Games the Centre plays

http://www.downtoearth.org.in/node/1736

States used Essential Commodities Act to lower the price of Bt cotton And states fight back

For the past five years, the Centre and the states have been fighting a battle over seed pricing with Delhi frequently changing the rules to outsmart state governments that had decided to clamp down on predatory pricing.

Although agriculture is a state subject, the power to fix prices had remained with the Centre—until the states decided to take matters into their own hands. They passed enabling legislation that allowed them to regulate prices as and when required. Andhra Pradesh has been most tenacious in safeguarding its farmers from what it terms the exploitative and monopolistic pricing by seed companies.

In 2006, it used the Essential Commodities Act (ECA) to slash the price of the genetically engineered Bt cotton seeds by more than half, after first going to the Monopolies and Restrictive Trade Practices Commission. Gujarat, Maharashtra, Karnataka and Madhya Pradesh, followed Andhra Pradesh’s example and used the ECA to slash the royalty rates which accounted for as much as twothirds of the seed cost, to bring prices down sharply. As a result, farmers in these states could buy the Bt cotton (marketed as Bollgard and Bollgard II) at `750 for a 450 gramme packet compared with `1,800 in 2002-03.

However, in December 2006, the Union government quietly amended the ECA to exclude cotton seeds from the list of essential commodities. This, according to some analysts, enabled Mahyco and the All India Crop Biotech Association (AICBA), the association of multinational seed companies, to challenge the states on their jurisdiction in fixing cotton seed prices. Most state governments got around the legal hump by passing special laws that gave them the power to do so. In 2007, Andhra Pradesh passed Act 29 to regulate the sale and prices of cotton seeds because cotton seed was not covered either by the Seeds Act, the Seeds Control Order, the ECA or the Environmental Protection Act.

This has resulted in a cat and mouse game between the states and the Union government. For instance, when AICBA challenged Gujarat’s ordinance which was on the same lines as that of Andhra Pradesh’s, the Ministry of Agriculture came to the rescue of the multinationals. It sent an affidavit to the Gujarat High Court in January 2009 that cotton seeds were out of the “purview of any regulatory and quality control mechanism”. As such, “no administered control system should be introduced in the sale of seeds”. Even more curious was that in November 2009 the Union Cabinet decided to re-include cotton seeds in the list of essential commodities for six months. It said that once the Seeds Bill, 2004, was passed cotton seeds would cease to be under ECA.

The stakes are high in the seeds business. A 2009 study estimates the market at `6,000 crore, with massive potential for growth since farmers are switching over increasingly to hybrids (seeds which cannot be reused). Traditionally farmers in India have reused their seeds and as much as 70 percent of the seed requirement of Indian agriculture is met from seeds bred and sold, or exchanged, by farmers among themselves. Growth rate is buoyant at an annual 12-13 per cent, making the prospects for private seeds companies extremely lucrative since most of the state sector seed companies have almost withered away.

The Andhra Pradesh government is insisting on a standard formula for royalty rate in the bill: not more than 20 per cent of the cost of the bare seed for the first three years and 5 per cent for the subsequent period.

http://www.downtoearth.org.in/node/1735

Prices under the scanner in US

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Did Monsanto abuse its market power?

Seeds have turned into a hotbed of political conflict worldwide. As multinational companies increase their grip on the seed market, governments in developed countries are beginning to take a closer look at how the lack of competition is hurting farmers at home and abroad.

The most significant development is the investigation by the US administration into the steep rise in prices of major food crop seeds at a time when the recession had brought down the prices of most goods. Last year, corn seed prices were reported to have shot up 32 per cent and that of soybean seeds by 24 per cent. While the Justice Department has launched an antitrust investigation of the seed industry, at least seven US states are investigating whether Monsanto has abused its market power to lock out competitors and raise prices.

Monsanto controls the biggest chunk of the market for GM seeds (see table) that are designed to make crops resistant to pests and herbicides. In the US, its Roundup Ready gene was in 93 per cent of the soybean crop and in 82 per cent of the corn produced last year.

