India's role key to break the Doha deadlock: Lamy
Posted online: Tuesday, March 13, 2007 at 0000 hours IST
NEW DELHI, MAR 12 :  WTO director-general Pascal Lamy on Monday criticised the slow progress of the Doha Round of talks and called for speeding up the process to achieve a breakthrough by June. India can help in breaking the ice, Lamy said.

Lamy, who was here to participate in a seminar on the Doha Round said, “Time is not on our side and many members of the World Trade Organisation (WTO) are becoming impatient. The multilateral process of negotiations must therefore begin at full speed and chairpersons of various negotiation groups must come in centrestage.”
“We need to speed up the process to grasp the opportunity, which closes in June, with the expiry of the US Trade Promotion Authority,” Lamy added.

Lamy, however, said, at present, political leaders were focussing to get a breakthrough since they realised the cost of failure would be “absolutely huge”. Meanwhile, around 200 protestors from farmers’ groups, including Bharat Krishak Samaj (BKS), Bharatiya Kisan Union (BKU) and NGOs Housing Rights Association, Peoples Campaign for Justice and Sovereignty, Youth for Justice and Slum Dwellers Association, gathered outside the venue and demanded to be heard. “We do not want a bad deal at any cost,” they said. Vandana Shiva of Navdanya questioned why no farmers’ leader was invited at the seminar.

“I was informed that some progress has been made in testing hypothesis, approaches and formulae last week in bilateral contacts between the US, EU, Brazil and India” Lamy said during his speech. On agriculture, Lamy said WTO members have agreed that this Round has to deliver effective cuts in trade-distorting farm subsidies in developed countries

Under pressure, India makes U-turn

At a two-day international seminar on “Saving Doha and delivering on development” that concluded at New Delhi on 13 March, India’s Commerce Minister Kamal Nath provided ample evidence of India’s willingness to go along with the rich and industrialised countries. The writing is on the wall, says Devinder Sharma.

15 March 2007 – The writing is clearly on the wall. With India succumbing to pressure and the G-33 group of developing countries unlikely to stand in the way, the controversial Doha Development Round of the World Trade Organisation (WTO) may just be all set to sail through.

At a two-day international seminar on “Saving Doha and delivering on development” that concluded at New Delhi on Mar 13, India’s Commerce Minister Kamal Nath provided ample evidence of India’s willingness to go along with the rich and industrialised countries. In what appears to be a u-turn in India’s position so far, Mr Kamal Nath said: “This round is not about removal, but about reduction of distortions that lead to artificiality in prices.”

To be seen in conjunction with what Prime Minister Manmohan Singh said the same day at another roundtable organised by The Economist in New Delhi: “India was committed to an early positive conclusion of the Doha Development Round,” the underlying message is crystal clear.

For a few months now, after the suspension of the Doha round negotiations in mid-2006, New Delhi has been under pressure to drop its opposition. WTO chief Pascal Lamy had time and again visited India, and had used every opportunity to negotiate on behalf of the developed countries so much so that he was allowed to walk after he had literally threatened India. Knowing well that Kamal Nath’s ‘tough’ posturing is aimed only at the media, Lamy now made it abundantly clear that an agreement on Doha round has to be reached before the expiry of the US Trade Promotion Agreement in June.

If the agreement is not signed by June, the US President will lose his Fast Track authority to approve international trade agreements, which means the US Senate/Congress will then oversee the agreements. That is why the US wants to hurry. If no agreement is signed by June it will still be beneficial for Indian agriculture. As long as the subsidies stay in the rich countries, we will not be able to protect our agriculture.

The two-day conference in New Delhi was therefore an effort by the Ministry of Commerce to provide justification for a complete somersault in its official stand. The list of invitees, and the selective picking up of speakers and rapporteurs made the real objective copiously clear. Keeping the real stakeholders away, and ensuring that the critical voices were not present, “Saving Doha” became the rallying point.

