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Posts Tagged ‘Confederation of Indian Industry

Hot potatoes from Farmer Obama

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Pair of bullock carts on the Allahabad-Delhi highway

Pair of bullock carts on the Allahabad-Delhi highway

The government of the USA has planned for India to become an important consumer of US agricultural exports and of US crop science. India is also planned as a host country for an agricultural research agenda directed by American crop-seed-biotech corporations. This is to be achieved through a variety of programmes in India, some of which began their preparation two years ago.

This agenda, labelled US-India cooperation by India’s current UPA-2 government and by the USA’s current Barack Obama administration, has the support of the American farm sector as its aim, not the support of India’s farmers and cultivators. The clear and blunt objective is to increase US agricultural exports and to widen as quickly as possible the trade surplus of the US agricultural sector.

This agenda has become clear following the three business and industry meetings held during the visit of US President Barack Obama — the ‘US-India Business and Entrepreneurship Summit’ in Mumbai on November 6, the ‘India-US: An Agenda for Co-Creation’ with the Confederation of Indian Industry (CII) in New Delhi on  November 8, and the ‘US-India Conclave: Partnership for Innovation, Imperative for Growth and Employment in both Economies’ with the Federation of Indian Chambers of Commerce and Industry (FICCI) in New Delhi on November 9.

The US agri-business view has been projected in India by the US-India Business Council, a business advocacy group representing American companies investing in India together with Indian companies, with the shared aim of deepening trade and strengthening commercial ties.

A vendor of sweet lime juice and his cart, Mumbai

A vendor of sweet lime juice and his cart, Mumbai

In a document titled ‘Partners in Prosperity, Business Leading the Way, Advancing the US-India commercial agenda as the foundation for strategic partnership’ (November 2010) the business council stated: “India requires an ‘Ever-Green Revolution’ — a new programme which would engage the country’s rural sector, providing water utilisation and crop management ‘best practices’ to promote greater food security — this time based on technology to increase efficiency and productivity. The effort to vitalise India’s agriculture sector should be driven by business, and the first step is improving India’s farm-to-market global supply chain.”

This business-driven trade in agricultural goods and services was given formal shape two months ago during the inaugural meeting of what is called the India-US Agriculture Dialogue, on September 13-14, 2010 in New Delhi. India’s Foreign Secretary Nirupama Rao and USA’s Under Secretary (Energy, Economic and Agricultural Affairs) in the US State Department, Robert Hormats, co-chaired the ‘Dialogue’. Under this agreement India and the USA have set up three working groups for: ‘strategic cooperation in agriculture and food security’, ‘food processing, agriculture extension, farm-to-market linkages’, and ‘weather and crop forecasting’.

A hamlet off the Grand Trunk Road, Uttar Pradesh

A hamlet off the Grand Trunk Road, Uttar Pradesh

The ‘Agriculture Dialogue’ is designed to be the implementing process for the India-US Memorandum of Understanding for Cooperation in Agriculture and Food Security, signed almost a year ago by Obama and Singh. On November 24, 2009 they had agreed on a Memorandum of Understanding on Agricultural Cooperation and Food Security that will, according to the US State department, “set a pathway to robust cooperation between the governments in crop forecasting, management and market information; regional and global food security; science, technology, and education; nutrition; and expanding private sector investment in agriculture”.

‘Agriculture Dialogue’ is the new name given to a US-India plan for trade and investment in agriculture which saw its genesis on July 18, 2005, when Singh and then US President George W Bush announced the ‘US–India Knowledge Initiative on Agricultural Education, Teaching, Research, Service, and Commercial Linkages (AKI)’. At the time, apart from officials from government on both sides representing agriculture and crop bureaucracies, Indian and American universities and the private sector were on the AKI board.

The Indian agri universities were the Govind Ballabh Pant University of Agriculture and Technology (Pantnagar, Uttaranchal), the Tamil Nadu Agricultural University (Coimbatore, Tamil Nadu) and the Indian Veterinary Research Institute (Bareilly, Uttar Pradesh). India’s private sector was represented by Venkateshwara Hatcheries Ltd, Masani Farms (its owner was a National Horticultural Board director), ITC Ltd’s Agribusiness chief executive and Wal-Mart India. The American private sector was represented by Archer Daniels Midland Company and Monsanto.

