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Ecological News

To kick start Start-Up India, poor entrepreneurs must be encouraged

Ground Reality - Sat, 02/06/2016 - 12:09
These women selling vegetables on the pavement in Leh in Ladakh are also entrepreneurs.


If you had been to Leh in Ladakh you would have surely seen women in traditional attire selling vegetables on the pavements. Closer home, I am sure you encounter the rehriwalaumpteen numbers of times during the day doing the rounds selling vegetables or your daily necessities. Walk into any market, and you will find people swarming around a rehri eating pao-bhaji or gol-gappas or chats.
One thing common about them is that they are all entrepreneurs.
I was reminded of the women in Leh when the Prime Minister Narendra Modi announced a series of sops and tax exemptions as part of the “Start Up India, Stand Up India” campaign for aspirational young Indians. Have an entrepreneurial mindset, improve your efficiency and empower yourself to make a difference goes the underlying refrain. And that makes me wonder, why are the policy makers unable to appreciate the spirit of entrepreneurship that lies largely untapped among the lower strata of the society. True economic growth is only possible if the social divide is bridged, not widened. Given the right kind of policy push, I am sure several million flowers in rural India would have also bloomed by now. Yes, you heard it right, several million. 

A Rs 10,000-crore endowment fund, income tax relief for first three years, exemption from capital gain tax, no labour inspection for three years, credit guarantee fund for startups, easy exit, self certification and a number of sops greet the young Start Up entrepreneurs. Thanks to the state largesse, newspaper reports point to top performers in a number of startups to see their pay packets doubling this season. High performers are expected to get a pay rise of 30-50 per cent.
Despite such massive subsidy support, the number of startups in India is only between 4,200 and 4,400 (third largest in the world) already providing employment for an estimated 80,000 to 85,000 people. An AFP news report (Feb 5) however is indicative of the bubble already showing signs of bursting with hundreds of layoffs at several Indian startups. It quotes Arvind Singhal, chairman of management consulting form Technopak: “The valuation bubble is bursting. The valuation had reached levels where they were ridiculous and could not be justified at any level.”
While what has gone wrong with startups is topic for another day, I take you back to the failure to appreciate and encourage entrepreneurship amongst the poor. Take the case of a poorest of the poor woman in a village. She has no land, works as a daily wage worker, and somehow manages to survive. To make a better living, she decides to buy a goat. By selling milk and raising the goat kids that she can sell off at a later stage she thinks she can make a decent living. She goes to a Micro-Finance Institution (MFI) to get a loan of Rs 7,000-Rs 8,000 to buy a goat. She gets the loan at an interest rate of 24 per cent on an average, and to be paid back at weekly intervals. At weekly repayment schedule, the interest rate effectively comes to 32 per cent.
This is hailed as a significant step in women empowerment. I wonder if a 32 per cent rate of interest can empower a poor woman, how come the well-to-do entrepreneurs in the urban centres need all the tax exemptions and government sops?
Compare this with the classic example of Punjab state’s benevolence bestowed on the steel tycoon Laxmi Mittal. According to a report in Indian Express, Laxmi Mittal was given Rs 1,250-crore by the Punjab government to invest in the Bathinda refinery. This was to be treated as a soft loan for 20 years, to be paid back at 0.1 per cent rate of interest. Film star Hema Malini got a 2,000 square metre plot worth Rs 13.5 crore for a mere Rs 70,000. Gujarat Chief Minister daughter Anar Jayesh Patel's business partners have got 250 acres of land at an official rate of Rs 15 per square metre, says a news report.
I am sure you will agree that if the poor woman too had got a loan at 0.1 per cent rate of interest, she would have been driving a Nano car at the end of the second year. Similarly, if the vegetable vendors in Leh had got bank credit at the same interest rate, and a small piece of land at the rate at which Anar Patel got the land, they too would have set up small pucca shops.
The poor are entrepreneurs too. They would have moved up the ladder in large numbers if suitable and appropriate schemes to encourage entrepreneurship were also carved out for them. They too can be part of ‘Stand Up India’ provided the government focuses on social inclusiveness to build up economic equality. Let us not leave the poor at the mercy of loan sharks – and then consider them suitable only for MNREGA activities. It is time to disband MFIs and use Jan Dhan Yojnato give the poor an easy access to cheaper credit. 
Social equality is at the very foundation for economic growth. We cannot discriminate among entrepreneurs just on the basis of where they come from. 
To kick start Start Up India, poor entrepreneurs must be encouraged. ABPLive. Feb 5, 2016 http://www.abplive.in/blog/to-kick-start-start-up-india-poor-entrepreneurs-must-be-encouraged
Categories: Ecological News

Yes, Mr Prime Minister. Incentives too are subsidies.

Ground Reality - Thu, 02/04/2016 - 11:40


Yes, Mr Prime Minister. You are absolutely right. It is all a game of words. When the poor are given financial support it is called subsidies, a word which has now been demonized. But when the rich are doled out massive freebies like land at a throwaway price, natural resources being made available on a platter, tax exemptions, tax holidays, and the list is endless; it is called incentive for growth.
This clever manipulation of economic thought through a deliberate choice of words – and parroting it to a level that it becomes a part of the popular discourse – in reality is what has actually led to worsening inequality. The choice of right vocabulary to cover up massive subsidise to the rich and the influential, often doled out at an obscene level, is perhaps at the very foundation of the global economic crisis.
The tragedy is that none of the mainline economists have ever questioned this. They knew it but they kept quiet.
When Prime Minister asked: “If the fertilizer subsidy were to be re-named ‘incentive for agricultural production’, I wonder if some experts might view it differently,” he actually hit the nail on the head. This is exactly what I have saying for long. How come an outlay of Rs 1.25 lakh crore for the food security programme, which is expected to feed 67 per cent of India’s population, is decried by economists as a wasteful subsidy but Rs 42-lakh-crore tax concessions (listed as Revenue Foregone in the budget documents) to India Inc since 2004-05 is considered to be an incentive for growth? You would have noticed. Every time I raised this question on various TV panels I was just ignored.
I still remember. In one of the pre-budget meetings with the Finance Minister Arun Jaitley I had specifically made a suggestion to withdraw tax concessions (at that time it stood at Rs 5.24 lakh crore for just one year) which I explained were nothing but a terrible drain on nation’s finances, a mainline economist had gone to the extent of actually asking the Finance Minister Arun Jaitley to strike off the ‘revenue foregone’ category from budget documents so that these massive doles remain hidden from public glare. 
Consider this. The LPG subsidy was decried as a wasteful subsidy. Much of it of course goes to affluent section, which should be withdrawn. I remember an economist wrote that every year the country was spending Rs 48-crore for subsidizing LPG cylinders, an amount good enough to wipe out poverty from India for one year. He wanted the entire subsidy to be scrapped. When I responded by saying that if Rs 48-crore subsidy could wipe out poverty for one year, Rs 42-lakh crore subsidy by way of tax exemptions could have removed poverty for 84 years, and surely would have made poverty history, I was told that tax exemptions to corporate India were an ‘incentive for growth’.
These massive tax exemptions, enough to meet the entire budget expenditure for three years, however failed to deliver. India is witnessing jobless growth, employment generation is dismal, industrial growth has remained sluggish, manufacturing has gone into negative, and the exports have failed to pick up. The question that I have been asking and which still remains unanswered is that if the incentives have failed to make any visible impact, then where has all that money gone? But the Niti Ayog never questioned this. Nor did the Chief Economic Advisor ever point it out.
The silence is deafening.
I like it when Narendra Modi says: “Double taxation treaties have in some cases resulted in double non-taxation.” These are also not counted in the tax exemptions that are fished out every year. In other words, the country is suffering a double loss. On the one hand there is a revenue loss from these tax exemptions, and on the other, as the Prime Minister says, “dividends and long-term capital gains on shares traded in stock exchanges are totally exempt from income tax even though it is not the poor who earn them. Since it is exempt, it is not even counted in the tax exemptions.”
He is absolutely right. The country continues to suffer a double blow.
The language game does not end here. If you and I default on a bank loan, we are called defaulters. The bank can seize the car against which the loan is taken or mortgage the property or even use wrong arm tactics to extract the amount. But when the rich and the corporate default a bank, it is called Non-Performing Assets (NPAs). First, the common man on the street does not understand that how cleverly a difference in language hides a bigger crime. Secondly, the banks never seize the physical assets of these companies but instead go for restructuring the bad debts.
Non-Performing Assets of banks have reached a critical level. But watch any TV debate; NPAs rarely feature in prime time discussions. We are time and again reminded of the Rs 74,000-crore loan waiver that was given to farmers in 2008-09 but I have never seen the mainline media (including the business channels) ever question the restructuring of bad loans. The reason is obvious. The rich want to protect their subsidies, and the best way is to dress them in a vocabulary that the masses cannot differentiate. Thank you, Mr Prime Minister. You have stepped in where mainline economists and the mainline media fears to tread.
PM Modi bats for subsidies and rightly so. ABPLive.in  http://www.abplive.in/blog/pm-modi-bats-for-subsidies-and-rightly-so 
Categories: Ecological News

Activists urge farmers to shift to organic crops

Navdanya Diary - Mon, 01/25/2016 - 17:37

By Neel Kamal – The Times of Inda, 25 January 2016

Bathinda: The issue of farmers committing suicides due to cotton crop damage is being highlighted through a social media campaign and a documentary film made by a non-government organization (NGO) in an area.

The NGO, Navdanya, is reaching out to Punjab cotton growers, who are committing suicides after crop failure. Navdayna used social media awareness with hash-tag #farmerslivesmatter and documentary ‘BT Cotton-seeds of suicide’ to make Punjab farmers use locally-prepared seeds.

Concerned over damage to the cotton crop in Punjab which forced many farmers to commit suicide last year, Navdanya on Sunday held a solidarity meet at village Chughe Kalan in Bathinda where two months ago farmer Kuldeep Singh had committed suicide after his crop was damaged by pests. Manveer Singh, an expert in the natural prevention of pests, said pests could be stopped without even using pesticides.

Another activist Indra Shekhar Singh spoke about BT cotton crisis. “The genetically modified (GM) crops are being grown on our soil and then blended illegally into our edible oils. This blending makes all industrial oils toxic and unhealthy,” he claimed.

NGO Kheti Virasat Mission executive director Umendra Dutt said, “Navdanya has helped convert Sikkim into an organic state and people of Punjab should also join with them and help change from a chemical model of agriculture and go organic.” Navdanya distributed desi organic cotton seeds to villagers.

 
Related Campaign

Navdanya Campaign in support of farmers victims of BT Cotton failure in Punjab

 

 
Related Event

Navdanya Solidarity meeting in Bathinda

 

                          
Categories: Ecological News

NGO shows the way to debt-ridden farmers

Navdanya Diary - Mon, 01/25/2016 - 17:29

by Sanjeev Singh Bariana – The Tribune, 24 January 2015

Source: http://www.tribuneindia.com/news/punjab/ngo-shows-the-way-to-debt-ridden-farmers/187704.html

Chugge Kalan (Bathinda), Jan 24 – Taking a lead from the village of farmer Kuldeep Singh, who committed suicide on September 25, 2015, following his failed cotton crop, NGO Navdanya, which played a pivotal role in Sikkim being awarded for organic farming, launched “Anna Swaraj” today, promoting organic farming and denouncing Bt crops.

The NGO also released a film “Bt Cotton Seeds of Suicide”, which has a name of 40 farmers from the neighbourhood who committed suicide because of debt related to cotton crop. Dr Mira Shiva, member of the Central Council for Health, said, “Appreciating the great initiative shown by the Prime Minister in promoting organic farming, we too are making a beginning here.”

“Research indicates that cancer is linked to the use of excessive pesticides. There were enough indications to show linkages with other health disorders. We need to make a beginning and adopt organic farming following the example of Sikkim,” Dr Shiva said. Agricultural expert Manveer Singh spoke on techniques through which pests could be stopped without using pesticides.

Umendra Dutt, chairman of the Kheti Virasat Mission, said, “Organic farming is the healthiest alternative to harmful Bt varieties. Navdanya has helped convert Sikkim into an organic state. Now, people of Chugge Kalan should join hands and set the example of an organic model for Punjab.”

A national-level NGO promoting biodiversity and organic farming, Navdanya has been campaigning against GM crops since 1991. The NGO has helped set up 54 community seed banks in the country promoting organic agriculture.

The gathering also talked about the country’s first social awareness hash tag (#Farmerslivesmatter) being extensively used to voice out plight of Bt crop growers in Punjab and Maharashtra.

