Everyone is stealing germplasm: Dr. Hampaiah, Chairperson, AP Biodiversity Board


Author(s): Latha Jishnu

Date: Sep 15, 2012

When agronomist Ralladoddi Hampaiah was advisor to the Russian government, he discovered how easy it was to take genetic resources out of India. And also how easy it was to bring in such material—bypassing quarantining regulations and other critical formalities. He once took 100 seeds of maize for testing to Russia from Delhi, and at Moscow airport he was grilled thoroughly about the seeds, their origin and certification. On his return from Russia, he brought in an enormous quantity of seeds, all of 15 kg, but was waved through customs! No questions asked. That was in 1993 before the international convention on biodiversity came into being. But not much has changed since then, although India has passed its own laws on biodiversity conservation and has regulatory systems in place, says the man who is now chairperson of the Andhra Pradesh State Biodiversity Board. Coming to the post after a long innings with private seed companies, most of it with Pioneer Seeds, a multinational owned by DuPont, Hampaiah has a clear understanding of how the industry works. Everyone is stealing germplasm, alleges the official who has been in the news for several controversial actions, including a case against Monsanto. In a freewheeling conversation with Latha Jishnu, Hampaiah says biopiracy is a major concern, but shortage of funds and experts are hampering the work of state boards. Excerpts:

RALLADODDI HAMPAIAHWhy do you say our bio-resources are going out of India? We have laws to safeguard them.

It is not lack of laws but lack of understanding. Many of our ministries and departments don’t know the value of our germplasm. Till the mid-1990s, everything was exchanged freely. Look at the number of multinational companies (MNCs) that came to India because of our germplasm. It is all readymade for whoever wants to pick it from either the agriculture universities or research institutions in the country. Important germplasm resources we have are of sorghum, pearl millet, rice, cotton….Andhra Pradesh has a wealth of biodiversity and that may be the reason why we have hundreds of MNC operating in the state.

Is it all brazen theft?

No, the regulations also enable our germplasm to be taken out legally. Under Section 40 of the Biological Diversity Act, valuable material can be exported openly as “normally traded items”. It allows the Centre to exempt some items from the required permission from the National Biodiversity Authority (NBA) for use of biological resources. All kinds of germplasm are being sent out as “normally traded items”.

Who is sending out our germplasm?

Seed companies, pharmaceutical industry, researchers, just about everyone is stealing. The small seed companies steal from the big ones and the big ones get it from research institutions under various ploys after signing MoUs with them or with universities. No one declares the origin of the material. Other countries are particular about their genetic resources. In 1993, even before the Convention on Biological Diversity (CBD) was signed, I realised the difference in the way we treat our germplasm and other countries do. I took some 100 maize seeds to Russia when I was advisor to the government and they asked me for certification and other information. It was the same when I took out 15 kg of maize from Russia. The DNA of all the material is coded and registered and they follow the rules strictly. When I brought the seeds to India—and it was only to make a point—I was waved through customs. The plant quarantine officials were not present. So just to see how the system worked, I took the seeds to Faridabad where the office is located. They were taken aback and pleaded with me to take the seeds away quietly.

What is the way out?

Government should insist on a certificate of origin from NBA for all such items in addition to the phytosanitary certification. Every department should be sensitised to the value of our bio-resources, specially the customs. They have a major role to play.

Given these constraints, what have you done to protect biodiversity in Andhra Pradesh in the past six years?

We have taken a number of measures to spread awareness among the people by forming biodiversity management committees at the village-level and written to NBA about the trade in genetic material through the “normally traded” route. The regulator had no clue at the time about this. We had also filed a case for benefit-sharing against Monsanto for stealing the bacterium bacillus thuringiensis (Bt) from Mahanandi village in Kurnool district. (Bt is the most widely used bacterium in genetic modification of crops). Analysis of the soil shows that the bacterium comes from this area. We were claiming one to two per cent of sales revenue earned from the sale of Bt cotton (seeds) as royalty.

Are you saying Bt cannot be found anywhere else? What happened to the claim on Monsanto?

