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Friday, April 30, 2021
Monday, April 26, 2021
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What India is doing today to Agriculture was done by the West with disastrous consequences
Around the mid-1980s, my interest grew in the extent of subsidies rich developed countries were giving to the agriculture sector. If farmers in rich countries were allegedly doing so well, why did these governments, all champions of the free market, have to provide subsidies to their farmers? Generally speaking, no political regime wants to subsidise Agriculture; they would rather put all the eggs in the corporate basket.
Then during my travels to the USA and Europe, especially the countryside, I witnessed the devastation market-oriented agriculture had done to rural communities in America, Canada, and in Europe. We are constantly told in India that developed countries are so prosperous and their farmers are in such good shape that we need to copy the same model. In reality I found that whatever remains of the American agriculture today is entirely due to the massive subsidies the government provides.
When WTO came into existence, I was commissioned by British journal The Ecologist to do a column on how the WTO regime would benefit Indian farmers. In that column I compared Indian farmers to a European cow, comparing the subsidies that a European cow received vis a vis an Indian farmer’s income. It became a major talking point among the economists and the UN Human Development Report by the UN and the World Development Report by the World Bank both mentioned dairy subsidiaries in comparison to developing world.
Dominant economic thinking is that we have to reduce the size of the population dependent on agriculture to achieve higher growth. when I visit foreign universities, economists endlessly argue that there is no other way than this. One of our former RBI Governors in fact went on record to say that the biggest reform in India would be when we can move people away from agriculture to urban areas, which need cheap labour.
If we take this migration of people to the cities as employment generation – creating an army of dihadi mazdoor - there is something fundamentally wrong with our economic thinking. There are lessons from the lockdown last year, when we saw the plight of migrant workers, as hundred million walked back long distances to their villages. I call these migrant workers ‘agricultural refugees’. They were pushed to the cities because the economic paradigm created by the dominant thinking has made rural areas economically unviable.
In America , 1.5 percent or so of the population depends on agriculture, agriculture by this warped definition should have been a lucrative profession. But it is not. Agriculture in American is facing a severe crisis, with farmers saddled with a bankruptcy of $425 billion as of July 2020. The idea that fewer people engaging in agriculture will ensure prosperity has clearly outlived its utility and it is time for economists to stop flogging this dead horse.

There is another flawed argument that larger the land holding size, the better the bargaining power. The average land holding size in the US is 440 acres while 86 percent of Indian farmers have land holdings of less than 5 acres. It is therefore argued that we need aggregators and contract farming, which would enhance bargaining power of farmers and there will be price discovery. My question is why did this then not happen in America? Or Or in France where the average land holding size is 135 acres? Or Canada where it is 3000 acres; or in Australia where it is a staggering 10,800 acres?
When Ronald Reagan was encouraging big corporates to replace the allegedly inefficient small farmers, the world did initially go into surplus food production, prices fell and consumers were happy . But a country where over 50 percent of the population are involved in agriculture, we do not have to follow what America did but go by what Gandhiji said, production by the masses, not production for the masses. In fact, that is what PM Modi also envisages, Sabka Saath Sabka Vikas.
As I have said before, economists have to be held accountable for the crisis the agriculture sector the world over is facing. They have misled us to believe that this model of economic growth works. They need to go beyond Economic theory and look at the ground realities. The reverse migration we saw in India should be a lesson for them to go into reverse economic thinking. Rather than pushing people to the urban areas, the challenge is how to make rural areas economically viable and profitable.
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Indian farmers are still on the streets. Their agitation is far from over and the whole world is eagerly observing how it shapes up. The movement has moved out from the Delhi border to various parts of the country as farmers have started going to villages, holding maha-panchayats and taking their message to more and more people. This is possibly the greatest mass movement of our times.
Just two years back, the chief economist of the US Department of Agriculture admitted that since the 1960s, American farm income has seen a steep decline if you adjust for inflation. Whereas in India we are told that free market agriculture model would make farm income go up. I fail to understand why that did not happen in first world countries after they opened up?