Christine Varney, who heads the antitrust division in President Barack Obama’s administration, announced in March this year that the Justice Department is investigating whether biotech-seed patents are being abused to extend or maintain companies’ dominance in the industry. A more recent report says that the investigators in the West Virginia attorney general’s office have reviewed several studies by agriculture experts showing that Monsanto’s advertised claims of higher yields for its high-priced new soybean seed, Roundup Ready 2 Yield, have not been realised.

Industry analysts say the sharp escalation in seed prices began a little over a decade ago with emergence of GM crops and the swift consolidation of the seed industry that accompanied it.

Of more significance to India, perhaps, is a heated debate in the Canadian Parliament over a bill that seeks to amend the Seeds Regulations “to require that an analysis of potential harm to export markets be conducted before the sale of any new GM seed is permitted”.

At Farm's hand

http://www.downtoearth.org.in/full6.asp?foldername=20090331&filename=croc&sec_id=10&sid=1

At farm’s hand

An assured income for farmers will make agriculture viable and ensure food security
In his budget speech finance minister Pranab Mukherjee claimed that agriculture, services, manufacturing along with trade and construction were drivers of the country’s growth in the past few years. But actually agriculture should not be slotted in the same bracket as manufacturing and services. Agricultural growth averaged 2.5 per cent in the past five years. This pales in comparison to the 10 per cent growth achieved by manufacturing and services in the same period.
Agriculture, in fact, touched a terrible low between 1997 and 2008 with 182,936 farmers committing suicide—according to government records. The returns from agriculture are paltry in comparison to other vocations. Let us consider some figures. Between 1997 and 2007, salaries of government employees increased by over 150 per cent—we are not even looking at the hikes proposed by the sixth pay commission and the earnings of our mlas increased by 500 per cent, but the farmer could manage only a 25 per cent increase in the prices of his produce. Prices of non-agricultural commodities, meanwhile, shot up by 300-600 per cent. The prices of agricultural inputs went up by 400 per cent.
This disparity has struck the farmer hard. The Arjun Sengupta committee on the unorganized sector reckons that an average Indian farmer’s monthly income is Rs 2,115 while his expenditure is Rs 2,770 every month.
Successive governments have tried to keep agricultural prices low to ensure cheap labour—the rationale being that cheap food will make labour cheap. But the farmer’s bill on other inputs has gone spiralling. The minimum support prices do not ensure a fair return to the farmer who has to spend a fortune on hybrid seeds, GM crops and new generation pesticides. And in any case, the government announces msps for only 33 agricultural commodities and intervenes in market operations only for rice and wheat. So farmers growing other crops are left to the mercy of markets.
The National Commission on Farmers has stated the government should ensure farmers earn a “minimum net income”, and also make sure that agricultural progress be measured by the increase in that income. It should appoint a statutory body—a Farmers Income Commission—to examine the real income of farmers every year across the state.
The government should ensure remunerative prices for agricultural produce. The prices for agricultural commodities should be based on the real cost of production and linked with inflation. msps should be announced before the beginning of each crop season and procurement must be timely.
Today agricultural workers don’t find employment and at the same time farmers cannot afford to pay for labour. The government should provide input subsidy in the form of labour wages (up to 100 days in a calendar year) to farmers to monetize family labour or to pay other farm labourers. This subsidy should include all agricultural operations from sowing to harvesting. It can be operationalized on similar lines as the National Rural Employment Guarantee Scheme, or by extending the scheme to agricultural work. This will also help agricultural workers.
The net income of farmers can be increased by promoting post-harvest oerations at the village level. Agriculture-centered small scale industry can give the rural economy a boost
But these measures will only help partially. It is essential to provide direct cash payment to make up for the shortfall. All cultivators should be given fixed cash support to ensure them a fair living standard. This could be set at Rs 15,000 per family and revised every year by the commission.
If we consider the 9 crore farmer families in the country, the government’s annual expenditure on this support will come to Rs 1.35 lakh crores. If we add the labour wage support, the government’s subsidy bill will go up by another 1 lakh crores. But by spending Rs 2.35 lakh crores, the government can extricate more than 50 per cent of people from the below poverty line trap.