We have proved up to 99 per cent that Monsanto took Bt from Mahanandi. It did not contest this. But the case was not legally tenable because the notice to the US MNC was sent too late, in 2007. The germplasm was taken in 1992 and our regulation (BDA) came into force in 2002. The lawyers said the claim will now have to be fought in US courts.

Are there any other cases of biopiracy that you can cite?

Hundreds. In the case of Bt cotton, the germplasm was taken from Acharya Ranga Agricultural University in Hyderabad. What was used is a top quality variety called Narasimha. Unfortunately, the variety came into the public domain in 2004 when the registration period (18 years) ended. Similarly, so much rice germplasm has been taken away from the Directorate of Rice Research in Hyderabad which is a huge repository of our indigenous varieties. Nowadays MNCs are signing MoUs with it.

In the case of the Ongole bull, reports say the government gave a conservation award to a farmer for exporting its semen to Brazil at a time when Brazil is being accused of biopiracy. Doesn’t this undermine the board’s credentials?

No, that is not correct. The farmer was awarded for selling an Ongole bull to a Gujarat buyer for a big amount, Rs 35 lakh. Promoting this breed is a good example of conserving local biodiversity and creating awareness. I agree these bulls are taken to Bhavnagar for onward export to Brazil and other countries. But the problem is that the trade in Ongole bulls is huge. In a recent fair in Panama, a bull was on offer with a base price of Rs 3 crore. I have seen fancy catalogues of cattle fairs even in Australia where the Ongole bull is a prized breed.

At a recent fair in Panama, Andhra Pradesh’s Ongole bull was offered for `3 croreAt a recent fair in Panama, Andhra Pradesh’s Ongole bull was offered for Rs 3 crore (Photo: Guna Sekhar Pera)So what is the Andhra Pradesh board doing about it? After all Ongole bulls have been traded for over a 100 years and are now an international breed.

I spoke to the CBD executive secretary Braulio Ferreira de Souza Dias, a Brazilian, about this issue. He said we should have a cut-off date—1993 when CBD was established—otherwise, it would become too messy if we delved too far into the past. Now, another breed, the Punganur cow (from Punganur in Chittoor district), is becoming important and we want to create awareness about it.

What can the board do about conservation?

Spread awareness and ensure fair benefit-sharing from the use of bio-resources as we did in Amarchinta village in Mehboobnagar district. We found that a local company was sending big shipments of neem leaf to Japan but was paying the villagers just Rs 20 per kg. We helped the local biodiversity management committee to get a much better price of Rs 100 per kg for the neem. But I must admit that if the Japanese buyer had not insisted on a certificate of origin and forced the local exporter to come to us we would not have come into picture.

The focus seems to be just plants. What about other species?

What can we do without funds? So far, we were getting just a sustenance allowance and had no place even to sit. There is little we can do on awareness and capacity building at the grassroots. Only now, on account of the Conference of Parties to CBD in Hyderabad in October we are getting Rs 8 crore.

That’s a huge sum. What do you plan to do with it?

We have been granted six hectares so we will start building an office and museum.

Ignoring the nation’s poor: A political peril in 2012?

In today’s America, one in four Americans live in poverty. Since 2007, number of working families living in poverty or near poverty rose by 25 per cent. The official poverty rate rose to 15.9 per cent this month. This is happening despite the presence of Wal-mart which is supposed to be creating jobs and helps in economic growth. Since 2007, 10.4 million more Americans have had their incomes fall below the official poverty line. I can’t believe this. And we are made to believe that the country must follow the US economic model if it has to grow, to remove poverty and to eliminate hunger. What a fallacy.

This analysis is from an Oxfam report. http://bit.ly/SewjEf

Surinder Sud: Fertiliser Subsidy burden or boon?