 
Related Campaign

Navdanya Campaign in support of farmers victims of BT Cotton failure in Punjab

 

 
Related Event

Navdanya Solidarity meeting in Bathinda

 

                          
Categories: Ecological News

No justification for lifting ban on khesari dal

Ground Reality - Fri, 01/22/2016 - 10:37


The desperation is clearly visible. Unable to rein the prices of common man’s dal, the mere idea of allowing the cultivation of toxic khesari dal shows policy makers are at a loss. 
In a grim famine-like situation I would have still accepted it. But to use the high prevailing prices of pulses as a justification for lifting the ban of the harmful khesari dal hardly makes any sense, both scientifically as well as economically. 
Khesari dalwas banned in 1961. The ban was imposed after reports of spread of a disease lathyrism, a neurological disorder from eating khesari dal (botanical name: Lathyrus sativus) that leads to limping, was widely reported and diagnosed. According to New Scientist (Aug 23, 1984) -- “the disease has two forms: latent and established. The latent form is characterised by mild back pain, an alteration in gait and difficulty in running. In just over half the cases, the disease goes no further. But in its established form, lathyrism leads to spastic paraplegia of the lower limbs; the fortunate sufferers can hobble on crutches; for others leg muscles give way completely and patients are reduced to crawling helplessly."
Despite the ban, khesari dal is still grown in parts of Madhya Pradesh, Chhatisgarh, Odisha, West Bengal and eastern Uttar Pradesh. It certainly has some positive traits -- it is a drought resistant crop, very hardy, and has a shorter growing period.
Since it is cultivated in Bangladesh, reports of the dal being smuggled by traders have also appeared from time to time. Even local traders are known to mix it with arhar to make a fast buck. So when scientists at the Kanpur-based Indian Institute of Pulses Research claim they have developed three varieties – mahateora, rattan and prateek – which do not carry the water soluble, non-protein amino acid ODOP toxin, I wonder how will they ensure that these three varieties are not adulterated with the traditional legume grains that carry the toxin. Since it is practically impossible to ensure why then willingly get into a problem we know we have no control over.
There are several studies showing detoxification of ODOP by certain processing techniques like roasting, soaking prior to boiling, treatment with tamarind water etc. Some studies indicate that frying in oil removes 72-100 per cent of ODOP. This clearly shows that khesari dal indeed contains the toxin. That is why the need to detoxify. Knowing this, I don’t think it will be advisable to promote khesari dal in the common man’s menu assuming that he/she would take the necessary precautions. It is therefore very important to know how and on what basis the Indian Council of Medical Research (ICMR) has accorded approval to the three varieties. After all, any discerning consumer would like to know the details so as to be convinced. Similarly, the Food Safety and Standards Authority of India (FSSAI) also need to hold rigorous trials and that too in public domain before any definite conclusion is arrived at.
There seems to be no justification in pushing for the revival of toxic khesari dal’sproduction in the garb of boosting domestic pulses production. In any case, even if the commercial trials for khesari dal are approved, it will be several years before its production can make a significant addition to India’s production of pulses. This risk is certainly therefore not worth the effort. Instead of diverting attention to khesari dal, which has historically been found to be toxic for human health, the entire thrust should focus on increasing domestic production of pulses.
The effort should instead be to promote newer varieties being developed by the Indian Council of Agricultural Research (ICAR) system. The New Delhi-based Indian Agricultural Research Institute (IARI) claims to have developed an improved variety of arharwhich matures in 120 days and has a yield potential of 20 quintals per hectare. Similarly, there are some other promising varieties that have been developed recently. I would rather spend my energies in taking these new varieties to farmers.
Boosting domestic production of pulses needs a two-pronged strategy. First, it is important to raise the import duties so as to stop the cheaper imports coming in. At the same time, I see no reason why India should not refrain from importing yellow peas, which is traditionally used as cattle feed in Canada, and selling it as an alternative to arhar. Putting a stop to imports must be accompanied by announcing a procurement policy that assures farmers that every grain of legume produced will be purchased by the government agencies. A high minimum support price (MSP) along with the promise of an assured procurement is the only mechanism to boost domestic production.
The government’s move to procure only 40,000 tonnes of pulses for the proposed buffer it intends to create is a flawed approach. Building up a buffer on assured procurement and leaving the rest of the farming communities to be exploited by the private trade is no incentive for production growth. Such a policy may enable the government to meet any eventuality arising from rising prices, but is fraught with dangers. Unless the availability of pulses in the market increases, and that it possible only if the total production goes up, the buffer will not be of any help in bringing down the prices.  
No justification for lifting ban on khesari dal. ABPLive.in Jan 21, 2016http://www.abplive.in/blog/no-justification-for-lifting-ban-on-khesari-dal
Categories: Ecological News

Why does India need GM Mustard at all?

Ground Reality - Thu, 01/21/2016 - 10:30


Thirteen years after the Genetic Engineering Approval Committee (GEAC) had ‘deferred’ commercial approval for genetically-modified (GM) mustard; the genie is once again back. Costing Rs 70-crore of taxpayer’s money, which could have helped set up at least 3,000 new schools, the new GM mustard awaiting approval for commercial cultivation this time comes dressed up in public sector attire.
The same claims, the same language (almost the same) and the same fears. Earlier it was Pro-Agro Seeds India Private Ltd, a subsidiary of multinational agro-chemical giant Bayer, which claimed its GM variety containing four foreign genes, would raise the productivity of mustard by 20-25 per cent, and improve oil quality. The new GM mustard that has been developed by the Centre for Genetic Manipulation of Crop Plants, University of Delhi, and contains three alien genes – Bar, Barnase and Barstar -- also makes strikingly similar claims. At the same time, for reasons that can be explained, the promoters of the earlier Pro-Agro GM mustard as well as Delhi University’s new GM mustard deny the expression of herbicide resistance, although both use a gene known for it.
The country is importing Rs 60,000-crore worth of edible oils every year and therefore there is an urgent need to increase the production of mustard, which in turn means producing more edible oils, goes the refrain. In several panel discussions and public debates on this subject in which I have partcipated, I have heard Dr Deepak Pental, a former Vice-Chancellor of Delhi University and the lead developer of the new GM mustard, repeatedly assert on the need to cut down on the foreign exchange outgo and also how much would be the resulting saving for a developing country like India. This is exactly what the promoters of the GM mustard developed by Pro-Agro used to claim some 13 years back. Edible oil imports at that time were also around 50 per cent of the domestic requirement, costing the state exchequer Rs 12,000-crore.  
To any educated person, the argument on the need to reduce the huge import bill on edible oils sounds very appealing. But very cleverly, the GM lobby has used this argument to give an impression as if it is because of the a shortfall in mustard production. In reality, it is not so.
Let me explain. Former Prime Minister Rajiv Gandhi was piqued over India’s rising imports. He was desperate to cut down on what the macro-economists call as the Current Account Deficit. Fuel, fertilizer and edible oils topped the import chart. The annual import bill for edible oils then hovered between Rs 1500 and Rs 3000-crores. Knowing that edible oil imports could be stopped since India had the ability to raise domestic oilseeds production and also undertake processing, he launched a Technology Mission in Oilseeds in 1985.
In less than ten years, between 1986 and 1993, doubling of oilseeds production was remarkable indeed, and was later dubbed as Yellow Revolution. From 11 million tonnes in 1986-87, oilseeds production jumped to 22 million tonnes in 1993-94. From a net importer, India became almost self-sufficient in edible oils. With 97 per cent self-sufficiency, India’s imports were reduced to only 3 per cent of the requirement. The downslide began a few years later when India deliberately began to lower the import duties allowing cheaper and heavily subsidized edible oil to flow in. The more the edible oil imports, the more the domestic processing industry pulled down the shutters. 
In 2002-03, when Pro-Agro was trying to market its GM mustard, the imports had touched Rs 12,000-crore at the then prevailing prices. Thirteen years later, when Dr Pental is trying to push the new GM mustard – DMH 11 -- the annual import bill has soared to Rs 60,000-crore. But the rising import bill, as is evident, is not because of any shortfall in domestic production, but resulting from a flawed import-export policy that had brought the import tariffs to almost zero. What is therefore needed is to raise the import tariffs to about 70 per cent or higher (WTO allows India a maximum of 300 per cent import tariffs on edible oils) and then provide a high price and an assured market, farmers would do the rest.
At the same time, the claim that GM mustard increases productivity by 20-25 per cent is simply absurd, and if I may say so is motivated. First of all, there is no known gene (or a cluster of genes) that can increase productivity. Secondly, any GM variety is known to be as good as the hybrid in which the alien gene is inserted. Even if a gene simplifies the process of hybridization it does not mean it raises crop productivity. To compare the yield of GM mustard (which essentially means hybrid mustard) with traditional varieties therefore is only unfair. On the related issues of gene flow, contamination and the growth of super weeds, the response so far has been unscientific.
In the past 13 years, I have not heard of any complaint about the quality of mustard oil that is available. Mustard has traditionally been used for food (its leaves cooked as sarson ka saag) and should not be viewed only as edible oil. I sometimes use mustard oil for taking care of my ear and nose ailments, for regular body massage, and it is also used in several traditional medicine formulations. It is therefore crucial that the concerns raised by the Ministry of Environment and Forests at the time of imposing a moratorium on Bt brinjal in 2010, the Parliamentary Standing Committee report on GM Foods, as well as the recommendations of the Supreme Court Technical Committee are followed in letter and spirit. 
The common problem that consumers encounter with mustard oil is its rampant adulteration with cheaper oils. Nowadays I find that even the adulterated mustard oil (mostly with cheaper cottonseed oil or palm oil) that is being openly sold contains a sprinkling of red chilly solution so as to satisfy the taste and smell at the time of cooking. ABLE would do a remarkable public service if it were to launch a consumer campaign demanding the Food Safety Standards Authority of India (FSSAI) to ensure availability of genuine and pure mustard oil. I still can’t understand why the Genetic Engineering Appraisal Committee (as it is called now) wants to sweep under the carpet the conclusions arrived in the excellent 19-page report the then Minister for Environment Jairam Ramesh had submitted at the time of announcing a moratorium. Is the GM industry so powerful that the GEAC is willing to scuttle a scientific debate spearheaded by a former minister and is even willing to ignore the resulting health and environmental concerns for no apparent benefit resulting from commercializing GM mustard?  
Why does India need GM Mustard at all? BioSpectrum. Jan 19, 2016http://www.biospectrumindia.com/biospecindia/views/223161/why-india-gm-mustard#sthash.AbjFlJ0G.uxfs&st_refDomain=www.facebook.com&st_refQuery=
Categories: Ecological News

European Patent Office revokes Monsanto patent on Indian melons

Navdanya Diary - Thu, 01/21/2016 - 00:11

No Patents on Seeds, 20 January 2016

Source: http://no-patents-on-seeds.org/en/information/news/european-patent-office-revokes-monsanto-patent-melons

Opponents urge politicians to take action

20 January 2016

The European Patent Office (EPO) has revoked a patent held by Monsanto on melons (EP1962578) for technical reasons. Monsanto was claiming melons with a natural resistance to plant viruses as its own invention, derived from breeding without genetic engineering. The resistance was detected in Indian melons. The patent was granted by the European Patent Office (EPO) even though European patent law does not allow patents on plant varieties and processes for conventional breeding. The Indian government supported the opposition from No Patents on Seeds! by a sending letter requesting the patent to be revoked. The letter was sent to the EPO just one day before the hearing. Essentially the application of the patent constituted an act of biopiracy – violating Indian law and international treaties.

“The patent was based on essentially biological processes for breeding and claimed plant varieties. This was a clear violation of European patent law”, says Christoph Then for the international coalition of No Patents on Seeds! which organised the opposition. “It is a huge success that the patent has been revoked! Nevertheless, the general problem cannot be resolved simply by filing oppositions at the EPO. Politicians need to make sure that laws are applied properly and prohibitions are no longer ignored.”

The opposition was filed by Arbeitsgemeinschaft Bäuerliche Landwirtschaft (Germany), Bund Naturschutz in Bayern (Germany), Berne Declaration (Switzerland), Gesellschaft für Ökologische Forschung (Germany), Greenpeace (Germany), No Patents on Life! (Germany), Verband Katholisches Landvolk (Germany) and Foundation for Future Farming.

Contact:
Christoph Then, Tel + 49 151 54638040, info@no-patents-on-seeds.org

Further information: www.no-patents-on-seeds.org

Downloads: Media Release

Related article:

Hearing on the opposition against Monsanto Patent on Indian Melon

Media Release – No Patents on Seeds, 18 January 2016

On 20th Jan 2016 the #EPO revoked Monsanto's #Biopiracy #patent on #Indianmelons.We earlier won cases on Biopiracy of #neem,#basmati,#wheat

— Dr. Vandana Shiva (@drvandanashiva) January 20, 2016

#Monsanto #Biopiracy of of Indian #melon.In 2004 Navdanya stopped #wheat Biopiracy https://t.co/vs89bUeK9f #NoPatentsOnSeed @PMOIndia

— Dr. Vandana Shiva (@drvandanashiva) January 20, 2016

Related Campaign

Seed Freedom and Food Democracy                           
Categories: Ecological News

Hearing on the opposition against Monsanto Patent on Indian Melon

Navdanya Diary - Tue, 01/19/2016 - 14:56

Media Release – No Patents on Seeds, 18 January 2016

Indian melon (Photo: Seth Vidal)

Source: http://no-patents-on-seeds.org/

Increasing opposition against patents on conventional breeding

18 January 2016. On 20 January the European Patent Office (EPO) will hold a public hearing on the opposition to a European Patent on melons (EP1962578). Monsanto is using this patent, to claim melons with a natural resistance to plant viruses as its own invention, derived from breeding without genetic engineering. The patent was granted by the European Patent Office (EPO) even though European Patent Law does not allow patents on the conventional breeding of plants and animals. The resistance was copied from Indian melons. The opposition is also supported by the renowned Indian activist Vandana Shiva and her organisation Navdanya.