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SEZ policy should be scrapped…



MUMBAI: The Manmohan Singh government should scrap its SEZ policy as many lacunas in it have been exposed, the threat to food security being just one, says BJP MP Kashiram Rana, also the convenor of the parliamentary committee on SEZs.
In an exclusive interview to ET, a day after 15 lives were lost in Nandigram, West Bengal, in a protest against a chemical hub in the region, the BJP leader from Gujarat lashed out at the Centre’s obsession for SEZs. His views assume significance because as head of the Parliamentary panel he had recently toured Andhra Pradesh, Maharashtra, Gujarat, Kerala, Orissa and Karnataka, where many SEZs are coming up.
In Mumbai last month, Mr Rana minced no words criticising the Vilasrao Deshmukh government for being “hand-in-glove with SEZ developers”. The committee will submit its report to Parliament in the current session.
“Time has come for the government, and particularly the Group of Ministers led by defence minister Pranab Mukherjee to revisit the whole issue. Considering the developments across the country, the existing policy needs to be scrapped,” he said. When pointed out that the SEZ idea had been his party’s (the BJP) creation, Mr Rana said it was more balanced than the current policy.
“We had a clear idea of core and non-core business activities that would be allowed in SEZ territories. And most importantly we never wanted agriculture land to be used for these zones,” he said.
According to Mr Rana, the most important changes the current policy needs pertains to use of agriculture land for SEZs. “The policy allows single crop land for SEZs.
But even in single crop land, farmers carry out lot of allied activities such as growing seasonal fruits or horticulture. How can one measure the farmers’ losses?” he asked and went on to suggest that there should be a blanket ban on using such land for SEZs.
However, he is not against SEZs. “I’m not against these zones. But my point is that there is enough barren, unused or waste land available in the country. Why not make such land open for SEZs,” he said. Mr Rana is also concerned about India’s food security.
“Our agricultural production has been falling drastically. It’s a matter of serious concern. Preventing use of agriculture land for industrialisation could be one way of arresting this decline,” Mr Rana feels.

ADB says rural loan may help stem farmer suicides…

March 15, 2007
By Unni Krishnan and Surojit Gupta
NEW DELHI (Reuters) – The Asian Development Bank hopes a $1 billion loan aimed at reforming India’s rural credit structure will help stem farmer suicides in the country, a senior official said on Thursday.
An estimated 5,000 farmers have killed themselves over six years across India’s sprawling western and southern plateau — where the black soil has long borne a rich harvest of cotton — because they could not repay loans taken for their crops.
The spate of suicides in the country’s richest state of Maharashtra has not abated despite efforts by New Delhi to ease the farmers’ financial burden.
“We are hoping in terms of outcome I hope two years from now there will be a reduced number of farmers committing suicides,” Kunio Senga, director general of the South Asia department of the bank told Reuters in an interview.
The programme, carried out in five Indian states, aims to revitalise the cooperative credit structure and reach masses of small farmers, Senga said.
Economic growth of more than 8 percent in the past three years has made millions in the cities richer, but it has bypassed the farming sector that supports more than 60 percent of India’s one billion-plus people.
Most of India’s farming community is poverty-stricken and many farmers borrow from the village moneylender at rates as high as 30-60 percent a month.
Ensuring economic growth was inclusive of poorer members of society has become increasingly important in India and the communist-backed ruling coalition has made it the centrepiece of its economic agenda.
The Congress party-led coalition, which swept to power in May 2004, has been trying to bridge the rural-urban divide and include millions of poor in the country’s largely city-based boom. “We are very much into assistance directly to address inclusiveness of growth. Our $1 billion rural finance programme is one signal that we are very much now into inclusiveness of growth,” Senga said.
He said upgrading of rural infrastructure, particularly to develop the farm sector, was key to sustaining growth and the bank was optimistic about reforms undertaken by the government to reform the sector.
The Union budget for 2007/08 has doled out gifts aimed at giving a major boost to the ailing farm sector which puts food on the tables of 115 million farming families.
Analysts say the government should focus on linking farmers to the markets through private investment in production, post-harvest infrastructure and refrigerated distribution.
“Inclusiveness requires more reforms including agricultural related and I am quite optimistic,” Senga said.

Economic globalisation has become a war against nature and poor…

by Vandana Shiva

RECENTLY, I WAS visiting Bhatinda in Punjab because of an epidemic of farmers’ suicides. Punjab used to be the most prosperous agricultural region in India. Today every farmer is in debt and despair. Vast stretches of land have become waterlogged desert. And, as an old farmer pointed out, even the trees have stopped bearing fruit because heavy use of pesticides has killed the pollinators — the bees and butterflies.

And Punjab is not alone in experiencing this ecological and social disaster. Last year I was in Warangal, Andhra Pradesh, where farmers have also been committing suicide. Farmers who traditionally grew pulses and millets and paddy have been lured by seed companies to buy hybrid cotton seeds referred to as “white gold”, which were supposed to make them millionaires. Instead they became paupers.