Why phasing out the fertiliser subsidy will affect small farmers

The Prime Minister’s Economic Advisory Council (PMAEC) has suggested in its recent Economic Outlook report for 2012-13 that the process of reducing the subsidy burden on the exchequer could begin with “dismantling the fertiliser subsidy”. To justify this plea, the PMAEC has reportedly argued that agricultural input subsidies are progressively losing their relevance because their role in contributing to productivity enhancement is fast diminishing.
The PMAEC’s arguments are, indeed, far from incontrovertible. For, several widely held perceptions concerning the fertiliser subsidy, its relevance to agriculture and its ultimate beneficiaries do not seem to be well founded. This is borne out by a well-researched working paper (No 2012-09-01) brought out by the Indian Institute of Management (IIM), Ahmedabad, earlier this month.
Based largely on the analysis of government data, the author of this paper, Professor Vijay Paul Sharma, has dispelled the prevalent notion that fertilisers are used mainly by large farmers who also corner a bulk of the fertiliser subsidy. Likewise, this paper has demolished the impression that the use of fertilisers is chiefly confined to irrigated crops and that tillers of rainfed land don’t benefit from the fertiliser subsidy.
Moreover, this in-depth study finds that doing away with the fertiliser subsidy would render farming unviable, especially for small and marginal farmers, in some agriculturally-underdeveloped states.
Regarding the better targeting of the fertiliser subsidy, which could be one of the options for the government to cut down its subsidy bill, the paper argues that this might pose the kind of glitches that are encountered while targeting food subsidy. There could be grave errors in identifying the intended recipients, leaving out many needy farmers, notably tenant farmers who constitute a sizable section of the Indian farm community. The IIM report has, in fact, preferred “rationing” of fertilisers over “targeting”, though even this plea seems debatable.
Analysing the data generated by the all-India input surveys conducted by Krishi Bhawan’s agricultural census division, the study has inferred that small and marginal farmers use higher amounts of fertilisers per hectare than their larger counterparts and, thus, get a relatively bigger slice of the overall fertiliser subsidy. About 53 per cent of the fertiliser subsidy goes to these small and marginal farmers though they cultivate only around 44 per cent of the cropped land.
More surprisingly, marginal farmers operating tiny farms apply nearly twice the quantities of chemical plant nutrients, estimated at 140 kg per hectare, than large farmers that use, on average, 68 kg per hectare. Thus, even these resource-poor farmers benefit from the fertiliser subsidy.
Notably, the rate of increase in fertiliser use, too, is far higher in the case of small farmers compared to large farmers. Between 1996-97 and 2006-07, the highest increase of 55.4 per cent was accounted for by small farmers, followed by nearly 44 per cent by semi-medium farmers, against merely 32.2 cent growth in fertiliser consumption by large farmers.
An important lesson that can be learnt from this IIM report is that hasty, half-baked and improperly-implemented moves on the subsidy front can prove counterproductive. The nutrient-based subsidy regime is a case in point. Though this concept is theoretically sound, its flawed enforcement has rendered it counterproductive.
While the prices of non-urea fertilisers have been decontrolled and subjected to subsidy cuts, urea – the most consumed fertiliser – has been left out of this system. As a result, while the farm gate prices of phosphatic (P) and potassic (K) fertilisers have soared, more than doubling in some cases, those of urea have risen only marginally, widening further the price differential between urea and non-urea fertilisers. This has, predictably, encouraged higher use of urea at the cost of phosphates and potash, worsening the imbalance in the nutrient use that is perilous for soil fertility and crop productivity.

Given the far-reaching policy implications of this study, the government would be well advised to keep them in view while revisiting the fertiliser subsidy issue.
Please find below the link of today’s article mentioned about Prof. Vijay Paul Sharma’s study paper  “Dismantling Fertilizer Subsidies in India: some issues and concerns for farm sector growth” on September 4, 2012.

Feeding a thirsty world: challenges and opportunities for a water and food secure future

Source: Stockholm International Water Institute | August, 2012

This report presents the latest thinking and new approaches to emerging and persistent challenges to achieve food security in the 21st century. It focuses on critical issues that have received less attention in the literature to date, such as: food waste, land acquisitions, gender aspects of agriculture, and early warning systems for agricultural emergencies. It also offers perspectives on how to better manage water and food linkages.