Infochange India, which provides news and analysis on development news and social justice in India, has carried the rest of my article on the Obama visit to India here.

India’s decade of wheeled deities

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In the period 2002-03 to 2008-09 the average annual growth rate in sales for the basic four categories of vehicles – commercial vehicles (lorries/trucks and buses), three-wheeled vehicles (that includes autorickshaws, which are short-distance transport in almost every Indian town and city), two-wheeled vehicles (that includes motorcycles, scooters and mopeds), and cars – has become the stuff of manufacturing legend.

India auto market (Reuters graphic)

India's vehicle market, Jan to Nov 2009, credit Reuters

Yearly sales growth of 17.46% for commercial vehicles, 13.51% for three-wheeled vehicles, 25.69% for cars, and 10.97% for two-wheeled vehicles have turned India into a market which has the potential to become a US$145 billion auto bazaar by 2016, say the Automotive Component Manufacturers Association (ACMA), the Confederation of Indian Industry (CII) and the Society of Indian Automobile Manufacturers (SIAM) who have jointly organised the expo.

These are the numbers that have caused every single major automaker from anywhere in the world to descend on New Delhi. Ten years ago, in 1999-2000, auto factories in India had made 574,000 cars – in 2008-09 the annual figure is 1,620,000. In ten years the number of commercial vehicles built has more than doubled, from 299,000 to 635,000. In ten years the number of two-wheelers built has more than doubled, from 3,778,000 to 8,394,000.

“Why India?” asks the promotional literature of the Auto Expo, and the organisers (supported by the Government of India and representing too the interests of the global auto giants) smugly provide the answers: “India is the second largest two-wheeler market in the world”, “Fourth largest commercial vehicle market in the world”, “Eleventh largest passenger car market in the world, and expected to be the seventh largest by 2016”

There are twin reasons for the rise of the Indian automobile bazaar. First, since 2006, globally the automobile industry has suffered what it plaintively calls “severe demand shock” on account of the economic slowdown and credit crunch in western markets (OECD + North America).

Auto sales, China vs USA, Reuters graphics

Auto sales, China vs USA, Reuters graphics

The drop in demand for 2008 and 2009 has been 38% in the US, 18% in Europe and 13% in Japan. In contrast the Indian passenger vehicle market maintained its demand during 2008-09 and is rising sharply for 2009-10. This is why most of the big names in the global automobile industry (GM, Toyota, Ford, Hyundai, Suzuki, Honda, Skoda, Volvo, Mercedes Benz, BMW, Volkswagen) are planning what industry analysts call “significant capacity build-up for the Indian markets”.

The triumphant notes being sounded by the automobile czars in New Delhi ignore entirely India’s worryingly uneven and imbalanced sectoral distribution of ‘growth’. What the comprador media calls “the India growth story” has only marginally touched agriculture, with evidence that over a prolonged period starting in the early 1990s, the per capita output of foodgrains was on the decline for the first time in the country’s post-Independence history, as economist C P Chandrasekhar has pointed out. Around 55 per cent of the increment in GDP over the last decade has come from the services sector, and just less than half of that contribution was due to an expansion of organised services, public administration and defence.

This gigantic exercise in furthering the cult of the car in India is underwritten by the Government of India. The industry has as its guidebook the ‘Automotive Mission Plan 2006-2016: A Mission for Development of Indian Automotive Industry’. This is a policy document from India’s Ministry of Heavy Industries and Public Enterprises which says, clearly and unambiguously in its ‘vision’ statement: “To emerge as the destination of choice in the world for design and manufacture of automobiles and auto components with output reaching a level of US$145 billion accounting for more than 10% of the GDP and providing additional employment to 25 million people by 2016.”

There’s more in the full article I wrote for Energy Bulletin here.