Their native seeds have been displaced with new hybrids which cannot be saved and need to be purchased every year at a high cost. Hybrids are also very vulnerable to pest attacks. Spending on pesticides in Warangal has increased 2,000 per cent from $2.5 million in the 1980s to £50 million in 1997. Now farmers are consuming the same pesticides as a way of killing themselves so that they can escape permanently from unpayable debt.

The corporations are now trying to introduce genetically engineered seed, which will further increase costs and ecological risks. That is why farmers like Malla Reddy of the Andhra Pradesh Farmers’ Union had uprooted Monsanto’s genetically engineered Bollgard cotton in

On March 27th, twenty-five-year-old Betavati Ratan took his life because he could not pay back debts for drilling a deep tube well on his two-acre farm. The wells are now dry, as are the wells in Gujarat and Rajasthan where more than 50 million people face a water famine.

The drought is not a “natural disaster”. It is “man-made”. It is the result of mining of scarce ground water in arid regions to grow thirsty cash crops for export instead of water-prudent food crops for local needs.

It is experiences such as these which tell me that we are so wrong to be smug about the new global economy. It is time to stop and think about the impact of globalization on the lives of ordinary people. This is vital if we want to achieve sustainability.

Seattle and the World Trade Organization protests last year have forced everyone to think again. For me it is now time to re-evaluate radically what we are doing. For what we are doing in the name of globalization to the poor is brutal and unforgivable. This is especially evident in India as we witness the unfolding disasters of globalization, especially in food and agriculture.

WHO FEEDS THE WORLD? My answer is very different from that given by most people.

It is women and small farmers working with biodiversity who are the primary food providers in the Third World and, contrary to the dominant assumption, their biodiversity-based small farm systems are more productive than industrial monocultures.

The rich diversity and sustainable systems of food production have been destroyed in the name of increasing food production. However, with the destruction of diversity, rich sources of nutrition disappear. When measured in terms of nutrition per acre, and from the perspective of biodiversity, the so-called “high yields” of industrial agriculture do not imply more production of food and nutrition.

Yield usually refers to production per unit area of a single crop. Output refers to the total production of diverse crops and products. Planting only one crop in the entire field as a monoculture will, of course, increase its individual yield. Planting multiple crops in a mixture will have low yields of individual crops, but will have high total output of food. Yields have been defined in such a way as to make the food production on small farms, by small farmers, disappear.

This hides the production by millions of women farmers in the Third World — farmers like those in my native Himalaya who fought against logging in the Chipko movement, who in their terraced fields grow Jhangora (barnyard millet), Marsha (amaranth), Tur (pigeon pea), Urad (black gram), Gahat (horse gram), soy bean (glycine max), Bhat (glycine soya), Rayans (rice bean), Swanta (cow pea), Koda (finger millet). From the biodiversity perspective, biodiversity-based productivity is higher than monoculture productivity. I call this blindness to the high productivity of diversity a “Monoculture of the Mind”, which creates monocultures in our fields.

The Mayan peasants in the Chiapas are characterized as unproductive because they produce only two tons of corn per acre. However, the overall food output is twenty tons per acre when the diversity of their beans and squashes, their vegetables and fruit trees is taken into account.

In Java, small farmers cultivate 607 species in their home gardens. In sub-saharan Africa, women cultivate as many as 120 different plants in the spaces left alongside the cash crops, and this is the main source of household food security.

A single home garden in Thailand has more than 230 species, and African home gardens have more than sixty species of tree. Rural families in the Congo eat leaves from more than fifty different species of tree.

A study in eastern Nigeria found that home gardens occupying only 2% of a household’s farmland accounted for half the farm’s total output. Similarly, home gardens in Indonesia are estimated to provide more than 20% of household income and 40% of domestic food supplies.

Research done by fao has shown that small biodiverse farms can produce thousands of times more food than large, industrial monocultures.

And diversity is the best strategy for preventing drought and desertification.

What the world needs to feed a growing population sustainably is biodiversity intensification, not chemical intensification or genetic engineering. While women and small peasants feed the world through biodiversity, we are repeatedly told that without genetic engineering and globalization of agriculture the world will starve. In spite of all empirical evidence showing that genetic engineering does not produce more food and in fact often leads to a yield decline, it is constantly promoted as the only alternative available for feeding the hungry.

THAT IS WHY I ASK, who feeds the world?

This deliberate blindness to diversity, the blindness to nature’s production, production by women, production by Third World farmers, allows destruction and appropriation to be projected as creation.

