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They’ve Got the World by the Belly

by P. SAINATH

When you’re down to distributing fertilizer from a police station, you have a problem. It’s what they did in Hingoli, here in the Indian state of  in Maharashtra. That was a week ago, but the police are still, in a sense, involved in its distribution there and elsewhere. In Hingoli itself, there are lots of policemen controlling the queues outside dealers’ outlets. The dealers won’t open up otherwise. Thanks to the police, Hingoli’s farmers got some fertilizer. Sort of gives a whole new meaning to the acronym PDS. Police Distribution System.

In Nanded, cops wielding riot sticks charged angry farmers demanding fertilizer needed urgently with the rains setting in. In Akola, there is heavy police security precautions for the same reasons. More than one Agriculture Officer has fled his workplace to escape mobs. There were angry outbursts at the market place in the chief minister’s own constituency at Latur. Protests in neighbouring Karnataka have grabbed national attention with a farmer being shot dead. In Andhra Pradesh, farmers stormed zilla parishad meetings in Medak and Rangareddy and set up road blocks in other districts.

In Vidharbha’s cotton belt, for all the celebration of Bt’s success, there have been huge shifts towards soybean. That’s because soybean costs much less to grow than cotton. At least for now. soybean needs less fertilizer than cotton. But all the same, it still needs it at the time of sowing, just as the rains set in. In Madhya Pradesh’s, “soya bowl,” the shortages are hurting. And for years now, more farmers have been joining the soybean bandwagon in other states, too.

At the very least, it argues that government was unprepared for the agricultural season. The shortages had been predicted for a long time. Not just fertilizer, but seeds as well. In Maharashtra, the state argues that the Gujjar agitation has crippled freight train traffic, hence the shortages. This may well be a real factor, but it is not going to account for the 60 per cent shortfall in supply.
Even if we tide over the present crisis, fertilizer troubles will worsen. Many complex factors are asserting themselves. Some of the very things that happened with grain and food prices are at work with fertilizer as well. The corporate conquest of agriculture is well apace. As the Wall Street Journal (April 30, 2008) notes: “At a time when parts of the world are facing food riots, Big Agriculture is dealing with a different sort of challenge: huge profits.” The WSJ points to the grain-processing giant Archer-Daniels-Midland Co., which saw a 42 per cent leap in its fiscal third quarter profits. “Including a sevenfold increase in net income in its unit that stores, transports and trades grains such as wheat and corn, as well as soybeans.”

Seed and herbicide giant Monsanto and fertilizer maker Mosaic Co. “all reported similar windfalls in their latest quarters.” As the WSJ grudgingly says: “Some observers think financial speculation has helped push up prices as wealthy investors in the past year have flooded the agriculture commodity markets in search of better returns.” So much so that “The Commodity Futures Trading Commission last week held a hearing in Washington to examine the role index funds and other speculators are playing in driving up grain prices.” The WSJ cites research showing that total index fund investment in corn, soybean, wheat, cattle and hogs has risen by 37 billion dollars (which is well over double India’s farm loan waiver for millions of farmers) since 2006.

Now, it’s the turn of the New York Times (June 5, 2008) to note that “a few big private investors are starting to make bolder and longer-term bets that the world’s need for food will greatly increase — by buying farmland, fertilizer, grain elevators and shipping equipment.” One company has bought about five dozen fertilizer distribution outlets and a fleet of barges and ships. And others, “including the giant BlackRock fund group in New York, are separately planning to invest hundreds of millions of dollars in agriculture, chiefly farmland, from sub-Saharan Africa to the English countryside.”

Of course, the NYT and WSJ also parrot the corporate chant that this could be a good thing for hungry humanity. “These new bets by big investors could bolster food production at a time when the world needs more of it,” says the NYT report. And the WSJ notes that food companies “say bigger profits can be used to develop new technologies that will ultimately help farmers improve productivity. Monsanto says it’s designing improved genetically modified seeds that can squeeze even more yield from each acre of planted grain.” Gee! They’re the good guys, actually. In the WSJ’s eyes (June 10, 2008) the villains are elsewhere. The problems arise with “China and India gobbling food as never before and food prices soaring…”

Complex as the reality is, the principles are fairly simple. At a time when debates in India highlight the un-viability of agriculture, giant corporations are betting the opposite. For them, at least, it holds the promise of an undying source of super profit. The NYT report’s headline sums it up nicely: “Food is gold, so billions invested in farming.” Ultimately, you can live without a lot of things, yes, even television. Or aircraft and SUVs. But you cannot live without food and water. The latter “commodity” is the focus of the biggest thrust of some huge multinational companies. And we are well into the process of privatising water in India (for them) in a  process that promises chaos, misery and conflict on a scale we cannot begin to grasp at this point.