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G V Ramanjaneyulu is with Centre for Sustainable Agriculture, Hyderabad. He can be reached at gvramanjeyulu@gmail.com

Stimulus for agriculture;A bailout for farming?

By Devinder Sharma

The serial death dance in the countryside continues, with an estimated 1,82,936 farmers commiting suicide since 1997.

Buried under the whole array of angry reactions following the Mumbai terror is yet another and perhaps more violent disaster. A startling piece of news that should have shaken up the country’s screaming elite has not even been perceived by the electronic media as worthy of being dubbed as breaking news. That 16,632 farmers had committed suicide in 2007, with Maharashtra topping the list, has simply been ignored.
The reason is obvious. They did not belong to the Taj-is-my-second-home class.
While the serial death dance in the countryside continues unabated, with an estimated 1,82,936 farmers as per the National Crime Records Bureau (NCRB) taking the fatal route since 1997 to escape the humiliation that comes along with growing indebtedness, the government is on a bailout spree. Since September, the government has provided a fiscal stimulus of US $ 100 billion by way of liquidity and other budgetary provisions. Another stimulus package is awaited.

The stimulus package has so far gone to sectors that erred. The proposed interest sops to housing loans of Rs 20 lakh is one such economic misadventure. By forcing banks to reduce interest rates on housing so as to create more demand is completely unwarranted. Why should the government even consider a bailout for people who can afford to pay an EMI of Rs 25,000 a month? Why should the government bail out the real estate sector which has fleeced the society? In the past four years, the prices of flats have risen by an estimated 450 per cent.

Indian banks needed liquidity inflow to jumpstart the economy. That is what we were made to believe. The Reserve Bank of India moved in swiftly. Through a series of measures, including a cut in repo rate, opening a special lending facility for the banks, and cutting cash reserve ratio, RBI has pumped Rs 3,00,000 crore into the banking system since mid-September. And look, what happened. The banks are putting the money back with RBI as safe deposits. Between December 1-8, (in just eight days), banks have deposited Rs 327,000 crore back with RBI at a nominal interest of six per cent, which was further lowered to five per cent.

The fiscal stimulus is expected to control the economic slump to some extent. In effect, the guiding principle appears to appease different lobby groups keeping an eye on the forthcoming elections. Exporters, for instance, have twice received a stimulus package. First when the rupee/dollar exchange rate had slumped to 37 per dollar, the textile and garment exporters had pitched for higher support. The government had moved in swiftly pumping in over Rs 1400 crore. Now when the exchange rate is closer to 50, the industry has again managed a second dose.
Not to be left behind, Indian cotton ginners and exporters are also demanding a bailout. They want the government to bridge the difference between a higher minimum support price for cotton, and the world prices. Citing a 95 per cent drop in exports, the industry is demanding a rescue package. Wonder when the MSP was low and the international prices were higher, and why the industry never asked the government to compensate the cotton farmers.
Amidst all the gloom, the only sector that has emerged unscathed to a large extent is agriculture. Whether India was shining or sinking, agriculture truly remained the mainstay of the economy. Complete apathy and neglect of the farm sector drove farmers to commit suicide, and also to quit farming. Facilitating the demise of agriculture are the government policies that are now forcibly enforcing land acquisition, and bringing in polices for corporate takeover.
With 60 per cent of India’s population are directly engaged in agriculture, and another 200 million landless workers indirectly bank on farming, the real stimulus to economy can come only if the focus shifts to agriculture. When I say agriculture, I don’t mean a bailout package for the tractor industry or the food processing industry. This would be counter-productive. Nor would it be cost effective.
What is urgently needed is a radical shift by stimulating the farm sector. This is a sure recipe for revitalising the economy. First, the package should be for regenerating agriculture, providing sops for organic farming systems that can restore soil health. The Rs 1.20 lakh crore fertiliser subsidy should be given directly to farmers so that they can make an informed choice of shifting to natural farming systems. And finally, the package should focus on farmers’ welfare. A fixed monthly income based on the principle of direct income support is what the beleaguered farming community needs.
In addition, the National Rural Employment Guarantee Act 2005 (NREGA), which guarantees a minimum 100 days employment every year to rural workers and promises a minimum wage of Rs 60 per day, should have the upper cap of 100 days immediately removed. Rural workers need to be given employment for 365 days, like all of us in the organised sector. This in turn will generate demand that is expected to kick-start the economy. At the same time, there is an urgent need to link NREGA with agriculture. This is the recipe for all around growth. And not only limited to those who consider the Mumbai Taj to be the national icon.