“Monsanto’s melon Patent is biopiracy at its most devious. First of all, the patented resistance was not invented by Monsanto – just discovered in an Indian melon. Monsanto is now pretending to be the first to have bred it into other melons – but to copy something is not an invention”, says Francois Meienberg from Berne Declaration. “Secondly, Monsanto has violated the Indian Biodiversity Act implementing rules on Access and Benefit-Sharing based on the Convention on Biological Diversity. It would be a disgrace if the European Patent Office rewards Monsanto with a patent based on a flagrant violation of Indian law.”

The Berne Declaration has access to a letter sent by the National Biodiversity Authority of India to Monsanto in November 2012, explicitly stating that “The actions of Monsanto in using Indian melon varieties in research and development with commercial intent including application of a patent based on Indian melon varieties amounts to a blatant violation of Section 3 and 6 of the Biological Diversity Act.”

The melon patent is just one of several patents granted on plants and animals derived from conventional breeding by the EPO. Recent No Patents on Seeds! research shows that in 2015 around hundred new patent applications were filed. These patents concern carrots, potatoes, brassica plants, maize, melons, pepper, rice, lettuce, soybeans, spinach, tomatoes, wheat and onions. Amongst the applicants are big companies like Bayer, Dupont/Pioneer, Monsanto, Syngenta and Dow AgroSciences. All in all, around 1400 patent applications on conventional breeding are pending with around 180 being granted already by the EPO.

Opposition is growing against these patents: Around 80.000 individuals and more than 200 organisations have signed a call from No Patents on Seeds! within the last few months demanding that patents on conventional breeding are stopped. Further, today in Germany the organisation Campact, together with its European partners and also supported by “No Patents on Seeds!”, is starting a campaign urging national governments to take more action in the fight against patents on plants and animals.

The coalition No Patents on Seeds! is supported by Arche Noah (Austria), Bionext (Netherlands), The Berne Declaration (Switzerland), GeneWatch (UK), Greenpeace, Misereor (Germany), Development Fund (Norway), NOAH (Denmark), No Patents on Life (Germany), ProSpecieRara (Switzerland), Red de Semillas (Spain), Rete Semi Rurali (Italy), Reseau Semences Paysannes (France) and Swissaid (Switzerland). They are all calling for a revision of European Patent Law to exclude breeding material, breeding processes, plants and animals, their characteristics, their genetic components, the harvest and food derived thereof from patentability.

Contacts: Francois Meienberg, Berne Declaration, phone +41 44 277 70 04 food@evb.ch Christoph Then, No Patents on Seeds!, phone + 49 151 54638040, info@no-patents-on-seeds.org

Further Information:
Link to the patent and the opposition

Overview on patent applications in 2015

The No Patents on Seeds! petition

The new Campact campaign

For further information

Related Campaign

Seed Freedom and Food Democracy                           
Categories: Ecological News

Sikkim becomes 'organic' model for other Himalayan states.

Ground Reality - Fri, 01/15/2016 - 21:42


Enough reasons to smile now. Pic from Sikkimnews.blogspot.com 
This is fabulous news. Perhaps the best we heard in recent times. The tiny, land-locked Himalayan State of Sikkim has become fully organic. All credit goes to Chief Minister Pawan Kumar Chamling for making that possible.
It took almost 12 years to realize that dream. When Pawan Kumar Chamling made a declaration in the State assembly way back in 2003 to go completely organic, I doubt if many experts and policy makers would have taken that seriously. But it was his firm resolve and commitment that gradually converted 75,000 hectares of cultivable farm land into certified organic.
Prime Minister Narendra Modi is scheduled to formally announce this at a glittering ceremony followed by a sustainable agriculture conference at Gangtok on Monday, Jan 18. I am told the Prime Minister intends to announce a series of steps to promote organic agriculture in the country.
The political will demonstrated by Sikkim will certainly send a loud message for sustainability. The firm resolve to go organic has certainly made Sikkim a potential role model for the rest of the Himalayan States. Prime Minister Modi is already keen on turning the Northeastern States into an organic bowl, in contrast to the UPA regime’s effort of bringing the 2nd Green Revolution intensive farming practices to Assam and beyond. This is a welcome initiative and needs to be extended to the entire Himalayan range.
Himalayas have a unique ecosystem. In such a salubrious environment, where people come to enjoy the beauty of nature, it is a rude shock to see farmers spraying chemical pesticides on standing crops. Travelling into the lower hills of Uttarakhand sometimes back I was aghast to find farmers spraying a heavy dose of chemicals on the tomato crop. I was told that more than a dozen pesticides sprays are conducted routinely on the tomato crop. In Himachal Pradesh, the scene is no different. Apple cultivation for instance is perhaps the worst when it comes to pesticides use and abuse. Besides contaminating the food chain, pesticides do get into the soil, the environment, and get washed down into streams. But over the years, the emergence of lifestyle diseases has slowly but steadily turned people towards organic foods. Incidentally, the growth in organic foods in India is amongst the highest in the world, almost exceeding 22 per cent every year. 
Pesticides sprays are part of the recommendations that are officially made in the package of practices to be followed. Following the same farming techniques as in Punjab and Haryana, which comprise the food bowl, is certainly not advisable for the hills. To sustain the fragile hills, what is needed is a different kind of mountain agriculture rather than blindly aping the intensive chemical farming practices from the plains. Agricultural Universities in the hills need to be directed to shift the research focus on sustainable farming practices in the mountains along with appropriate economic policies that encourage organic farming.
If you think this is not possible, you need to rethink. In Andhra Pradesh, which has faced the brunt of intensive chemical farming practices over the years, the State Government has decided to train 1.5 lakh farmers in organic farming. Chief Minister Chandrababu Naidu has already announced that the entire farming population will be trained in organic farming practices in the next three years. This is not a small target. The approach Andhra Pradesh has adopted is to train the best among the organic farmers as trainers. These trainers are then fanning out into different parts to teach the other farmers.
Andhra Pradesh is picking up from its famed Community Managed Sustainable Agriculture (CMSA). In almost the same period in which Sikkim went completely organic, 36 lakh acres in Andhra Pradesh (half of this area is now in the newly created Telengana) got converted to non-pesticides farming. Despite the fear that pest attack will increase thereby hitting crop productivity, the area under non-pesticides management went on increasing. It has now been found that with the withdrawal of chemical pesticides, the insect attack has greatly reduced, the environment has become much clean as a result of which the health costs for the farming families has also fallen by about 40 per cent. In essence, while the household food security has improved, farm incomes too have gone up.
If non-pesticides management can be adopted by farmers in 36 lakh acres, I see no reason why such practices cannot be adopted by farmers in ten times more area -- 360 lakh acres. All it needs is proper training, skill development, and of course adequate backing from the State Governments. 
What has been attained in Andhra Pradesh can certainly be imbibed by other States making suitable adjustments in the approach as per their agro-climatic conditions. But what has been achieved by the hilly State of Sikkim is certainly a model for the rest of the Himalayan States. More so, considering that the entire Himalayan biodiversity is under a threat. It is therefore important to preserve and conserve what has survived the onslaught. I only hope Sikkim emerges as a trendsetter, a harbinger of sustainable agriculture, which is the only plausible way to achieve climate resilience.
Source: Sikkim becomes 'organic' model for other Himalayan states. ABPLive.in Jan 15, 2016.http://www.abplive.in/blog/sikkim-becomes-organic-model-for-other-himalayan-states
Categories: Ecological News

Anna Swaraj (Food Freedom)

Navdanya Diary - Thu, 12/31/2015 - 00:22

By Dr Vandana Shiva – The Asian Age, 30 December 2015

Source: http://www.asianage.com/columnists/anna-swaraj-964

“Instead of regulating those selling unhealthy oils, the government is trying to close Gandhi’s ghani — producing pure oil in front of the eyes of consumers — because it does not have a lab attached to it”

Mahatma Gandhi’s spinning wheel and Gandhi’s ghani (the indigenous cold press oil mill) are both symbols of swadeshi as economic freedom and economic democracy.

Gandhi inspired everyone in India to start spinning their own cloth in order to break free from the imperial control over the textile industry, which enslaved our farmers to grow cotton and indigo for the mills of Lancashire and Manchester, and dumped industrial clothing on India, destroying the livelihoods of our spinners and weavers. The spinning wheel and khadi became our symbols of freedom.

Gandhi promoted the ghani to create employment for the farmer and processor and to produce healthy, safe and nutritious edible oils for society. What the spinning wheel is to “kapda”, the economy of clothing and textiles, the “ghani” is to “roti”, the economy of food.

Fresh, local and artisanally processed food without chemical additives and industrial processing is recognised as the healthiest alternative. That is why until the 1990s, food processing was reserved for the small-scale and cottage industry sector. The World Trade Organisation rules changed our food and agriculture systems dramatically.

Today we are living in food imperialism. We have become a sick nation due to the rapid spread of industrially processed food and junk food, which are destroying our healthy food traditions.

The oils most Indians are consuming today, as “vegetable oil” are industrially processed imported palm oil and genetically modified organism (GMO) soya oil. Unlike sesame, mustard, groundnut, linseed and coconut these are not true oils because they cannot be processed in ghanis or through cold press.

The oil from soya is extracted at high temperatures in hexane solvent extraction plants. Hexane (CH3 (CH2) CH3) is a crude oil-based organic solvent with many industrial uses and is a neurotoxicant. No tests or labelling inform citizens about this process and the inclusion of GMOs in our food chain.

In industrial refined oils, 30 per cent “blending” in “refined” oils is legal. The adulterants are labelled as “vegetable oils”, without letting consumers know that vegetable oils include oil from the toxic GMO cotton seed. GMO foods are not allowed in India, yet Bt cotton seed oil is being freely blended in industrial “edible” oils.

The industrial soya lobby has consistently attempted to monopolise the Indian edible oil market. In 1998, it manipulated a ban on our ghanis and got a law passed that each tiny ghani had to have labs — each costing lakhs — and hire two chemists. Women working with Navdanya organised Mahila Anna Swaraj and undertook the “Sarson Satyagraha” to bring our cold press mustard oil back.

Instead of regulating those selling unhealthy, unsafe oils without proper labelling, the government is trying to close down Gandhi’s ghani — producing pure oil in front of the eyes of consumers — because it does not have a lab attached to it.

It is industrial food with chemicals which needs to be tested in labs, not just for artificial ingredients, but also for the impact of chemical additives and industrial processing on our health.

The new food safety rules are arbitrary because they do not differentiate between artisanal, chemical-free processing of oil from the industrial chemical crude oil based processes. Imposing chemical labs on a ghani ensures that safe foods made in the artisanal sector are shut down to create a monopoly by corporations for unhealthy and unsafe foods.

The pure virgin oil from the ghani is sold at Gandhi’s Sewagram Ashram and people come from far and wide to buy it. Food safety in the artisanal sector needs participatory systems where citizens who produce the oil and those who consume it set the standards of quality and reliability.

Just as there are participatory guarantee systems for organic production, we need participatory systems for artisanal food processing.

Imported and adulterated edible oils are dominating the market because they are subsidised and their ecological and health costs are hidden and externalised. Even the price of these artificial oils is made cheap through subsidies. The import duty of edible oil was reduced from 300 per cent to zero, which is an indirect subsidy. In addition, the government gives `15 per litre to soya oil. This is over and above the subsidy given by the US government.

The expansion of palm oil plantations is also the primary reason for the destruction of rainforests of Indonesia. The expansion of GMO soya plantations is a major reason for the destruction of the Amazon rainforests and Cerrado, in Brazil and Argentina. This counters the big myth that industrial agriculture is contributing to protection of wilderness and biodiversity. Forest destruction contributes to 18 per cent of greenhouse gases while 85 per cent of rainforest destruction is for expansion of industrial agriculture, primarily GMO soya and palm oil. Oil palm cultivation in Indonesia accounted for an estimated two to nine per cent of all tropical land use emissions, from 2000 to 2010. Indonesia was the world’s seventh-largest polluter in 2009, and deforestation accounted for about 30 per cent of these emissions, ranking second (behind Brazil) in pollution due to deforestation. This threatens wildlife and biodiversity. It also adversely affects people, the global climate, water reserves and soil quality.Soya cultivation in India is destroying soil fertility and destroying farmers in Madhya Pradesh and Maharashtra.

