Microfinance groups can effectively improve agriculture, water resources and standard of life of an individual, community….etc as various empirical studies has pointed out. People’s contribution along with assistance from banks and government could work well to stimulate investment in rural agricultural activities. Obtaining fertilizers at lower rate than market rate and easy availability of credits can provide relief to farming community. As any micro credit programme there is mutual sharing of plans, actions, and crises due to which members are able to react quickly to emergency situations and mitigate loss.
Today, there are about 60,000 retail credit outlets of the formal banking sector in the rural areas comprising the 12,000 branches of district level cooperative banks, over 14,000 branches of the Regional Rural Banks. On an average, there is at least one retail credit outlet for about 5,000 rural people. In the mist of the apparent inadequacies of the formal financial system to cater to the needs of the rural poor, NABARD sponsored an action research project in 1987 through an NGO called MYRADA. Encouraged by the results of field experiments in group based approach for lending to the poor, NABARD launched a pilot project in 1991-1992 in partnership with NGOs for promoting and grooming self help groups of homogenous members and making savings from existing banks and within the existing legal frame work. Steady progress of the pilot project led to the mainstreaming of the SHG-Bank linkage programme in 1996 as normal banking activity of the banks with widespread acceptance. The rapid progress achieved in SHG formation, which has now turned in to an empowerment movement among women across the country, laid the foundation for emergence of MFIs in India.
Delivering small-scale loans and savings mechanisms can be particularly challenging in areas of low population density, where the distance between clients is great, transportation networks are often poor and low income levels tend to translate into impracticably small financial transactions. This phenomenon prevails in India to a large extent. India has seen man farmer suicides during the last few years; the reasons attributed are many, ranging from pro rich approach of World trade Organization to lack of access to proper credit facilities.
The identification of agricultural microfinance is a significant remaining challenge to financial sectors that serve the majority of the poor spurred CGAP to undertake an analysis of current practices. CGAP in 2002 began desk research, consultant site visits, and stakeholder consultations to identify promising agricultural operations. The study was based on Kyrgyzstan, Bolivia, Peru, Mozambique and Kenya.
Summary of the studies are as follows;
Bai Tushum Financial Foundation (BTF) began agricultural credit operation Kyrgyzstan in 2000, after it assumed the foundering, three-year-old portfolios of several small agricultural credit associations. Through dedicated attention to building a sustainable institution and creative solutions to cultural and legislative barriers, BTF has quickly evolved into a strong local institution serving a range of rural and urban borrowers’ needs. BTF has half of its loan portfolio in agriculture, offering crop production and livestock loans, as well as a mixture of agro-processing, trade, and mortgage loan products. Yet it is profitable, achieving 230 percent operational self-sufficiency in its first year of operation. The institution’s commitment to agricultural lending appears to have superseded profit maximization however, with trade and other loans sometimes cross-subsidizing the agricultural portfolio.
Confianza, Peru is a small regulated financial institution in central Peru that provides a mixture of rural, urban, small business, agricultural, housing, and consumer loans to low-income clients. Confianza’s loan portfolio was almost exclusively group loans for agricultural purposes. Confianza was forced to make a set of swift, substantial changes in order to survive due to plunging commodity prices and combination of other factors. The organization’s approach demonstrates that agricultural lending can be viable when combined with other rural and urban financial services, making small-farmer clients attractive when competition is strong in urban areas. By the end of 2002, the organization was financially sustainable, lending more than US $4 million annually.
Equity Bank Limited (Equity), Kenya provides microfinance services to more than 250,000 low and moderate income citizens in Nairobi and Kenya’s Central province via a network of branch offices and mobile banking units. In 1994, it began tailoring its loan and saving products to a microfinance market, eventually adding two loan products for tea and dairy farmers that are secured by agribusiness contracts. By the end of 2003, the deposit base of equity had grown o US $44 million and its outstanding loan portfolio topped $22 million.
In very recent years some recognition has been given to food production by urban residents. And urban agriculture is a concept that evokes contradictory images. However, as urbanization overtakes demographic trends in developing countries, it is critical that policy makers in developing countries, it is critical that policy makers in developing countries and urban planners in particular heighten their awareness and appreciation of the important contribution that urban food and non-food production is making to the diversity of livelihood activities of the urban poor and the quality of life in urban centers in developing countries (Remenyi, 1999, and UNDP,1996)
It is only relatively recently that microfinance providers in Bangladesh have begun to target the needs of the urban poor for financial services. The Grameen bank restricts itself to rural areas. BRAC, on the other hand, initiated an urban credit program for slum dwellers in 1997. In a city (Dhaka) of two million people below the poverty line the BRAC share is only 2.5% of the poor. BRAC urban credit program is targeted at women slum dwellers, especially recent arrivals who have least knowledge of where land might available for planting or animal production, and with the least opportunities to use their rural production skills.
In addition to BRAC, ASA and SafeSave, willing cooperation was forthcoming from the Credit and Development Forum (CDF) in Bangladesh. CDF is an umbrella body representing microfinance and micro enterprise development programs and NGOs in Bangladesh. It is electronically networked b email to all 850 member institutions.
The project’s impact on the agricultural sector, however, was modest, largely because of the scattered nature of its activities and future interventions in Bangladesh will require a radical rethink to maximize overall project impact.
Sunday, September 14, 2008
Friday, August 29, 2008
The sad state of minorities in India
Large number of young Muslims are being victimised by police on the charge of being involved in terrorist acts across the country, according to a public tribunal.
In its report, a people's tribunal on atrocities committed against minorities in the name of fighting terrorism noted that such instances were reported more from Maharashtra, Gujarat, Madhya Pradesh, Andhra Pradesh and Rajasthan. In most of the cases, the persons picked up are not shown to be arrested by the police until many days after their arrest in gross violation of the law. Their families are also not informed about their arrest. In many cases, they have been tortured in police custody and made to 'confess' and sign blank papers, the report said, adding that the police has often been humiliating Muslim detenues on the ground of their religion. The tribunal, comprising retired judges, academicians and media persons, said the testimonies it heard showed widespread communalisation of the police across states in the country.It also flayed the media for uncritically publicising allegations levelled by the police.
This has resulted in the destruction of the lives and reputations of a large number of persons picked up by the police, who have later been found to be innocent, it added. The tribunal observed that citizens who are picked up by police officers for interrogation are subject to repeated harassment and torture, and are implicated in false cases even after release or acquittal. They are further subjected to mental and physical torture.