Take the case of the much-flaunted “golden rice” or genetically engineered vitamin A rice as a cure for blindness. It is assumed that without genetic engineering we cannot remove vitamin A deficiency. However, nature gives us abundant and diverse sources of vitamin A. If rice were not polished, rice itself would provide vitamin A. If herbicides were not sprayed on our wheat fields, we would have bathua, amaranth, mustard leaves as delicious and nutritious greens.

Women in Bengal use more than 150 plants as greens. But the myth of creation presents biotechnologists as the creators of vitamin A, negating nature’s diverse gifts and women’s knowledge of how to use this diversity to feed their children and families.

The most efficient means of rendering the destruction of nature, local economies and small autonomous producers is by rendering their production invisible.

Women who produce for their families and communities are treated as “non-productive” and “economically inactive”. The devaluation of women’s work, and of work done in sustainable economies, is the nat
ural outcome of a system constructed by capitalist patriarchy. This is how globalization destroys local economies and the destruction itself is counted as growth.

And women themselves are devalued, because for many women in the rural and indigenous communities their work co-operates with nature’s processes, and is often contradictory to the dominant market-driven “development” and trade policies, and because work that satisfies needs and ensures sustenance is devalued in general. There is less nurturing of life and life support systems.

The devaluation and invisibility of sustainable, regenerative production is most glaring in the area of food. While patriarchal division of labour has assigned women the role of feeding their families and communities, patriarchal economics and patriarchal views of science and technology magically make women’s work in providing food disappear. “Feeding the World” becomes disassociated from the women who actually do it and is projected as dependent on global agribusiness and biotechnology corporations.

Industrialization and genetic engineering of food and globalization of trade in agriculture are recipes for creating hunger, not for feeding the poor.

Everywhere, food production is becoming a negative economy, with farmers spending more buying costly inputs for industrial production than the price they receive for their produce. The consequence is rising debts and epidemics of suicides in both rich and poor countries.

ECONOMIC GLOBALIZATION is leading to a concentration of the seed industry, the increased use of pesticides, and, finally, increased debt. Capital-intensive, corporate-controlled agriculture is being spread into regions where peasants are poor but, until now, have been self-sufficient in food. In the regions where industrial agriculture has been introduced through globalization, higher costs are making it virtually impossible for small farmers to survive.

The globalization of non-sustainable industrial agriculture is evaporating the incomes of
Third World farmers through a combination of devaluation of currencies, increase in costs of production and a collapse in commodity prices.

Farmers everywhere are being paid a fraction of what they received for the same commodity a decade ago. In the us, wheat prices dropped from $5.75 to $2.43, soya bean prices dropped from $8.40 to $4.29, and corn prices dropped from $4.43 to $1.72 a bushel. In India, from 1999 to 2000, prices for coffee dropped from Rs.60 to Rs.18 per kg and prices of oilseeds declined by more than 30%.

The Canadian National Farmers’ Union put it like this in a report to the senate this year:

“While the farmers growing cereal grains — wheat, oats, corn — earn negative returns and are pushed close to bankruptcy, the companies that make breakfast cereals reap huge profits. In 1998, cereal companies Kellogg’s, Quaker Oats and General Mills enjoyed return on equity rates of 56%, 165% and 222% respectively. While a bushel of corn sold for less than $4, a bushel of corn flakes sold for $133. In 1998, the cereal companies were 186 to 740 times more profitable than the farms. Maybe farmers are making too little because others are taking too much.”

And a World Bank report has admitted that “behind the polarization of domestic consumer prices and world prices is the presence of large trading companies in international commodity markets.”

While farmers earn less, consumers, especially in poor countries, pay more. In
India, food prices have doubled between 1999 and 2000, and consumption of food grains has dropped by 12% in rural areas, increasing the food deprivation of those already malnourished, pushing up mortality rates. Increased economic growth through global commerce is based on pseudo surpluses. More food is being traded while the poor are consuming less. When growth increases poverty, when real production becomes a negative economy, and speculators are defined as “wealth creators”, something has gone wrong with the concepts and categories of wealth and wealth creation. Pushing the real production by nature and people into a negative economy implies that production of real goods and services is declining, creating deeper poverty for the millions who are not part of the dotcom route to instantaneous wealth creation.

WOMEN — AS I HAVE SAID — are the primary food producers and food processors in the world. However, their work in production and processing has now become invisible.