Gandhi’s ghani is a symbol of our freedom in times to a new corporate imperialism trying to control what we grow on our farms, how we process our food and what we eat. While the current food safety laws originate in the Sanitary and Phytosanitary Agreement of WTO, with the Doha Round of WTO as good as dead after the recently concluded Nairobi Ministerial, the toxic food industry is getting ready to impose the Trans-Pacific Partnership trade deal which will fully dismantle our food safety systems. We must act now to reclaim our right to grow and eat safe, healthy, indigenous foods.

On January 30, Gandhi’s martyrdom day, I will join Gandhians in Sewagram, in defence of Gandhi’s ghani as a symbol of the swadeshi food. Anna Swaraj (Food Freedom) is the birthright of every Indian.

The writer is the executive director of the Navdanya Trust

                          
Categories: Ecological News

‘Free Basics’ will take away more than our right to the internet

Navdanya Diary - Wed, 12/30/2015 - 18:07

By Dr Vandana Shiva – medium.com | vandanashiva.com, 29 December 2015

Sources: https://medium.com/@drvandanashiva/free-basics-will-take-away-more-than-our-right-to-the-internet-4d39422fe122#.y1zrm8q26  | http://vandanashiva.com/?p=369

Free Basics : Corporate freedom to privatise India’s Basic Economy

As the TRAI decides the fate of Free Basics, Mark Zuckerberg is in India with ₹100 crore, in pocket change, for advertising. Facebook’s Free Basics is a repackaged internet.org, or in other words, a system where Facebook decides what parts of the internet are important to users.

Reliance, Facebook’s Indian partner in the Free Basics venture, is an Indian mega-corporation with interests in telecom, energy, food, retail, infrastructure and, of course, land. Reliance obtained land for its rural cell phone towers from the government of India and grabbed land from farmers for SEZ’s through violence and deceit. As a result and at no cost, Reliance has a huge rural, semi-urban and suburban user base — especially farmers. Although Free Basics has been banned (for the time being), Reliance continues to offer the service across its networks.

A collective corporate assault is underway globally. Having lined up all their ducks, veterans of corporate America such as Bill Gates are being joined by the next wave of philanthro-corporate Imperialists, including Mark Zuckerberg. The similarities in Gates and Zuckerberg’s perfectly rehearsed, PR firm-managed announcements of giving away’ their fortunes is uncanny. Whatever entity the Zuckerbergs form to handle the US$45 billion they will be investing will most likely end up looking a lot like the Bill and Melinda Gates Foundation. ie: powerful enough to influence the climate negotiations, responsible for nothing.

What could Bill Gates and Mark Zuckerberg have to gain from dictating terms to governments during the climate summit? “The Breakthrough Energy Coalition will invest in ideas that have the potential to transform the way we all produce and consume energy,” Zuckerberg wrote on his Facebook page. It was an announcement of Bill Gates’ Breakthrough Energy Coalition, the combined wealth of hundreds of billions of dollars of 28 private investors who will influence how the world produces and consumes energy.

At the same time, Gates is currently behind a push to force chemical, fossil fuel dependent agriculture and patented GMOs (#FossilAg) through the Alliance for a Green Revolution in Africa (AGRA). It is an attempt to lock African farmers into a dependence on fossil fuels that should be left underground, as well as creating a dependence on Monsanto for seeds and petrochemicals.

95% of the cotton in India is Monsanto’s proprietary Bt Cotton. This year, in regions from Punjab to Karnataka, 80% of this Bt crop failed  — that’s 76% of Bt Cotton farmers with no crop left at harvest time. If they had a choice, they would switch. But what resembles a choice between cotton seeds is the same Bt Cotton seed, marketed by different companies under different names, purchased in desperation as farmers try combination after combination of seeds, pesticides, herbicides, fungicides — all of which have chemical names designed to make you feel inadequate — until you have no ‘choices’ left but to take your own life.

What Monsanto has done by pushing Intellectual Property Rights (IPR) laws and patents on seeds, Zuckerberg is attempting to do to internet freedom in India. And like Monsanto, he is targeting the most marginalised Indians.

Free Basics will limit what the internet is to a vast majority of India. Already at its outset Free Basics has said it won’t allow video content on the basis that it will interfere with the telecom companies’ services (read: profits) — despite the TRAI’s own recommendation that video content is more accessible to different parts of the population.

Once allowed as a free service, what is to stop telecom companies from redefining the internet to suit their own interests, and those of their corporate partners? After all, the ban on Free Basics has not stopped Reliance from carrying on with the service to its huge user base, a large proportion of who are farmers.

Why should Mark Zuckerberg decide what the internet is to a farmer in Punjab, who has just lost 80% of his cotton harvest because Monsanto’s Bt Cotton and the chemicals he was told to spray completely failed? Should the internet allow him to see how GMO technology has failed everywhere in the world and is only kept afloat through unfair market and trade policies, or should the internet suggest the next patented molecule he should spray on his crop?

The Monsanto-Facebook connection is a deep one. The top 12 investors in Monsanto are almost the same as the top 12 investors in Facebook, including the Vanguard Group. The Vanguard Group is also a top investor in John Deere, Monsanto’s new partner for ‘smart tractors’, bringing all food production and consumption, from seed to data, under the control of a handful of investors.

It’s no surprise that the Facebook page March Against Monsanto, a major American movement in support of labelling and regulating GMOs, was deleted.

Recently India has seen an explosion in e-retailing. From large corporations to entrepreneurs, people all over the country are able to sell what they make to a market that was earlier unreachable to them. Craftsmen have been able to grow their businesses, farms have found consumers nearby.

Just like Monsanto with patented seeds, Zuckerberg wants not just a slice, but the whole pie of the basic economy of the Indian people, especially its farmers and peasants. What would Monsanto’s monopoly over climate data mean for farmers enslaved through a Facebook gateway to Monsanto data delivered through an internet that is controlled by Facebook? What would this mean for internet and food democracy?

The right to food is the right to choose what we want to eat; to know what is in our food (#LabelGMOsNow) and to choose nourishing, tasty food — not the few packaged goods that corporations want us to consume.

The right to the internet is the right to choose what spaces and media we access; to choose spaces that enrich us — not what companies think should be our ‘basics’.

Our right to know what we are eating is as essential our right to information, all information. Our right to an open internet is as essential to our democracy as our right to save, exchange and sell open pollinated farmers’ seeds.

In the ultimate Orwellian doublespeak, “free” for Zuckerberg means “privatised”, a far cry from privacy — a word Zuckerberg does not believe in. And like corporate-written “free” trade agreements, Free Basics is anything but free for citizens. It is an enclosure of the commons, which are ‘commons’ because they guarantee access to the commoner, whether it be seed, water, information or internet. What Monsanto’s IPRs are to seed, Free Basics is to information.

Smart Tractors from John Deere, used on farms growing patented Monsanto seed, sprayed and damaged using Bayer chemicals, with soil and climate data owned and sold by Monsanto, beamed to the farmer’s cellphone from Reliance, logged in as your Facebook profile, on land owned by The Vanguard Group.

Every step of every process right up until the point you pick something up off a supermarket shelf will be determined by the interests of the same shareholders.

Talk about choice.

Visit http://www.savetheinternet.in to tell TRAI (again) that we need net neutrality

                          
Categories: Ecological News

No one gives a damn for farmers.

Ground Reality - Tue, 12/29/2015 - 12:18


One thing has become crystal clear. All these years, in the midst of electoral slogans like Garibi hatao and Yeh Garibo ki sarkar haiit is the affluent sections of the society who have been continuously pampered. The widening gulf between the rich and the poor is an outcome of deliberate economic policies that have largely ended up benefitting the rich.
At a time when agriculture is passing through a terrible distress, with an unprecedented spurt in farmer suicides witnessed particularly in 2015, I had expected the NDA government to rescue the beleaguered farming community with an economic package. After all, if the industry can get economic bailout package at the drop of a hat, and get tax exemptions to the tune of Rs 42-lakh-crore in ten years, between 2005 and 2015, I thought it was a payback time to help farmers minimize their economic hardship. 
But nothing like this happened. Once again, 60-crore farmers have been given the boot.
Instead, beginning New Year, 47-lakh Central government employees and another 52-lakh pensioner will get a bonanza. The 7thPay Commission report, which has been accepted by the government, will entail an additional annual financial burden of Rs 1.02- lakh- crore. In reality, it will be several times more, not less than Rs 3-lakh core by a conservative estimate, when similar pay hikes have to be also given to State government employees, autonomous bodies, universities and public sector units. Finance Minister Arun Jaitley says the additional burden on the country’s fiscal situation is ‘manageable’. He has no problems with the hike in salaries.
But the government has all kinds of problems when farmers have to be given a legitimate rise in the farm prices. Only a few months back, in an affidavit filed before the Supreme Court, the additional solicitor general Maninder Singh had expressed government’s inability to provide 50 per cent profit over the cost of production to the farmers as recommended by the Swaminathan Committee. He had said that “prescribing an increase of at least 50 per cent on cost may distort the market. A mechanical linkage between Minimum Support Price (MSP) and cost of production may be counter-productive in some cases.”
This was an electoral promise Prime Minister Narendra Modi had made. But soon after coming to power, Modi government had refused to give a remunerative price in the form of enhanced MSP for paddy and wheat. At a time when DA for employees is raised by 13 per cent in a year, price of wheat and paddy is raised by a paltry Rs 50 per quintal, which translates into an increase of 3.6 per cent, not enough to even offset the additional burden of inflation at that time.
Look at the blatant discrimination. The minimum wage of a chaprasi under the 7thPay Commission has been raised from Rs 7,000 to Rs 18,000 – an increase of a whopping 260 per cent. Compare this to what an average farmer in India earns. You will be shocked to know that in the last 45 years, between 1970 and 2015, the basic salary plus DA of a government employee has been raised by an average of 120 to 150 times, that of professors/lecturers by 150 to 170 times whereas the minimum support price (MSP) for wheat has been raised by only 19 times in the same period.   
Given this huge income disparity, which is deliberate, it is futile to expect younger generation to take to farming.
The income disparity is glaring. While the minimum wage for an employee has now been enhanced to Rs 18,000 per month, what an average farmer family earns in a month as per the NSSO 2014 report is a paltry Rs 6,000, of which Rs 3,078 comes from farming. Nearly 58 per cent farmers have to rely on non-farming activities like MNREGA to supplement their monthly incomes. The farm incomes is low because successive governments have deliberately kept farming starved of resources and denied economic price to farmers. If only farmers were to get a rise in income (in the form of MSP) in parity with other sections of the society, the wheat price, which was Rs 76 per quintal in 1970, should now have been Rs 7,600 per quintal. 
Procurement price (or the market price) is the only mechanism through which a farmer is able to earn. His net return depends on the market price that he is able to fetch for his produce. There is no other source of income, including DA and emoluments that he can count on. Compare this with the government employees. Every six months they get DA, which is increasingly being merged with the basic salary. At the same time, if the 7th Pay Commission is to be believed, of the 198 total allowances they used to get, 108 allowances have been retained and enhanced. This includes an allowance for hair cutting for CRPF employees, and also an allowance for family planning which basically means an allowance for buying condoms. Employees will receive an increase of 63 per cent in allowances.
If farmers were to given at least four monthly allowances that the employees get – housing allowance, travel allowance, education allowance for children, and medical allowance – I am sure lakhs of farmer suicides could have been averted. Several studies have shown that health expenses alone costs a farming family 40 per cent of its monthly budget. Such is the plight, that I have often heard farmers saying say they can’t even afford to fall sick.  
I am not against the giving a higher salary to the government employees. What is being missed is that one section of the society is being pampered at the cost of the masses. My suggestion therefore has always been to constitute a National Farmers Income Commission that is mandated to ensure parity in incomes between the farming sector and the organized sector. Knowing that an economic security to the farming population is the crying need of the times, the Farmers Income Commission should be able to indicate an assured monthly package that a farming family should receive every month. Till then, the recommendation of the 7thPay Commission should be held in abeyance. This is what the 2ndNational Convention of Farmer Organisations held at Bangalore in November – in which 60 major farmer unions participating under the banner of Kisan Ekta– had resolved. #
Categories: Ecological News