6th Conference of the Parties serving as the Meeting of the Parties to the Cartagena Protocol on Biosafety

1-5 October 2012 
Hyderabad, India

Report of COP-MOP5: Biosafety Protocol Steps Forward
COP-MOP5 met in Nagoya, Japan from 11-15 October 2010. This is a TWN report on the meeting’s outcomes.
Lim Li Lin, Third World Network and Doreen Stabinsky, College of the Atlantic
The bi-annual meeting of Parties to the UN Cartagena Protocol on Biosafety ended in Nagoya on Friday, 15 October 2010 with a major advance in international law. The meeting saw the adoption of a new environmental treaty – the Nagoya-Kuala Lumpur Supplementary Protocol on Liability and Redress to the Cartagena Protocol on Biosafety.
A number of significant Decisions of the 5th Conference of the Parties serving as the Meeting of the Parties (COP-MOP5) to the Cartagena Protocol were also adopted. A Strategic Plan for the next ten years (2011-2020) and its multi-year programme of work for the next five years (2012-2016) lay out a plan and vision for its implementation. Key Decisions that take forward issues at the heart of the debate over biosafety – on risk assessment and socio-economic impacts – were also adopted.
[The Cartagena Protocol deals with living modified organisms (LMOs) that may have adverse effects on the conservation and sustainable use of biological diversity, “taking also into account risks to human health, and specifically focusing on transboundary movements”. The Cartagena Protocol uses the term “living modified organisms” for what is commonly known as genetically modified organisms (GMOs). The parent treaty of the Cartagena Protocol is the Convention on Biological Diversity (CBD), which will hold its 11th Conference of the Parties in Hyderabad, 8-19 October 2012.]
Liability and redress
The Nagoya-Kuala Lumpur Supplementary Protocol on Liability and Redress is a supplementary Protocol to the Cartagena Protocol on Biosafety. Negotiations of the Supplementary Protocol took more than six years, over ten negotiating sessions, and other preparatory meetings. However, having a substantive international liability and redress regime to address damage resulting from LMOs is actually ten years overdue.
When the Cartagena Protocol was adopted in January 2000 in Montreal, developing countries had actually wanted to have substantive provisions on liability and redress included in the Cartagena Protocol itself. During the Cartagena Protocol negotiations, many civil society observers and developing country delegates supported the “No liability, no Protocol” campaign.
However, liability and redress issues proved too contentious to resolve, and the compromise was to negotiate liability and redress rules at a later stage, after the entry into force of the Cartagena Protocol. This process began in earnest in 2005.
The name of the Supplementary Protocol reflects the contribution of two countries to the process: Nagoya, Japan where the negotiations of the Supplementary Protocol were completed and the Supplementary Protocol adopted; and Kuala Lumpur, Malaysia where the first COP-MOP was held in 2004 where the mandate of the first negotiating group was adopted, and where two negotiating meetings were held (and were supposed to be completed).
It was also Malaysia, during the negotiations of the CBD, that had introduced the biosafety issue to ensure that conservation and sustainable use of biodiversity would not be threatened by LMOs.
The negotiations were difficult and were heavily opposed by those with an interest in the production and export of LMOs – the biotechnology industry, biotechnology scientists and non-Parties to the Cartagena Protocol – who had also actively worked to water down the Cartagena Protocol and block the negotiations.
Developing countries and some developed countries like Norway on the other hand, had always maintained that an international regime to deal with damage caused by LMOs was necessary because of the unique risks of LMOs and their transboundary nature, and in order to ensure that those responsible would be held liable. This is necessary to prevent damage to biological diversity, the environment and people, particularly in poor countries. In cases where damage does occur, a liability regime should ensure that financial resources are made available to enable or compensate for necessary measures to redress the damage.
At times, it appeared that there would be no agreement on the Supplementary Protocol. In particular, the issue of the nature of the liability regime had been very difficult to resolve. Most developing countries wanted to have a binding international regime that would set substantive rules on civil liability whereby victims of damage from LMOs can turn to national courts for redress.
Instead, the Supplementary Protocol largely takes an “administrative approach” whereby responses measures are required of the operator (person or entity in control of the LMO) or the competent authority if the operator is unable to take response measures. This would cover situations where damage has already occurred, or when there is a sufficient likelihood that damage will result if timely response measures are not taken.
However, countries can still provide for civil liability in their domestic law and the first review of the Supplementary Protocol (five years after its entry into force) will assess the effectiveness of domestic civil liability regimes. This could trigger further work on an international civil liability regime.
