FAO says no to moratorium on biofuels

http://www.financialexpress. com/news/fao-says-no-to- moratorium-on-biofuels/373966/
ASHOK B SHARMA
Posted: Oct 16, 2008 at 0113 hrs IST
Updated: Oct 16, 2008 at 0113 hrs IST

New Delhi, Oct 15 : The UN Food and Agriculture Organisation (FAO), which has acknowledged that bio-fuel programme as one of the factors responsible for the present global food crisis, has soft-pedaled on the issue by not calling for a moratorium. It has rather suggested to make an in-depth assessment of its risks and possible benefits.

An FAO report ‘The State of Food and Agriculture-2008’ said, “A variety of factors have combined to raise food prices to the highest levels since the 1970s (in real terms) with serious implications for food security among poor populations around the world. One of the most frequently mentioned contributing factors is the recent rapid growth in the use of agricultural commodities – including some food crops – for the production of bio-fuels.”

“The emergence of bio-fuels as a new and significant source of demand for some agricultural commodities – including maize, sugar, oilseeds and palm oil – contributes to higher prices of agricultural commodities in general, and for resources used to produce them,” it said.

According to the FAO representative in India and Bhutan, Gavin Wall, who released the report in Delhi on Wednesday, the potential benefits of bio-fuels and farmers’ income need to be considered.

Though the report said that the impact of bio-fuel on food prices and its potential to contribute to energy security, climate-change mitigation and agricultural development continue to remain as the topic for the debate. It, however, acknowledged that the future of bio-fuels and the role they would play for agriculture and food security remain uncertain. Though the bio-fuels will offset only a modest share of fossil energy use over the next decade, they would have much bigger impact on agriculture and food security.

The report also found the impact of bio-fuels on greenhouse gas (GHG) emissions varying widely, depending upon where and how various feedstock crops are produced. In many cases increased emissions from land-use changes may offset or even exceed GHG savings obtained through replacing fossil fuel use. Other concerns are the impact on water use, soil and biodiversity.

FAO pinned its hope on the second generation bio-fuels which may offer additional benefits and called investment on is research and phasing out of production subsidies and trade barriers in OECD countries.

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Agrarian Crisis and Farmers' Suicides


Source: Agrarian Crisis and Farmers’ Suicides in India

Srijit Misra, IGIDR

The larger agrarian crisis has two dimensions. On the one hand, there is a livelihood crisis that threatens the very basis of survival for the vast majority of small and marginal farmers as also for agricultural labourers. On the other hand, there is an agricultural developmental crisis that lies in the neglect of agriculture arising out of poor design of programmes and allocation of resources and having resulted in declining productivity and profitability. This twin dimensions could also be equated with the developmental discourse where the former is about displacement of people and the latter is about displacement of ideology. The outcome is that planning is not people-centric.
In monsoon India, abundance or paucity of water has always been considered as a major source of agricultural uncertainty. Today, this yield risk could also be because of spurious inputs or inappropriate use of technology. Increasing costs, price volatility, non-availability of credit from formal sources and other risks further compound it. Social responsibility of education, healthcare and marriage instead of being normal activities add to the burden. All these would even put the semi-medium farmer under a state of transient poverty.
An extreme response to this distress is the increasing incidence of farmerss suicides. Between 1995 and 2006, more than 190,000 farmers have committed suicides, 83 per cent of these being males. The suicide mortality rate (SMR, suicide death for 100,000 persons) for male farmers increased from 10.5 to 19.5 whereas that of male non-farmers has more or less remained around 13. The major states with SMR for male farmers greater than the all India average of 18 during 2001-06 are Kerala (233), Maharashtra (53), Chattishgarh (47), Karnataka (39), Andhra Pradesh (35), Tamil Nadu (31) and West Bengal (21). It is to be reiterated that suicide is a symptom of the larger crisis, and its absence does not in any way indicate the absence of a crisis.
It is only in Kharif 2008 that one observes a substantial increase in the minimum support prices of the 16 major crops. In fact, the absolute increase would be almost equal to increments in the entire decade. Though welcome, this vindicates the established fact that returns to agriculture had turned out to be abysmally low. Per-capita per day returns to farmer households from cultivation in 2002-03 was eight rupees. Another recent public policy intervention has been the Rs.70,000 crore debt waiver package. This is just a book keeping exercise and at best will reduce the burden from formal sources. Indebtedness, like suicides, is another symptom.
Risk mitigation has to go beyond suicides and debt. What is more important is to spruce of public investments that will increase returns to cultivation. Skill enhancement and linking of opportunities to local resources are required to spruce up non-farm income. Success of the credit and input markets require effective regulation. There is a case of encouraging technological and financial products that would reduce costs while increasing returns. Institutions that can organize farmers are required.
My earlier blog on a related theme is Indian Agriculture in Doldrums.
Selected Readings:
Bhaduri, Amit (2008), Predatory Growth, Economic and Political Weekly, 43 (16), 10-14.
Government of India (2007), Report of the Expert Group on Agricultural Indebtedness, Chairman: R Radhakrishna.
Mishra, Srijit (2007), Agrarian Scenario in Post-reform India: A Story of Distress, Despair and Death, Orissa Economic Journal, 39, (1 & 2), 53-84. IGIDR Working paper version is WP-2007-001.
Mishra, Srijit (2008) Risks, Farmers’ Suicides and Agrarian Crisis in India: Is There a Way Out? Indian Journal of Agricultural Economics, 63 (1), 38-54. IGIDR Working paper version is WP-2007-014.
Reddy, D. Narasimha and Srijit Mishra (eds.) (2008) Agrarian Crisis in India, Oxford University Press, forthcoming.
This is the abstract of a presentation at a one day international seminar, “Environmental degradation and food crisis – Lessons for India” being organized by Greenpeace India on 24 October 2008 atIndia International Centre, Lodhi Road, New Delhi, India.

