People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 46

November 14, 2010



Profits Surge for MNCs, Perils for Indian Farmers


Vijoo Krishnan


A LOT has been said about the visit of Barack Obama, the US president to India. Corporate media were in their usual over-enthusiastic drive to bring to their audience the minutest details about the visit --- from where he stayed and what he ate to how many warships, planes and cars accompanied him and how a whopping 200 million dollars were spent per day for the visit (Rs 900 crore approximately x 10 days). Nor did they miss on the stories about his oratory skills and his wife’s graceful dance steps. Some coverage was also given to defence and strategic issues, the issue of ban on outsourcing, the jobs he took to the US and the support extended to an India that has “emerged” for sitting at the “high-table” of the UN Security Council. A section of the media and some columnists also referred in glowing terms to the enormous possibilities opened up for Indian agriculture and the advent of an “Ever-Green Revolution.” What, however, has not been reported is the nature of the “strategic cooperation” in agriculture and food security; food processing, farm-to-market linkages and agricultural extension, crop and weather forecasting. The unison with which the corporate media sang hosannas for the US president is understandable. They were representing their interests, just as they were safeguarding their interests while giving space for paid news. But what was missed in all the cacophony was the impact of the visit on Indian masses, our peasantry and the rural poor. Let us go through the contours of this “strategic cooperation.”




The Obama regime has maintained continuity with the preceding Bush regime in the basic thrust of US’s relations with India in agriculture. The dice is heavily loaded in favour of the predatory agribusinesses mainly based in the US, while our ruling classes also pushed the agenda of Indian corporate houses. Unmistakably, it is the India-US Knowledge Initiative in Agriculture (KIA) that determines the direction of “strategic cooperation” in agriculture. US monopolies in seed, food and retail trade, namely Monsanto, Archer-Daniels-Midland and WalMart, have representation on the KIA Board, in addition to the present day incarnation of the erstwhile Imperial Tobacco Company and others like FICCI and CII representing the interests of Indian businesses. Ironically, the board meant to deal with agriculture does not have a single representative of the peasantry.


Well in advance of the Obama visit, a meeting of the “US-India Agriculture Dialogue Steering Committee” took place. US under secretary of state for economic, energy and business affairs Robert D Hormats, US Department of Agriculture’s under secretary for farm and foreign agricultural services Jim Miller, deputy coordinator for development, Office of the Coordinator of Global Hunger and Food Security and US Department of State’s ambassador William Garvelink held the meeting along with an Indian delegation led by foreign secretary Nirupama Rao. The committee reportedly met to identify areas of cooperation for working groups on “strategic cooperation” in agriculture and food security, food processing, farm-to-market linkages and agricultural extension, crop and weather forecasting. The present set of negotiations are only aimed at operationalising the India-US MOU for cooperation in agriculture and food security which was signed, shrouded in secrecy well in advance of the Obama visit. It is only to take forward the vision that brought into existence the KIA.


The five-year-old KIA had come to an end on March 31, 2010, but is all set to get a three-year extension as the agriculture ministry took up the issue with the US authorities. This is despite the parliament’s standing committee on agriculture asking the agriculture ministry to review the implementation and achievements of the initiative. The committee, headed by CPI(M) leader Basudeb Acharia, noted that the scheme failed to spend much as grants offered by the US were not available. According to the committee, the KIA envisaged that matching grants would be received from the US side but has seen continuous low spending in the scheme during all three years of the eleventh plan and it was less than one third of the total outlay of Rs 50 crore. The agriculture ministry was not able to persuade the US to release matching grants in suitable proportions. Further, the committee rather harshly indicted the ministry’s failure to work towards a mutually beneficial arrangement. While this was the reality, US MNCs have used the opportunity and managed to infiltrate all Indian centres for agricultural research, extension and policy making structures. Although the KIA appears to be in cold storage for the time being, it succeeded in promoting unwanted US technologies in several farm universities and research centres, and also got the farm gates opened to American agribusinesses.


Of late, Dr Manmohan Singh and Obama have been harping on an “Ever-Green Revolution.” It is not surprising that the US-India Business Council (USIBC) talks of “growing agriculture” and the “noble objective” of an “Ever-Green Revolution” in its document titled Partners in Prosperity: Business Leading the Way, published on the eve of Obama visit. This carries forward the KIA’s stated objectives and sets the tone for “strategic cooperation in agriculture” in the coming years. This document also stresses on the need to encourage US companies to “showcase in India their own success stories of business sector intervention in agriculture and food processing.” It claims that this would ''raise awareness in a positive way about how 'best practices' and technologies can deliver greater efficiencies'' so that India could achieve the 'Ever-Green Revolution.' The USIBC unequivocally stated that the efforts to vitalise India’s agriculture sector “should be driven by business.” It means our policy makers are merely dancing to their tunes.




The unbridled access to Indian agriculture provided by the Knowledge Initiative in Agriculture has been systematically strengthened by the subversion of agricultural research in India and diluting the autonomy of Indian agricultural universities and research centres by forced collaborations between them and US agribusinesses. The direction of agricultural research in the country is now being altered to cater to the needs of MNCs driven by the sole motive of profit. Peasant agriculture is being sidelined by promoting technologies tailor-made to benefit corporate agriculture. The recent trend of laying undue emphasis on research GM crops, seen as central to the “Ever-Green Revolution,” is a direct result of such an intervention. The cooption of a section of agricultural scientists and researchers in these organisations into the paradigm sought by the agribusinesses on the KIA Board, and their unquestioning compliance to its recommendations, has also been achieved systematically.