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Hunger in Indian States "alarming"

BBC online: Oct. 14, 2008..

Hunger in India states ‘alarming’

India has some of the highest rates of child malnutrition in the world

Twelve Indian states have “alarming” levels of hunger while the
situation is “extremely alarming” in the state of Madhya Pradesh, says
a new report.

Madhya Pradesh’s nutrition problems, it says, are comparable to the
African countries of Ethiopia and Chad.

India has more people suffering hunger – a figure above 200 million –
than any other country in the world, it says.

The report, released as part of the 2008 Global Hunger Index, ranks
India at 66 out 88 countries.

‘Scored worse’

The hunger index has been released by the International Food Policy
Research Institute (IFPRI) along with Welthungerhlife and the
University of California.

It measures hunger on three indicators which include child
malnutrition, rates of child mortality and the number of people who
are calorie deficient.

Table of full results

The problem of hunger is measured in five categories – low, moderate,
serious, alarming or extremely alarming.

The survey says that not one of the 17 states in India that were
studied were in the low or moderate hunger category.

“Despite years of robust economic growth, India scored worse than
nearly 25 sub-Saharan African countries and all of South Asia, except
Bangladesh,” the report says.

The best performing state was Punjab, which has a ‘serious’ hunger
problem and does less well than developing countries such as Gabon,
Vietnam and Honduras.

About 60% children in Madhya Pradesh state are malnourished

“When Indian states are compared to countries in the Global Hunger
Index, [the central Indian state of] Madhya Pradesh ranks between
Ethiopia and Chad,” it says.

India is long known to have some of the highest rates of child
malnutrition and mortality in under-fives in the world.

According to the Indian government statistics two years ago, around
60% of more than 10 million children in the state were malnourished.

Nutrition experts say the abysmal record is due to an inadequate
access to food, poor feeding practices and poor childcare practices in
India.

And now the rise in the global food prices has reduced the food-buying
capacity of many poor families, making their situation worse.

In the past year food prices have increased significantly, but
people’s incomes haven’t kept pace, forcing many families further into
hunger, experts say.

The report says “improving child nutrition is of utmost urgency in
most Indian states”.

“All states also need to improve strategies to facilitate inclusive
economic growth, ensure food sufficiency and reduce child mortality,”
it adds.

"King" Bt cotton stumbles

http://www.spot-on.com/archives/kaul/2007/04/india…

On March 9th India celebrated the fact that, according to the latest figures released by Forbes magazine, more billionaires call it home than any other Asian nation, a honor held by Japan for the last two decades.

Being Indian that made me happy, but only so much. March also saw a spate of farmer suicides across the country, something that has been going on for a while in the nation’s rural villages, some worse affected than the others. In India, unfortunately, one becomes immune to the harsh disparities between the rich and the poor, but this contrast was a little too stark for me. The rich had just got richer and more numerous while desperate debt-ridden farmers were killing themselves by drinking the pesticides meant for their crops.