Across the globe, the entire chain of resources and inputs is now getting cornered by corporations. Farm land, water, fertilizer, seed, pesticide and many more. Grab these together and you’ve got the world by its belly. The giant companies are now putting out papers on how they will solve the world’s food problem. Never mind they are at the heart of it.

Meanwhile, making chemical fertilizer requires large use of fossil fuels. So rising oil prices further spur the fertilizer crisis. The rip-off by the top corporations in that sector has been so great that even the United States Senate saw moves to impose a windfall profits tax on oil companies. (In India, the government responded to such calls by transferring the burden to the people and asking for “patience on the inflationary trend.”) Of course, it was scotched in the Senate, too.

Fertilizer subsidies in India have for long gone to manufacturers, not farmers. (If they went to farmers directly, they would have more choice in what fertilizer to use.) Meanwhile, the world over, speculative capital has been moving towards agricultural commodities and fertilizer. Other sectors in the stock markets have tanked or not done so well. In India, too, calls for a ban on futures trading in agricultural commodities arose from such a situation. Wheat went underground for a while. Prices rose (and keep rising). Now it is the turn of fertilizer. A bag of Diammonium Phosphate today costs Rs. 490 officially. In black, it sells for around Rs. 600. (The global price, far more under corporate control, is at least four times as much. That makes imports more difficult.) Even our nominal price is nearly three times what it was 15 years ago.

For well over a decade now, we have invested less and less in agriculture. Following the World Bank-IMF menu, we discouraged food crop and focused on cash crop and sang the hymns of export-led growth. Mindless de-regulation saw corporate control grip more sectors of agriculture. Seed, fertilizer, markets, you name it. We reduced our agricultural universities to labs for private corporations. We stepped up our use of chemical fertilizers and pesticides. Millions of farmers were shifted to a much higher-cost economy where input costs are crippling. A (non-organic) farmer in 1991 could cultivate an acre of cotton in Vidharbha for Rs. 2,500. [Just over $60.] Today that would cost him or her Rs. 13,000 or more, given the “miracles” of chemicals, pesticides and Bt.

As these costs shot up, we disabled our capacities to meet the needs of the cultivator. And then we withdrew credit. Even if the fertilizer comes through this season, countless farmers in the post-loan waiver world find themselves without fresh credit. “We’re not mad,” say bank managers in crisis regions. “The farmer has no new income. Nor better prices. How will someone who could not repay Rs. 10,000 repay thrice that sum?” So who do farmers seeking credit turn to? The very input dealers who are emerging the major source of informal credit in the countryside. And who are implicated in the black marketing of vital inputs in every crisis.

The fertilizer shortage might even be overcome just now. But the crisis won’t go away. It and many more to come are built into both what’s going on in world capitalism and what we have been doing in India. We’ve dismantled vital parts of our agriculture and with it, the livelihoods of millions. This at a time when the World Bank and IMF are trying to hide their tracks in the trail of disaster they left the world over. A study by the Bank’s economists now says that “economic growth of the agriculture sector is at least twice as effective at reducing poverty as any other sector.” (The Wall Street Journal, June 10, 2008). And we fail to see why food costs could get a lot worse. The corporations do, though. As that NYT headline puts it: “Food is gold, so billions invested in farming.” Or, more truly, in the capture of it.

P. SAINATH is the rural affairs editor of The Hindu, where this piece appears, and is the author of Everybody Loves a Good Drought. He can be reached at: psainath@vsnl.com.

 

 

 

 

 

P Sainath is the founder-editor of the People’s Archive of Rural India. He has been a rural reporter for decades and is the author of ‘Everybody Loves a Good Drought’You can contact the author here: @PSainath_org

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