2015 was a bad year for Indian agriculture

Ground Reality - Wed, 12/23/2015 - 11:17





It was a bad year for agriculture. Not that it was anything better earlier, but 2015 was particularly a bad year. Bruised by the continuous battering received since the beginning of the year, and dumped by an apathetic government, the continuing agrarian crisis has only worsened.
With a back-to-back drought for the second year in a row, the summer rainfall deficit touched a high of 14 per cent, the highest in six years. Nearly 40 per cent of the country’s cultivable area recorded deficit monsoons with Uttar Pradesh, Karnataka, Maharashtra, eastern Madhya Pradesh, Gujarat and Telangana being the worst affected. Punjab and Haryana too received less rainfall but escaped being negatively impacted because of a wide network of irrigation.
Before the summer rainfall seasons began in June, an unexpectedly long spell of unseasonal rains, accompanied by strong winds and hailstorm, had lashed western Uttar Pradesh, Haryana, Punjab, Rajasthan, parts of Madhya Pradesh and Maharashtra. The standing wheat crop that was almost ready for harvest was extensively damaged with a spate of farmer suicides hitting the hailstorm affected belt. Uttar Pradesh, Haryana and Rajasthan saw a rise in farmer deaths, with many farmers dying from shock after seeing a flattened crop.
Far away in Karnataka, in what appears to be an unprecedented reflection of the severity of a continuing agrarian crisis, more than 600 farmers (and still counting) have taken their own lives since June. In fact, self-immolation by some farmers, a few of them even jumping in the burning sugarcane fields, is seen as an expression of extreme indignation against the apathetic and farmer-unfriendly agricultural policies of the state. Such has been the pace and spate of suicides that Karnataka has suddenly joined the category of farm suicide hotspots of the country.
The situation is the worst in Maharashtra. More than 2,950 farmers had committed suicides till October from the beginning of year. A year earlier, according to official estimates, 1,611 farmers had ended their own lives. Besides the suicide-prone Vidharbha region, the worsening plight of farmers in Marathwada has turned the region into a new suicide hot spot of the country. Not knowing what else to try, the Maharashtra chief minister had earlier roped in film actress Deepika Padukone to apply a psychological approach in minimizing the death toll. Later, he announced a relief package of Rs 10,512-crore. Madhya Pradesh and Chhatisgarh too witnessed a spurt in suicides. In Madhya Pradesh, it was primarily the attack of yellow mosaic virus on soybean that compounded the prevail crisis. But what came in as a bigger shock was the spate of farmer suicides in Odisha. Almost close to 100 farmers have taken their lives prompting the State BJP to launch a campaign seeking the ruling BJD to address the issue.
In Punjab and Haryana, the food bowl of the country, two to four suicides on an average are happening every day. After unseasonal rains in March-April, a crash in potato prices followed forcing farmers to distribute potato free of cost at various places. The prices of basmati rice were the next to slump, with farmers not being able to get more than Rs 1,200 per quintal for the early maturing variety. Two years earlier, basmati had fetched a handsome return of Rs 4,000 per quintal or more. The price for basmati at that time was even less than the Minimum Support Price (MSP) for rice. To add to their woes, approximately Rs 5,500-crore of paddy MSP has not been paid to farmers even a month after the procurement was over.
As if this is not enough, whitefly, a tiny insect, which was till recently considered a minor pest, took a devastating form to devour nearly 75 per cent of the standing cotton crop. Much of the damage was on Bt cotton, the genetically-modified strain. Agriculture Radha Mohan Singh has informed Parliament that cotton crop in 3.32 lakh hectares had been destroyed from whitefly attack. Some estimates point to Rs 4,600-crore loss for farmers. Irate farmers had resorted to rail rook at a number of places demanding a compensation of Rs 40,000 per acre for the damage done by whitefly. They also are seeking a relief of Rs 20,000 for farm workers who were laid off due to the insect attack. The rail rook protests were later discontinued but farmers still continue to resist the entry of ruling party politicians into the villages.
It is not only the weather that played havoc with the farming systems across the country, but what has systematically added on to the agrarian crisis is the prevailing apathy and neglect. At a time when the farmers were the worst hit, I had expected the Central government to come up with a higher MSP for wheat and paddy, and in addition announce at least a Rs 2-lakh-crore economic bailout package for farmers. Instead the government has ignored the cries of the farming community and has decided to provide a three-times increase in the monthly emoluments of the government employees through the 7thPay Commission. While the MSP for farmers has been raised by a paltry Rs 50 per quintal, which corresponds to an increase of 3.5 per cent or so, the lowest government employee – chaprasi – has been given a jump of 260 per cent in basic salary.
I am of the firm opinion that the underlying intention is to drive farmers out of agriculture. Make it so uneconomical that farmers are left with no choice but to abandon farming. This is the better way rather than forcing them out. Niti Ayong deputy chairman Arvind Panagariya and the Reserve Bank of India (RBI) Governor Raghuram Rajan has often said that the biggest reform will be when population from agriculture is moved to the urban areas. The Confederation of India Industry (CII) on the other hand has been seeking cheaper labour for infrastructure which can come only if farmers are forced out. An indication of this process comes from a news report which says around 500 farmers in Sonepat district (adjoining Delhi) are offering their land being acquired for setting up an educational institute. Another report tells us that 3,000 villages have been deserted in Uttarakhand in past 15 years !
This is a telling insight into the deliberate effort over the years to keep the farmers impoverished. But if you think, farmers have suffered unknowingly, you are simply mistaken. For a country to grow economically, the economic prescription is to reduce drastically the dependency on agriculture. Therefore the entire effort is to create such pitiable conditions that forces people on their own to abandon farming and migrate to the cities. Government needs cheap work force – dehari mazdoors. But what is being forgotten is that agriculture is the biggest employer. All efforts should be to make it economically viable and environmentally sustainable. #
Categories: Ecological News

A big GST question. Why should I foot your bill?

Ground Reality - Sun, 12/20/2015 - 11:19



                                                                           From: The Economic Times
Just imagine: my neighbour has been renovating his house for the past few months. He has broken down the edifice, perhaps he thinks it is outdated now, and is using modern architecture incorporating landscape designing. I am sure the renovated house will surely look ultra modern, with strong geometric shapes and swanky looking interiors, and would certainly be far more functional.
But what if my neighbour were to later send me a fat bill to share his construction costs? This is not done, anyone will say. After all, why should I be made to pay for the renovation work my neighbor decides to undertake.
This is exactly what we are being made to overlook in the entire discussions happening around the ‘path-breaking’, ‘historical’ and ‘game changer’ Goods and Services Tax (GST). I have heard the Finance Minister Arun Jaitley say time and again how GST will be game changer for India Inc. The GST, which certainly is a tax reform, will replace all the existing indirect taxes like central excise duty, sales tax, value added tax, luxury tax, service tax, octroi and so on. It is expected that GST will greatly reduce the cascading effect, as a result of which growth is likely to increase by 0.9 to 1.7 per cent of GDP.
I had always failed to understand why a cumbersome tax regime was in operation all these decades. Not only would a plethora of taxes, or as some say tax over tax, add not only to the cost of a product but the system merrily allowed rampant corruption at every stage of tax collection. Whatever be the reasons, the reality is that consumers paid the final retail price even if it was on the higher side. The producer had to live with the hassles of a laborious multi-tax regime whereas the end cost – in the form of a higher price -- was always borne by the consumer.
The GST will now provide a hassle-free tax regime for the goods producer. Instead of multiple taxes on goods and services, and at multiple entry points, there will only be a single tax to be now paid. Whether it finally increase the growth rate is beside the point, but what is more important is that it will create an environment conducive to making it easy for business.
While it makes it easy for business I fail to understand why the consumer is being made to bear the ultimate cost. Like I shared the story of my neighbour’s house under renovation, the GST is also essentially a renovation of the prevailing multi-layered tax regime. I am sure you will agree that the cost of renovation should be paid by those who are undertaking the tax reform. If India Inc is the real beneficiary, as we all know, they should be asked to pay for it. Instead, the cost is being very conveniently passed on to gullible consumers.
To prepare the consumers to absorb the high GST rate, Arun Jaitley had raised the service tax in Budget 2015 from 12.36 to 14 per cent. We will get to know only at the time of the next Budget in 2016 as to how much money has been extracted from common man’s pocket in 2015-16. Just to give you an idea, service tax alone had yielded an additional Rs 50,000-crore in the previous fiscal. If I go by the progressive increase in service tax collections, and knowing that service tax will merge with single rate GST which is expected to have a standard rate of 18 per cent, the additional annual fiscal burden on the ignorant masses will be somewhere around Rs 2.5 lakh crores.
In other words, the entire cost of undertaking GST reforms is to be borne by the consumers. The sole beneficiary – India Inc – gets away without paying anything. 
Since the GST is a single rate, service tax has to be merged with it. This makes economic sense. But this is perhaps also essential to ensure that the existing revenue collections – measured in the form of Revenue Neutral Rate (RNR) – do not fall. The drop in revenue from the existing multi-layered taxation system is therefore certain. To make up for the shortfall, the best way is to further tax the common man. A careful perusal of the Report on the Revenue Neutral Rate and Structure of Rate for Goods and Services Tax (GST) submitted by a team headed by the Chief Economic Advisor Arvind Subramaniam clearly brings out the deliberate effort to keep a higher rate of collection. It suggests a RNR of 15-15.5 per cent with a dual rate of taxation at 12 per cent for some goods and the remaining at a standard rate of 17-18 per cent. The committee itself admits that the RNR is at best a guess estimate.  
It mentions that among the 160 countries that have introduced VAT – and GST is a form of VAT – there are problems. Whether in the countries adopting single rate GST or double rate GST like proposed for India, there are challenges. Even among the large economies with federal structure, like European Union, Canada, Australia, Brazil and Indonesia, there are huge problems with implementation. I am not getting into implementation problems that are likely to appear but simply look at the additional burden that the common man will come under.
The report states that in a number of economies like Australia, Canada and New Zealand, GST implementation resulted in a steep inflation. To say that the rate of increase in prices will later come down, as has been seen in those countries, is nothing but economic jugglery. Take the case of prices of pulses. In Between June-October the price of common man’s dal zoomed from an average of Rs 70/Kg to Rs 170-200/Kg. If at present the prices have come down to Rs 120/kg, the rate of inflation is certainly lower considering the base level. But effectively, the prices have gone up from Rs 70 and have now stabilized at Rs 120/kg. Any further increase in dal prices next year will be measured from the base of Rs 120/kg.
In addition, a higher service tax creates a domino effect. Raising the service tax alone is a good enough reason for the price rise that is expected. The report has listed 24 services, including travelling, hospitality, entertainment, insurance, freight, repairs of building and machinery, royalty, professional/consultancy fees, telephone and gifts. This additional tax burden notwithstanding, the resulting rise in inflation in addition becomes an indirect tax. Therefore practically you get taxed twice.
Petroleum (only in initial years), electricity, real estate, alcohol are outside the ambit of GST. The report estimates that petroleum and alcohol are biggest revenue sources for the States fetching 29 per cent of overall indirect tax revenue and 41.8 per cent of total revenues of States to be subsumed under GST. Since GST will have a two tier structure – taxes levied by Centre (CGST) and others by States (SGST) – the duplicity alone will take away much of the advantage that is being cited. For instance, Finance Minister said in Parliament the other day that the day he lowered excise duty on fuel, he found many States raised VAT simultaneously.
So far we are only being made to believe that a maximum of 18 per cent will be the standard tax slab. But the fact that the Finance Minister is not willing to make it a Constitutional limit indicates that the upper limit is still open. Many experts believe that once the GST rate is fully harmonized the two rates to be followed would be a low of 12 per cent and a high standard rate of 22 per cent. There can be no denying that the probability for the service tax to be eventually raised to 22 per cent exists. This is the reason why the Government is not willing to cap the upper limit.
There was no hue and cry when the service tax was raised from 12.36 to 14 per cent this year. This was further raised by 0.5 per cent calling it a cess for Swatch Bharat. In such a gradual and phased manner service tax will be raised periodically so as to enable the consumer to absorb the additional tax burden. Jor ka jhatka dhire see, (buffer the blow) as they say. 
What is therefore important is to ensure that the burden of a GST tax reform is not passed on to consumers. This must be explicitly stated in Parliament as well as in the GST Model Law that is being prepared. The only way this can be done is to put a cap on the upper limit of service tax. Since India is planning to adopt a dual rate policy – my suggestion is to club service tax along with the lowest rate of 12 per cent. The standard rate, which is likely to be 18 per cent, should be a flexible rate but the lowest slab should never be allowed to be raised beyond 12 per cent. Expanding the tax base and doing away with the numerous tax exemptions to Corporate, which is around 2.7 per cent of GDP, is a sure way to add onto tax revenues. # 
A big GST question. Why should I foot your bill? Catch News Dec 19, 2015
http://www.catchnews.com/business-economy-news/the-big-gst-question-why-should-i-foot-your-bill-1450527461.html
Categories: Ecological News

After bottled water, lets be ready to use bottled air !