Food First Policies needed to tackle hunger in India

Shiva: Food-First Policies Needed to Tackle Hunger in India

Indian activist Vandana Shiva holding a pin that reads 'No thanks to GMO food'

Shiva blames the increase in hunger on the use of genetically engineered seeds

Dramatic price increases have left nearly a billion people hungry worldwide. As World Poverty Day draws attention to the issue, DW’s Dennis Stute speaks with activist Vandana Shiva about India’s huge hunger levels.

Dr. Vandana Shiva is a physicist, ecologist, activist and author. In India she has established Navdanya, a movement for biodiversity conservation and farmers’ rights. She also directs the Research Foundation for Science, Technology and Natural Resource Policy.

The UN has declared Oct. 17 as the International Day for the Eradication of Poverty.

DW-WORLD.DE: How has the food crisis affected India?
Vandana Shiva: Very severely. Prices of staples have literally doubled in the last year and that has meant that the poor who were already only eating half of what they should be eating are now eating a quarter of what they should be. Unfortunately, it is the poor who must make a living by working physically and what we’re basically doing is robbing them of their ability to earn a living.

In addition, when children don’t get enough food to eat or when a mother is malnourished and she gives birth to a low birth-weight child, we are creating generations of people deprived of full mental health and full physical health.

According to a new report, there are “alarming” levels of hunger in 12 Indian states and “serious” levels in the remaining five. What, in your view, is the reason for the widespread malnutrition?

There are two very big reasons why India has emerged as the capital of hunger. The first is the “Green Revolution” model of agriculture, which was actually a hunger-creating model proposed as a hunger solution. But when you destroy food sources in pulses, in vegetables, in grains, in oil seeds and create monocultures of rice and wheat, you destroy the millets — the nutritious grains that have 40 times higher level of nutrition — and call them inferior grains and push them to extinction. On the ground, you have less food per unit acre and you have less nutrition access per capita.

Man picking an ear of corn from a stalk GMO crops require more water and provide less nutritional value, says Shiva

The second is related to the new thrust of the 1991 policies of trade liberalization which instead of focusing on food for people focused on exports of luxury cash crops to rich countries, destroying India’s food security base. This was trade-driven and really put food on the back burner then, treated as something you don’t need policy for.

The food situation is particularly bad in the state of Madhya Pradesh. Why is this state doing even worse than the others?
The two reasons Madhya Pradesh is more severely affected than others is that it’s a large forest state and it’s largely a tribal state. The food security of the tribals came from abundant forest products including edible products from the forest’s produce. Mining and industrialization is so rampant that tribals are losing their food resources.