The official figure for the number of suicides in the past five years is about eleven thousand, and alarming as that is, the real figure, it seems, is much higher, closer to twenty thousand. Last July the Prime Minister toured the worst hit regions and announced a relief package of 37.5 billion rupees ($833 million). Out of this, about 22 billion rupees was to be spent on existing irrigation projects, but nine months later that has yet to happen. So the money meant for the farmers has yet to reach them and they continue to kill themselves in droves

The worst affected are the cotton growers, and the reasons for this are many – crop failure, lower price for their product, low import duty, drought, and lack of irrigation facilities – to name a few. But the main culprit, claim farm activist Kishore Tiwari, and others is a crop known as “Bt cotton.” The state government promoted this genetically modified and pricier (nearly double than the ordinary ones) cotton plant claiming that it would yield better results since it was resistant to pests (the “Bt” in the name refers to this attribute). The idea was that planting Bt cotton would reduce the need for harmful chemical pesticides. But that’s not what happened. Cotton crops were affected by disease every year. This sad state of affairs was pointed out back in 2002, but nothing was done. Hearing the promises of a higher return for their crop, many farmers had taken loans from private moneylenders at steep rates to buy seed and were devastated when the crop failed. But Monsanto, that international agriculture conglomerate that manufactured Bt cotton doubled it’s sales.

What happened next was typical: Panels of experts were set up, fingers pointed and causes explored. But all this was of little relief to the farmers who continue to live in wretched poverty even today, caught between the government, private Shylock-like money lenders, crop failure and drought. In one cotton growing state in Western India, Maharashtra; there was a suicide every six hours. As crops have continued to fail, year after year, farmers have no option but to borrow more money and fall deeper into the debt trap, a vicious circle that many are unable to break out of. In many cases, after they’re gone, their widows and children have no money even for their funerals – and they often inherit the debt.

It’s a desperate situation and no one seems to care. It grabs a headline every once in a while, politicians clash over it, committees are sent to the villages, but in the end, even if relief is allocated, it fails to reach the farmers, or to their widows who are left penniless and with no breadwinner for the family. Critics say that the government has not done enough, and more importantly, that it has contributed to the agrarian crisis by promoting a transgenic crop like Bt cotton, which has proved disastrous for the areas where it was grown.

At the crux of it, it’s the age-old scenario: A multinational company lobbies the government to switch to their technology, in the apparent interest of the masses. But in this case the government, for the vested interests of some, does not do it’s homework, it blindly implements a scheme; crops fail; farmers die; non-government agency advocates howl but – at the end – nothing happens.

The Indian government now reluctantly admits that the Bt cotton crop has failed. And some farmers, those who’ve survived, are giving up on cotton. But there are a variety of serious factors that still need to be looked into – higher prices for the produce and drought being two important ones. The ministry of agriculture on it’s website declares that: “Drought is a condition of moisture deficit sufficient to have an adverse effect on vegetation, animals and man over a sizable area.” It then goes on to add that drought is a management issue and can be avoided, it just fails to mention how this is all to be done. Needless to say, it does not even address the farmers’ issue.

How long this agrarian crisis will continue, is hard to say. The road looks long and hard for many Indian farmers. Even as I write this I wonder how many are contemplating suicide, driven to desperation, neck-deep in dept and abandoned by corrupt government officials. This, I say in sadness, is India too.

Posted by Gopika Kaul at 2:07 PM | Print this article

India wants removal of non-tariff barrier in agriculture

SHEILA MATHRANI

TIMES NEWS NETWORK[ SUNDAY, MARCH 11, 2007 12:20:02 AM]

GENEVA: India has joined the chorus in criticising the EU’s non-tariff barriers (NTBs) and SPS issues, and market access in agriculture at the WTO Trade Policy Review of the EC.
According to the WTO Secretariat report the EC’s agriculture policies were a matter of concern with its protection by a complex tariff structure, high tariffs, tariff quotas of which some were not filled, and high levels of domestic support and export subsidies.
In its intervention India informed the WTO of its steady, significant intensification of strategic partners dialogue and of a proposed agreement on trade and investment between India and the EU. The negotiations of which could commence shortly and “open vast opportunities for businesses on both sides.”
The EC is one of the largest sources of FDI from India. It is not only India’s largest trading partner, it accounts for almost a quarter of India’s exports and imports. In 2005 India-Europe trade was around 40 billion euros, EU’s exports to India grew by 23.8%, and EU imports from India by 16.2% as compared to 2004.
India stated that it has submitted written questions to the EC for clarification on some of its trade policies, however mentioned that Indian agriculture exporters continue to suffer on account of NTBs and SPS issues.
It pointed out that in market access several instances had been brought to the Indian government’s notice by Indian exporters of meat and meat products, marine products, milk products, egg products, Basmati, mushrooms, refrigerators, lack of intra EU harmonisation of standards, which impede exports from India to the EC.
India stated that it seeks dismantling of these non-tariff barriers to enable it increase access to the European markets for Indian exporters. India also focused on the EC restrictive policy on Services which it urged to take urgent stops to address.
India stated that despite its advantage of young population, complemented by a vast network of academic infrastructure and educated, English-speaking talent, India’s opportunities with the EC in trade services sector are hindered by issues relating to Mode 4, the imposition of unclear ENTs, domestic regulations, territorial requirement to set up business, residence requirements, and discriminatory tax treatment.