Bedabrata mentions in his Times of India that the price American farmers get for wheat today is less than what they used to get during the American civil war. In Canada the wheat price in 1867 when adjusted for inflation was $30 per bushel. 150 years later, in 2017 the price had come down to $5 per bushel. This is what free markets have done to agriculture.
In the US, 40% of average farm income actually comes from subsidies. It clearly demolishes the argument that markets lead to price discovery. A study of cotton in America shows that around 2005 there were 20,000 cotton growers. American farmers were getting a subsidy of 4.7 billion dollars in 2005 to produce a crop which was sold at 3.9 billion dollars. It depressed global cotton prices. Farmers in Africa and India were priced out.
We were led to believe that our farmers were inefficient and unproductive; but in reality, Indian farmers were priced out because of subsidies that American farmers received from their government. On top of it, America provided an additional subsidy of 180 million dollars to the textile industry to buy the subsidized cotton. Still Brazil continues to heavily subsidize cotton growers.
According to the Centre for WTO Studies, New Delhi, America provides a subsidy of 85 lakh rupees to each cotton grower every year while in India the subsidy a cotton grower gets is Rs. 1500.
Situation is not much different in Europe. Despite the massive subsidies for the agriculture sector, every minute one farmer is quitting agriculture. EU provides a subsidy support of 100 billion Euros every year. Imagine if this subsidy is withdrawn, what would happen to the farmers in EU? Even in France, the top most agriculture producer in EU, recently farmers hung dozens of suicide dolls from trees in front of Parliament to highlight their plight.
So why do we want to borrow this failed model? It’s a question I have been repeatedly asking.
Sonny Perdue, Donald Trump’s Agriculture Secretary had said, “In America the big gets bigger, the small go out.” To illustrate in 1970s there were more than 6 lakh dairy farms in America. 93 percent of American dairy farms have closed down. Does that mean milk production has come down? No. On the contrary it has gone up, which drove the prices down and dairy farmers committed suicide. Today there is so much surplus milk with mega dairy farms, each with 7000 to 15000 cows that America is trying to find a market for its surplus milk; and that’s why the US is pushing India for market access in dairy.India is the largest producer of milk in the world and yet we are under pressure to open up our markets to dairy companies for milk..
Even for India, the Director General of International Food Policy Research Institute, Washington DC, comes up with similar advice, “Move up or move out.”
Bedabrata mentioned about the nexus between political power and big corporates in America. In fact there is another player - the economists. The mainline economists all over the world speak the language of capitalist power , a language that has failed to enhance farmers’ income anywhere in the world.
Agrarian crisis is so severe in America that one of the farmers called me up the other day asking what is happening in India. As I explained the situation he said, “We know that living in debt is living in hell. We are very happy that Indian farmers are standing up and fighting our battle.” Another farmer in France said that agriculture is being sacrificed to keep consumers happy. Not only in France or US, the crisis of farm debts is the same everywhere. It is actually caused by the denial of rightful income to farmers which is the biggest issue globally farmers are facing.
Prior to the Indian farm protests in hundreds of tractors had marched into Washington DC in Feb 1979 asking for guaranteed price. . They camped for 4-5 weeks but they could not get what they wanted. Jimmy Carter, then American President could not meet farmers demand. If he had not failed, American agriculture would have been a global model for economic viability of the farmers.
What farmers need everywhere today is a guaranteed price for their produce which alone can pull them out of the prevalent crisis. Markets would automatically adjust to it. Don’t forget when the debate about minimum wages had started, corporates had objected saying this would upset their balance sheet but eventually they had to provide minimum wages and adjust their business plans accordingly. If there can be minimum wages for workers, it is time we provide minimum support price (MSP) to the farmers as a matter of right.