Lamenting on the lack of accountability, the tribunal said unfortunately, the courts are going along with this behaviour of the police and are virtually ignoring allegations of torture in police custody. Criticising the Human Rights Commission for not standing up against such violations, the jury felt that by and large the complaints were being treated with casual indifference. "They either do not take up such cases on the ground that they are the subject matter of court proceedings or just ask for a routine police report without getting any independent investigation done on such serious charges of human right violations."Some of the recommendations put forth by the tribunal are:
State Human Rights Commission and National Human Rights Commission and State Minority Commission should take up such matters seriously and come to independent finding itself and awarding adequate compensation in suitable Cases. It should not wait for somebody to approach the commission but should take action Suo-moto.
Courts must not routinely grant police or judicial custody, but must examine at that stage whether there is any credible evidence against the accused. The courts should keep in mind that no reliance should be placed on the alleged confession of the accused even for consideration of bail/remand.
Whenever any person is released by the police for want of evidence against him the courts should award adequate compensation for destruction of his life and reputation. In such cases, the courts should examine if the prosecution was malafide, and if it is so found, the police officials involved must be held accountable and the compensation payable to the victim must be recovered from the officers concerned.
Independent police complaints authorities must be immediately set up at all levels in line with the Supreme Court's judgment in the Police Reforms case.
Trial courts be provided with a medical officer, who can immediately examine any accused complaining of torture in police or judicial custody.
The number of trial courts must be greatly increased to ensure speedy conclusions of Trials. Investigations must also be concluded within the shortest possible time and extensions of time must not be routinely given.
The police, during interrogation or investigation, cannot get blank papers signed by the accused; Police officers found indulging in such practice must be severely punished.
Narco analysis is a psychologically and physically third degree method of investigation, which is not even scientifically proven. It must not be allowed on persons, particularly without consent.
The media, both print as well electronic, should be very careful not to publicise mere allegations or claims of the police, which can irreparably damage reputations of innocent persons without subjecting them to basic scrutiny.
India must immediately sign the International Criminal Court Treaty, known as the Rome Statute which has been signed by most countries.
Courtesy: Rediff.com, 28/8/2008
In its report, a people's tribunal on atrocities committed against minorities in the name of fighting terrorism noted that such instances were reported more from Maharashtra, Gujarat, Madhya Pradesh, Andhra Pradesh and Rajasthan. In most of the cases, the persons picked up are not shown to be arrested by the police until many days after their arrest in gross violation of the law. Their families are also not informed about their arrest. In many cases, they have been tortured in police custody and made to 'confess' and sign blank papers, the report said, adding that the police has often been humiliating Muslim detenues on the ground of their religion. The tribunal, comprising retired judges, academicians and media persons, said the testimonies it heard showed widespread communalisation of the police across states in the country.It also flayed the media for uncritically publicising allegations levelled by the police.
This has resulted in the destruction of the lives and reputations of a large number of persons picked up by the police, who have later been found to be innocent, it added. The tribunal observed that citizens who are picked up by police officers for interrogation are subject to repeated harassment and torture, and are implicated in false cases even after release or acquittal. They are further subjected to mental and physical torture.
Lamenting on the lack of accountability, the tribunal said unfortunately, the courts are going along with this behaviour of the police and are virtually ignoring allegations of torture in police custody. Criticising the Human Rights Commission for not standing up against such violations, the jury felt that by and large the complaints were being treated with casual indifference. "They either do not take up such cases on the ground that they are the subject matter of court proceedings or just ask for a routine police report without getting any independent investigation done on such serious charges of human right violations."Some of the recommendations put forth by the tribunal are:
State Human Rights Commission and National Human Rights Commission and State Minority Commission should take up such matters seriously and come to independent finding itself and awarding adequate compensation in suitable Cases. It should not wait for somebody to approach the commission but should take action Suo-moto.
Courts must not routinely grant police or judicial custody, but must examine at that stage whether there is any credible evidence against the accused. The courts should keep in mind that no reliance should be placed on the alleged confession of the accused even for consideration of bail/remand.
Whenever any person is released by the police for want of evidence against him the courts should award adequate compensation for destruction of his life and reputation. In such cases, the courts should examine if the prosecution was malafide, and if it is so found, the police officials involved must be held accountable and the compensation payable to the victim must be recovered from the officers concerned.
Independent police complaints authorities must be immediately set up at all levels in line with the Supreme Court's judgment in the Police Reforms case.
Trial courts be provided with a medical officer, who can immediately examine any accused complaining of torture in police or judicial custody.
The number of trial courts must be greatly increased to ensure speedy conclusions of Trials. Investigations must also be concluded within the shortest possible time and extensions of time must not be routinely given.
The police, during interrogation or investigation, cannot get blank papers signed by the accused; Police officers found indulging in such practice must be severely punished.
Narco analysis is a psychologically and physically third degree method of investigation, which is not even scientifically proven. It must not be allowed on persons, particularly without consent.
The media, both print as well electronic, should be very careful not to publicise mere allegations or claims of the police, which can irreparably damage reputations of innocent persons without subjecting them to basic scrutiny.
India must immediately sign the International Criminal Court Treaty, known as the Rome Statute which has been signed by most countries.
Courtesy: Rediff.com, 28/8/2008
Wednesday, July 23, 2008
Behind The Opposition of Nuclear Deal-Part II
The Deal has been pushed forward in India in an anti-democratic manner without approval of the Parliament - in fact in the teeth of opposition by a large majority of parliamentarians. Power from nuclear energy is a failed project in developed countries and the eagerness of the Prime Minister to clinch the Deal fails to generate any enthusiasm among the common people of India. Neither is nuclear energy a solution to global warming as some experts make it out to be. On the contrary the entire nuclear fuel cycle is fraught with danger and exposes human beings to hazardous radiation. The world is yet to find a safe way for disposal of radioactive waste, a factor which is constraining the growth of nuclear power programmes in the developed countries.
The US, UK, Canada, Germany, France, Japan all seem to be reviewing their nuclear energy programmes and commissioning of new nuclear power plants in all these countries has almost come to a stand still. Australia, the biggest supplier of Uranium in the world, is yet to initiate a nuclear power programme. Everybody has realized there is no future in nuclear energy. Advanced countries are looking for alternatives. But because of the parochial vision of our government the ruling class of this country has become obsessed with the nuclear option without any clear understanding of its implications. There seems to be a superficial feeling that this Deal is somehow going to enhance the stature of India in the community of nations. Hence it is matter of vanity and false sense of pride with possibly no concrete benefits for the people of this country.
A Planning Commission study shows that even with the best possible estimates of capacity addition in power generation after the Deal is through, the country is not going to increase its share of electricity from nuclear energy from the present 3% to more than 7-9%. And this would come at a huge cost -- financially and politically. We would be required to bring our foreign policy in line with the US policy as has been already exhibited by India being forced to vote against Iran in the IAEA meeting.