According to the McKinsey corporation, “American food giants recognize that Indian agro-business has lots of room to grow, especially in food processing. India processes a minuscule 1% of the food it grows compared with 70% for the US, Brazil and
Philippines.” It is not that we Indians eat our food raw. Global consultants fail to see the 99% food processing done by women at household level, or by small cottage industry, because it is not controlled by global agribusiness. 99% of
India’s agroprocessing has been intentionally kept at the household level. Now, under the pressure of globalization, things are changing. Pseudo hygiene laws that shut down the food economy based on small-scale local processing under community control are part of the arsenal of global agribusiness for establishing market monopolies through force and coercion, not competition.

In August 1998, small-scale local processing of edible oil was banned in
India through a “packaging order” which made sale of open oil illegal and required all oil to be packed in plastic or aluminium. This shut down tiny “ghanis” or cold-pressed mills. It destroyed the market for our diverse oilseeds — mustard, linseed, sesame, groundnut and coconut.

The take-over of the edible oil industry has affected 10 million livelihoods. The take-over of “atta” or flour by packaged branded flour will cost 100 million livelihoods. These millions are being pushed into new poverty.

The forced use of packaging will increase the environmental burden of millions of tonnes of plastic and aluminium. The globalization of the food system is destroying the diversity of local food cultures and local food economies. A global monoculture is being forced on people by defining everything that is fresh, local and handmade as a health hazard. Human hands are being defined as the worst contaminants, and work for human hands is being outlawed, to be replaced by machines and chemicals bought from global corporations. These are not recipes for feeding the world, but for stealing livelihoods from the poor to create markets for the powerful. People are being perceived as parasites, to be exterminated for the “health” of the global economy. In the process new health and ecological hazards are being forced on Third World people through dumping genetically engineered foods and other hazardous products.

Recently, because of a wto ruling, India was forced to remove restrictions on all imports. Among the unrestricted imports are carcases and animal waste parts that create a threat to our culture and introduce public health hazards such as mad cow disease.

The US Center for Disease and Prevention (cds) in Atlanta has calculated that nearly 81 million cases of food-borne illnesses occur in the us every year. Deaths from food poisoning have more than quadrupled due to deregulation, rising from 2,000 in 1984 to 9,000 in 1994. Most of these infections are caused by factory-farmed meat. The us slaughters 93 million pigs, 37 million cattle, 2 million calves, 6 million horses, goats and sheep and 8 billion chickens and turkeys each year. Now the giant meat industry of the us wants to dump contaminated meat produced through violent and cruel methods on India.

The waste of the rich is being dumped on the poor. The wealth of the poor is being violently appropriated through new and clever means like patents on biodiversity and indigenous knowledge.

PATENTS AND INTELLECTUAL property rights are supposed to be granted for novel inventions. But patents are being claimed for rice varieties such as the basmati for which theDoon
Valley — where I was born — is famous, or pesticides derived from the neem which our mothers and grandmothers have been using. Rice Tec, a US-based company, has been granted Patent No. 5,663,484 for basmati rice lines and grains.

Basmati, neem, pepper, bitter gourd, turmeric . . . every aspect of the innovation embodied in our indigenous food and medicinal systems is now being pirated and patented. The knowledge of the poor is being converted into the property of global corporations, creating a situation where the poor will have to pay for the seeds and medicines they have evolved and have used to meet their needs for nutrition and health care.

Such false claims to creation are now the global norm, with the Trade Related Intellectual Property Rights Agreement of the wto forcing countries to introduce regimes that allow patenting of life forms and indigenous knowledge.

Instead of recognizing that commercial interests build on nature and on the contribution of other cultures, global law has enshrined the patriarchal myth of creation to create new property rights to life forms just as colonialism used the myth of discovery as the basis of the take-over of the land of others as colonies.

Humans do not create life when they manipulate it. Rice Tec’s claim that it has made “an instant invention of a novel rice line”, or the Roslin Institute’s claim that Ian Wilmut “created” Dolly denies the creativity of nature, the self-organizational capacity of life forms, and the prior innovation of Third World communities.

Patents and intellectual property rights are supposed to prevent piracy. Instead they are becoming the instruments of pirating the common traditional knowledge from the poor of the Third World and making it the exclusive “property” of Western scientists and corporations.

When patents are granted for seeds and plants, as in the case of basmati, theft is defined as creation, and saving and sharing seed is defined as theft of intellectual property. Corporations which have broad patents on crops such as cotton, soya bean and mustard are suing farmers for seed-saving and hiring detective agencies to find out if farmers have saved seed or shared it with neighbours.