Let us look at the confectionary industry with a turnover of $212 billion. Chocolate is a major component. Guess what the average income of a cocoa farmer is, it is Rs 100 per day, less than the price of a standard chocolate bar. Coffee industry is no better. There are around 50-60 lakh coffee bean farmers across the globe and 80 percent of them earn less than $1.9 per day, which the World Bank defines as acute poverty line imagine if these farmers had received a minimum support price all these years rather than being left to face the brutalities of the market.
Source: Lessons for Indian Agriculture. National Herald. April 17, 2021. https://www.
Friday, April 23, 2021
Agriculture: There are lessons from China.
Pic courtesy: depositphotos.com
Speaking at an international conference in 1998 at the University College Cork, in Ireland, to commemorate 150 years of the Great Irish Famine that killed nearly one million people, I was asked a question: who will feed India? This question cropped up at a time when the world was already deliberating a hypothesis floated by the well-known environmental researcher and thinker, Lester Brown.
Founder of the US-based environmental think tank, the Worldwatch Institute, and later president of the Earth Policy Institute, Lester Brown in 1995 had built on his analysis to come out with a book Who Will Feed China? This had triggered a hot debate, prompting numerous seminars and conferences across the globe. I remember having participated in a few of these conferences, witnessing heated debates that followed. There were terrific academicians who would support Lester Brown’s hypothesis, and there were experts who openly challenged it. Nevertheless, 25 years later, faced with record high domestic grain prices, China has emerged as the world’s biggest food importer – a reminder of what Lester Brown had warned decades back.
While the severity of China’s food crisis is being denied, questions continue to be raised especially after President Xi Jinping launched an ‘Operation Clean Plate’ campaign in August last year, asking people to ensure that no food is wasted. With an estimated 6 per cent food wasted every year, good enough to feed 200 million people, the campaign even involved restaurants to ensure people are not provided with lavish spreads. If the consumers order for five meals, the quantity of food served by some restaurants would equal to the requirement for four people.
This reminds me of the times when in 1965, the then Prime Minister Lal Bahadur Shashtri had asked Indians to observe a fast on Monday, every week. This was primarily to ensure that people learn to ‘share and care’ at a time when food was in great shortage. In fact, in 1965, a year prior to the launch of Green Revolution, India had imported 10 million tonnes of foodgrains to tide over the severe food crisis. Shows how precarious the situation was. But after the launch of Green Revolution, India attained food ‘self-sufficiency’ but with the easy availability of food over the years, a kind of complacency has set in.
Similarly, China too had taken long strides in food production. It was in 1996 that China had brought in a policy focus to ensure that it meets 95 per cent of its food needs from domestic production. But by 2011, as per the World Trade Organisation (WTO), China had become world’s largest food importer. With rising incomes, the food preferences of the burgeoning middle-class had undergone a change that shifted the food habits from staples to an exploding demand for meat and nutritious products, including dairy.
The changing food habits prompted the government to shift the policy focus from food self-sufficiency to allowing ‘moderate imports’. Denials notwithstanding, mass urbanisation and the efforts to move bulk of the farming population away from agriculture to join the industrial workforce in the cities did leave a gap in production. At the same time, intensive farming practices resulted in heavy soil contamination, groundwater decline as well as pollution, and the resulting environmental degradation reduced the extent of arable lands, prompting China to announce that it will protect 120 million hectares of farmlands to meet its food security needs.
As the average farm size in China declined to 1.6 acres, the growing appetite for chemical fertilisers, including nitrogen, coupled with direct income support for farmers had resulted in grain surplus accumulating to 600 million tonnes in 2017. Although the silos were bursting, the growing demand for nutritious foods, including beef, also soared meanwhile. To give you an idea, the sale of beef to China in a decade had grown by 19,000 per cent. A change in diet therefore forced China to scout for food all over the world, including India and Pakistan.
According to Fitch Ratings, China’s imports of corn, wheat, sorghum and barley in 2020 soared by 136 per cent, 140 per cent, 437 per cent and 36.3 per cent, respectively. It expects the trend to continue in 2021 as well. Already it has exhausted soybean supplies from Brazil, the world’s biggest soya producer, and is now turning to USA. So much so, as Forbes points out that despite being the world’s second biggest wheat producer, China holds over half of world’s wheat stocks. Similarly, it has 65 per cent of world’s corn inventories.
