Tuesday, June 16, 2009


Towards the ideal of a hunger-free India
“To a people famishing and idle, the only acceptable form in which God can dare appear is work and promise of food as wages.” These were the words of Mahatma Gandhi when he was healing the wounds arising from the Hindu-Muslim divide at Naokhali in 1946. He thus stressed the symbiotic bonds among work, income and food security. Eradication of hunger and poverty is also the first among the U.N. Millennium Development Goals (MDG),represent a global common minimum programme for human security and well-being.

The Food and Agriculture Organisation says that far from achieving the goal of reducing hunger by half by 2015, some 75 million more were added to the hunger trap during 2007, principally due to the rise in food prices.
Nearly 30 million of the 75 million additions are from India. Recent data from the National Family Health Surveys indicate an unacceptable extent of malnutrition among children and pregnant women in particular.

Five-point action plan :
a) Institutional structures for public policy and coordinated action in nutrition
Overcoming malnutrition requires concurrent attention to food (macronutrients and micronutrients, clean drinking water) and non-food factors (such as sanitation, environmental hygiene, primary health care, nutrition, literacy and work and income security). Achieving the goal of nutrition security for all will need a fusion of political will and action, professional skill and peoples’ participation. Such a coalition of policy makers, professionals and citizens will have to start from the village and go up to the national level.

b) Learning for success: converting the unique into the universal
Nothing succeeds like success. Therefore it is important to learn from successful examples of the elimination of malnutrition, as for example, Kerala and Tamil Nadu. Kerala has adopted a universal Public Distribution System (PDS). A unique combination of the ICDS (Integrated Child Development Services) and the TINP (Tamil Nadu Integrated Nutrition Project) was launched in Tamil Nadu where TINP identified a community worker to concentrate on families with children in the 0-3 age group. From 1982, Tamil Nadu has been operating a universal noon-meal programme for school children, which now covers old age pensioners, destitutes, widows and pregnant women. Support is being extended to nursing mothers. Further, Tamil Nadu is providing rice to the poor at Re. 1 a kg from September 15, 2008. This will help reduce under-nutrition substantially.

This will require focussing on two important target groups: children under two years of age and women, especially adolescent girls and pregnant and nursing women. Based on successful models, State governments can develop a ‘Hunger Free State’ strategy, with a life cycle approach to the delivery of nutrition support.

c) Action at the local level: community food and water security system
Community food and water security systems including grain, seed, fodder and water banks can be promoted by local bodies. The food basket should be widened so as to include a wide range of millets such as ragi, besides legumes, vegetables and tubers.

d) Action at the State level: coordinating nutrition security initiatives
The State Level Committee on Nutrition Security chaired by the Chief Minister should facilitate the implementation of ongoing nutrition safety net programmes (national, bilateral and international) in a coordinated and mutually reinforcing manner, in order to generate synergy and maximise the benefits from the available resources. A media coalition must be formed to include representatives of the print media, audio and video channels, new media including the Internet, and traditional media such as folk dance, music, and street plays.

e) Action at the national level: mainstream nutrition in national missions
At the national level, the most urgent task relates to including nutrition outcome indicators and targets in all major missions in the field of agriculture and rural development. Programmes such as the Rashtriya Krishi Vikas Yojana (Rs. 25,000 crore), the National Horticulture Mission (Rs. 20,000 crore) and the National Food Security Mission (Rs. 5,000 crore) should have a nutrition advisory board, so that cropping and farming systems are anchored on the principle of food-based nutrition security.

The National Rural Employment Guarantee Act (NREGA) sites, where mostly illiterate women and men work on unskilled jobs, should have a nutrition clinic operated by a knowledgeable person and a PDS facility. If food is not available at affordable prices at NREGA sites, most of the money earned will go towards purchasing staple foods at high cost and under-nutrition will persist.

Some more steps:

• All MLAs and MPs who are provided with Rs. 1 crore to Rs. 2 crore a year respectively for local area development (under MPLADS) should set apart the funds to eliminate malnutrition from their constituencies based on the Gandhi district plan of assisting every family to earn their daily bread. This should be done until malnutrition is totally eradicated from the constituencies concerned.

• Corporate houses should allot funds available for corporate social responsibility to projects designed to eliminate hunger. Such projects could relate to enhancing the productivity and profitability of small scale farming and women’s self help groups, as well as to strengthening nutrition safety nets and eliminating leakages in the delivery system.

We should erase the stigma and the shame associated with our country being home to the largest number of malnourished people in the world.