The recent announcement that Monsanto is giving away the rice genome for free is misleading: Monsanto has not made a commitment to stop patenting rice varieties or other crops.

Sharing and exchange, the basis of our humanity and our ecological survival, have been redefined as a crime. This makes us all poor.

Nature has given us abundance. Women’s indigenous knowledge of biodiversity, agriculture and nutrition has built on that abundance to create more from less, to create growth through sharing. The poor are pushed into deeper poverty by being made to pay for what were their resources and knowledge. Even the rich are poorer because their profits are based on theft and on the use of coercion and violence. This is not wealth creation but plunder.

Sustainability requires the protection of all species and all people and the recognition that diverse species and diverse people play an essential role in maintaining ecosystems and ecological processes. Pollinators are critical to the fertilization and generation of plants. Biodiversity in fields provides vegetables, fodder, medicine and protection to the soil from water and wind erosion.

As humans travel further down the road to non-sustainability, they become intolerant of other species and blind to their vital role in our survival.

In 1992, when Indian farmers destroyed Cargill’s seed plant in Bellary, Karnataka, as a protest against seed failure, the Cargill Chief Executive stated: “We bring Indian farmers smart technologies which prevent bees from usurping the pollen.” When I was participating in the United Nations Biosafety Negotiations, Monsanto circulated literature to defend its Roundup herbicide-resistant crops on grounds that they prevent “weeds from stealing the sunshine”. But what Monsanto calls weeds are the green fields that provide vitamin A rice and prevent blindness in children and anaemia in women.

A world-view that defines pollination as “theft by bees” and claims that biodiversity “steals” sunshine is a world-view which itself aims at stealing nature’s harvest by replacing open, pollinated varieties with hybrids and sterile seeds, and at destroying biodiverse flora with herbicides such as Monsanto’s Roundup. The threat posed to the Monarch butterfly by genetically engineered bt. crops is just one example of the ecological poverty created by the new biotechnologies. As butterflies and bees disappear, production is undermined. As biodiversity disappears, with it go sources of nutrition and food.

When giant corporations view small peasants and bees as thieves, and through trade rules and new technologies seek the right to exterminate them, humanity has reached a dangerous threshold. The imperative to stamp out the smallest insect, the smallest plant, the smallest peasant comes from a deep fear — the fear of everything that is alive and free. And this deep insecurity and fear is unleashing violence against all people and all species.

The global free-trade economy has become a threat to sustainability. The very survival of the poor and other species is at stake not just as a side effect or as an exception but in a systemic way through a restructuring of our world-view at the most fundamental level. Sustainability, sharing and survival are being economically outlawed in the name of market competitiveness and market efficiency.

We need urgently to bring the planet and people back into the picture. The world can be fed only by feeding all beings that make the world.

In giving food to other beings and species we maintain conditions for our own food security. In feeding the earthworms we feed ourselves. In feeding cows, we feed the soil, and in providing food for the soil, we provide food for humans. This world-view of abundance is based on sharing and on a deep awareness of humans as members of the earth family. This awareness that in impoverishing other beings, we impoverish ourselves and in nourishing other beings, we nourish ourselves is the basis of sustainability.

The sustainability challenge for the new millennium is whether global economic man can move out of the world-view based on fear and scarcity, monocultures and monopolies, appropriation and dispossession and shift to a view based on abundance and sharing, diversity and decentralization, and respect and dignity for all beings.

Sustainability demands that we move out of the economic trap that is leaving no space for other species and most humans. Economic globalization has become a war against nature and the poor. But the rules of globalization are not god-given. They can be changed. We must bring this war to an end.

Since Seattle, a frequently used phrase has been the need for a rule-based system. Globalization is the rule of commerce and it has elevated Wall Street to be the only source of value, and as a result things that should have high worth — nature, culture, the future — are being devalued and destroyed. The rules of globalization are undermining the rules of justice and sustainability, of compassion and sharing. We have to move from market totalitarianism to an earth democracy.

We can survive as a species only if we live by the rules of the biosphere. The biosphere has enough for everyone’s needs if the global economy respects the limits set by sustainability and justice.

As Gandhi reminded us, “The Earth has enough for everyone’s needs, but not for some people’s greed.”