The Indo-US Nuclear Deal is meant to serve the interests of the global nuclear power industry and is a ploy to keep India away from staking claims to shrinking fossil fuel reserves in proportion to its large population so that these reserves may last for some more time for the rich countries.
The undue importance given to the Indo-US Nuclear Deal as opposed to the Iran-Pakistan-India gas pipeline, even though gas is predicted to be the major source of power globally for the next two to three decades, raises questions about the motives of the Indian government.
In the face of unprecedented pressure mounted by the US, the Left Front, a partner in the UPA alliance, must be congratulated for successfully stalling the Indo-US Nuclear Deal up till now. The Deal is now stuck at the stage of finalizing an India specific agreement with the IAEA. The Left party leaders have displayed foresight in foiling the US hegemonic designs in South Asia even though they have yet to take an ideological position against the nuclear power programme. It would make more political, economic and environmental sense for India to pursue a path of self reliant renewable energy programme for fulfilling its need rather than the elusive nuclear energy for which we'll always be at the mercy of external agencies. But then India will have to give up its own hegemonic designs of acting as a regional military super power.
Clean source of energy will have to be accompanied by clean politics. India will have to work on the agenda of regional peace, disarmament and stability rather than converting it into a region of warfare. If Manmohan Singh embarks on this twin objective programme, he would be remembered for his wisdom more than he would be if he were to finalize the Indo-US Nuclear Deal. He would favourably alter the course of history of not only this nation but also possibly the world towards a cleaner, safer and secure future.
Courtesy :Dr Sandeep Pandey.
The US, UK, Canada, Germany, France, Japan all seem to be reviewing their nuclear energy programmes and commissioning of new nuclear power plants in all these countries has almost come to a stand still. Australia, the biggest supplier of Uranium in the world, is yet to initiate a nuclear power programme. Everybody has realized there is no future in nuclear energy. Advanced countries are looking for alternatives. But because of the parochial vision of our government the ruling class of this country has become obsessed with the nuclear option without any clear understanding of its implications. There seems to be a superficial feeling that this Deal is somehow going to enhance the stature of India in the community of nations. Hence it is matter of vanity and false sense of pride with possibly no concrete benefits for the people of this country.
A Planning Commission study shows that even with the best possible estimates of capacity addition in power generation after the Deal is through, the country is not going to increase its share of electricity from nuclear energy from the present 3% to more than 7-9%. And this would come at a huge cost -- financially and politically. We would be required to bring our foreign policy in line with the US policy as has been already exhibited by India being forced to vote against Iran in the IAEA meeting.
The Indo-US Nuclear Deal is meant to serve the interests of the global nuclear power industry and is a ploy to keep India away from staking claims to shrinking fossil fuel reserves in proportion to its large population so that these reserves may last for some more time for the rich countries.
The undue importance given to the Indo-US Nuclear Deal as opposed to the Iran-Pakistan-India gas pipeline, even though gas is predicted to be the major source of power globally for the next two to three decades, raises questions about the motives of the Indian government.
In the face of unprecedented pressure mounted by the US, the Left Front, a partner in the UPA alliance, must be congratulated for successfully stalling the Indo-US Nuclear Deal up till now. The Deal is now stuck at the stage of finalizing an India specific agreement with the IAEA. The Left party leaders have displayed foresight in foiling the US hegemonic designs in South Asia even though they have yet to take an ideological position against the nuclear power programme. It would make more political, economic and environmental sense for India to pursue a path of self reliant renewable energy programme for fulfilling its need rather than the elusive nuclear energy for which we'll always be at the mercy of external agencies. But then India will have to give up its own hegemonic designs of acting as a regional military super power.
Clean source of energy will have to be accompanied by clean politics. India will have to work on the agenda of regional peace, disarmament and stability rather than converting it into a region of warfare. If Manmohan Singh embarks on this twin objective programme, he would be remembered for his wisdom more than he would be if he were to finalize the Indo-US Nuclear Deal. He would favourably alter the course of history of not only this nation but also possibly the world towards a cleaner, safer and secure future.
Courtesy :Dr Sandeep Pandey.
Wednesday, July 9, 2008
"Why do I Oppose Indo-U.S Nuclear Deal?"
I am apprehensive about this deal because of various other reasons as well. Let us consider any treaty or international law with regard to the “respect” the US has been “endowing” upon them!
They have signed CTBT, but not ratified it ,
They have not signed Kyoto protocol,
They don’t care at all about the Geneva Convention ( Check for Rumsfeld, with the torn Geneva Convention Papers, in his hands, in Google!).
They withdrew from the International Court of Justice in 1986,
They have Nelson Mandela listed in the “terrorist list” (After i came to know this, i just could not stop laughing for an hour so. Probably in the 50’s Gandhi, would have been featured in the list!)
They knew there was no WMD in Iraq, but went on to attack them on the basis of their own false allegations!
IAEA- to which India is planning to hold talks about the 123 agreement – have been constantly bringing out reports that Iran doesn’t have enough capabilities to make a nuclear bomb. US is not convinced about this either; with their sheer conviction based on some biblical blathering about Rapture, they are devising an attack on Iran.
It is dangerous. If the US is telling Iran or North Korea against developing nuclear weapons. Even George Bush has described as evil the weapons of mass destruction. So it is wrong for the US to help any other countryThere is an awful lot of noise in the media these days because the dogmatic left parties in India are opposing the Nuclear Deal, the 123 agreement with United States. Left, according to the media is retrograde; they are still stuck in the Soviet era, the cold war hangover. The “rising” India needs energy, which, according to the present Congress government can only be solved by nuclear energy. The left claims, it is more of a strategic deal, the Hyde Act passed by the US Congress will subvert the deal and so on…
So where do I stand on this? I will not get into the technical aspects of the deal, but, the fact is that I don’t really need to delve into technicalities to oppose this deal. I have enough and more reasons that will eclipse the “technical advantage” this deal may provide.
First of all, I would like to ask: Where is that gas pipeline from Iran which we planned for? It has been totally pushed to oblivion; the only minister in the Congress government who pushed this plan was the former (please note!) petroleum minister Mani Shankar Aiyar. He has been booted out of this portfolio a while ago and now, heads the sports ministry, and is in logger heads with all the sports bureaucrats in India. It is Congress’s internal issue that he was booted from the post. But, he actively campaigned for the Iran pipeline, and after he was made to leave, the petroleum ministry never uttered a word about this pipeline! Sources say: the American administration was not very happy with Mani; the self proclaimed leftist in the congress government. So that’s what he gets: a bloody boot! Having Mani as the petroleum minister who wanted to realize the pipeline would have irked the American administration as they are waiting for an opportunity to bring “Democracy in Iran” and make the government in Iran “accountable to the people”. As we all know, America is doing a tremendous job with Iraq! So we have been made to completely forget this pipeline by the media, as it is not acceptable to America and we still claim we have an independent foreign policy.