Much has been left to countries to determine and implement at the national level. This reflects the lack of consensus of countries in the negotiations. The process to truly ensure that there is justice when damage to people and the environment occurs is still a long and winding road.
Safe or un-safe?
One of the main dynamics influencing the negotiations in Nagoya was the political rift between those countries that consider that the Cartagena Protocol should be used to prevent damage arising from the risks that LMOs pose to biological diversity and human health and those countries that attempt to downplay those risks because they are, or plan to be, exporters of LMOs and products thereof.
This split was quite evident in discussions on the Strategic Plan, risk assessment and risk management, and capacity building on socio-economic issues. Discussions on the latter two revolved around the establishment or continuation of technical expert groups that would further consider risks of LMOs and provide guidance to Parties on addressing those risks.
Risk assessment and risk management
COP-MOP5 continued and built on work on risk assessment and risk management initiated by COP-MOP4 (held in Bonn in 2008), where Parties established an ad hoc technical expert group (AHTEG) on risk assessment and risk management to: a) develop a “roadmap” on the necessary steps to conduct a risk assessment, b) consider needs for specific guidance documents for different types of LMOs and lay out a plan for developing those guidance documents, and c) develop modalities for producing further guidance documents and testing the roadmap.
The AHTEG met twice during the intersessional period, between Bonn and Nagoya. At COP-MOP5, Parties had before them several products developed by the AHTEG: the roadmap, as well as three guidance documents for conducting risk assessments of different types of LMOs: LM mosquitoes, LM crops with stacked traits, and LM crops engineered for abiotic stress tolerance.
Parties at COP-MOP5 were to consider these results of the AHTEG and determine next steps on risk assessment and risk management under the Cartagena Protocol.
Early in the discussions, divisions emerged between Parties that wished to continue the AHTEG and other Parties that were not happy with the outcomes of the AHTEG process. Conflict emerged on what to do with the roadmap and the guidance documents, on the current membership of the AHTEG, and on the terms of reference for the continued work of the group.
Several developing country Parties led the critique of the outcomes of the current AHTEG. Brazil, India, the Philippines, Paraguay and Mexico emerged at this meeting as strong deniers of the risks posed by LMOs, and either critiqued the composition of the AHTEG or stressed that the AHTEG outcomes should be further reviewed and ‘validated’. Other non-Parties to the Cartagena Protocol such as the United States also expressed their dissatisfaction with the AHTEG outcomes.
After it became clear that there was wide support (from the African Group and many other developing country Parties, as well as developed country Parties such as the European Union and Norway) for continuation of the current AHTEG, the countries that were not happy with the AHTEG and its outcomes fought for its expansion to include persons “with hands-on experience” in risk assessment and risk management, as well as language in its revised terms of reference referring to “peer review” of the roadmap and guidance documents.
A long discussion ensued on whether or not to retain the word “peer” in front of “review,” which was concluded when the Chair replaced the word “peer” with “scientific.” The final COP-MOP Decision provides for the continuing review and testing of the roadmap and guidance documents by the AHTEG, with a view to develop a revised version.
Also during the debate on the issue of risk assessment and risk management, Parties considered modalities to implement two separate Cartagena Protocol provisions regarding identification of LMOs that may and LMOs that are not likely to have adverse impacts on biological diversity.
On the topic of identifying LMOs that are not likely to have adverse impacts on biological diversity, many countries noted that risk assessments must be conducted on a case-by-case basis, and this would preclude any a priori determination of LMOs not likely to cause adverse effects.
On the topic of identification of LMOs that may have adverse impacts, Parties were requested to submit to the Biosafety Clearing-House decisions and risk assessments where potential adverse effects have been identified, to be compiled by the Secretariat and considered at the next COP-MOP.
Socio-economic considerations
Under the agenda item on capacity building, Parties considered recommendations from the sixth Coordination Meeting for Governments and Organizations Implementing or Funding Biosafety Capacity-Building Activities regarding capacity building needs for the assessment of socio-economic impacts of LMOs.
The Coordination Meeting had identified lack of capacity as one of the main reasons preventing countries from taking socio-economic impacts into consideration in their decision-making. Socio-economic impact assessment needs identified by a survey conducted by the Secretariat/UNEP-GEF (UN Environment Programme-Global Environment Facility) included food security, coexistence of LMOs with conventional and organic agriculture, impact on indigenous and local communities, and Farmers’ Rights (e.g., control of seeds).
