A FLAWED AGRICULTURAL POLICY-DROUGHT AND CONSEQUENCES

Diversion of valuable food materials that can quench the hunger of millions of people for non-food purpose is nothing but a crime against humanity and this is what is going on in a supposed to be "civilized" country like the US. It is understandable that renewable energy is a priority for the whole world because fossil fuels cannot last for ever and world cannot sustain itself without energy with every human endeavor anchored to energy use. While energy from solar, wind, geothermal, wave and other sources is being tapped with increasing efficiency, there is one area where man is doing harm to himself by using food materials like corn soybean, sugarcane and Palm oil for converting into automobile fuels to extend the supply of fossil fuels. It is understandable if there is a vast surplus production of food that needs to be utilized without wasting them but the present situation indicates that world is short of foods unable to feed millions of people in Africa, Asia and South America. As the North American drought is spreading across the continent mercilessly, the corn and soybean production is plummeting causing world wide concerns regarding its impact on food prices. It is here that the US, a major producer of corn in the world  has to show its statesmanship and magnanimity by temporarily suspending its "corn for ethanol" policy at least for two years. Here is a commentary on this issue with which many dispassionate observers agree.  

"More than one-third of our corn crop is used to feed livestock. Another 13 percent is exported, much of it to feed livestock as well. Another 40 percent is used to produce ethanol. The remainder goes toward food and beverage production. Previous droughts in the Midwest (most recently in 1988) also resulted in higher food prices, but misguided energy policies are magnifying the effects of the current one. Federal renewable-fuel standards require the blending of 13.2 billion gallons of corn ethanol with gasoline this year. This will require 4.7 billion bushels of corn, 40 percent of this year's crop. Other countries seem to have a better grasp of market forces and common sense. Brazil, another large ethanol producer, uses sugar instead of corn to make ethanol. It has flexible policies that allow the market to determine whether sugar should be sold on the sugar market or be converted to fuel. Our government could learn from the Brazilian approach and direct the E.P.A. to waive a portion of the renewable-fuel standards, thereby directing corn back to the marketplace. Under the law, the E.P.A. would first have to determine that the program was causing economic harm. That's a no-brainer, given the effects of sharply higher grain prices that are already rippling through the economy. The price of corn is a critical variable in the world food equation, and food markets are on edge because American corn supplies are plummeting. The combination of the drought and American ethanol policy will lead in many parts of the world to widespread inflation, more hunger, less food security, slower economic growth and political instability, especially in poor countries".

Of course America is a sovereign country with full power to dictate its own policy, deemed to be appropriate to its population but under today's globalized environment can one country decide unilaterally what it will do without bothering to think about the consequences of its action?. If past history is taken into consideration, the US is the biggest food donor in the world and one can assume that same humane consideration will prevail over its response to the new situation emerging in the food front. As a super power with vast technological superiority, this country can always think of other feasible alternatives for fuel production and the non-food biomass conversion to ethanol or high fat algal production can be a feasible alternative if pursued vigorously on a priority basis. The US must provide leadership to the rest of the world in ensuring that every grain of food is conserved and no human being goes to bed with a hungry stomach!

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

AN OVER BEARING GOVERNMENT-BASHING THE CITIZEN

Inflation is supposed to eat into the real buying power of people and all responsible governments try hard to rein in such distortions in the economy. India is no exception to this bitter reality. Inflation affects different people in different ways, the affluent families not feeling the pinch to the same extent as those in the low and middle income groups of population. Economic liberalization in India two decades ago has unleashed a force that is influenced more by international developments than by any ameliorative policies of the national government. In a democracy every citizen has a right to protest against the policies of the government elected by him if they are found to be heaping misery on him. While the suffering citizens do expect the government to be sympathetic to his woes, bashing him for raising his voice against price rise especially of staple foods, is not an acceptable behavior of a responsible official of the very same government. Here is the controversial "admonition" from a senior minister in Indian Government who expressed his displeasure against citizens railing against price rise. 

"Answering a question on the burden on the common man, the Home Minister referred to the different segments of the population and the schemes that benefit the different segments.  He referred to higher MSP (as benefiting the farmers); MGNREGA (as benefiting the rural poor); mid-day meal scheme (as benefiting millions of children); and he referred to PMGSY (as benefiting thousands of villages).  He referred to the price of crude oil and how the Government was constrained to first raise petrol prices and then how it was reduced twice to benefit the middle class.  He then said (as can be seen from the exact text of the answer): "You mentioned high food prices.  Yes food inflation is high.  But higher procurement prices will reflect in slightly higher food prices.  But higher procurement prices benefits millions of farmers.  If you increase the price of sugarcane, sugar cannot be cheaper than before.  If you increase the price of procured wheat or procured paddy, rice and wheat for the consumer cannot be less. Sometimes, and I have written about this once, we are prepared to pay fifteen rupees for a bottle of water but we will not bear one rupee increase in the price of a kilo of wheat or a kilo of rice.  We are prepared to pay rupees twenty for an ice cream cone but won't pay a rupee more for a kilo of wheat or rice." 