Unable to meet its growing food needs domestically, China has been on an aggressive spree buying farmlands in Africa and Latin America, and is now turning its attention to purchase farm lands in America, European Union and Australia. The website farmlandgrab.org estimates that since 2010, China has already made an investment of $ 94 billion in farm activities abroad, purchasing 3.2 million hectares.
While China is clearly at the edge of a severe food crisis, there are important lessons here for India. In a country where mainline economists ravel in cut paste prescriptions in the name of agricultural reforms, the Chinese example illustrates how the transformation from a state-regulated farming to a market-oriented agriculture has brought it to face an unmanageable food crisis, perhaps pointing to a bigger crisis ahead. With the experiment to transform China into a manufacturing hub going awry, especially after Africa was able to provide cheap workforce, restoring farm viability now is becoming a still bigger challenge.
China provides $206 billion of farm subsidies ever year (add to it tens of billions spent on importing food year after year) shows if the same amount had gone into converting small farm lands into an economic powerhouse, the world’s biggest grain producer could have easily avoided turning into world’s biggest grain importer. There was an alternate economic pathway, more sustainable in the long run, that China failed to undertake.
India cannot afford to go on the same beaten track. Or else, the question as to who will feed India will continue to haunt future generations. #
Lessons for India from China's food import. The Tribune. April 21, 2021. https://www.tribuneindia.com/
Monday, April 19, 2021
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Wednesday, April 14, 2021
Reporting of Northern Ireland unrest 'not telling whole story'
I’m concerned about the surge in violence Northern Ireland, where I recently conducted a year-long project, and about how the unrest is being covered in the media.
Media have all too often exacerbated conflicts by engaging in ‘us vs. them’ narratives and sensationalism. At the same time, there is concern that there should be more to reporting unrest than just the surface.
Una Murphy, editor of View Digital Magazine in Northern Ireland, said via email, “As a journalist working in a society where there was armed conflict I remember the first riot I covered, the first murder scene, the first funeral. Looking at the TV pictures of the street rioting around Easter time in 'post-conflict' Northern Ireland, I felt for the young journalists covering these events. I thought that little had changed in how these events were framed. I'm interested in exploring peace journalism, so I felt that counting the numbers and reporting on how many petrol bombs had been thrown and how many police officers had been injured, while important, was not telling the whole story.”
To see how much of “the whole story” is being covered, in a thoroughly unscientific study, I randomly selected 8 articles from US, UK, and Northern Ireland news outlets (see below) and examined their reporting about the unrest.
The good news first: There was a wealth of accurate information about the multifaceted causes of the violence. Only one story inaccurately framed the unrest only as strictly a “unionist vs. loyalist” event. In general, the youth involved were, under the circumstances, treated respectfully and not demonized. NewsLetter’s article is the only one that used demonizing language from authorities (“shameful and senseless”) to describe the protesters.
Fortunately, none of the articles used a Chicken Little “the Troubles are returning” framing.
On the negative side, each of the eight stories prominently featured pictures and video of mayhem, the kind lamented by Murphy—mostly fires and clashes with police. Were these images overly sensational, and did they accurately reflect the events? Also, none of the reports interviewed any of the youth involved, leaving their motivations to be speculated upon by officials. Only one story (Belfast Telegraph) substantively examined how underlying poverty and other chronic deficits in working class loyalist areas may have helped to stoke the violence.
In all the articles, there was plenty of posturing and bloviating from politicians on all sides, and boilerplate talk about urging calm. However, while there was expert analysis in many articles (the Politico article especially), none of the stories went in-depth into actual solutions that might address the underlying causes of the unrest.