I am trying to dissect the sheer apprehension in me, about India signing a nuclear deal with them. Vikram Sood writes in The Hindu: “For the U.S., it was part of a larger game plan. The deal was a means to cap India’ s strategic programme, provide access to India’s growing defence market, and become a strategic partner in U.S. foreign policy initiatives globally. One of the abiding primary bipartisan U.S. objectives has been to restrict, roll back and cap the Indian strategic deterrent.”
I still believe that this more of a strategic partnership than it being a simple nuclear deal. Dogmatic, you would say. US, with a tie-up with General Musharaff has been meddling around with our neighbor for a long while, but has not gained anything in particular, other than some hostility from the ultra-right wing groups in the region. With Russia and China building up strategic partnership through Shanghai Cooperation Organisation , joined military exercises and forthright comments from the hard man Putin against the unipolar world, the leftover major player in this area is India, with a susceptible Prime Minister in Manmohan Singh. So, this deal is definitely more than a simple nuclear deal!
So what is wrong with having a nuclear deal which is not exactly a nuclear deal alone? Vikram Sood goes on writing in The Hindu: “The deal was supposed to give India several benefits but the pressure to sign the deal by a specific deadline mostly came from the Americans, almost as if India was being hustled into this. The old principle of never ever signing anything in a hurry was abandoned. The Japanese, for instance, spent seven years discussing the deal before signing it. The China-U.S. 123 agreement of 1985 specifically states that both sides would observe the principle of international law under which neither party could invoke a domestic law to justify failure to perform a treaty. The India-U.S. 123 agreement does not have this safeguard.” If Japan, an outright ally of US, could take seven years in studying and charting out the repercussions of such a deal, why are we especially Manmohan Singh in a hurry? Is it that US needs an ally in us when they attack Iran? Russia and China have big business interests in Iran, they would not come out in support for the attack. As India has been restricted in laying the gas pipeline, we are not at stake if they attack Iran and some coaxing/bullying will enable USA to get us on their side. Though it is unlikely that we will send any troops or ammunitions, but we keeping silent, when such a blatant aggression takes place is more than enough for us to be on their side. So, there is no wonder US is pushing for another deal, along with the Nuclear one called Access and Cross Servicing Agreement, which will inevitably provide logistical support for US from different locations in India. I am not confident enough to make a statement on the part of our people about their knowledge that Iran shares a boundary with Afghanistan, and a logistical base in India for the US of A will not be a bad idea for their future plans of offering a “shock and awe” treatment for Iran!
They have been blatantly attacking nations doting all over the globe! They also maintain around 700 military settlements across continents. Their view of the world has a more uni-polar nature, where they tend to boss around.
So, where is our assurance that the US of A will abide all those clauses in the 123 Agreement? Their credentials from the past does not assure me that they will.
It is ridiculous and callous that our media is trying to simplify the issue as a dogmatic subservience. It shows the struggle of Indian Left, which failed to carve an identity of their own in this country. So, the middle class in India, catered by columns from the ilk of Tavleen Singh, who came on an NDTV discussion, with her perky mannerisms said, “ the model of democracy which US brought about in Afghanistan is wonderful”, are misled.
Her claim almost put me in bouts of laughter, pushed me in to a sense of sympathy, which later, turned into rage. I wonder, if there is any difference between her and a US spokesperson. So, it is not surprising to see the Indian, angrezi-speaking, middle class, supporting the Congress in their act of signing the deal, and vilifying the Left. I believe that it is crass on the part of the Indian media, to reduce this issue as a mere dogmatic subservience. When media affirm this point time and again, they fail to consider the point the Left is trying to raise, and is restricting them from having a voice of their own. This voice raised by the Left is to be considered, when Russia and China hardly matters as sources of inspiration for them anymore.
To conclude, personally, I am reluctant to accept the “clauses” offered by an American system, which I know is totally flawed, corrupted, and brazen on all fronts!
http://tushizap.wordpress.com/2007/09/07/why-i-oppose-the-nulcear-deal/
They have signed CTBT, but not ratified it ,
They have not signed Kyoto protocol,
They don’t care at all about the Geneva Convention ( Check for Rumsfeld, with the torn Geneva Convention Papers, in his hands, in Google!).
They withdrew from the International Court of Justice in 1986,
They have Nelson Mandela listed in the “terrorist list” (After i came to know this, i just could not stop laughing for an hour so. Probably in the 50’s Gandhi, would have been featured in the list!)
They knew there was no WMD in Iraq, but went on to attack them on the basis of their own false allegations!
IAEA- to which India is planning to hold talks about the 123 agreement – have been constantly bringing out reports that Iran doesn’t have enough capabilities to make a nuclear bomb. US is not convinced about this either; with their sheer conviction based on some biblical blathering about Rapture, they are devising an attack on Iran.
It is dangerous. If the US is telling Iran or North Korea against developing nuclear weapons. Even George Bush has described as evil the weapons of mass destruction. So it is wrong for the US to help any other countryThere is an awful lot of noise in the media these days because the dogmatic left parties in India are opposing the Nuclear Deal, the 123 agreement with United States. Left, according to the media is retrograde; they are still stuck in the Soviet era, the cold war hangover. The “rising” India needs energy, which, according to the present Congress government can only be solved by nuclear energy. The left claims, it is more of a strategic deal, the Hyde Act passed by the US Congress will subvert the deal and so on…
So where do I stand on this? I will not get into the technical aspects of the deal, but, the fact is that I don’t really need to delve into technicalities to oppose this deal. I have enough and more reasons that will eclipse the “technical advantage” this deal may provide.
First of all, I would like to ask: Where is that gas pipeline from Iran which we planned for? It has been totally pushed to oblivion; the only minister in the Congress government who pushed this plan was the former (please note!) petroleum minister Mani Shankar Aiyar. He has been booted out of this portfolio a while ago and now, heads the sports ministry, and is in logger heads with all the sports bureaucrats in India. It is Congress’s internal issue that he was booted from the post. But, he actively campaigned for the Iran pipeline, and after he was made to leave, the petroleum ministry never uttered a word about this pipeline! Sources say: the American administration was not very happy with Mani; the self proclaimed leftist in the congress government. So that’s what he gets: a bloody boot! Having Mani as the petroleum minister who wanted to realize the pipeline would have irked the American administration as they are waiting for an opportunity to bring “Democracy in Iran” and make the government in Iran “accountable to the people”. As we all know, America is doing a tremendous job with Iraq! So we have been made to completely forget this pipeline by the media, as it is not acceptable to America and we still claim we have an independent foreign policy.