It’s also the state where the drought impact because of climate change has been felt very severely. Bundelkhan has had a drought and rainfall failure for four years — there has been no cultivation at all. And that’s partly because the agricultural model is based on new seeds like hybrid seeds which need chemicals. But that’s the stupidest thing you could do because climate change requires adaption to drought which means planting crops that are resilient to drought — the millets that use only 250 millimeters of rain.

But unfortunately the government, driven by international agencies like the World Bank, has walked on the wrong road for a period of market volatility and climate uncertainty. The combination is a recipe for hunger and famine. We need to shift our focus from global markets and global trades to local food security and away from export crops to growing food and nutrition for our people.

In the past ten years, more than 140,000 farmers in India have committed suicide according to official figures. Why is their situation so desperate?

The first suicide came in 1997. When the impact of the new policies of liberalizing the seed sector started to get felt and corporations like Monsanto, who wanted to sell genetically modified seed, entered the market.

They started to sell non renewable hybrid seeds which meant the farmers had to spent huge amounts of money buying seed every year. These seeds also needed irrigation and were vulnerable to pests to the farmers had to spend more money putting in irrigation systems and buying pesticides. That meant a higher debt burden on farmers. Falling prices of the products and rising costs of production squeezed the farmers even further into debt. And that is what has led to the spate of suicides.

How can you tackle the problem of hunger?

A bowl of rice is being handed from an adult hand to a child's Getting food into the hands of the poor is difficult due to heavy subsidies

I think the most urgent steps to be taken to tackle the problem are to actually develop the farming systems to produce more food per unit acre. Every assumption of industrial agriculture is wrong because it does not produce more food but uses more chemicals and more water per unit acre. It produces more commodities for international trade per unit acre but it does not produce more food or more nutrition per unit acre. Models of farming that can increase food-production fivefold, ten fold, depending on your climatic conditions have evolved through the organic movement. Those models of biodiverse, ecological systems can solve the problem of hunger.

The second thing that needs to be done is to bring back food-first policies. In India after independence we have not had hunger on the scale we are now witnessing. We had a famine in 1942 which killed two million people. We had enough food in the country but the British were extracting every bit of rice from Bengal and exporting it for profit — exporting it to finance the war. We drove that famine away through public policy that put food first through a universal public distribution system that meant everyone has a right to affordable food. That was dismantled by the World Bank and it has to be resurrected.

The poor must have food at affordable price instead of subsidizing global corporations. What the government has to do is to buy, preferably organics, from the Indian farmers and then subsidize the prices for the poor. We would save our financial budgets, we would save our taxes and we would have more food at lower prices. India this year is spending one trillion rupees in subsidies for global corporations to buy chemical fertilizers. That’s the wrong way to go. We can lower costs of production, increase output per acre, increase equity and distribution. That is food sovereignty. That is food security. That is food first.

Food Crisis: The Moral Failure of Liberal Economists

August 30, 2008

Time was when writers lampooned economists for “knowing the price of everything but the value of nothing.” Today, they seem to be unaware even of the price of things!

By Aseem Shrivastava

From Hardnews (Delhi, India) August 2008
(Original title: (Stiglitz and Sen: Profit and Pain”)

An economic transaction is a solved political problem. Economics has gained the title of queen of the social sciences by choosing solved political problems as its domain.
— Abba Lerner

Nobel economist Joseph Stiglitz has recently expressed his views on the ongoing food crisis around the world. Given his pre-eminence in the profession and his vast experience as an advisor to governments, his views deserve to be scrutinized carefully.

The Stiglitz diagnosis

Stiglitz traces the problem of inflation in food and energy prices around the world to the policies that have been enacted in the US and elsewhere during the past few decades. He finds fault with the massive financial deregulation and generous tax cuts for the rich in the Anglo-Saxon world since the Thatcher-Reagan years, attributing to them rightly the “huge increase in inequalities in most countries,” the dramatic fall in household savings rate in the US, significant declines in employment prospects for most people everywhere and most worryingly, threats to nutrition standards even in the so-called developed world. A less flattering catalogue of global failures would be hard to summon.

The proliferation of opaque financial products in the wake of deregulation didn’t so much manage risk as enhance it, converting the world economy into a gambler’s paradise (since most countries were made to choose similar policies of deregulation — by the IMF and the World Bank), which has been systematically transferring wealth and real income from the poor to the rich globally, relying on the unerring precision of market forces.