The Supreme Court on SC/ST denigration
The Supreme Court has deprecated the practice of upper castes denigrating the Scheduled Castes and the Scheduled Tribes and said "this is a disgrace to our country."

"Our Constitution provides for equality which includes special help and care for the oppressed and weaker sections who have been historically downtrodden. The SC/ST communities in our opinion are also equal citizens, and are entitled to a life of dignity in view of Article 21 of the Constitution as interpreted by this court,"

The Bench was dealing with a criminal appeal whether the use of the word `Chamar' (an SC name) was an offence attracting the provisions of The Scheduled Castes and The Schedules Tribes (Prevention of Atrocities) Act, 1989.

"The caste system is a curse on our nation and the sooner it is destroyed the better. In fact, it is dividing our country at a time when we must all be united as Indians if we wish to face the gigantic problems confronting us - poverty, unemployment, price rise, corruption, etc. The 1989 Act is a salutary legislative measure in that direction."

It may be mentioned that in America to use the word `nigger' today for an African-American is regarded as highly offensive and is totally unacceptable, even if it was acceptable 50 years ago. In our opinion, even if the word `Chamar' was not regarded as offensive at one time in our country, today it is certainly a highly offensive word when used in a derogatory sense to insult and humiliate a person. Hence, it should never be used with that intent.

WTO - India's contention

India argues that “revival of the weakest” and “not survival of the fittest” should form the core of the negotiations for reaching an agreement.

WTO chief Pascal Lamy has renewed efforts to bridge differences, mainly on the issue of the safeguard for agriculture in the developing countries, between India and the U.S. following the failure of the Geneva talks a fortnight ago on the issue, known as the Special Safeguard Mechanism in WTO parlance.

He in on a trip to seek India’s help for reviving the negotiations. The success of the Doha Round could result in worldwide duty cuts of $150 billion a year.

WTO Basics :

Binding tariffs, and applying them equally to all trading partners (most-favoured-nation treatment, or MFN) are key to the smooth flow of trade in goods. The WTO agreements uphold the principles, but they also allow exceptions — in some circumstances. Three of these issues are:

* actions taken against dumping (selling at an unfairly low price)

* subsidies and special “countervailing” duties to offset the subsidies

* emergency measures to limit imports temporarily, designed to “safeguard” domestic industries.

Safeguards are contingency restrictions on imports taken temporarily to deal with special circumstances such as a sudden surge in imports. They normally come under the Safeguards Agreement, but the Agriculture Agreement has special provisions (Article 5) on safeguards.

Safeguards that applied to all products were included in the General Agreement on Tariffs and Trade (GATT), and there is a Safeguards Agreement in the Uruguay Round Agreement that created the WTO. The provisions can be used if a domestic industry is injured or threatened with injury caused by a surge in imports accompanied by a price fall.

In agriculture, unlike with normal safeguards:

• higher safeguards duties can be triggered automatically when import volumes rise above a certain level, or if prices fall below a certain level; and

• it is not necessary to demonstrate that serious injury is being caused to the domestic industry.

The special agricultural safeguard can only be used on products that were tariffied — which amount to less than 20% of all agricultural products (as defined by “tariff lines”). But they cannot be used on imports within the tariff quotas, and they can only be used if the government reserved the right to do so in its schedule of commitments on agriculture.

Agriculture Indebtedness - Radhakrishnan Committee

A short note is posted here. To view detailed recommendations please click on the link here.

Roots of the Problem

1.slowdown in the growth of the agricultural sector in the past two decades

2. An excessive proportion of the population is dependent on agriculture, resulting in increasing pressure on land, or a decline in the availability of land per agricultural worker. This lead to increase in smaller holdings of land.

3.Increasing stress on water resources.

4.Wide disparities between different states as regards the productivity and growth in agriculture.

5.Lack of availability of credit to small and medium farmers.

6. The seed-fertiliser technology seems to have exhausted its potential and is no longer cost efficient.

7. Inadequate public investment in the agricultural sector has also resulted in limited extension services.

8. Depletion in the quality of soil, groundwater and the growing pollution of river and canal water.

PM’s Package

• Announced in July 2006, it was to provide relief and rehabilitation to farmers in 31 distressed districts across four states of Andhra Pradesh, Karnataka, Kerala and Maharashtra.

• Package is around 17000 crores, with around 11,000 crore as subsidy/grant and the remaining as loans to be implemented over a three year period.

• The package includes a credit component, and a non-credit component which includes irrigation, watershed development, rainwater harvesting and check dams and extension services. The no-credit component aims to revive the livelihood base of the distressed farmers.