Here is a comment by an enraged citizen after hearing the above statement which aptly reflects the revulsion among the masses.

"Tea Re.1.00 Soup Rs.5.50 Dal Rs.1.50 Meals Rs.2.00 Chappathi Rs.1.00 Dosa Rs.4.00 Veg Briyani Rs.8.00 This is actual price list. These items are meant for "POOR PEOPLE" & is available at Indian Parliament Canteen. The salary of those poor people is Rs.80,000.00 per Month!! PLUS HEFTY BONUS IN SCAMS.... Pls forward to all Indians (this all money comes from our pocket, TAXES YOU PAY)" 

Probably the minister, drunken with absolute power felt that he is not answerable to the people who elected him as his survival in the government depends more on paying obeisance to people not answerable to the constitution of India where accountability is the last thing that counts in public life. With luxurious life given on a platter to the "elected" representatives in the name of "serving" people, there seems to be a disconnect between common man and their representatives as reflected by the comments quoted above. Whether it is the salary, perks, living facilities, transport, communication facilities the "leaders" seem to be united in granting these privileges liberally to them selves unanimously with hardly a few seconds deliberations! Probably it is time that the present constitution is thoroughly over hauled to return the real power to the people of the country in the true sense.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

MAKING RICH FARMERS RICHER-NEW AMERICAN POLICY

Agricultural subsidies doled out to rich farmers in some of the wealthy countries are considered an anachronism and in spite of world wide condemnation of such practices, there does not seem to be any sign of this incongruous policy being curtailed. United States of America and the European Union countries are the major culprits in perpetuating such distorted policies. Where else except in the US farmers are paid to leave their land fallow, fearing the adverse impact a surplus production will have on the market prices of commodities? Now comes the report that the government there is debating the feasibility of new ways of subsidizing its farmers to insure them against crop failures or low market price realization for their crops. It is interesting that even some of the members of the farming community feel that such government hand out is not necessary for those engaged in honest farming. Of course genuine problems like unexpected crop failure or disasters affecting crop yields must be factored in when agriculture farming is planned and any financial help to cushion the insurance premium is understandable. How far the planned financial aid to the agricultural farms will materialize depends on the political flux this country is going through. However, most WTO members, especially the poor and the developing world, have been fighting this perverted policies of the rich nations with very little success. On the contrary the political classes in the developed economies are contriving to perpetuate this distortion by increasing the dole outs through the tax payers' money, probably for furthering their vested interests. Here is a take on this developing story.    

"Advocates, including farm interest lobbyists and lawmakers with a long history of creating and protecting benefits, argue that the new program would save Washington money by replacing a longstanding one costing $5 billion a year, known as direct payments, that pays owners of farmland a set amount regardless of whether they have planted crops. Crop insurance has existed for decades, with the government now spending about $7 billion a year to pay about two-thirds of the cost of farmers' premiums. Under the federal program, farmers can buy insurance that covers poor yields, declines in prices or both. On Tuesday, the Senate began debate on a farm bill, passed by the Agriculture Committee in April, that would set up another crop insurance subsidy, costing $3 billion a year, to cover any losses farmers suffer, known as deductibles, before their crop insurance policies kick in. The change from the existing direct payment program to the crop insurance subsidies as the primary safety net for farmers means that "payments are going to people who are actually farming," Senator Debbie Stabenow, Democrat of Michigan and chairwoman of the Agriculture Committee, said Wednesday. The Senate measure would cut about $23 billion in spending over the next 10 years, though that is far less than the Obama administration wanted. Crop insurance supporters say insurance programs provide an important safety net for farmers, who are subject to the whims of weather, pests and volatile markets. "Cuts in the crop insurance program would reduce the effectiveness of the most important risk-management tool farmers have," said Sam Willett, senior director of public policy at the National Corn Growers Association. Even some farmers argue that the subsidies are already generous to agribusinesses, especially with the government facing large deficits. Jim Faulstich, a farmer and rancher in Highmore, S.D., said he was in favor of farmers having crop insurance, but added that the insurance should not be used to make money at taxpayer expense. "If we as farmers expect taxpayers to support premium subsidies, it's only fair that we grow on land that is capable of supporting it," he said. "Could some of this land be profitable without the crop insurance subsidy? I think not."

Theoretically what any nation does within its borders is no body else's business but can such an isolationist policy work in a globalized community where cooperation and mutual help are the watch words. With what cheek countries like America, the EU, Japan and others with high per capita income, can ask the poorer countries to lower their import tariffs for industrial products manufactured by them so that their domestic manufacturing sector flourishes? Don't they know that cheap food grains produced in their countries through massive subsidies depress the global prices of many of them and hurt many countries depending on export of their surplus commodities for sustenance? With what conscience the American citizens go to sleep each day when millions of poor people starve around the world because of the subsidies doled out by their insensitive politicians? What is the use of billions of dollars worth of surplus food grains, being channelized to African countries in the name of food aid  if the huge subsidies received by the American farmers effectively kill the local agriculture? If WTO cannot stop this patently unjust policies of the rich nations, it has no right to exist any more!

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com