Additionally, Stiglitz points to two significant policies of the Bush administration that have exacerbated food and energy crises in recent years. He points to Washington’s war on Iraq. Bush’s foolish policies have made the connection between food and energy markets tight, thanks to a misguided biofuels programme during the past few years.

Stiglitz makes it a point to underscore how Third World agriculture has been put in severe jeopardy not just because of benign neglect by governments, international financial institutions and aid agencies, but also because of unfair competition from a systematically and heavily subsidized agriculture in the rich world. This last is a criminal hypocrisy (the West being at the forefront of the messianic crusade for ‘free’ markets) too

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banal to belabor. The powerful World Bank is once again waking up slowly to the resilient truth that there is simply no way to reduce (let alone eliminate) poverty in the world without paying special attention to agriculture.

The Stiglitz remedy

What according to Stiglitz is the solution?

“Rich countries must reduce, if not eliminate, distortional agriculture and energy policies, and help those in the poorest countries improve their capacity to produce food. But this is just a start: we have treated our most precious resources — clean air and water — as if they were free. Only new patterns of consumption and production — a new economic model — can address that most fundamental resource problem.” (The Guardian, June 15, 2008)

Other than a euphemistic argot all too familiar in Orwellian times and the habit-bound economist’s search for the universally right ‘model’ to implement everywhere, a technocratically enlightened formula for guaranteed success, the above words could have come from Jesus Christ himself.

So where does Stiglitz fall short?

Stiglitz wants rich countries to “reduce, if not eliminate distortional agriculture and energy policies.” But don’t we already know they will never do this? Stiglitz keeps appealing to a constituency he already knows has long been morally deaf. For someone sacked by the US Treasury from his plum position near the top of the World Bank not so long ago, Stiglitz certainly knows this. Under the revolving door system the Americans have between their highest public and corporate offices, it is a sure wager that it was precisely the annoyance at Stiglitz on the part of the global investor class that prompted his sacking. Then why does he pretend otherwise?

“The world” he appeals to for merciful economic policies in the future is in actual fact the world’s tiny and shrinking class of corporate captains, precisely the bunch which sponsors the lobbies and policy elites which have led the relentless, decades-long campaign for financial deregulation, the very phenomenon Stiglitz holds responsible for the mess around us. This band of global corporate czars lives better than the royalty of other ages of humanity. It takes a dozen flights on private jets every week and dines every evening on wine and caviar which have been flown half way around the world especially for their banquets. Why should they listen to mad men like Stiglitz?

For at least half a generation many have been trying to persuade the governments of the rich nations to remove the unjust agricultural subsidies that harm Third World agriculture. Why have the governments of the rich nations not followed this morally impeccable advice? Is it not because they are influenced by transnational businesses maximizing profits globally? Is it not because they are cynically Machiavellian?

The real world

The latter hypotheses can hardly be dismissed. Consider what US Senator Hubert Humphrey said 50 years ago:

“I have heard that people may become dependent on us for food. To me that is good news because before people can do anything, they have got to eat. And if you are looking for a way to get people to lean on you and be dependent on you, in terms of their own cooperation with you, it seems to me that food dependence would be terrific.”

So the idea, far from helping “those in the poorest countries improve their capacities to produce food” (as Stiglitz continues to wish in vain) is to keep them permanently locked into a state of fundamental economic dependence on the West. (Did we ever get done with colonialism?) If Stiglitz and his panglossian followers think that times have changed (and the West is more civilized after all these decades of folly upon culpable folly), they should listen to President Richard Nixon’s chilling words from a more recent decade: “Let us remember that the main purpose of aid is not to help other nations but to help ourselves.”

More recently, in 1986, John Block, the US Agriculture Secretary said:

“The push by some developing countries to become more self-sufficient in food may be reminiscent of a bygone era. These countries could save money by importing more food from the US.”

If Stiglitz thinks such an opinion is unusual, he might ask himself if it is fundamentally different from the following view:

“Food self-sufficiency is a peculiarly obtuse way of thinking about food security. There is no particular problem, even without self-sufficiency, in achieving nutritional security through the elimination of poverty (so that people can buy food) and through the availability of food in the world market (so that countries can import foo
d if there is not an adequate stock at home)…The focus has to be on income and entitlement, and the ability to command food rather than on any fetishist concern about food self-sufficiency…”

The words belong to Stiglitz’s illustrious colleague and fellow-Nobel laureate Amartya Sen. He gave an interview on the topic of world hunger to The Guardian in 2002.