I am trying to dissect the sheer apprehension in me, about India signing a nuclear deal with them. Vikram Sood writes in The Hindu: “For the U.S., it was part of a larger game plan. The deal was a means to cap India’ s strategic programme, provide access to India’s growing defence market, and become a strategic partner in U.S. foreign policy initiatives globally. One of the abiding primary bipartisan U.S. objectives has been to restrict, roll back and cap the Indian strategic deterrent.”
I still believe that this more of a strategic partnership than it being a simple nuclear deal. Dogmatic, you would say. US, with a tie-up with General Musharaff has been meddling around with our neighbor for a long while, but has not gained anything in particular, other than some hostility from the ultra-right wing groups in the region. With Russia and China building up strategic partnership through Shanghai Cooperation Organisation , joined military exercises and forthright comments from the hard man Putin against the unipolar world, the leftover major player in this area is India, with a susceptible Prime Minister in Manmohan Singh. So, this deal is definitely more than a simple nuclear deal!
So what is wrong with having a nuclear deal which is not exactly a nuclear deal alone? Vikram Sood goes on writing in The Hindu: “The deal was supposed to give India several benefits but the pressure to sign the deal by a specific deadline mostly came from the Americans, almost as if India was being hustled into this. The old principle of never ever signing anything in a hurry was abandoned. The Japanese, for instance, spent seven years discussing the deal before signing it. The China-U.S. 123 agreement of 1985 specifically states that both sides would observe the principle of international law under which neither party could invoke a domestic law to justify failure to perform a treaty. The India-U.S. 123 agreement does not have this safeguard.” If Japan, an outright ally of US, could take seven years in studying and charting out the repercussions of such a deal, why are we especially Manmohan Singh in a hurry? Is it that US needs an ally in us when they attack Iran? Russia and China have big business interests in Iran, they would not come out in support for the attack. As India has been restricted in laying the gas pipeline, we are not at stake if they attack Iran and some coaxing/bullying will enable USA to get us on their side. Though it is unlikely that we will send any troops or ammunitions, but we keeping silent, when such a blatant aggression takes place is more than enough for us to be on their side. So, there is no wonder US is pushing for another deal, along with the Nuclear one called Access and Cross Servicing Agreement, which will inevitably provide logistical support for US from different locations in India. I am not confident enough to make a statement on the part of our people about their knowledge that Iran shares a boundary with Afghanistan, and a logistical base in India for the US of A will not be a bad idea for their future plans of offering a “shock and awe” treatment for Iran!
They have been blatantly attacking nations doting all over the globe! They also maintain around 700 military settlements across continents. Their view of the world has a more uni-polar nature, where they tend to boss around.
So, where is our assurance that the US of A will abide all those clauses in the 123 Agreement? Their credentials from the past does not assure me that they will.
It is ridiculous and callous that our media is trying to simplify the issue as a dogmatic subservience. It shows the struggle of Indian Left, which failed to carve an identity of their own in this country. So, the middle class in India, catered by columns from the ilk of Tavleen Singh, who came on an NDTV discussion, with her perky mannerisms said, “ the model of democracy which US brought about in Afghanistan is wonderful”, are misled.
Her claim almost put me in bouts of laughter, pushed me in to a sense of sympathy, which later, turned into rage. I wonder, if there is any difference between her and a US spokesperson. So, it is not surprising to see the Indian, angrezi-speaking, middle class, supporting the Congress in their act of signing the deal, and vilifying the Left. I believe that it is crass on the part of the Indian media, to reduce this issue as a mere dogmatic subservience. When media affirm this point time and again, they fail to consider the point the Left is trying to raise, and is restricting them from having a voice of their own. This voice raised by the Left is to be considered, when Russia and China hardly matters as sources of inspiration for them anymore.
To conclude, personally, I am reluctant to accept the “clauses” offered by an American system, which I know is totally flawed, corrupted, and brazen on all fronts!
http://tushizap.wordpress.com/2007/09/07/why-i-oppose-the-nulcear-deal/
Friday, June 27, 2008
How To Write And Publish Your Own Book
There are great rewards when writing a book for the first time. Free ArticlesThere is a great sense of accomplishment by the individual person once they have a complete manuscript in their hand.The other reward is obviously money; if you write a good book that is marketed correctly you will receive a reward.Depending on how well you market your book will depend on the size of the pay cheque.The first step to writing a good book is…Writing the book.Start on your computer or with a piece of paper and start writing; don’t go back to correct spelling mistakes, grammatical errors, sentences that don’t make sense. Just keep writing.Set yourself a target each day, say you want to write 20 pages in a day, then stick to it and do it.In a short amount of time, hopefully in less than two weeks you will have a rough manuscript.The next step is to get your book proof read and copy edited. The copy editor will make any grammatical changes, correct spelling mistakes and get your book reading well.You then need to design the layout of your book, this is important because the book must have sufficient gaps, payout in the correct paces so the readers don’t get tired.You then need to design a cover for your book, you can do this yourself or you can find a cover designer on the Internet.Next you need to get an ISBN number; you can usually find these on the Internet. You can buy these from a few sources; the best price I have seen them for is $55.00.All books need printing, and you need to find a printing company, I would suggest Gardeners or Book Force. Upload your book to their websites; they will take care of all the printing and distribution for you.The penultimate step is to deposit your books in the legal deposit library; this is a requirement that 6 copies of each book written need to be deposited to qualify as an actual book.The final step is to register a book registration company; in the UK it’s Nielsons Book Data. You need to find out what it is in the USA. If you are a resident there.You all done, your book will appear on Amazon and other online book shops, all you have to do is go out and promote your book.Get out on the road, hire a PR agency, get on your local radio station, write to the newspapers.Good Luck and Good Writing.
Christopher Angus is a writer and promotes the following sites: http://www.mdhsasbestosconsultants.com/ http://www.the-printing-company.com/ http://www.everest-oxfordshire.co.uk/. » Read more articles by Chris Angus
Tuesday, June 10, 2008
Food, Water And Fuel:Three Fundamental Necessities Of Life In Jeopardy.
We are at the crossroads of the most serious economic and social crisis in modern history. The process of global impoverishment unleashed at the outset of the 1980s debt crisis has reached a major turning point, leading to the simultaneous outbreak of famines in all major regions of the developing World.
There are many complex features underlying the global economic crisis pertaining to financial markets, the decline in production, the collapse of State institutions and the rapid development of a profit-driven war economy. What is rarely mentioned in this analysis, is how this global economic restructuring forcibly impinges on three fundamental necessities of life: food, water and fuel.