Additionally, Murphy observed a shifting narrative in reporting about the unrest. “The narrative changed a few days into the story to concentrate on criminal gangs encouraging children to riot, with the Children's Commissioner stating that the behavior of some adults amounted to 'child abuse,’” she noted.
Shifting and superficial narratives seem to be standard practice for journalists covering civil unrest—a pattern seen not only in Northern Ireland but in last summer’s coverage of the BLM protests in the US.
Murphy asks, "When you are reporting on a riot scene you don't have much time for reflection. I am interested in finding out more about how journalists can frame the story differently when violence erupts on the streets."
In my book “Peace Journalism Principles and Practices,” I present seven principles on how to frame stories differently and more responsibly report civic unrest. These principles are shown below, with my comments specifically about Northern Ireland in parenthesis:
1. Report on “them” fairly, respectfully, and with empathy. (Why are these kids angry? Desperate?)
2. Report about the invisible causes and effects of the unrest. (The geopolitical/Brexit analysis is fine, but what were the proximate causes during the last month that sparked the riots? Are criminal gangs really to blame?)
3. Use precise and objective language (Was it a loyalist uprising, a few angry kids, or something else? Was this child abuse?)
4. Report proactively to facilitate dialogues before violence occurs (How much reporting about the poor conditions in loyalist communities was done before the riots?)
5. Report counter-narratives that provide a different perspective on the protesters, the police, and the community (Profiles of protesters, police, impacted small shop owners, etc.)
6. Report with reconciliation in mind (Where can we go from here? How can we bring these protesters back into society? How does NI heal? Is this an opportunity for Stormont to unite in common cause?)
7. Give voice to peacemakers on all sides during and after the unrest (Were there protesters who attempted to head off or end the violence? Or those in either community—not politicians—who attempted to mediate?)
Media must report when unrest occurs. The hope is that this reporting can be done in a way that doesn’t pour gasoline on the fire, and helps society consider non-violent responses to the conflict.
Articles analyzed
https://www.bbc.com/news/uk-northern-ireland-56664868
https://www.cnn.com/2021/04/09/uk/northern-ireland-violence-explainer-gbr-intl/index.html
https://www.pbs.org/newshour/world/explainer-what-is-behind-the-latest-unrest-in-n-ireland
https://www.politico.eu/article/northern-ireland-oped/
https://www.irishtimes.com/news/crime-and-law/fears-mount-of-another-night-of-violence-in-northern-ireland-1.4527570
https://inews.co.uk/news/politics/belfast-riots-northern-ireland-violence-what-loyalist-nationalist-stormont-emergency-meeting-947169
https://www.belfasttelegraph.co.uk/news/northern-ireland/loyalist-concerns-cannot-be-dismissed-as-nonsense-arlene-foster-says-40303623.html
https://www.newsletter.co.uk/news/crime/calmer-streets-in-belfast-on-saturday-night-following-violent-clashes-3196245
Thursday, April 8, 2021
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Friday, April 2, 2021
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Agriculture cannot be viable till it provides for an assured price.
A few weeks back, French farmers hung suicide dolls on trees outside Parliament to draw attention to the devastation brought about by continuously sliding market prices. In a country which follows modern agricultural practices, it is disturbing to know that while three farmers on an average commit suicide every two days; growing indebtedness is resulting in the closure of at least 1,500 farms every year.
That such a grave tragedy should afflict the biggest farm producer in the European Union (EU), and ironically, which also happens to be the topmost recipient from the $100 billion agricultural subsidy kitty that Europe provides for every year, shows clearly how markets are tightening the noose leaving struggling farmers in exasperation. “How can anyone want to be a farmer today?” Dominique Metenier, a farmer, told the French storytelling platform Narratively, adding: “What is the point to being in debt all the time, and toiling for no reason? We are sacrificed so the consumer is always happy with low prices.”
