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Desperate food gambits and the danger to India

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India’s Republic Day in 2015 will also see the visit of the president of the USA, Barack Obama, accompanied by the usual large delegation of business persons, lobbyists and functionaries of the American government. They will use this visit to demand many things, and amongst the demands will be that the NDA-BJP government ‘reform’ all that is hindering the agriculture and food transformation in Bharat.

A couple tending their stack of rice stalks residue in the Konkan.

A couple tending their stack of rice stalks residue in the Konkan.

We must resist this with strength and perseverance. So far, the NDA-BJP government has not shown that it recognises or understands the threats and dangers, which are very very serious indeed. The American delegation will push this government to clear the way for genetically modified seed and crop (including in food staples such as cereals), for the further industrialisation and mechanisation of crop production (which will mean the removal of smallholder ‘kisans’ from their plots, all in the name of market efficiency), and the deepening of the food processing and food retail industries’ grip on what we eat.

The Prime Minister’s Office, the Union Cabinet and the seniormost bureaucrats of the major ministries involved must wake up to this threat and be firm against it. The signals from elsewhere are many and they are clear about what lies in store for Bharat if the NDA-BJP government at the centre and if state governments do not discharge their duty – which is, safeguard the sovereignty of Bharat.

Already in Europe, the German Environment Ministry is insisting on a complete ban on green genetic engineering in Germany. Under a new European Parliament directive, member states of the European Union will now be able to restrict or completely ban GMO cultivation within their borders. One of the leading proponents of such a legal ban in Germany is its Ministry of Agriculture, which also supports a national ban on cultivation.

soilatlas2015_main_1Moreover, in a position paper from the Federal Ministry of the Environment, Minister Barbara Hendricks said she does not want to leave any back doors open for genetic engineering. The GMO law must be changed, so that controversial green genetic engineering cannot be used under any pretext in Germany, she stated in the document. “Green genetic engineering has turned out to be the wrong track,” Hendricks said. “It is risky for nature and the environment and is not desired by consumers.”

Worldwide, the project to fully industrialise global food production is far from complete, yet already it is responsible for most deforestation, most marine pollution, most coral reef destruction, much of greenhouse gas emissions, most habitat loss, most of the degradation of streams and rivers, most food insecurity, most immigration, most water depletion, and massive human health problems.

Relationships between soil, urbanisation, fertiliser use, farming, ecology and health. Images from the Soil Atlas, 2015, Heinrich Böll Stiftung.

Relationships between soil, urbanisation, fertiliser use, farming, ecology and health. Images from the Soil Atlas, 2015, Heinrich Böll Stiftung.

Under GM- and tech-centric industrial agriculture and food systems – which is what the Americans will demand from us – countries are becoming literally uninhabitable as a result of the social and ecological consequences.

Wherever industrial and genetically engineered agriculture is found, landscapes are left progressively emptier of life. Eventually, the soil turns either into mud that washes into the rivers or into dust that blows away on the wind. Industrial agriculture has no long term future and is ecological suicide. But those who profit from it cannot allow all this to become broadly understood – and unfortunately that has included our NDA-BJP government. That is why they have continued to peddle the lie of food scarcity in India, which the previous Congress government employed so recklessly.

The agriculture and food problem – which will become a more extreme problem for us if the Obama group is given its way – is closely interlinked with growing demand for land. Land is a lucrative investment and has fuelled the real estate boom in India for the last decade. But for our smallholder kisans it is the source of livelihood, as it is for our shepherd groups and tribal communities. Rising demand for land also harms the ecosystem – as is seen in each and every one of the 63 cities whose populations this year are at least one million. The more intensive the farming, the more damage it does to the environment. This is the main reason for the decline in biological diversity, above and below the ground.

The American push will be for agri-food systems in accordance with the new international trade agreements. These are nothing but colonial ways of thinking – that food should be produced for international export as a tool of foreign policy and to control populations (especially through GM) and as a byproduct financially benefit powerful corporations that act as agents of such colonial ways of thinking. Thus it is a direct assault on people’s sovereignty over their natural resources, farming systems and food access as well as their human right to dignified living standards free of exploitation and dependence.

Such treaties (such as the TTP which is facing opposition even amongst those the USA calls allies) are dangerous because they are negotiated in secret. But what has emerged (thanks to leaks) is appalling. Some of the texts in these treaties wants the outright patenting of plants and animals, many draft agreements come with severe punishments for farmers who break intellectual property laws, they deliberately undermine local agriculture (as seen with NAFTA), commons lands are proposed for privatisation, labelling of GM foods will be prohibited, and the governments of countries that try to undo the damage will be liable to be sued by the multi-national corporations. This is the extent of the danger facing Bharat, which will become more clear come Republic Day 2015.

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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.