VJAS termed Maharashtra CM move seeks spiritual help to stop vidarbha suicides

Friday, March 16, 2007 (NAGPUR):
Vidarbha Jan Andolan samiti to termed Maharashtra chief Minister Vilasrao Deshmukh move to seek spiritual help
Facing severe criticism over farmer suicides in Maharashtra,as a popular spiritual leader from the south, Mata Amritanandamayi, visited the CM on Thursday to discuss the issue of farmer suicides as failure of administration to tackle farmers suicide issue.Spiritual teaching is must but maharashtra chief minister vilasrao deshmukh not for vidarbha farmers who healthy tradition of spiritual binding and this is not answers to food starvation and economical problems of cotton farmers who are being forced to commit suicide due the wrong policies of state ,kishor tiwari farm activist of VJAS informed today .

VJAS has thanked popular spiritual leader from the south, Mata Amritanandamayi for pledging Rs 200 crore for poor farmers across the Vidarbha, which is also to be used for the spiritual guidance and rehabilitation of farmers in the suicide-prone Vidarbha region but has requested not handover to chief minister of maharashtra who has record land garbing and fund garbing before as the vidarbha region is yet to receive funds promised by Prime Minister Manmohan Singh.
VJAS has also urged to have physiological check up of chief Minister Vilasrao Deshmukh along with the Relief and Rehabilitation Minister Patangrao Kadam and state Chief Secretary DK Shankaran because of their bankruptcy to address agrarian crisis as this is not the first time that Vilasrao Deshmukh has turned to spirituality in his search for the ideal solution to the farmer suicides,.The chief minister had earlier sought help from Sri Sri Ravi Shankar’s Art of Living Foundation ,Bhyuji Maharaj of indore as well alongwith with lot of jagran yatras,kishor tiwari added.
VJAS also condemned Chief Minister stand on the Congress Party’s win in the recent Zilla Parishad and Panchayat elections has led them to argue that the reason behind the farmer suicide is not dissatisfaction with the government. is it recent win in zillaparishad free licence for chief minister to kill vidarbha farmers,kishor tiwari asked.the reasons of distress are known to govt.and economical solution are with them then what is drama when administration failed to slow down vidarbha farmer suicides even after announcement of rs.3750 core package,now it’s time for to sit together and work out relief plan that will provide health care ,proper credit,rural employment and support to distress farm families at ground level,kishor tiwari added.

Indian Money and Credit

Subroto Roy

from The Sunday Statesman, August 6 2006,

One rural household may lend another rural household 10 kg or 100 kg
of grain or seed for a short time. When it does, it expects to
receive back a little more than the amount lent ~ even if that
little amount is in services or in plain goodwill among friends or
neighbours. That extra amount is “real interest”, and the percentage
of its value relative to the whole is the “real rate of interest”.
So if 10 kg of grain are lent for two weeks and 11 kg are returned,
an implicit real rate of interest of 10 per cent has been paid over
that short period. The future is always less valuable than the
present in the sense that 10 kg of grain today is worth something
more than the prospect of the same 10 kg of grain tomorrow.
But loans may be made in terms of money rather than real units of
grain, thus the change in the value of money over the period of the
loan becomes relevant. If a loan of Rs 100,000 is made by a bank to
a borrower for one year at a simple interest rate of 13 per cent per
annum, and the value of money then declines at 8 per cent over the
year, the debtor is paying real interest of just about 13 per cent-8
per cent = 5 per cent. The Yale economist Irving Fisher described
how this monetary rate of interest equals the real rate of interest
plus the rate of monetary inflation, while the great Swedish
economist Knut Wicksell predicted inflation if the monetary rate
fell below the real rate, and vice versa.

And there is another consideration too. A new cycle-rickshaw
costs about Rs 5,000. A rickshaw driver who does not own his own
machine has to pay the owner of the rickshaw a fixed rental of about
Rs15 per day. Now a government policy may want to see more cycle-
rickshaw drivers owning their own machines, and allocate bank-credit
accordingly. But some fraction of the drivers are alcoholics and
hence are bad credit-risks, while others are industrious, have
strong family lives and are good credit-risks. If a creditor is
unable to distinguish between who is an alcoholic and who is not,
credit terms will tend towards subsidising the alcoholic and taxing
the industrious. On the other hand, a creditor who knows each debtor
individually will also know their credit-risks, and price individual
loans to them accordingly.

India’s credit markets, both rural and urban, have been segmented
always into “formal” and “informal”, and remain so despite (or
perhaps because of) much government intervention in recent decades.
Banks and the RBI operate in formal financial markets, but the
informal credit market is where the real action is. For example, a
mosaic-machine used in the construction business costs Rs 15,000
brand new and gets to be rented out at the rate of Rs 150 per day.
Someone with access to formal sector bank loans at say 13 per cent
per annum, might borrow the Rs 15,000, buy a machine, rent it out,
break-even within a few months and make a whopping profit
afterwards. Everyone would thus hunger after subsidised formal
sector bank loans, and these would be rationed quickly and then come
to be allocated to people known to bank officials (like their own
friends and relatives).

