in Karnataka. Veolia is operating water and wastewater plant in Nagpur in Maharashtra and it has also formed a joint venture with JUSCO. Ondeo-Degremont has won contracts to construct water treatment plants in Mumbai and Chennai and it is also operating a wastewater treatment plant in Delhi. Thames Water was involved in a leak reduction project in Bangalore while United Utilities and Bechtel are partners in the Tiruppur project. JUSCO has projects in Jamshedpur, Bhopal, Kolkata and Adityapur. IVRCL is working on a wastewater treatment project in Alandur, desalination in Chennai and solid waste management in Tiruppur. IL&FS is involved in various projects in Haldia, Tiruppur, Vishakhapatnam and municipal waste processing facilities in Delhi and Ajmer, Rajasthan.

The CPCB has outlined the water, sewage and pollution tasks for cities, but its worries are going to be transformed into “a challenge to unlock latent demand” by the multilateral lending organisations on the one hand and the global water merchants (together with their Indian partners). Already deficit in terms of civic infrastructure and struggling with yawning gaps in the provision of healthcare and education, India’s towns and small cities will pass the burden of water profiteering on to those who can’t afford it. They leave the rural districts to earn a living in the cities, when their water rupee gets squeezed down to the last drop, where will they go then?