To address these capacity building needs, the Coordination Meeting recommended to the COP-MOP to establish an expert group on socio-economic considerations to, inter alia, develop criteria and guidance to assist Parties in determining which socio-economic considerations to include in their decision-making.
During the COP-MOP discussions on the topic, a split emerged over whether an expert group was necessary at this time. While the African Group and Bolivia were strongly in favor of convening an expert group, the EU, supported by several other countries, considered that it was premature for an expert group to develop guidance on taking socio-economic considerations into account during decision-making, or that an expert group was not the appropriate means to address the topic. Budgetary constraints were also considered in the deliberations.
Negotiations on this item stretched into the final plenary, with an informal group tasked to resolve the issue over whether or not an expert group would be convened. Finally, the compromise was to conduct online forums and hold a workshop on socio-economic considerations, with the results to be forwarded to COP-MOP6 for further consideration. The Norwegian government offered to support the workshop with a $75,000 contribution.
Strategic Plan
The Strategic Plan for the implementation of the Cartagena Protocol sets out five focal areas: facilitating the establishment and further development of effective biosafety systems for the implementation of the Cartagena Protocol; capacity building; compliance and review; information sharing; and outreach and cooperation.
Under the first focal area, Mexico had wanted LMOs that are not likely to have adverse impacts on biological diversity to be included. This was opposed by Peru, Norway and the EU, and was eventually dropped.
On the issue of scientific and technical advice, the EU opposed provisions on mechanisms for providing scientific and technical advice in the Strategic Plan and the multi-year programme of work. These provisions were deleted.
The issue of socio-economic considerations also reared its head in these discussions. The EU did not want an emphasis on socio-economic guidance or guidelines for Parties in reaching decisions on imports, but rather on research and information exchange. They were strongly opposed by the African Group that wanted a focus on how Parties can take into account socio-economic consideration in their decision-making.
The final language strikes a compromise – “To, on the basis of research and information exchange, provide relevant guidance on socio-economic considerations that may be taken into account in reaching decisions on the import of LMOs”. This is further qualified with the reference to “peer reviewed research” relevant to socio-economic considerations.
[However, in Appendix C of Annex III ‘Consolidated modus operandi of the Subsidiary Body on Scientific, Technical and Technological Advice (SBSTTA)’ of Decision VIII/10 on the ‘Operations of the Convention’, the Conference of the Parties to the CBD has adopted a Decision that sets out the modalities/activities of “peer review”: “1. Selected reviewers; 2. A wider audience including Parties, other Governments, SBSTTA focal points, experts nominated by Parties, organizations and indigenous and local communities and/or other conventions and their focal points.”]
Finances and resources
COP-MOP5 saw a difficult debate on the issue of the financial mechanism and resources, with many developing countries lamenting the lack of support for implementation of biosafety measures at the national level. Many developing countries called for the establishment of a special biosafety fund within the GEF, to allow for funding of biosafety projects outside the new GEF System for Transparent Allocation of Resources (STAR).
However the EU, represented at the meeting by the German GEF Council member, refused to include such a request to the GEF because it was outside the mandate of the COP-MOP to decide the structural organization of the GEF.
The final compromise language urged Parties to give priority to biosafety when applying for GEF funding under the biodiversity focal area, and urged the GEF to consider, during the next GEF replenishment process, defining specific quotas for biosafety funding for each country.
“Handling, transport, packaging and identification” 
During COP-MOP5, Parties considered two issues under the implementation of the Protocol on handling, transport, packaging and identification of LMOs. First, they reviewed documentation requirements for LMOs intended for use as food, feed or for processing and, because of limited experience gained to date in implementation of these requirements, decided to postpone further consideration of this issue until COP-MOP7 (in 2014).
Second, the Parties considered the need for and modalities of developing standards with regard to identification, handling, packaging and transport practices. They agreed to request the Executive Secretary to commission a study analyzing gaps, guidance on the use of existing standards, and the possible need for elaboration of standards under the Protocol, for further consideration of the matter at COP-MOP6.
Other Decisions
COP-MOP5 also adopted Decisions on the Compliance Committee; the Biosafety Clearing House; capacity building and the roster of experts; rights and/or obligations of Parties of transit of LMOs; monitoring and reporting; assessment and review; cooperation with other organizations, conventions and initiatives; public awareness, education and participation; and the budget for the Secretariat and work programme until the next COP-MOP.