Ground Reality - Thu, 12/17/2015 - 16:23


                                                                                        Pic courtesy: The Telegraph
First, it was water. Now it is the turn of clean air. Whatever be the outcome of the recently concluded Paris accord on climate change, the fact that bottled clean air (yes, I said bottled clean air) is now being traded across borders is a pointer to where the world is headed.
Bottled clean air from the Rocky Mountains in Canada is now being sold in China. What started as a joke has now turned into an attractive business opportunity. Moses Lam, co-founder of the company Vitality Air told The Telegraph, London, (Dec 15, 2015) in an interview: “Our first shipments of 500 bottles of fresh air were sold in four days.”
In a country where clean air is becoming a luxury, the demand for bottled air is picking up fast. When smog peaks in winters, Beijing puts up giant digital screens to show its residents how did the sun look like on that particular day. Sun rise and sun set are regularly beamed on giant screens. In such a gloomy scenario, grabbing an ounce of fresh air turns it into a priceless possession. Even though bottled fresh air is priced fifty times more than mineral water, it is certainly worth every penny. But before you start worrying about its high price, think of how the very idea of selling fresh bottled air has taken the world to a dead end, almost to the very dead end.
Commodification of air was always on the card, I was never in doubt. Writing in The Hindustan Times several years ago, I had talked of how the world was fast moving towards privatization of air. The privileged for instance had access to cool air flowing from air-conditioners, to centrally heated conditions, all coming with a price tag. As the pollution levels began to rise in cities, the advent of air-purifiers in homes and offices became quite a norm. This is nothing but pricing clean air for those who could afford. For the lesser mortals, they must learn to live with murderous air. Later, some companies started manufacturing personal air-purifier gadgets that could be hung around the neck or tied to a belt. The access to ambient air therefore was linked to a price one could afford. I wasn’t therefore surprised when at a time Beijing announced a red alert over worsening smog levels last week, a Chinese restaurant in Zhangjiagang city in Jiangsu province began charging an extra fee for dining in an ambience of purified air. Although the Chinese authorities booked the owner for ‘selling’ purified air which is not allowed, I wonder what the reaction would be over the sale of bottled fresh air.
Delhi tops the air pollution chart relegating Beijing to the second spot. But it’s not only Delhi that is heavily polluted. Of the world’s top 20 polluted cities, 13 are in India. An evaluation of the latest National Air Quality Index of the Central Pollution Control Board shows that 15 of the 17 cities being monitored fail to meet the ambient air quality standards. Most cities have exceeded China’s levels, with at least four cities – Lucknow, Ahmedabad, Muzaffarpur and Faridabad – should be issuing a ‘red alert’ warning considering the poor air quality levels attained.
And yet, New Delhi’s elite is building up a strong case for continuing with business as usual, opposed to trying out the odd-even policy for plying cars. As Business Standard columnist Mihir Sharma aptly puts it: “Certainly, one truly extraordinary statement of our cultural biases is that most people seem more willing to pay thousands of rupees for air purifiers for every room than to deal with road rationing for a few weeks. If the electricity goes off, no worries! The diesel gen-set will kick in, spewing more fumes into the air. This is my right; and it is a problem only for those with neither air purifiers nor electricity.”
Since the elite are unlikely to make any lifestyle changes, I wouldn’t be surprised if some enterprising business’ takes up production and marketing of bottled fresh air. While Canada-based Vitality Air may soon add India among its attractive marketing destinations, there would be ample avenues available for local entrepreneurs. The retreating Himalayan glaciers may be a cause of worry for environmentalists but may turn out to be an economical proposition to bottle mountain fresh air. It may appear to be an outlandish idea in the beginning, but like in the case of bottled water when people were initially shocked at the very sight, India’s packaged bottled water industry has grown exponentially over the years, projected to touch $ 160 billion by 2018.  
With clean air turning into a marketable commodity, the Right to Clean Air is an idea whose time has probably come. A few years back, we scorned at the very idea of Right to Water. But gradually it began to be accepted. I wouldn’t therefore be surprised if the demand for a Right to Clean Air is articulated at the forthcoming CoP 22 of the United Nations Framework Convention on Climate Change scheduled to be held at Marrakesh in Morocco in November 2016. But the bigger question still remains unanswered: after polluting water, and now air, what more is left to destroy.  
After bottled water, we will now be purchasing clean bottled air ! ABPLive.in Dec 17, 2015 http://www.abplive.in/blog/after-bottled-water-we-will-now-be-purchasing-clean-bottled-air
Categories: Ecological News

Why is meat consumption not on the chopping block at Paris CoP 21?

Ground Reality - Sat, 12/12/2015 - 11:26




This particular news report caught my attention. A jumbo load of cattle – 150 in total – arrived on a Boeing 747 fight directly from Melbourne at the Chongqing airport in China just a day before the climate talks began at Paris. Chongqing is certainly far away from Paris, but it has a direct relation with the ongoing talks on climate change.
With China’s demand for beef consumption soaring, and with domestic laws making it mandatory for the animals to be slaughtered close to the place of consumption, Rabobankestimates an additional requirement of 2.2 million tonnes of beef a year. Bloomberg says the newly acquired taste for beef in China is likely to create a $ 60 billion market a year. Considering that the industrially-farmed livestock alone is responsible for 18 per cent greenhouse gas emissions (GHGs), the cumulative impact of cattle rearing in Australia, transportation of cattle from the ranches down under to China, and the resulting lifestyle emissions from soaring demand for beef alone is going to be enormous.
And yet meat consumption has not been on the chopping block at the ongoing 21st Conference of Parties (CoP) at Paris. The reason is simple. The western lifestyle has not to be disturbed.
A detailed report published by WorldWatch in 2009 showed “livestock and their byproducts actually account for at least 32,564 million tonnes of carbon dioxide per year, or 51 per cent of worldwide GHG emissions.” This report incorporated all the emissions from not only livestock rearing but also related activities. Now, this is nothing short of a disaster in making. All these years, I was under the impression that the international leadership would wake up to an environmental threat emanating from their own eating habits. But I was grossly mistaken. None of the leaders of the 150 countries who had assembled at Paris even mentioned reforming the diet as a possible solution to keeping temperatures much below the agreeable 1.5 degrees target.
Several projections point to a peak of 355 million tonnes of meat consumption likely to be attained by the year 2030. And if the consumption continues to soar, the world would require another 110 million tonnes more to reach the staggering figure of 465 million tonnes to satisfy the growing appetite by 2050. Even if the emissions from livestock farming are cut by 30 per cent as the FAO has projected, the sheer increase in the number of animals would raise the environmental footprint by a huge margin.
Considering that 40 per cent of the land under cultivation today is utilized for raising crops that primarily goes into feeding the animals, the resulting implications are going to be disastrous. I wonder where from the world would be producing food for human consumption if most of the cultivable lands go for feeding the animals. While the worry is how to feed the burgeoning human population, expected to reach 9 billion by 2050, I haven’t seen any concern being raised on how to feed 120 billion animals expected to be reared for meat cultivation in the same period. I am not sure of this is deliberate.
In addition, meat production requires huge quantities of water. This is what the FAO says: “The production of one kilogram of beef requires 15,414 litres of water on average. The water footprint of meat from sheep and goat (8,763 litres) is larger than that of pork (5,988 litres) or chicken (4,325 litres). The production of one kilogram of vegetables, on the contrary, requires 322 litres of water.”
This also brings me to the related and equally serious issue of air pollution from agriculture. Now don’t be startled when I say air pollution from agricultural practices. Using health studies and computer models, a study published in the science journal Natureshows that farming plays a bigger role than smog and is the second most important killer worldwide. Ammonia released from the farms mixes with the motor exhausts and the particles from coal-based plants making it a deadly combination.
Accordingly, air pollution from agriculture results in the death of 664,100 people every year. This is primarily because of the emissions from chemical fertilizers and animal wastes which release ammonia and nitrous oxide into the atmosphere. Nitrous oxide alone is 300 times more potent than methane. Business as usual is not the way forward, as International Assessment of Agricultural Knowledge, Science and Technology for Development (IAASTD) had shown. Agriculture practices therefore need to immediately shift to agro-ecological methods but that’s a topic for a different day.
Let’s look at animal farming. If only intensive farming practices for feed cultivation, as well as industrial-farmed livestock rearing, were to undergo a phase out in the years to come the expected climatic turbulence would be far less than what is being feared. The focus therefore should have been on cutting down on meat consumption, laying out specific reduction targets to be attained by 2020 and thereafter. But then, probably no one wanted their dining plate to be on the negotiating table. The impression I get from all international talks on climate change is that it is the poor who must make a sacrifice. The lifestyle of the rich, howsoever damaging it may be for the climate, is non-negotiable. #
Climate change & soaring temperatures: getting to meat of the problem. ABPLive.in Dec 11, 2015
http://www.abplive.in/blog/climate-change-soaring-temperatures-getting-to-meat-of-the-problem
Categories: Ecological News

WTO spat: 'The price US paid to its wheat farmers in 1986-88 is almost equal to what India is paying 20 years later in 2015-16'.

Ground Reality - Fri, 12/11/2015 - 13:39


Indian agriculture or for that matter agriculture in the developing countries is on a chopping block at the forthcoming 10th WTO Ministerial at Nairobi . At the heart of the negotiations lies India's demand for a permanent  solution to public food stock holding for food security purposes. This is being contested by the United States, European Union and Japan -- an issue that I had addressed in one of my earlier posts (here is the link: http://devinder-sharma.blogspot.in/2015/12/agriculture-under-threat-at-nairobi-wto.html) which want India to follow the AMS criteria using 1986-88 reference price as stipulated earlier by the AoA. India's Minimum Support Price (MSP) or what is technically called the administered price is at variance with the market price, and the difference is calculated as a subsidy. This product-specific subsidy has not to exceed 10 per cent of the value of the particular crop harvest. In this excellent economic analysis, French economist Jacques Berthelot has pierced through the flawed argument of the rich countries to establish that there is hardly a difference between what constitutes administered price and what is taken as market price or reference price. Accordingly, the reference price that US and EU want India to follow is actually inclusive of massive subsidies. If you compute these subsidies in the final price, it is no different than the MSP that India provides now. Using the USDA data he shows: " Now it is  clear that this US FOB price of $211.7 in 1986-88 would have implied an Indian FERP of at least $230 (to accountfor the gap from FOB Gulf to CIF Mumbai), a level which would practically be the same as the present Indian minimum support price (MSP) of Rs 1,450 a tonne in 2014-15or $231.9 at the average exchange rate of Rs 62.514 to the US$."

This paper is a must for everyone following the WTO negotiations. I am therefore reproducing the entire paper here.


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Why the fixed external reference price of 1986-88 should be challengedJacques Berthelot (jacques.berthelot4@wanadoo.fr),December 7, 2015
To solve the conflicting positions of the developed countries and the G-33 on the fundamental issue for Nairobi of placing in the green box and not in the amber box (or AMS, aggregate measurement of support) "the difference between the acquisition price and the external reference price"of public stocks for food security purposes, it is necessary to challenge the four concepts of "administered price", "market price", "reference price" and "fixed external reference price" (FERP). Indeed the present rule of the Agreement on Agriculture (AoA) Annex 2,paragraph 3, foot note 5 makes a clear distinction between the food purchases at "market prices" – which is presented as the situation in the United States (US) – and at "administered prices", which is presented as the situation in India (and in other countries). Let us illustrate the issue for wheat.
Indeed there is no reason to differentiate between the "administered prices" paid to farmers in developing countries (DCs) and the so-called "market prices" paid in developed countries (paragraph 4 of Annex 2 of the AoA) as the latter are not actual market prices, being heavily subsidized.
1 – The concept of "administered price"
Investopedia defines an administered price as "The price of a good or service as dictated by a governmental or other governing agency. Administered prices are not determined by regular market forces of supply and demand… When supply and demand for the good change, the administered price may change to subsidize the supplier or protect the consumer"[1].
The concept of agricultural "administered price" is not defined in the WTO although it works in opposite ways in developed countries and DCs. Whereas in DCs the administered prices – the Indian MSPs (minimum support prices) for example – are fixed above domestic market prices to ensure remunerative prices to small farmers, particularly just after the harvest, and to force the private traders to pay higher market prices, in developed countries they are minimum prices fixed below the prevailing market prices in order to reduce their level or security nets when the market prices fall too low. But – here lies the fundamental difference – these lower administered prices were accepted by Western farmers only because they were offset by domestic subsidies, including by the alleged decoupled[2]fixed direct payments in the EU and US (before the 2014 Farm Bill) plus coupled subsidies, such as the US various types of marketing loan benefits, counter cyclical payments and insurance subsidies. In developed countries administered prices are always triggering subsidies, apart from the other means necessary to render them effective: import duties, export subsidies or restrictions, land set aside, production quotas, etc. Indeed the US Farm Bills and EU CAP reforms since the 1990s have consisted in lowering by steps their administered prices to increase their domestic and external competitiveness – importing less and exporting more – through massive compensatory alleged non-trade-distorting subsidies of the blue and green boxes[3].
2 – The concept of "market price"
To know what a "market price" is the best source are the US and EU anti-dumping provisions on "non-market economies" which are considered not to use prices in line with their "normal value". Thus, in the US anti dumping manual, "For the merchandise under investigation or review, there must be virtually no government involvement in setting prices"[4]. Or, in the 2009 edition, according to David A. Gantz: "Commerce requires for purposes of the affected sector a showing that there  is no government involvement in determining prices or production quantities; there is private or collective (rather than full government) ownership; and that all significant inputs are subject to market-determined prices"[5], and here we must include the subsidies to the largest input, feed (cereals, oilseeds meals and pulses), which have reduced a lot the price of animal products (meats, eggs and dairy).Another text of the US anti-dumping manual gives the definition under 19 USC §2703a (d): "A market-based economy that protects private property rights, incorporates an open rules-based trading system, and minimizes government interference in the economy through measures such as price controls, subsidies [not underlined in the text], and government ownership of economic assets"[6].
Clearlythe same can be said of the EU agricultural prices which are even more subsidized per tonne than the US ones. In its Communication to the Council and the European Parliament, the European Commission wrote in July 1991: "Community has to run a price policy which would be founded on the necessity to face the competition to which it cannot escape neither on its own market nor on the world markets… A system of compensatory payments will be instituted for existing farms in order to compensate their income losses linked to the reduction of institutional prices… The income loss for cereals will represent the difference, i.e. 55 ecus/t, between the new indicative price of 100 ecus/t and the average present purchase price of 155 ecus/t"[7]. The Bonn University's contribution to the European Commission's assessment of the Agenda 2000 added that "Further reduction of intervention prices for grains increases the chance to export without subsidies… most of the time and will be able to participate in the rapidly growing demand on the world market. Furthermore, the reduction of grain and other feed prices close to world market prices will be an important step to increase the competitiveness of the European pork and poultry production"[8].
3 – The concept of "reference price"
The fundamental problem lies in the way OECD selects the "world reference price". As Tim Wise stresses, "The PSE and MPS assume that the chosen reference price is the undistorted market price for a given commodity. The measures are very sensitive to the selection of the appropriate reference price. In the world of agricultural commodities, it is very difficult – some would say impossible – to determine a world price. The OECD tends to select the most competitive price, which is generally the lowest price among exporting countries"[9]. For dairy products OECD has chosen the New Zealand price as the world reference price from which it computes the MPS in all OECD countries. And, for cereals other that rice, if has chosen the US FOB prices (in the OECD PSE data for US wheat you see that the reference price at farm gate has been the same as the producer's price at farm gate since 1996 so that the MPS was zero).
4 – The concept of "fixed external reference price" (FERP)
There is a consensus that the US is price maker of the world wheat prices so that the FOB and CIF prices of other countries are largely based on the US FOB price of each variety of US wheat, particularly of HRW and SRW, plus the transport and insurances costs between US FOB and the other countries' FOB and CIF prices, plus clearly the impact of exchange rates variations. So that the "fixed external reference price" (FERP) or wheat is largely the US FOB price or derived from it.
The comparison of the EU (France, Rouen) wheat n°1 FOB price and the US SRW FOB price from November 2007 to November 2015 confirm the strong correlation in the twoprices, despite the recent depreciation of the euro to the dollar, the average gap between the two over these 8 years being of $12.7 per tonne, reflecting largely the freight from Gulf to Rouen, with an average gap of $19.7 per tonne from  November 2007 to September 2014 and then of -$8.7 from October 2014 to November 2015, due to the depreciation of the euro to the dollar[10].