One clear intention of the Obama visit is to expand the stranglehold of US agribusinesses in our countryside. Already the states ruled by the Congress as well as the BJP and their allies are going full steam ahead by superimposing over the public extension services (which they so meticulously dismantled over the last two decades) a network of extension services to be provided by predatory agribusinesses. The farm gates in the state of Rajasthan have already been opened up to Monsanto, DuPont, Bayer, PEPSICO, Cargill, SAB Miller, Lupin and some Indian companies. An MOU has been signed with Reuters for “sending advisories to farmers” on mobile phones. This is something Obama referred to in glowing terms before emphasising that Indian agriculture was ‘growing’ and that the time is ripe for the “Ever-Green Revolution.” Monsanto has a major maize project called Project Golden Rays in Rajasthan and the Project Sunshine in Gujarat where the states buy the hybrids from the company and distribute them to farmers, the expenditure incurred being financed by the Rashtriya Krishi Vikas Yojana. The Congress as well as the BJP and their allies converge on this policy of rolling the red carpet to these agribusinesses. What the Obama visit envisaged is to spread their web across the country and retain control of Indian agriculture and the nature of technology transfer in agriculture.


In the name of reducing post-harvest losses, there is talk of improving India’s ‘farm-to-market global supply chain’ which hints at business sector intervention in food processing and storage other than retailing per se. This is another sector which the big American companies are eyeing and the Indian government has also been talking the same language for quite some time. What one cannot miss in this context is that Mike Duke, CEO of the world's largest retailer WalMart Stores Inc, had come to India well in advance of Obama’s visit, drumming up support among Indian policy makers for the opening up of the multi-brand retail sector for FDI. WalMart has been pressing for removing the restrictions upon foreign companies investing in multi-brand retailing. For the purpose, Duke met the commerce minister Anand Sharma and Planning Commission deputy chairman Montek Singh Ahluwalia.




Organised retail accounts for only 6 per cent of the 450 billion dollars retail sector in India and at present the access to foreign firms in the sector is restricted. Most top retailers of the world see a lucrative market in India and have been asking us to ease the restrictions on foreign ownership in retail operations so that they could sell their agricultural and dairy products among other things. The above mentioned USIBC document also asked for opening up of multi-brand retail sector to ‘organised players.’ It claimed: “Study after study has shown, doing so would bring efficiency, infrastructure, technology, and knowhow to Indian farmers, food processors, food service providers, and other suppliers.” The USIBC also noted the “massive market opportunity” in Indian cities for retail operations. The Department of Industrial Policy and Promotion (DIPP) articulated similar concerns when in a discussion paper it stated emphatically that “The agriculture sector needs well functioning markets to drive growth, employment and economic prosperity in rural areas.” Opening up retail trade for FDI remains a top priority issue for the global retail giants. Millions of Indians depend on this sector as their small shops provide the main source of livelihood for them, catering to the demands of more than one billion people. Their livelihoods will be put into jeopardy by any such move.


The USIBC document specifically stated that the Joint Agriculture Dialogue should be backed with both “resources and solid deliverables,” and suggested the lowering of tariff and non-tariff barriers which are ''affecting trade in fresh fruits and vegetables, poultry, pistachios, dairy products, and horticultural products. We also seek reduced customs duties on items such as processing equipment, restaurant equipment, and related goods.” US MNCs and US Grain Council have been insisting on lifting trade barriers. The easing of controls on dairy products, for instance, will seriously compromise the livelihood of an estimated 90 million people, a majority of whom are women. Women are estimated as comprising 75 million of the employees in dairy sector and they will be out of job as they cannot compete with the heavily subsidised American dairy sector. Dairy sector is also of crucial importance to the small and marginal farmers as well as the landless poor, and a significant source of income for millions of families. The very existence of the vibrant network of cooperative milk federations and women’s groups will be under threat. This sector is already witnessing a crisis with the increasing costs of cattle-feed and fodder, and imports of cheaper skimmed milk powder and butter oil despite a glut in domestic production. The flooding of Indian markets with cheap dairy products from the US will further push the millions of farmers and agricultural labourers into indebtedness and perpetual poverty, forcing them to give up agriculture and dairying.


The agriculture ministry has said it has put on hold the imports of dairy products on the ground that these products may be made from the milk of the cattle fed with feed containing blood meal, internal organs of animals or a non-vegetarian diet containing beef. It said, “India would have to be sensitive to religious sentiments.” Ironically, thus, the decision was not on the ground that it will compromise the livelihoods of millions of our farmers. In the same breath, the agriculture minister stated that India has an “open mind” on the matter but the dairy products will be subject to protocol and verification. Thus, if scientific studies prove that it does not affect the milk, he gave enough indication that their import will be allowed. The directions of the negotiations are clearly in favour of taking forward the neo-liberal agenda of free trade. In the context of huge subsidies to American agriculture, such moves will help the US products swamp the Indian market. This will mean a surge in profits for US MNCs --- an increase in trade surplus for the US agriculture and perils for our peasantry. The US wants to revitalise its wilting economy on the strength of the Indian market, at the expense of Indian farmers and consumers.


The stress on the rather innocuous looking crop and weather forecasting, water utilisation, and the blackout of the substantive issues of negotiations, is a clever move by both the governments. Only time will tell how these moves provide precise information to the benefit of American food exporters and traders. The agriculture minister has recently gone on record that the talks with US Department of Agriculture were inconclusive but would continue. He, however, said they discussed the “general issues” like mango export and the high phytosanitary fee making it unviable for India. The USDA is basically interested in export of barley and pet food, especially for dogs. The minister also added that barley import may benefit beer makers like United Breweries. Are the people of India so naïve as to believe that barley, mango, beer and dog food was what occupied the major share of time in the discussions between him and the USDA? If we don’t miss the wood for the trees, the direction of negotiations clearly points to the takeover of Indian agriculture by MNCs and Indian business houses.