Sen writes as though trade, income and entitlement were there just for the asking! He surely knows enough history to know that food has always been a weapon of warfare. He writes:

“There are situations in which self-sufficiency is important, such as during wars. At one stage in the Second World War, there was a real danger of Britain not being able to get enough food into the country. But that is a very peculiar situation, and we are not in one like that now, nor are we likely to be in the near future.”

Iraq was invaded by Washington, London and Canberra within a year of Sen’s interview.

Sen’s “trade fetish” is symptomatic of a global pandemic among academic economists. It only indicates his deep-seated conditioning by the economics profession as it has been shaped by a decadent intellectual culture in the western world after World War II. The intellectuals of the ex-colonies have never considered decolonizing their minds. Sen is the leading example. They might do well to read Tagore and Gandhi once more.

State of the dismal science

This sums up the professional consensus within “the dismal science.” The real world for most hungry people (we know for sure after recent food price inflation) is very different from what economists imagine it to be. In the latter’s world, poor nations, on the verge of industrial breakthroughs and massive transfers of labour away from agriculture to more “productive” and lucrative occupations (events which have not transpired yet in countries like India and China), can feed themselves much like Belgium or the Netherlands do — by importing food from abroad (from rich countries which do not even have to have a comparative advantage in the production of food, but have profligate treasuries and ignorant, gullible taxpayers to fund the subsidies and can thus let their agribusinesses sell cheaper than anyone else in the world market).

From the real world where the poor and the powerless live under hegemonies of forced production and consumption along lines dictated by the megacorps, the latter’s ‘international’ financial institutions, and also their State patrons, things couldn’t look more different. Global markets could never seem so innocent to hungry, suicide-prone farmers in India or Africa, as they do to technocratic dreamers in the seminar rooms of Columbia or Cambridge.

Why economists perpetuate misunderstanding

In times as transparently and confidently unjust as ours, it’s either dim-witted naiveté or outright knavery for economists to continue to keep their technocratic heads buried in the “innocent” sands of social “science.” They keep pretending that economics and politics belong to different planets.

Economists are dispassionate thinkers practicing disinterested science. Economics is on its way to becoming a pure science. Society and human communities are irrelevant. In any case, “there is no such thing as society.” Governments are a nuisance. They ought to stay away from markets. Markets are omniscient. They know everything that needs to be known (and not just about prices). Markets are free of politics. (What have they got to do with corporate power and influence?) They are the repositories of the best virtues in human nature. Therein rules liberal utopia.

Thou shalt not doubt these time-tested verities.

These are the kernels of truth that adorn the seminar rooms of the economics profession around the world today. America’s imperial conquests are more obvious in the ‘intellectual’ realm than in any other, with an obviously unscientific bubble economics (suitably insulated from facts) always leading the charge. Give or take a little here, some there, and you get the spectrum of opinions within the economics profession. They all must have not human communities — but the ‘free’ market at the heart of their conformist meditations.

Every economist — and Stiglitz and Sen are iconic iconoclasts within the tribe — is career-habit-and-hide-bound to pay his homage to the wisdom of market forces, even when he is critical of them (as both Sen and Stiglitz are in measurable degree). Such are the touchstones of the theology that today provides the primary justification for the widespread ecological and social ruin being precipitated by globalized growth around the planet.

The world has been “liberalized, privatized and globalized” with a messianic passion over the past few decades in the name of this putatively omniscient economics. It teaches the ancient virtue of patience. A little pain for some now, so that everyone can gain more tomorrow. As long as the masters of the universe are allowed a free hand to invest anywhere from the Mariana Trench to the moon. Trickle-down truths. Stale air. They all have faith in it, even if they are Sen or Stiglitz.

But as always, the cash-strapped housewife or the woman slaving at the construction site (or the one waiting in queue for one of those employed to break an arm) knows better than the pundits.

Time was when writers lampooned economists for “knowing the price of everything but the value of nothing.” Today, they seem to be unaware even of the price of things! They are desperate to rescue their fading conscience after having long back traded it away for professional success and career advancement. Moral failure was always on the cards. Now the writing is all over the wall for anyone with eyes to read.

The writer is an economist and independent researcher