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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.

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The food industry in India and its logic

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Tractor on a road to the city, Kanpur district, Uttar Pradesh

Tractor on a road to the city, Kanpur district, Uttar Pradesh

The Economic & Political Weekly (EPW) 09 October 2010 issue carries a commentary I wrote as a backgrounder to the price rise of food staples. Here is part of the commentary:

On multiple fronts, the union government is proceeding to forge new compacts with the private sector food industry, whether global, regional or national. There is a new set of investors whose claims in the emerging food industry are being staked, and which are being encouraged by state governments eager to display their foreign direct investment (FDI)-friendliness. These are investors, promoters, asset management professionals who have learnt the patterns of the 2007-08 commodities (food included) boom and who are now well equipped to take positions, both financial and real, in the emerging food industry.

An indication of the size and scale of the national market for food (production, collection, processing, distribution, retail) being envisaged can be gauged from a “discussion paper” circulated by the Department of Industrial Policy and Promotion (DIPP) in July 2010. The paper, “Foreign Direct Investment (FDI) in Multi-brand Retail Trading”, has been circulated to “generate informed discussion on the subject” which will “enable the Government to take an appropriate policy decision at the appropriate time”. As this article shows, these decisions have already been taken and investment in the direction revealed by the paper has been rolling out for months.

Supported by the Ministry of Agriculture, the top echelons of India’s national agricultural research system and dedicated agricultural trade and investment bodies, the union government has tackled the arguments against FDI in retail by describing the “limitations” of current conditions in the Indian retail sector. That there has been a lack of investment in the logistics of the retail chain, leading to “an inefficient market mechanism”. The point is made that India is the second largest producer of fruit and vegetables in the world (about 180 million tonnes or mt) but has “very limited integrated cold-chain infrastructure” with only 5,386 stand-alone cold storages which together have a capacity of 23.6 mt. It points out that post-harvest losses of farm produce – especially fruits, vegetables and other perishables – have been estimated to be over Rs 1,00,000 crore per annum, 57% of which is due to “avoidable wastage and the rest due to avoidable costs of storage and commissions”.

A couple working in their paddy field, North Goa

A couple working in their paddy field, North Goa

From 2009, the Ministry of Agriculture’s approach to its subject has shifted perceptibly – from its stated protection of the interests of the farming household and the rural and urban consumer – towards the food industry. Employing the reasons listed above, all of which contain some reflection of actual conditions, the massive apparatus of the ministry and its appurtenant research system is now ushering in private participation and control of areas that were hitherto in the public domain. When read with the rapid movement of finance between the money markets and the commodity markets, with the extension of infrastructure and property conglomerates into the processed food “value chain” domain, and with new alliances between agricultural research institutes and market entrepreneurs, the outlook for India’s small and marginal farming households is bleak.

The concentration of funds, food handling and transport systems and growing corporate control from farm to fork can clearly be seen in an address by the Union Agriculture Minister, Sharad Pawar, at the Indian Council of Agricultural Research (ICAR) – Industry Meet on 28-29 July 2010. The meet focused on four theme areas: seed and planting material; diagnostics, vaccines and biotechnological products; farm implements and machinery; and post-harvest engineering and value addition.

Pawar said that the ministry recognises the role of the private sector in critical areas of agricultural research and human resource development. The conventional approach of public sector agricultural R&D has been to take responsibility for priority setting, resource mobilisation, research, development and dissemination. He then explained that agricultural extension, which has been neglected for several years now, is “no longer appropriate”. It is here that the impact of the Indo-US Agricultural Knowledge Initiative, now in its fifth year, can be recognised. The alternative, Pawar advised, is public-private partnerships through which public sector institutes (such as those in the ICAR network) can “leverage valuable private resources, expertise, or marketing networks that they otherwise lack”.

Coconut trees along a bund between field and stream, North Goa

Coconut trees along a bund between field and stream, North Goa

This is the undisguised merchant reasoning behind the creation of “Business Planning and Development units” in five ICAR institutes (Indian Agricultural Research Institute, Indian Veterinary Research Institute, Central Institute for Research on Cotton Technology, National Institute of Research on Jute and Allied Fibre Technology, Central Institute of Fisheries Technology). These units will tackle intellectual property management, commercialisation of research, find investors and begin businesses. India’s national agricultural research system, therefore, has decided to now become a broker of its own output (publicly funded) and a speculator seeking profits from the country’s agricultural and food price crises.

If the Ministry of Agriculture has its way, rural India will be a patchwork not of villages and hamlets but of “intelligent agrologistic networks combining consolidation centres, agroparks (agroproduction and processing park) and rural transformation centres”, which is how the MTMs and their typical built-up footprints have been described by one enthusiastic bank. The techno-industrial idiom cannot conceal the union government’s intention to encourage a dangerous new dimension to urbanisation, by provisioning infrastructure to support an internal trade in agricultural products, and doing so by allocating a greater share of scarce funds to support favoured business and trading constituents rather than to the rural constituents who need it most, the smallholder farmer and local agro-ecosystems.

Supported by the vast and powerful machinery of the Ministry of Agriculture, emboldened by the global trading successes of commodity cartels which learned their tactics in the Multi Commodity Exchange of India (Mumbai), the National Commodity and Derivatives Exchange (Mumbai), and the National Multi Commodity Exchange of India (Ahmedabad), the new entrepreneurs in India’s agribusiness sector are promoting MTMs as potentially attracting “leading foreign retail chains to anchor and plan their supply chain at and through the agrofood parks” and exploiting the MTMs’ “township model approach to attract Indian MNCs and foreign food processing companies”.