Problems in implementing the package :

The package is universal in nature and does not take into account the specificities of various districts, especially since the causes of distress vary across the districts.
There has been no coordination between different agencies implementing the schemes.
Some schemes have not been designed taking into account the felt needs of the households.
Projects had been delayed due to problems in obtaining sanctions.

What is to be done ?

• Agriculture needs to grow at 4%; long term growth to be sustained; cropping intensity and yields must rise substantially
• Additional investment in rural infrastructure, irrigation, agricultural research and extension; greater focus on rainfed areas; plan for National Rainfed Areas Authority
• More attention to marginal and small farmers; promotion of allied activities, development of rural non-farm sector, organisation of small and marginal farmers through collectives like Self Help Groups, etc

• Improvement in R&D in the farm sector

• Efforts to be made to resurrect rural credit agencies in both geographical spread as well delivery mechanisms. Need to improve institutional supply of credit as against the non-institutional supply, and to better the credit absorption capability of farmers .

• Need to moderate price related risks (whether they be induced due to the weather or market fluctuations) through different tariff mechanism.

Resurgent Russia - basic facts
As India and other energy importing countries struggle with runaway oil prices, Russia is basking in an unprecedented windfall of petrodollars.

Ten years ago, it was a $200-billion economy; this year it has crossed the $1.4 trillion mark. Russia’s per-capita gross domestic product has quadrupled to nearly $7,000. Today Russia is the eighth largest economy in the world in Purchasing Power Parity (PPP), according to the World Bank. Russia has the world’s second largest number of billionaires nest only to USA. Russia has overtaken Germany this year as Europe’s biggest car market.

The oil-driven gap between the rich and the poor continues to widen despite the general improvement in living standards. About 19 million Russians still live below the official poverty line. Ten per cent of the richest Russians today earn 16 times more than the poorest 10 per cent. In fact, social contrasts appear starker today in Russia than in India: the global Gini Index places Russia 13 positions behind India in the inequality of wealth distribution.

Under an ambitious programme of economic modernisation unveiled earlier this year, Russia is to be transformed from a resources-dependent to a science-based economy by 2020.

It includes establishment of “national champions” — vertically integrated state-controlled holding companies that will spearhead growth in high-tech industries, such as nanotechnologies, aviation, shipbuilding and nuclear energy. A network of technoparks, largely modelled on India’s Silicon Valley in Bangalore which Mr. Putin visited in 2004, is being set up across Russia.

National Action Plan on Climate Change
INDIA’S National Action Plan on Climate Change (NAPCC), has been unveiled recently by Prime Minister Manmohan Singh. China and other fast developing economies too have come out with their action plans.

After G-8 meeting at Hokkaido, Japan further deliberations are planned in Poland on climate change in December 2008 followed by the final round at Copenhagen in December 2009. These would form the basis for evolving a new treaty alternative to Kyoto Protocol expiring on 2012.

The salient features of our NAPCC are:

Firstly, it states that India’s per capita GHGs emission would at no point exceed that of the developed countries.

Secondly, India has stuck to its earlier stand of not committing to specific emission reduction targets or energy efficiency targets.

Thirdly, the plan would be implemented through eight missions, viz.,

(a) enhancing solar energy contribution in total energy mix,
(b) introducing energy efficiency steps,
(c) promoting sustainable habitats,
(d) saving Himalayan glaciers,
(e) water resource management,
(f) protecting mountain eco-systems,
(g) improving eco-system services and
(h) making agriculture more resilient and adaptable to climate change.

Regarding per capita emissions, the rich countries have to take into account that India’s per capita emission is just above one tonne compared to their average per capita emission of above 12 tonnes. This gives India enough headroom for development and industrialisation, which is very necessary to combat its poverty.

At present, nearly 80% of our energy comes from burning of fossil fuels — the greatest source of GHGs. The action plan talks about increasing the share of solar energy however, there is no mention of enhancing production of nuclear energy which is 3% (about 3,100MW) of our total energy.

Further, scientists have proved that if India installed 200,000 MW of nuclear power by 2020, it would save the world 145 million tonnes of carbon emissions. This is equal to the entire commitment of EU countries to reduce emissions under Kyoto Protocol. Let us learn from the example of France which has produced 42,000 MW of nuclear power in just 10 years starting 1989 to 1999. Today, 70% of its energy is nuclear.

On Growth and DevelopmentThe report was prepared by the Commission on Growth and Development, an independent body supported among others by the United Kingdom, the Netherlands and the World Bank.

