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Posts Tagged ‘subsidies

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.


Dear scientists and donors, what part of ‘agro-ecology’ don’t you understand?

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“Resource-conserving, low-external-input techniques have a proven potential to significantly improve yields,” Olivier De Schutter, the United Nations Special Rapporteur on the Right to Food, has told the UN Human Rights Council at its Sixteenth session.

“In what may be the most systematic study of the potential of such techniques to date, Jules Pretty et al. compared the impacts of 286 recent sustainable agriculture projects in 57 poor countries covering 37 million hectares (3 per cent of the cultivated area in developing countries). They found that such interventions increased productivity on 12.6 millions farms, with an average crop increase of 79 per cent, while improving the supply of critical environmental services.”

“Disaggregated data from this research showed that average food production per household rose by 1.7 tonnes per year (up by 73 per cent) for 4.42 million small farmers growing cereals and roots on 3.6 million hectares, and that increase in food production was 17 tonnes per year (up 150 per cent) for 146,000 farmers on 542,000 hectares cultivating roots (potato, sweet potato, cassava). After UNCTAD and UNEP reanalyzed the database to produce a summary of the impacts in Africa, it was found that the average crop yield increase was even higher for these projects than the global average of 79 per cent at 116 per cent increase for all African projects and 128 per cent increase for projects in East Africa.”

Olivier De Schutter, United Nations Special Rapporteur on the Right to Food

Olivier De Schutter, United Nations Special Rapporteur on the Right to Food

The most recent large-scale study points to the same conclusions, De Schutter has said. Research commissioned by the Foresight Global Food and Farming Futures project of the UK Government reviewed 40 projects in 20 African countries where sustainable intensification was developed during the 2000s. The projects included crop improvements (particularly improvements through participatory plant breeding on hitherto neglected orphan crops), integrated pest management, soil conservation and agro-forestry. By early 2010, these projects had documented benefits for 10.39 million farmers and their families and improvements on approximately 12.75 million hectares. Crop yields more than doubled on average (increasing 2.13-fold) over a period of 3-10 years, resulting in an increase in aggregate food production of 5.79 million tonnes per year, equivalent to 557 kg per farming household.

The Special Rapporteur’s recommendations:
As part of their obligation to devote the maximum of their available resources to the progressive realization of the right to food, States should implement public policies supporting the adoption of agroecological practices by:
• making reference to agroecology and sustainable agriculture in national strategies for the realisation of the right to food and by including measures adopted in the agricultural sector in national adaptation plans of action (NAPAs) and in the list of nationally appropriate mitigation actions (NAMAs) adopted by countries in their efforts to mitigate climate change;
• reorienting public spending in agriculture by prioritizing the provision of public goods, such as extension services, rural infrastructures and agricultural research, and by building on the complementary strengths of seeds-and-breeds and agroecological methods, allocating resources to both, and exploring the synergies, such as linking fertilizer subsidies directly to agroecological investments on the farm (“subsidy to sustainability”);
• supporting decentralized participatory research and the dissemination of knowledge about the best sustainable agricultural practices by relying on existing farmers’ organisations and networks, and including schemes designed specifically for women;
• improving the ability of producers practicing sustainable agriculture to access markets, using instruments such as public procurement, credit, farmers’ markets, and creating a supportive trade and macroeconomic framework.

The research community, including centres of the Consultative Group on International Agricultural Research and the Global Forum on Agricultural Research, should:
• increase the budget for agroecological research at the field level (design of sustainable and resilient agroecological systems), farm and community levels (impacts of various practices on incomes and livelihoods), and national and sub-national levels (impact on socio-economic development, participatory scaling-up strategies, and impacts of public policies), and develop research with the intended beneficiaries according to the principles of participation and coconstruction;
• train scientists in the design of agroecological approaches, participatory research methods, and processes of co-inquiry with farmers, and ensure that their organizational culture is supportive of agroecological innovations and participatory research;
• assess projects on the basis of a comprehensive set of performance criteria (impacts on incomes, resource efficiency, impacts on hunger and malnutrition, empowerment of beneficiaries, etc.) with indicators appropriately disaggregated by population to allow monitoring improvements in the status of vulnerable populations, taking into account the requirements of the right to food, in addition to classical agronomical measures.