The provision of food, water and fuel is a precondition of civilized society: they are necessary factors for the survival of the human species. In recent years, the prices of these three variables has increased dramatically at the global level, with devastating economic and social consequences.
These three essential goods or commodities, which in a real sense determine the reproduction of economic and social life on planet earth, are under the control of a small number of global corporations and financial institutions.
Both the State as well as the gamut of international organizations --often referred to as the "international community"-- serve the unfettered interests of global capitalism. The main intergovernmental bodies including the United Nations, the Bretton Woods institutions and the World Trade Organizations (WTO) have endorsed the New World Order on behalf of their corporate sponsors. Governments in both developed and developing countries have abandoned their historical role of regulating key economic variables as well as ensuring a minimum livelihood for their people.
Protest movements directed against the hikes in the prices of food and gasoline have erupted simultaneously in different regions of the World. The conditions are particularly critical in Haiti, Nicaragua, Guatemala, India, Bangladesh. Spiraling food and fuel prices in Somalia have precipitated the entire country into a situation of mass starvation, coupled with severe water shortages. A similar and equally serious situation prevails in Ethiopia.
Other countries affected by spiraling food prices include Indonesia, the Philippines, Liberia, Egypt, Sudan, Mozambique, Zimbabwe, Kenya, Eritrea, a long list of impoverished countries..., not to mention those under foreign military occupation including Iraq, Afghanistan and Palestine.
Deregulation
The provision of food, water and fuel are no longer the object of governmental or intergovernmental regulation or intervention, with a view to alleviating poverty or averting the outbreak of famines.
The fate of millions of human beings is managed behind closed doors in the corporate boardrooms as part of a profit driven agenda.
And because these powerful economic actors operate through a seemingly neutral and "invisible" market mechanism, the devastating social impacts of engineered hikes in the prices of food, fuel and water are casually dismissed as the result of supply and demand considerations.
Nature of the Global Economic and Social Crisis
Largely obfuscated by official and media reports, both the " food crisis" and the " oil crisis" are the result of the speculative manipulation of market values by powerful economic actors.
We are not dealing with distinct and separate food, fuel and water "crises" but with a global process of economic and social restructuring.
The dramatic price hikes of these three essential commodities is not haphazard. All three variables, including the prices of basic food staples, water for production and consumption and fuel are the object of a process of deliberate and simultaneous market manipulation.
At the heart of the food crisis is the rising price of food staples coupled with a dramatic increase in the price of fuel.
Concurrently, the price of water which is an essential input into agricultural and industrial production, social infrastructure, public sanitation and household consumption has increased abruptly as a result of a Worldwide movement to privatize water resources.
We are dealing with a major economic and social upheaval, an unprecedented global crisis, characterized by the triangular relationship between water, food and fuel: three fundamental variables, which together affect the very means of human survival.
In very concrete terms, these price hikes impoverish and destroy peoples lives. Moreover, the Worldwide collapse in living standards is occurring at a time of war. It is intimately related to the military agenda. The war in the Middle East bears a direct relationship to the control over oil and water reserves.
While water is not at present an internationally trade commodity in the same way as oil and food staples, it is also the object of market manipulation through the privatization of water.
The economic and financial actors operating behind closed doors, are:
- the major Wall Street banks and financial houses, including the institutional speculators which play a direct role in commodity markets including the oil and food markets
-The Anglo-American oil giants, including British Petroleum (BP), ExxonMobil, Chevron-Texaco, Royal Dutch Shell
-The biotech-agribusiness conglomerates, which own the intellectual property rights on seeds and farm inputs. The biotech companies are also major actors on the NY and Chicago mercantile exchanges.
-The water giants including Suez, Veolia and Bechtel-United Utilities, involved in the extensive privatization of the World's water resources.
-The Anglo-American military-industrial complex which includes the big five US defense contractors (Lockheed Martin, Raytheon, Northrop Grunman, Boeing and General Dynamics) in alliance with British Aerospace Systems Corporation (BAES) constitutes a powerful overlapping force, closely aligned with Wall Street, the oil giants and the agribusiness-biotech conglomerates.
The Oil Price Bubble
The movement in global prices on the New York and Chicago mercantile exchanges bears no relationship to the costs of producing oil. The spiraling price of crude oil is not the result of a shortage of oil. It is estimated that the cost of a barrel of oil in the Middle East does not exceed 15 dollars. The costs of a barrel of oil extracted from the tar sands of Alberta, Canada, is of the order of $30 (Antoine Ayoub, Radio Canada, May 2008)
The price of crude oil is currently in excess of $120 a barrel. This market price is largely the result of the speculative onslaught.
Fuel enters into the production of virtually all areas of manufacturing, agriculture and the services economy. The hikes in fuel prices have contributed, in all major regions of the World, to precipitating tens of thousands of small and medium sized businesses into bankruptcy as well as undermining and potentially paralyzing the channels of domestic and international trade.
The increased cost of gasoline at the retail level is leading to the demise of local level economies, increased industrial concentration and a massive centralization of economic power in the hands of a small number of global corporations. In turn, the hikes in fuel backlash on the urban transit system, schools and hospitals, the trucking industry, intercontinental shipping, airline transportation, tourism, recreation and most public services.
Inflation
The rise in fuel prices unleashes a broader inflationary process which results in a compression of real purchasing power and a consequent Worldwide decline in consumer demand. All major sectors of society, including the middle classes in the developed countries are affected.
These price movements are dictated by the commodity markets. They are the result of speculative trade in index funds, futures and options on major commodity markets including the London ICE, the New York and Chicago mercantile exchanges.
The dramatic price hikes are not the result of a shortage of fuel, food or water.
This upheaval in the global economy is deliberate. The State's economic and financial policies are controlled by private corporate interests. Speculative trade is not the object of regulatory policies. The economic depression contributes to wealth formation, to enhancing the power of a handful of global corporations
According to William Engdahl;
"... At least 60% of the 128 per barrel price of crude oil comes from unregulated futures speculation by hedge funds, banks and financial groups using the London ICE Futures and New York NYMEX futures exchanges and uncontrolled inter-bank or Over-The-Counter trading to avoid scrutiny. US margin rules of the government's Commodity Futures Trading Commission allow speculators to buy a crude oil futures contract on the Nymex, by having to pay only 6% of the value of the contract. At today's price of $128 per barrel, that means a futures trader only has to put up about $8 for every barrel. He borrows the other $120. This extreme 'leverage' of 16 to 1 helps drive prices to wildly unrealistic levels and offset bank losses in sub-prime and other disasters at the expense of the overall population. (See More on the real reason behind high oil prices, Global Research, May 2008)
Among the main players in the speculative market for crude oil are Goldman Sachs, Morgan Stanley, British Petroleum (BP), the French banking conglomerate Société Générale, Bank of America, the largest Bank in the US, and Switzerland's Mercuria. (See Miguel Angel Blanco, La Clave, Madrid, June 2008)
British Petroleum controls the London based International Petroleum Exchange (IPE), which is one of the world's largest energy futures and options exchanges. Among IPE's major shareholders are Goldman Sachs and Morgan Stanley.