The challenge therefore is to shift less developed countries into the category of high growth ones. Growth itself is necessary and is the foundation of everything. Without it there can be no redistributive justice.

After making a detailed analysis of 13 countries which have consistently maintained a growth rate of 7 per cent and over for 25 years, the report lists out some common socio-economic policies that each one of them has followed that are worth emulating by the less developed countries. The list of countries includes Botswana, Brazil, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Malta, Oman, Singapore, Taiwan and Thailand. India and Vietnam are poised to join this group shortly.

They benefited from globalisation
maintained macroeconomic stability

sustained high rates of savings and investment

they let markets allocate resources to a substantial extent and

had a committed, credible and competent government.

The Washington consensus of the 1990s also conditioned the rich countries’ advice to the developing world. Privatisation, free trade and free markets were its mantra.
In many countries including India and China such policies were never implemented in full. But even in countries that followed the free trade-free markets agenda there was a realisation of the role the state can play in development. The emphasis on the role of the ‘developmental state’ characterises most of its recommendations.

Top 10 challenges for India

India could be 40 times bigger by 2050, and may also have the potential to be larger than the US by that time. To achieve this, however, India needs to implement many changes. A global research report on ‘Ten Things for India to Achieve its 2050 Potential’, brought out by Goldman Sachs lists a number of things for India to do.

Here are the 10 top challenges for India:

1) Improve governance
2) Raise educational achievement
3) Increase quality and quantity of universities
4) Control inflation
5) Introduce a credible fiscal policy
6) Liberalise financial markets
7) Increase trade with neighbours
8) Increase agricultural productivity
9) Improve infrastructure
10) Improve environmental quality

Loan Waiver – Some pertinent Issues

PSU Banks are proxy for government

It is an issue of autonomy of public sector banks. In several ways the government character of these banks is comes out not just in the functions that are delegated to them by virtue of government ownership, but through the behaviour and actions of their top managements.

Autonomy for these banks has been a mirage. The Finance Minister has on more than one occasion ‘talked’ to the PSB chairmen into lowering interest rates even when the RBI’s monetary policy stance has been anti-inflationary and hence favoured higher interest rates.

Political compulsions for the Government

Agriculture has been a sensitive issue. The loan waiver scheme announced in the budget sought to make political capital for the ruling alliance. Loans lent by the Banks from their own resources were sought to be waived. The funds were to come from the budget.

No say for other stakeholders

The above is the outcome of a belief that government owned banks are an extension of the government and that they exist only to carry out their owners’ will. In popular perception, public sector banks are like the electricity boards dispensing free power to some classes of consumers and are generally adopting practices that run contrary to accepted commercial principles. The other stakeholders in a bank — depositors and employees — have hardly any say in matters such as loan waivers.
Need to develop a strong rural banking culture
Some argue that farm loan waiver scheme is a socially relevant and commercial banking principles and practices can be ignored for the sake of larger goals .It is also in the national interest to develop a strong rural banking edifice: waivers such as these can harm the repayment culture that took years to develop.

An avoidable lapse

Already there are indications that even farmers who would have repaid their loans are holding back hoping to get a waiver. It is also likely that banks will slow down their lending to agriculture, especially for financing tractors and equipment. These are medium term loans and the risks of political interference here are higher than in short-term crop loans.

There is an urgent need to spruce up the public relations machinery of the PSBs. SBI’s back tracking over the tractor loan circular was not unexpected. But surely it could have made a much better job of communicating the original intentions.

Reforms process suffers

The biggest loser in such futile exercises is the reform process. The Finance Minister and other policy makers probably do not get the vital feedback from the banks.

Second Green Revolution
A second green revolution must be undertaken to enhance agriculture productivity
The world today is faced with a situation of increased demand and a shortage in the supply of foodgrains, resulting in a spiralling of foodgrain prices and also possibly a difficult global food situation.

This is an urgent challenge of our times and a second green revolution that will enhance agricultural productivity as also adopt new technologies for the optimum utilisation of agricultural produce must be undertaken.

Pandit Jawaharlal Nehru said, “Everything can wait, but not agriculture.” This is of special relevance globally as the country was at a critical juncture striving hard to achieve food security and eradicate hunger and poverty.

There is a huge losses of agricultural produce due to the lack of post-harvest technology, infrastructure and storage facilities.In India, we are wasting more than what many other countries are able to produce. There is an urgent need to evolve new scientific methods for post-harvest operations, creating proper storage facilities and and food processing units close to production centres in rural areas.

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