Rates of return on capital, i.e. real profits, are and always
have been massively high in India, and that is what is to be
expected because capital, both machinery and finance, is relatively
scarce as a factor of production. Rates of return on labour, i.e.
real wages, are on the other hand relatively low in India thanks to
our vast population. For these reasons we have had for three
centuries foreigners coming to India to invest their capital in
enterprise and make a profit, while Indians have emigrated all over
the world from Fiji to Britain to America in search of higher wages.

Now all of this is very elementary reasoning well known to serious
monetary economists, yet it seems to have always escaped India’s
monetary and fiscal decision-makers. For example, just the other
day, the Finance Minister said in Parliament that all rural banks
had been instructed to lend farmers credit at a 7 per cent
(monetary) rate of interest, and failure to do so would lead to
punishment. By the rickshaw example (in fact many cycle-rickshaw
drivers are also marginal farmers), the FM did not wish to, and of
course cannot in practice, distinguish between good and bad credit-
risks among the recipients of such loans. If the value of money is
declining by, say, 8 per cent per annum, a 7 per cent monetary rate
is equivalent to a minus 1 per cent real rate. i.e., the FM would
have done some Humpty Dumpty economics and caused the future
prospect of holding Rs 1,000 tomorrow to be more and not less
valuable than the certainty of holding Rs 1,000 today. It is
inevitable there will be credit-rationing when credit is so
massively subsidised, so the typical borrowing farmer will get some
little fraction of his credit-needs at the official government price
of 7 per cent per annum and then have to get the bulk of his credit-
needs fulfilled in the informal market ~ at a price perhaps of 1 per
cent-5 per cent PER DAY! The FM promising in his Budget to subsidise
farm credit sounds nice on TV but may be wholly futile as a way of
stopping farmers’ suicides.

The same kind of Humpty Dumpty monetary economics has been
religiously pursued by the RBI for decades upon directions from its
owner and master, the Finance Ministry ~ which in turn has always
meekly followed the dictates of India’s unreasonable politicians of
all parties. Formal sector interest rates in India have been for
decades so artificially lowered that even if we use official figures
measuring inflation, this leads to real interest rates being lower
in capital-scarce India than in the capital-rich West! (See graphs).
Negative or near-zero real interest rates in India’s formal
financial sector coexisting with massively high profit rates in
informal credit markets point to continuous processes of low risk
profits being made by arbitrage between the two. That is why the
organised private and public sectors seem so pleased with official
credit policies ~ while every borrower in the informal credit
markets always has suicide not far from his/her mind.

Other than Dr Rangarajan who once mentioned it, we have never had
an RBI Governor who has wished to see the RBI constitutionally
independent of the Government of the day, and hence dedicated to
restoring the integrity of India’s money. Playing with the repo rate
or other short term monetary rates is fun and makes the RBI think it
is doing something as important as the US or UK central banks.
Certainly the upward trend in such short term rates over the last
few months is better than the nonsensical flip-flops previously. But
it is small potatoes compared to the really giant variables which
are all fiscal and not monetary in India. For example, Sonia Gandhi
(as advised by another naturalized Indian, Jean Drèze, disciple of
the Non-Resident Amartya Sen) insisted on a massive “Rural
Employment Guarantee”; Manmohan Singh and Pranab Mukherjee have
insisted on massive foreign weapons’ purchases and government wage
increases; Praful Patel on massive foreign aircraft purchases; Arjun
Sengupta on Scandinavian welfare benefits; Montek Ahluwalia on
nuclear reactor purchases (so South Delhi will be able at least to
run its ACs in 20 years’ time). All this adds endlessly to the stock
of government paper being held as bank-assets, while the currency
remains inconvertible (See e.g. The Statesman 30 October 2005, 6-8
January, 23 April 2006).The RSS/BJP and JNU/Left have been equally
bereft of serious thought.

Tell any suicidal farmer that the Government of India has been
borrowing larger and larger amou
nts every year just to pay interest
on previously incurred debts; it may make him realise there are
famous and powerful people who are even more unwise than himself and
amount to effective suicide-prevention therapy. But do not tell him
that they unlike himself have been playing with public money ~ or
you may have the opposite effect.