With very high crop productivity, and with market-oriented agriculture expected to provide a higher price to efficient producers, why are French farmers increasingly in crisis remains baffling. Wonder what has happened to a progressive farming community that has always been on the forefront of adopting high-tech farming practices and innovations. To reiterate what I said earlier: the top 44 per cent of the French farmers are saddled with a bankruptcy of Euro 400,000 each. In addition, an estimated 10 per cent of the French farms, carrying a gross debt of Euro one billion, are fast heading towards closure.
This is despite huge subsidies French farmers receive year after year; significantly adding to the low incomes that markets otherwise leaves them with. And yet, nearly a quarter of the French farming population is somehow struggling below the poverty line, and in neighbouring Germany an estimated 130,000 farms have closed down since 2005. Surviving literally at the mercy of supermarkets, farming has ceased to be profitable. Ironically, farms are dying at a time when ample capital investments have already been made in modernising agriculture with food processing, building warehouses, creating rural infrastructure like roads, providing internet connectivity, scientific storage and a chain of cold storages. If the logic is that modernisation boosts farm incomes then why after such huge farm infrastructure investments, should farmers be struggling to survive? It clearly demonstrates that the benefits of modernisation are actually reaped by the agribusiness companies and of course, the supermarkets.
With farm mechanisation at its peak, and powerful market intelligence solutions available at the drop of a hat, one wonders why European farmers have failed to take advantage of a policy prescription that is routinely doled out to farmers everywhere, including India. Already the farming population in France, Germany and elsewhere has come down drastically, and if economists are to be believed, farm incomes should be going up when the number of farmers decline. That didn’t happen. The average farm size in France has grown to 135 acres and still farm incomes have declined.
To add, in Australia, where the average farm size is 4,331 hectares (or roughly 10,827 acres) one would expect farmers to be dictating the prices. Going by the logic of economy of scale, Australian farmers should be super rich. But on the contrary, Australian agriculture too presents a gloomy picture. A report in The Guardian says that the rate of suicide among male farmers is double the national average. In addition, the suicide rate among farm workers is still higher. Economic hardship is among the reasons cited.
Returning back, several studies have shown that European farmers are struggling for survival, the tragedy on the farm is being compounded by the devastation and deprivation wrought by free markets. Still, what remains unexplained is the inability of economic leadership (and that includes university professors) to acknowledge that the idea of price discovery by markets has failed miserably. Although the economic textbooks say so, but nowhere in the developed world have markets succeeded in turning farming into a profitable venture. Otherwise I see no reason why subsidies should form 40 per cent of the farm income in America, and 57 per cent in European Union.
Economists Bruno S Frey and David Iselin have argued in their book Economic Ideas You Should Forget that many of the old theories are outdated and need to be discarded “because they are misleading, or at least no longer fruitful.” This holds true for the outdated belief that markets help in getting the right farm prices. Universities and management schools should make this book a part of the course curriculum to get over the fixation they have with certain failed ideas and concepts. After all, how can economists go on talking about the virtues of free markets in agriculture without ascertaining why farmers are in misery. It only shows the disconnect economics has with the ground realities.
In another book ‘Zombie economics: How dead ideas still walk among us’ an Australian economist John Quiggin says that the time has come to discard the ‘efficient market hypotheses’ among some other outgrown ideas. I completely agree. Although his analysis was in relation to financial markets collapse but considering that the ‘efficient markets’ in agriculture too have failed to translate into higher farm incomes, the time has come to abandon the ruinous pathway that lazy economists still go on suggesting.
An analysis published in Nature, examining 118 studies conducted in 51 countries over a period of 50 years, demolishes the general perception about the efficiency of modern agriculture, concluding that small farms have higher yields and are ecologically sustainable. This is what India needs, and should call for an immediate policy shift from environmentally damaging industrial agriculture to an environmentally-safe and productive small scale farming. The new approach for a revitalised agriculture cannot be economically viable till it provides for an assured income by way of an assured price as a fundamental right for farmers. That’s the cardinal rule the world must adopt to move to a new agriculture. #
Shift from industrial to small-scale farming. The Tribune. April 2, 2021. https://www.tribuneindia.com/
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