According to Der Spiegel, Morgan Stanley is one of the main institutional actors in the London based speculative oil market (IPE). According to Le Monde, France's Société Générale together with Bank of America and Deutsche Bank have been involved in spreading rumors with a view to pushing up the price of crude oil. (See Miguel Angel Blanco, La Clave, Madrid, June 2008)
Spiraling Food Prices
The global food crisis, characterized by major hikes in the prices of basic food staples, has spearheaded millions of people around the World into starvation and chronic deprivation.
According to the FAO, the price of grain staples has increased by 88% since March 2007. The price of wheat has increased by 181% over a three year period. The price of rice has increased by 50% over the last three months (See Ian Angus, Food Crisis: "The greatest demonstration of the historical failure of the capitalist model", Global Research, April 2008):
The price of rice has tripled over a five year period, from approximately 600$ a ton in 2003 to more than 1800$ a ton in May 2008. (see chart below)
"The most popular grade of Thailand rice sold for $198 a ton, five years ago and $323 a ton a year ago. In April 2008, the price hit $1,000. Increases are even greater on local markets — in Haiti, the market price of a 50 kilo bag of rice doubled in one week at the end of March 2008. These increases are catastrophic for the 2.6 billion people around the world who live on less than US$2 a day and spend 60% to 80% of their incomes on food. Hundreds of millions cannot afford to eat" (Ibid)
The main actors in the grain market are Cargill and Archer Daniels Midland (ADM). These two corporate giants control a large share of the global grain market. They are also involved in speculative transactions in futures and options on the NYMEX and the Chicago Board of Trade (CBOT). In the US, "the world's largest grower of GM crops, Cargill, ADM and competitor Zen Noh between them control 81 per cent of all maize exports and 65 per cent of all soyabean exports." ( Greg Muttitt, Control Freaks, Cargill and ADM, The Ecologist, March, 2001)
Background of Agricultural Reform
Since the early 1980s coinciding with the onslaught of the debt crisis, the gamut of neoliberal macroeconomic policy reforms have largely contributed to undermining local agriculture. Over the last 25 years, food farming in developing countries has been destabilized and destroyed by the imposition of IMF-World Bank reforms.
Commodity dumping of grain surpluses from the US, Canada and the European Union has led to the demise of food self-sufficiency and the destruction of the local peasant economy. In turn, this process has resulted in multibillion dollar profits for Western agribusiness, resulting from import contracts by developing countries, which are no longer able to produce their own food.
These preexisting historical conditions of mass poverty have been exacerbated and aggravated by the recent surge in grain prices, which have led in some cases to the doubling of the retail price of food staples.
The price hikes has also been exacerbated by the use of corn to produce ethanol. In 2007, global production of corn was of the order of 12.32 billion bushels of which 3.2 billion were used for ethanol production. Almost 40 percent of corn production in the US will be channeled towards ethanol
Genetically Modified Seeds
Coinciding with the establishment the World Trade Organization (WTO) in 1995, another important historical change has occurred in the structure of global agriculture.
Under the articles of agreement of the World Trade Organization (WTO)), the food giants have been granted unrestricted freedom to enter the seeds' markets of developing countries.
The acquisition of exclusive "intellectual property rights" over plant varieties by international agro-industrial interests, also favors the destruction of bio-diversity.
Acting on behalf of a handful of biotech conglomerates GMO seeds have been imposed on farmers, often in the context of "food aid programs". In Ethiopia, for instance, kits of GMO seeds were handed out to impoverished farmers with a view to rehabilitating agricultural production in the wake of a major drought.
The GMO seeds were planted, yielding a harvest. But then the farmer came to realize that the GMO seeds could not be replanted without paying royalties to Monsanto, Arch Daniel Midland et al.
Then, the farmers discovered that the seeds would harvest only if they used the farm inputs including the fertilizer, insecticide and herbicide, produced and distributed by the biotech agribusiness companies. Entire peasant economies were locked into the grip of the agribusiness conglomerates.
The main biotech giants in GMO include Monsanto, Syngenta, Aventis, DuPont, Dow Chemical, Cargill and Arch Daniel Midland.
Breaking The Agricultural Cycle
With the widespread adoption of GMO seeds, a major transition has occurred in the structure and history of settled agriculture since its inception 10,000 years ago.
The reproduction of seeds at the village level in local nurseries has been disrupted by the use of genetically modified seeds. The agricultural cycle, which enables farmers to store their organic seeds and plant them to reap the next harvest has been broken. This destructive pattern – invariably resulting in famine – is replicated in country after country leading to the Worldwide demise of the peasant economy.
The FAO- World Bank Consensus
At the June 2008 FAO Rome Summit on the food crisis, politicians and economic analysts alike embraced the free market consensus: the outbreak of famines was presented as a result of the usual supply, demand and climatic considerations, beyond the control of policy-makers. "The solution": channel emergency relief to affected areas under the auspices of the World Food Program (WFP). Do not intervene with the interplay of market forces.
Ironically, these " expert opinions" are refuted by the data on global grain production: the FAO forecasts for world cereal production point to a record output in 2008.
Contradicting their own textbook explanations, World prices are, according to the World Bank, expected to remain high, despite the forcasted increased supply of food staples.
State regulation of the prices of food staples and gasoline is not considered an option in the corridors of the FAO and the World Bank. And of course that is what is taught in the economics departments of America's most prestigious universities.
Meanwhile, local level farmgate prices barely cover production costs, spearheading the peasant economy into bankruptcy.
The Privatization of Water
According to UN sources, which vastly underestimate the seriousness of the water crisis, one billion people worldwide (15% of the World population) have no access to clean water "and 6,000 children die every day because of infections linked to unclean water" (BBC News, 24 March 2004)
A handful of global corporations including Suez, Veolia, Bechtel-United Utilities, Thames Water and Germany's RWE-AG are acquiring control and ownership over public water utilities and waste management. Suez and Veolia hold about 70 percent of the privatized water systems Worldwide.