A previous paper from 9 September 2002 to 21 September 2007 showed also a strong correlation between the same prices[11].
Another paper comparing the Australian wheat price and the US HRW price confirms that "Australia can largely be considered a price taker on the traded wheat market, with the world wheat price dominated by the domestic price in the United States, given its role in the traded wheat market" and that "the exchange rate $Aus/USD does not act as an insulator to world price variances"[12].  
Now the WTO Annex 3 paragraph 8 states: "Market price support: market price support shall be calculated using the gap between a fixed external reference price and the applied administered price multiplied by the quantity of production eligible to receive the applied administered price". The issue here is that the US FOB price is not a "market price" but a de facto "administered price" for which the farmer has already pocketed the subsidy.
Il is why several US and international reports have underlined the necessity to internalize in domestic agricultural market prices the subsidies granted to the corresponding products: - The OECD did it in a 2011 report where the concept of domestic price is defined as "producer price plus payments linked to the production of a specific commodity"[13]. - In the US cotton case, the Appellate Body's report underlined that "During the oral hearing, the United States accepted that farmers decide what to plant based on expected market prices as well as expected subsidies" (paragraph 440)[14]. - A FAPRI[15]Report of October 2013 assessing the two Farm Bills adopted in 2013 by the House and the Senate presents tables of the expected "average crop revenue in dollars per acre"[16], tables where the expected subsidies are added to market sales. - A World Bank paper of November 2008 incorporates the decoupled subsidies in the indicator of agricultural prices distortion (the NRA, nominal rate of assistance): "Since the decoupled part of support in agriculture is steadily increasing in high-income countries, it is of particular importance to integrate this part of support, even though it is less market- and resource-distorting than other distortion measures"[17]. - And USDA has used extensively the concept of "Net Budgetary Expenditures per Commodity"[18] incorporating the subsidies with the farm price.
Indeed the US wheat prices cannot be considered as the world reference prices without adjustingthem of their subsidies component, particularly for the FERP in the 1986-88 period, where the OECD data on US indicators of wheat support show that the US average wheat market price support (MPS) was of $882 million for 54.526 million tonnes or of $16.2 per tonne, corresponding essentially to export subsidies. And the US Schedules of commitments notified to the WTO in 1994 gives an average of $594 million for the EEP (export enhancement programme) in 1986-88 for 19.580 million tonnes of subsidized wheat exports, hence at $30.3 per tonne, implying that only 58% of exports received export subsidies[19]. For conservative reasons we do not add the subsidy component of the US GSM export guarantee programmes that some researchers have evaluated to be of 4% of these credits[20]. But, on the basis of actual total exports of 33.775 million tonnes, the subsidy per tonne was of $17.6, not far from the $16.2 given by the OECD MPS. And the US Schedule shows also that the domestic subsidy per tonne was on average of $80.1 – of which $61.9 for the AMS and $18.1 for the green box subsidies allocated to wheat for its 4.1% share in total agricultural production value in that 1986-88 period –, which raises the total subsidy per tonne of exported wheat at $97.7 and the total subsidies to wheat exports at $3.300 billion.
Given the average FOB price of $114 (export value of $3.849 billion for 33.775 million tonnes), the average dumping rate was of 85.7%! So that, to be considered as the world reference price in that period, the US HRW FOB price should be increased by $97.7 to $211.7! Given hat the USDA data base does not provide the FOB price of SRW wheat from 1986-87 to 1988-89 but only from 1988-89 whereas the FOB prices of HRW wheat are only available from 1992-93, we will rely on the average FOB price of all wheats of FAOSTAT even if the HRW price was higher by about $10 than the SRW in the 90s. In fact the US wheat FOB price had never been so low since 1973.
Now it is clear that this US FOB price of $211.7 in 1986-88 would have implied an Indian FERP of at least $230 (to account for the gap from FOB Gulf to CIF Mumbai), a level which would practically be the same as the present Indian minimum support price (MSP) of Rs 1,450 a tonne in 2014-15[21]or $231.9 at the average exchange rate of Rs 62.514 to the US$[22]. If for the most recent years the US did not use explicit export subsidies, nevertheless the US domestic subsidies to wheat were of $2.772 billion on average from 2010 to 2014, or of $48.2 per tonne, implying total export subsidies of 1.412 billion.
Table 1 – US subsidies to wheatfrom 2010 to 2014 $ million 2010 2011 2012 2013 2014 Average Wheatproduct-specific (PS) subsidies Wheat CCC subsidies[23] 1280 1378 905 1116 1089 1154 WheatInsurance subsidies 688 1421 2162 1664 1020 1391 Total wheatspecific subsidies 1968 2799 3067 2780 2109 2545 Share of wheat in total agricultural production value   Wheat production value 11021 13494 16538 14024 11910 13397 US wholeagric. production value 318430 363710 399325 403018 420146 380926 " % of all agric. production value 3,46% 3,71% 4,14% 3,48% 2,83% 3,52% Non-product-specific (NPS) subsidies to wheat* Agricultural fuel 2375 2375 2375 2375 2375 2375 Irrigation 1000 1000 1000 1000 1000 1000 Agricultural loans 155 155 155 155 155 155 Promotion of agricultural products 1353 1250 1373 1267 1020 1253 States' farmexpenditures 1304 1262 1224 1226 1226 1248 Export Programmes 405 551 454 437 238 417 Total NPS subsidies 6592 6593 6581 6460 6014 6448 Wheat NPS subsidies 228 245 272 225 170 227 Total wheat subsidies PS + NPS wheat subsidies 2196 3044 3339 3005 2279 2772 Share of exports in wheat production
Production in 1000 tonnes 58834 54210 61254 58072 55107 57495
Export                  " 35115 28587 27526 31987 23229 29289
Export/production 59.7% 52.7% 44.9% 55.1% 42.2% 50.9%
Wheat subsidies
$ per tonne 37.3 56.2 54.5 51.7 41.4 48.2
Total to wheat exports in $ billion 1.311 1.605 1.500 1.655 961 1.412
Source: OECD and USDA. 2010 is for the marketing year 2010-11 and so on…http://www.ers.usda.gov/data-products/farm-income-and-wealth-statistics/cash-receipts-by-commodity.aspxhttp://www.fas.usda.gov/programs/export-credit-guarantee-program-gsm-102/yearly-activity-reports* Why the US rejects the agricultural modalities of December 2008, Solidarité, February 15, 2015, http://www.solidarite.asso.fr/Papers-2015?debut_documents_joints=20#pagination_documents_joints
However, for the three years period 2011-12 to 2013-14 the average total subsidies were of 3.002 billion for an average production of 57.995 million tonnes, i.e. of $51.8 per tonne, and the total export subsidies were of $1.474 billion for 28.474 million tonnes. 
Table 2 – US subsidies to wheatfrom 2011-12 to 2013-14
2011-12 2012-13 2013-14 Average Total subsidies in $ million 3191,5 3172 2642 3002 Production in 1000 tonnes 57732 59663 56589,5 57995 Subsidy in $ per tonne 55,3 53,2 46,7 51,8 Exports in 1000 tonnes 28056.5 29756.5 27608 28464 Subsidies to exports in $ million 1551 1582 1289 1474
Table 3 compares the annual wheat production costs and revenues per planted acre (without Government payments) on average from 1998 to 2014 and shows the necessity of wheat subsidies, despite the high prices from 2010 to 2014. We see that, on average the deficit was of $42.03 per acre or $1.04 per ha, of which of $1.69 in 2014[24]. For an average yield of 2,875 kg/ha, of which of 2,936 kg in 2014[25], the average deficit per tonne without Government payments was of $36.2, of which of $57.6 in 2014.
Table 3 – US wheat annual production costs and revenues without government payments: 1998-14 $ per planted acre 1998-03 2004-08 2009-14 1998-14 2014 Goss value of production 105,39 191,42 268,92 188,41 247,53 Total costs 175,88 224,84 289,67 230,44 315,78 Balance (withoutGov. payments) -70,49 -33,42 -20,75 -42,03 -68,25 Source: http://www.ers.usda.gov/data-products/commodity-costs-and-returns.aspx;http://www.ers.usda.gov/data-products/wheat-data.aspx#25171
We will not develop here the EU wheat subsidies but they were even higher per tonne than the US ones in the base period 1986-88, at €132.1 per tonne of which €118.8 in export subsidies and €13.1 in domestic subsidies, corresponding to a dumping rate of 114.2%. So that the combined US+EU wheat subsidy per tonne was of $110.7with a dumping rate of 97.4%!It has also been estimated that the US EEP programme alone explained 35% to 40% of the increase in the EU wheat export refunds. And, as the combined US+EU wheat exports reached 52.204 million tonnes, about half the total world exports (much more if we included the wheat processed in other exported products), the combined US+EU FOB wheat price on which the WTO Members are forced to align their FERP is unacceptable.
As Tim Wise acknowledges: "Policies in exporting countries that reduce export prices can have the perverse effect of increasing the estimates of farm support in other countries, particularly developing countries"[26].
The conclusion is that, if we are to comply with the AoA rules and at the same time with the legal definition of market price according to the US and the EU anti-dumping laws, we must add the subsidies per tonne to this so-called US FOB "market price". And, given that the US is the price maker of wheat for all the other countries, their reference prices should be raised by as much.

