Financial Daily from THE HINDU group of publications
Tuesday, Dec 17, 2002
Agri-Biz & Commodities - Exports & Imports
India follows Argentina Exports food, nurtures hunger
THE Finance Minister, Mr Jaswant Singh, presenting the Mid-Year Review of the Economy in Parliament, emphasised the need to boost private investment in agriculture, thereby encouraging commodity exports. Probably what he forgot to say was that India had decided to follow Argentina's model of economic growth, which virtually ensures the profits of a few agri-business enterprises at the cost of growing hunger, malnutrition and abject poverty.
Argentina, the world's fourth biggest exporter of food, faces an unprecedented socio-economic crisis. As the vast, fertile country continues to step up exports of meat, wheat, corn and soya this year, a catastrophe has hit the under-privileged in the countryside. As hunger multiplies, images of stunted, emaciated children have scandalised the world and marred the image of Argentina, long known as the grain store of the world.
Hunger also continues to grow in India, which alone accounts for one-third of the world's estimated 860 million people who go to bed hungry, and that too, in times of plenty. In fact, hunger and poverty have proved to be robustly sustainable.
Amidst reports of gnawing hunger and starvation deaths in Rajasthan, Madhya Pradesh and Orissa that hit the national headlines a few weeks back, India continues to make room for exporting surplus foodgrains. That an estimated 320 million people desperately need food, despite more than 60 million tonnes stocked in the open, and nothing, has failed to galvanise any political action.
Perceived by the neo-classical pundits as the glorious model of economic growth, an unprecedented humanitarian crisis confronts Argentina. In India, too, with the increased domination of market forces in the food sector, and reduced public policy intervention for food security, food prices have increased. Mr Jaswant Singh has promised to further cut subsidies and reduce the government's intervention in foodgrains procurement. Already, India's Export-Import Policy of 2001-02 lays a major thrust on promotion of agricultural exports. Exports have increased by 10 per cent every year since 1991. They rose from Rs 2,970 crore in 1994 to Rs 7,670 crore in 1997.
Between April-August 2002, export of wheat grew by 32 per cent and that of rice by 75 per cent over the corresponding period. Agriculture and allied products grew by an impressive 8.22 per cent in the same period.
However, other traditional export segments, such as plantation crops (tea and spices) and edible oils, continue to be imported in ever more quantities, with the lowering of the import duties and removal of quantitative restrictions. Instead of imposing duties that minimise the impact of cheap imports, the Government has provided Rs 500 crore to bail out the plantation sector.
In other words, while the small producers are driven out by cheaper imports, the major producers have their losses written off.
While people die of hunger, the government sits atop a mountain of foodgrains. In 2001, starvation deaths were reported in over 13 States while the storage facilities of the Food Corporation of India (FCI) over-flowed with grain, some of it rotting and rat-infested.
There was a proposal to dump it in the sea, to make storage space for the next crop, when export markets could not be found for this surplus. In 2002, reports of hunger and starvation deaths came in regularly from the progressive and economically fast-growing States Andhra Pradesh and Karnataka.
The Guardian (November 25, 2002) explains the dichotomy of economic growth in Argentina, quoting the Centre for Child Nutrition Studies, which advises the World Health Organisation, as saying that 20 per cent of children in the Latin American country are suffering from malnutrition.
Dr Oscar Hillal, the deputy director of the children's hospital in Tucuman, said: "This is not Africa, this is Argentina, where there are 50 million cattle and 39 million people but where we have a government which is totally out of touch with the people's needs."
Some of the children pictured in northeastern Tucuman province had bloated stomachs, blotchy skin and dry hair associated with severe protein deficiency. The national charity Red Solidaria said that 60 children a month were being taken to hospital with severe malnutrition, and 400 were being treated as outpatients.
Five non-government organisations from Tucuman province recently filed a legal suit against Tucuman's Governor Julio Miranda for "wilful neglect" of the children who have died of malnutrition in his province, where 64 per cent of people live in extreme poverty. They accused him of diverting national funding for social programmes into "clientelism and corruption".
A year ago, a case was filed by some NGOs in the Supreme Court asking for directions to ensure the fundamental right to food of every citizen. A Bench comprising Justice B. N. Kripal and Justice K. G. Balakrishnan had directed the government to "devise a scheme where no person goes hungry when the granaries are full and food is wasted due to non-availability of storage space."
To the Attorney-General's plea that devising such a scheme would require at least two weeks, the Court had allowed for enough time. It has also sought affidavits from the State governments of Orissa, Rajasthan, Chattisgarh, Maharashtra, Gujarat and Himachal Pradesh detailing their response to meet the unprecedented situation of "scarcity among plenty".
A year and a half later, starvation deaths are still reported from Rajasthan and Madhya Pradesh, while the exports of wheat and rice have increased. Malnutrition persists, more so among children and women.
And a day after the Prime Minister, Mr Atal Bihari Vajpayee, announced in mid-November that 1.3 million tonnes of foodgrains costing Rs 1,500 crore have been distributed in the country under various drought relief programmes, a survey conducted in Madhya Pradesh, in central India, found 6,785 children in 43 blocks of Shivpuri district severely malnourished an average of 160 per block.
Yet, all that the prime minister did was to call for an all-party meeting to discuss the crisis emerging from drought and hunger.
Far away in Argentina, some 450,000 jobs have been lost since October last year, leaving one in every five people unemployed, one in two living in poverty, and one in four destitute. Salaries have lost 70 per cent of their value and the economy is shrinking at a rate of 14 per cent, while inflation is running at 40 per cent. I
n Tucuman province, as The Guardian reported, parents admitted to feeding their babies and infants with sugary green tea instead of milk or food, which they often cannot afford.
For the political masters of both the countries, aided and abetted by the fast-emerging class of economists, agricultural exports remain the only path to speedy growth.
Reams of paper have already been wasted in theories, reports and studies detailing the virtues of export-oriented growth that can help eradicate poverty and hunger.
It is, therefore, not unusual to find economists like Jagdish Bhagwati, Lord Meghnad Desai and George Soros singing in chorus to the tunes of free trade and more liberalised economy, of leaving farmers at the mercy of market forces and withdrawing the state support to agriculture as quickly as possible. After all, what have they to lose? Not even their jobs.
In an astonishing and honest admission, Argentina's production minister, Mr Anibal Fernandez, however, attributed the children's deaths to "a sick society and a ruling class that are completely to blame, all of them, myself included. "If not, this would not be happening," he told The Guardian. "It is a chronic and cumulative problem. It has been going on for many years and everyone has been turning a blind eye."
One wonders, how many heads of state of WTO member-countries will make admissions of guilt, like Argentina's Mr Fernandez.
Accepting the fault is the first step towards correcting the policy blunders. Hoping against hope is what optimism is all about in the days of corporate control and market economy, where the poor and hungry are nothing more than unfortunate statistics that come in the way of development.
(The author is a New Delhi-based food and trade policy analyst. He can be contacted at www.dsharma.org)
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