Agriculture remains wanting

http://www.pr-inside.com/agriculture-remains-wanti…

2007-03-29 08:58:15 – The Standing Committee on Agriculture) 2006-07) is an unhappy committee. One does not have to look far for the reasons for this unhappiness

New Delhi, 29th March, 2007.
The Standing Committee on Agriculture) 2006-07) is an unhappy committee. One does not have to look far for the reasons for this unhappiness – lowering of per hectare growth of produce,, farmers’ rampant suicides, shortage of urea, inadequate water for irrigation, shortage of power for running irrigation pumps and last but certainly not the least,

old unimproved seeds that do nothing to increase productivity of grains.
The 23rd report of the Standing Committee on Agriculture, chaired by Prof. Ram Gopal Yadav has noted that despite their repeated recommendations in various reports to substantially increase budgetary allocations of the agriculture sector to give required impetus to agricultural development, the allocations in respect of this vital sector continues to be unsatisfactory and much below the requirement.
The Committee has been informed by the representatives of the Department of Agriculture and Cooperation that to build and sustain momentum of the agriculture sector it is necessary that both state and central plan outlays are augmented to achieve the required percentage of anticipated growth in the agriculture sector. Keeping that in view, they had proposed a plan outlay of Rs. 5917 crores for 2006-07 but only Rs. 4840 crores had been approved. The Committee noted that plan allocation of Rs. 3920 crores for 2005-06 at revised estimate stage was 6.3% less as compared to budget estimate of Rs. 4209.32 crores of the same year.
The Committee report, tabled in Parliament during the dying days of the first half of the budget session, noted that they are not at all impressed by the rosy picture portrayed by Member Secretary, Planning Commission during evidence where he profoundly declared that Plan allocation in favour of all the three departments of Agriculture put together (Department of Agriculture and Cooperation, Department of Agricultural Research and Education and Department of Animal Husbandry, Dairying and Fisheries) has been doubled within a single plan period from Rs. 3242 crores in 2002-03 to Rs. 6900 crores.
The Committee observed that in view of the inflation and value of money in real terms, the overall allocations are not actually being made from agriculture to carry out activities under its various programmes, although it has been termed as a priority sector. This can also be gauged from the fact that percentage share of agriculture in central plan outlay of Government of India has come down from 2.84 % in 2005-06 to 2.73% in 2006-07, of which share of Department of Agriculture and Cooperation accounts for 1.98% in 2005-06 and 1-89% in 2006-07.
The report said the Committee were of the firm opinion that to meet the challenges faced by agriculture sector, the government has to reprioritize the role of Department of Agriculture and Cooperation to achieve the targeted 4% growth rate envisaged for the agricultural and allied sector and to help the farmers to compete in the WTO regime.
The Committee strongly recommended that the Department should be provides Rs. 5917 crores by Planning Commission and Ministry of Finance at the revised estimates stage, as proposed by them at the budgetary estimates stage, since many of their new initiatives and other programmes are suffering owing to lack of requisite funding. The Committee further recommended that no financial cuts should be imposed on the department at revised estimates stage for smooth implementation of the schemes, as financial cuts imposed now may lead to further addition of miseries to Indian farmers and people engaged in the agricultural sector, in the absence of timely help. The need is to achieve the targeted 4% growth rate in agriculture and allied sectors.