[1]http://www.investopedia.com/terms/a/administered-price.asp[2] A subsidy is coupled when related to the production or price levels, and decoupled in the opposite case.[3]The blue box corresponds to the EU fixed direct payments per hectare (cereals and oilseeds), cattle head (bovines and ovines), or litre of milk decided by the CAP (common agricultural policy) reforms of 1992, 1999 and 2004 to offset the reduction of administered ("intervention") guaranteed  prices but farmers received them only if they produced the corresponding products. The green box covers two types of alleged non-trade distorting subsidies: 1) the traditional green box of in-kind aid to general agricultural services benefitting to farmers collectively: agricultural infrastructures, schools, research, agri-environment, calamities, phytosanitary warnings, etc.); 2) the green box of decoupled income support in place in the US from 1999 to 2014 and in the EU since 2005 where farmers continue to receive the average amount of blue box direct payments received in 2000-02 without being obliged to produce anything or being allowed to produce other products than those having benefitted of blue payments.[4]US Department of Commerce, Normal value, AD Manual, chapter 8.[5]http://ia.ita.doc.gov/admanual/2009/Chapter%2010%20NME.doc; http://works.bepress.com/cgi/viewcontent.cgi?article=1000&context=david_gantz[6]http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title19-section2703a&num=0&edition=prelim[7]Commission des CE, Evolution et avenir de la politique agricole commune. Propositions de la Commission, 2/91.[8]Wilhelm Henrichsmeyer and Heinz Peter Witzke, Overall evaluation of the Agenda 2000 CAP reform, Institute for Agricultural Policy, University of Bonn, European Commission, Impact analyses of Agenda 2000 decisions for CAP reform, February 2000, http://ec.europa.eu/agriculture/publi/caprep/impact/summary/sum_en.htm.[9]Timothy A. Wise, The Paradox of Agricultural Subsidies: Measurement Issues, Agricultural Dumping, and Policy Reform, Global Development and Environment Institute, TuftsUniversity, Working paper N° 04-02, February 2004 (http://ase.tufts.edu/gdae).[10]file:///C:/Users/berth/Downloads/GIEWS_price_data%20(2).pdf[11]http://www.bath.ac.uk/economics/research/working-papers/2009-papers/11-09.pdf[12]http://ageconsearch.umn.edu/bitstream/123139/2/Frost%26Parton%2005.pdf[13] Jean-Pierre Butault, Evolution of Agricultural Support in Real Terms in OECD Countries and Emerging Economies, OECD, 2011, http://www.oecd-ilibrary.org/docserver/download/5kgkdgf25x20.pdf?expires=1385386110&id=id&accname=guest&checksum=476FE82E1A92E7409C7AAE4E85F48958[14]WT/DS267/AB/R, 3 March 2005[15]US Research Center dependent from the US government.[16]http://www.fapri.missouri.edu/outreach/publications/2013/FAPRI_MU_Report_06_13.pdf[17] Kim Anderson and Signe Nelgen, "Estimates of Distortions to Agricultural Incentives, 1955-2011", updated in June 2013, http://siteresources.worldbank.org/INTRES/Resources/469232-1107449512766/Note_summarizing_core_updated_database_0613.pdf; Distortions to agricultural incentives in Asia,http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/0,,contentMDK:21960058~pagePK:64214825~piPK:64214943~theSitePK:469382,00.html[18]http://www.fsa.usda.gov/Internet/FSA_File/pb12_tbl35.pdf; http://www.fsa.usda.gov/FSA/webapp?area=about&subject=landing&topic=bap-bu-cc[19]https://www.wto.org/english/tratop_e/agric_e/schedule_e/usa.pdf [20]http://ageconsearch.umn.edu/bitstream/30791/1/24020506.pdf[21]http://farmer.gov.in/mspstatements.html[22]http://www.ers.usda.gov/data-products/agricultural-exchange-rate-data-set.aspx[23]http://www.fsa.usda.gov/about-fsa/budget-and-performance-management/budget/ccc-budget-essentials/index[24] http://www.ers.usda.gov/data-products/commodity-costs-and-returns.aspx[25] http://www.ers.usda.gov/data-products/wheat-data.aspx#25171[26] Timothy A. Wise, The Paradox of Agricultural Subsidies: Measurement Issues, Agricultural Dumping, and Policy Reform, TuftsUniversity, May 2004, http://www.ase.tufts.edu/gdae/pubs/wp/04-02agsubsidies.pdf
Categories: Ecological News

My TEDx talk --- Why are farmers dying?

Ground Reality - Tue, 12/08/2015 - 12:45

Farmer Suicides and the Global food crisis: A Story not told | This is a TEDx talk I had delivered some months back at the Rajiv Gandhi National University of Law, Patiala. The video has been uploaded now on the you tube.I hope you find it useful.
Categories: Ecological News

Climate change: No compromise over the western lifestyle. It has to be protected at any cost.

Ground Reality - Sat, 12/05/2015 - 10:13


When Prime Minister Narendra Modi blamed the lifestyle in the rich countries for the climatic upheaval the world is witnessing I must acknowledge that he hit the bull’s eye. Knowing that the western lifestyle remains non-negotiable, it is considered impolite and also politically incorrect to question the affluent countries.
“The lifestyle of a few must not crowd out opportunities for the many still on the first steps of the development ladder,” Prime Minister wrote in an opinion piece in the Financial Times. This reminds me of what the respected environmentalist, the late Anil Agarwal, had once written: “If the Indian middle class were to consume the same levels of energy that an average American does, the world would have boiled some fifty years ago.” He was right. But you try to question the expensive lifestyle of the rich and you get an angry response. I too got a taste of questioning this lifestyle when some years back in an article I challenged beef consumption to be much more environmentally disastrous than cultivating paddy as many studies have pointed out to. The angry backlash I received was no less than the organized abusive troll one sometimes faces on social media.
It was only three years back, in 2012, the Worldwide Fund (WWF) in its report Living Planet, released every two years, and had warned: “We are using 50 per cent more resources than the earth can support. Today we are living as if we have 1 ½ planet.” Jim Leape, the then WWF director general had said. “If we continue like this, by 2050 we will need three planets.” This was a warning as loud and clear as it could be.
Capping emission standards to ensure that the world does not heat up beyond 2 degrees is certainly desirable but what is being clearly missed out, and perhaps deliberately, is to cut down drastically on consumption. Since the market economy growth model is based on boosting consumption, which then becomes the basis for measuring gross domestic product (GDP), it is the commodification of nature that has led to the crisis. As WWF report had pointed out, our pattern of consumption is highly unsustainable. And still no one is talking of reducing consumption. Dare to do so, and you are quickly branded as anti-development. 
The ecological footprint left behind by rich countries is about six time that of low-income countries. I was reading a report in The Guardian which says every new born child in United States adds 9,441 tonnes to each parent’s carbon footprint. Compare this to China and Bangladesh where the footprint is only 1,384 and 56 tonnes, respectively. But in the race to catch up with the western lifestyle, a sizeable section of the developing economies, including India, is on a hyper consumption mode. The aspirant middle class in India therefore is no less guilty unless it vows not to adopt the western lifestyle. It is so convenient to shift the blame instead to per capita emission figures, which in other words means hiding behind the smokescreen enacted in the name of poor.
In a report Extreme Carbon Inequality released on Wednesday, the British charity Oxfam has further quantified the carbon footprint. Accordingly, only 10 per cent of the world’s richest are responsible for nearly 50 per cent of lifestyle consumption emissions. At the same time the share of the poorest 50 per cent of the global population in adding on to such lifestyle emissions is only 10 per cent. While it dispels the myth that the emerging economies, as the rapidly growing developing countries are called, are primarily responsible for distorting the emission charts, the fact remains that it is the rich lifestyle that is hitting the planet the most. 
Since the lifestyle in the rich countries remains non-negotiable, it will once again be the responsibility of the developing countries to make the sacrifice. If you don’t change, you will suffer the disastrous consequences of climate change goes the common refrain. While the rich countries will feel absolved of their responsibility of making any reasonable and workable commitments, a $ 100 billion climate fund is being doled out as a carrot for the developing countries. All kinds of studies painting a grim future for developing countries are already available. Even the developing country academicians and negotiators are always quick to repeat these studies ad nauseam. But you rarely get to hear or read of studies that warn of rich countries becoming inhospitable to live. Just a 1 degree increase in temperature had left more than 10,000 dead in France in 2003. But still, the sacrifice has to be made only by developing countries. The lifestyle of the rich should not be disturbed.
This again means it is the developing countries that will have to adapt green technologies to reduce emissions and minimize greenhouse gas emissions while the rich country lifestyle remains intact. Nor is any serious thought emerging on radically overhauling the prevailing economic model that has in the first instance led to the global climate going topsy-turvy. The reason is obvious. #
Categories: Ecological News

Agriculture under threat at the Nairobi WTO Ministerial

Ground Reality - Wed, 12/02/2015 - 16:07


While the ruling NDA is still coming to grips over the devastating electoral verdict in Bihar, there is more trouble brewing ahead – this time at the forthcoming 10th Ministerial Conference of the World Trade Organization (WTO) scheduled to be held at Nairobi from Dec 15-18. Unless India is able to put its act together, the outcome of the Nairobi Ministerial may strike a severe blow to agriculture.
With more than 600 million people engaged in agriculture, this is a risk that the Narendra Modi government cannot afford to take. The Prime Minister had given a strong indication of India’s stand when he told the recently-concluded India Africa Forum Summit in New Delhi: “We should [also] achieve a permanent solution on public stockholding for food security and a special safeguard mechanism in agriculture for developing countries.”
But the configurations are fast changing. Not only that the WTO director general Roberto Azevedo has been openly batting for the US/EU position of capping the Minimum Support Price (MSP) for Indian farmers as well as the need to limit input subsidies being given for fertilizer, seed, pesticides and irrigation to the present level, he is also literally threatening a “doomsday” scenario if the developing countries fail to accept the demand of the rich industrialized countries.
At the heart of the negotiations are two clauses that will hit India the hardest. The first pertains to public stockholding for food security for which India has managed to get a temporary exemption. The undue haste with which India went backwards to conform to the July 31 2014 deadline that WTO had imposed will continue to haunt New Delhi for many years to come. Instead of standing firm, India had buckled under pressure to accept a newly introduced Trade Facilitation Agreement in lieu of its food security concerns. Under the rules, India can go on maintaining its food buffer stocks till a permanent solution is found but cannot export subsidized food that can distort markets. Subsidised food exports from India therefore can be challenged by any member country.
The developed countries, including US, EU, Canada, and Australia are against giving India any permanent waiver. In reality, what the rich countries are aggressively wanting is to limit the provisions of MSP given to Indian farmers. Treating MSP as an agricultural subsidy, the rich countries have accused India of exceeding the 10 per cent limit – called de-minimis level -- that was imposed way back in 1986-88. But at the same time these countries are not willing to re-open the 2008 revised draft modalities achieved at the WTO that aimed at cutting the massive domestic and export subsidies in the rich countries. According to a study, the average farm subsidy a farmer in India gets is Rs 1,000 per month. America on the other hand provides an average monthly farm subsidy of Rs 2.5-lakh.
In addition, the US has now demanded the budgetary outlays for product-specific input subsidies for agriculture – like fertilizer, pesticides, seed, irrigation and credit – to be capped at the levels existing at the time of the Nairobi Ministerial. Such an obligation, if accepted, will strike a death-knell for Indian agriculture. What has to be understood is that these subsidies are primarily to keep the cost of production low so as to keep food prices low for consumers. Withdrawing the input subsidies will only increase the cost of cultivation, which means the food prices will skyrocket. The socio-economic as well as the political implications of restricting input subsidies to farmers are too grave to even visualize.
The second contentious issue pertains to special safeguard measures (SSM) that were granted to developing countries so as to minimize the harmful impacts of cheaper imports. The rich countries have already been using Special (Agricultural) Safeguards (SSGs) very effectively to check import surges. For instance Norway has applied SSG 581 times; Switzerland 961 times and US 189 times. Similarly, for the developing countries a SSM is being worked out, which too is being opposed by US, EU, Canada, Japan and Australia. SSM actually means raising tariffs temporarily to deal with a flood of imports and price falls. But this formula has still to be worked out keeping the level of import surges and at what level of imports should the countries be allowed to raise import tariffs.
The dice is therefore heavily loaded against India and China which have a huge food security programme depending upon massive food procurement from small farmers. In other words, procurement of food, which the WTO wants to dismantled, ensures livelihood security for millions of small and marginal farmers. India cannot ever think of placing the livelihood security of 600 millions farmers on the chopping block of international trade.
Considering that the demand for winding up the ongoing WTO negotiations at Nairobi are growing, India will have insist on the continuation of the negotiations unless its two major concerns on food security and agriculture are first addressed. It has the support of the powerful G-33 group of developing countries along with the least developing countries. But unfortunately it’s the domestic lobbies – including the industry associations and mainline economists – who are likely to make a loud noise saying that getting ‘isolated’ at Nairobi would mean India be branded as an obstacle to boosting global trade. I hope Prime Minister Narendra Modi does not easily succumb to this domestic pressure.
At the same time, India must aggressively bring the rich country agricultural subsidies back on the negotiating table. Agricultural subsidies in the developed countries have increased from US $ 350 billion in 1996 to $ 406 billion in 2011. Lately, the EU alone has notified Euro 84.106 billion farm subsidy for 2013. The latest US Farm bill 2014, which makes budgetary provision for farm subsidies for the next ten years, has forecasted a subsidy support of $ 956 billion. Unless these subsidies are cut, and cut drastically, any agreement to close the WTO negotiations at the forthcoming Nairobi Ministerial will be a betrayal of the farming communities. It will be like putting a lamb before a dinosaur. #
Categories: Ecological News
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