Constructing Facts: Bt Cotton Narratives in India


A group of researchers and industry writers have constructed a narrative of technological triumph for Bt  cotton in India, based on an empirical record of superior performance compared to conventional seed. Counterclaims of Bt cotton failure are attributed to mutually reinforcing interactions among non-governmental organisations which avoid rigorous comparisons. However, researchers and the biotechnology industry are also engaged in a similar authentication loop for generating, validating, and
publicising such facts. With Bt cotton, the convention of routinely ignoring the effects of selection bias and cultivation bias benefits researchers, journals and the industry, but keeps us from drawing meaningful conclusions about the relative performance of the
technology. But as poor as the case for isolating the technology impact of Bt cotton in India has been, it is useful in helping us understand the social conventions for creating one’s “own facts”.

Subsidies on food: Study advises delay of cash transfer scheme

NEW DELHI: With finance minister P Chidambaram recently declaring at a fullPlanning Commission meeting that cash transfers may replace subsidies for food, fertilizers and fuel by the end of the 12th five year Plan, the controversial proposal has again moved center stage. A recently concluded pilot project in Delhi which substituted ration cards with Rs 1000 transferred monthly to families throws light on the pros and cons of the scheme.

The study involved 450 below poverty line households living in Raghubir Nagar, a colony in west Delhi. Of these, 100 households (called the transfer group) received the cash through a bank account opened in the women’s name. The remaining 350 households (called control group) continued their routine of getting wheat, rice and sugar from the local ‘ration shops’ on their ‘ration cards’.

The final report of the study reveals that there was no difference between the amount of wheat, rice and sugar consumed by the transfer group and the control group. However, those getting cash transfers bought more pulses and eggs/fish/meat. Another significant finding was that those getting cash appeared to divert some of it at least to spending on medical attention from private hospitals. Earlier, when they were not getting the cash, only 2.4 percent households of this group used to go to a private hospital but after getting the monthly cash installments, this proportion shot up to almost 21%. Those not getting cash transfers continued to either go to government hospitals or seek alternative medicine which involved less spending.

Besides these two changes in lifestyle, cash transfers did not affect any other habits. There was no difference in fuel usage – cash receiving families did not switch to less hazardous fuels like LPG. Their children’s attendance or performance at school did not improve. They did not invest in income or skill enhancing measures. They did not spend more on sanitary improvements to their homes. Their savings did not improve. And, importantly, the men of the family did not increase spending on alcohol.

Not surprisingly, some of the cash transferred to the families was used by them to pay off pending loans, thus reducing their debt load. The families that had accepted the cash transfersystem were more indebted to begin with, having an average debt of Rs.74,746 compared to an average debt of Rs.43,216 among the control group.

The study also found that performance of the ration shops in the area improved after the study started – an unexpected spillover effect as the shopkeepers tried to keep their customers secure.

So, what is the bottom-line? Although 96% of those included in the year long study said at the end that they would like to continue with receiving cash, the report observes that “among the poor there is a strong public opinion in favor of the PDS system of subsidized food and fuel, in spite of its many defects”. Most of the poor are so used to the PDS system that they would be very insecure if it disappeared, the report says. Pointing to the multiple advantages of a BPL card in getting other government benefits the report says that people are “wary of experimentation” with this important document.

The study report also highlighted a surprising stumbling block – opening bank accounts. They found that “banks actively discourage no-frill accounts” in spite of directives from the RBI. “Opening a bank account is a tedious, time consuming and sometimes humiliating process,” the report says.

So, the study report recommends that the government very gradually introduce the cash transfer scheme and that too as an option, allowing the people to choose between ration cards and cash.

It was supported by the government of Delhi and the United Nations Development Program(UNDP) with Self Employed women’s Association (SEWA) doing the ground work.