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Posts Tagged ‘value chain

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.

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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”.