The privatization of water under World Bank auspices feeds on the collapse of the system of public distribution of safe tap drinking water: "The World Bank serves the interests of water companies both through its regular loan programs to governments, which often come with conditions that explicitly require the privatization of water provision..." (Maude Barlow and Tony Clarke, Water Privatization: The World Bank's Latest Market Fantasy, Polaris Institute, Ottawa, 2004))
"The modus operandi [in India] is clear -- neglect development of water resources [under World Bank budget austerity measures], claim a "resource crunch" and allow existing systems to deteriorate." (Ann Ninan, Private Water, Public Misery, India Resource Center April 16, 2003)
Meanwhile, the markets for bottled water have been appropriated by a handful of corporations including Coca-Cola, Danone, Nestlé and PepsiCo. These companies not only work hand in glove with the water utility companies, they are linked up to the agribusiness-biotech companies involved in the food industry. Tap water is purchased by Coca-Cola from a municipal water facility and then resold on a retail basis. It is estimated that in the US, 40 percent of bottled water is tap water. (See, Jared Blumenfeld, Susan Leal The real cost of bottled water, San Francisco Chronicle, February 18, 2007)
In India, Coca-Cola has contributed to the depletion of ground water to the detriment of local communities:
"Communities across India living around Coca-Cola's bottling plants are experiencing severe water shortages, directly as a result of Coca-Cola's massive extraction of water from the common groundwater resource. The wells have run dry and the hand water pumps do not work any more. Studies, including one by the Central Ground Water Board in India, have confirmed the significant depletion of the water table.
When the water is extracted from the common groundwater resource by digging deeper, the water smells and tastes strange. Coca-Cola has been indiscriminately discharging its waste water into the fields around its plant and sometimes into rivers, including the Ganges, in the area. The result has been that the groundwater has been polluted as well as the soil. Public health authorities have posted signs around wells and hand pumps advising the community that the water is unfit for human consumption....
Tests conducted by a variety of agencies, including the government of India, confirmed that Coca-Cola products contained high levels of pesticides, and as a result, the Parliament of India has banned the sale of Coca-Cola in its cafeteria. However, Coca-Cola not only continues to sell drinks laced with poisons in India (that could never be sold in the US and EU), it is also introducing new products in the Indian market. And as if selling drinks with DDT and other pesticides to Indians was not enough, one of Coca-Cola's latest bottling facilities to open in India, in Ballia, is located in an area with a severe contamination of arsenic in its groundwater.(India Resource Center, Coca-Cola Crisis in India, undated)
In developing countries, the hikes in fuel prices have increased the costs of boiling tap water by households, which in turn favors the privatization of water resources.
In the more advanced phase of water privatization, the actual ownership of lakes and rivers by private corporations is contemplated. Mesopotamia was not only invaded for its extensive oil resources, the Valley of the two rivers (Tigris and Euphrates) has extensive water reserves.
Concluding Remarks
We are dealing with a complex and centralized constellation of economic power in which the instruments of market manipulation have a direct bearing on the lives of millions of people.
The prices of food, water, fuel are determined at the global level, beyond the reach of national government policy. The price hikes of these three essential commodities constitute an instrument of "economic warfare", carried out through the "free market" on the futures and options exchanges.
These hikes in the prices of food, water and fuel are contributing in a very real sense to "eliminating the poor" through "starvation deaths". The sugar coated bullets of the "free market" kill our children. The act to kill is instrumented in a detached fashion through computer program trading on the commodity exchanges, where the global prices of rice, wheat and corn are decided upon.
'The Commission on Population Growth and the American Future'
But we are not dealing solely with market concepts. The outbreak of famines in different parts of the World, resulting from spiraling food and fuel prices have broad strategic and geopolitical implications.
President Richard Nixon at the outset of his term in office in 1969 asserted "his belief that overpopulation gravely threatens world peace and stability." Henry Kissinger, who at the time was Nixon's National Security adviser, directed various agencies of government to jointly undertake “a study of the impact of world population growth on U.S. security and overseas interests.”
In March 1970, the U.S. Congress set up a Commission on Population Growth and the American Future. (See Center for Research on Population and Security). The Commission was no ordinary Task Force. It integrated representatives from USAID, the State Department and the Department of Agriculture with CIA and Pentagon officials. Its objective was not to assist developing countries but rather to curb World population with a view to serving US strategic and national security interests. The Commission also viewed population control as a means to ensuring a stable and secure environment for US investors as well as gaining control over developing countries' mineral and petroleum resources.
This Commission completed its work in December 1974 and circulated a classified document entitled National Security Study Memorandum 200: Implications of Worldwide Population Growth for U.S. Security and Overseas Interests" to "designated Secretaries and Agency heads for their review and comments." In November 1975, the report and its recommendations were endorsed by President Gerald Ford.
Kissinger had indeed intimated in the context of the National Security Study Memorandum 200 (NSSSM 200) that the recurrence of famines, disease and war could constitute a de facto instrument of population control.
Although the NSSM 200 report did not assign, for obvious reasons, an explicit policy role to famine formation, it nonetheless intimated that the occurrence of famines could, under certain circumstances, provide a de facto solution to overpopulation:
"Accordingly, those countries where large-scale hunger and malnutrition are already present face the bleak prospect of little, if any, improvement in the food intake in the years ahead barring a major foreign financial food aid program, more rapid expansion of domestic food production, reduced population growth or some combination of all three. Worse yet, a series of crop disasters could transform some of them into classic Malthusian cases with famines involving millions of people.
While foreign assistance probably will continue to be forthcoming to meet short-term emergency situations like the threat of mass starvation, it is more questionable whether aid donor countries will be prepared to provide the sort of massive food aid called for by the import projections on a long-term continuing basis.
Reduced population growth rates clearly could bring significant relief over the longer term.....
In the extreme cases where population pressures lead to endemic famine, food riots, and breakdown of social order, those conditions are scarcely conducive to systematic exploration for mineral deposits or the long-term investments required for their exploitation. Short of famine, unless some minimum of popular aspirations for material improvement can be satisfied, and unless the terms of access and exploitation persuade governments and peoples that this aspect of the international economic order has "something in it for them," concessions to foreign companies are likely to be expropriated or subjected to arbitrary intervention. Whether through government action, labor conflicts, sabotage, or civil disturbance, the smooth flow of needed materials will be jeopardized. Although population pressure is obviously not the only factor involved, these types of frustrations are much less likely under conditions of slow or zero population growth."
(1974 National Security Study Memorandum 200: Implications of Worldwide Population Growth for U.S. Security and Overseas Interests". (emphasis added)
The report concludes with a couple of key questions pertaining to the role of food as "an instrument of national power", which could be used in the pursuit of US strategic interests.
"On what basis should such food resources then be provided? Would food be considered an instrument of national power? Will we be forced to make choices as to whom we can reasonably assist, and if so, should population efforts be a criterion for such assistance? Is the U.S. prepared to accept food rationing to help people who can't/won't control their population growth?" (Ibid, emphasis added)In the words of Henry Kissinger: "Control oil and you control nations; control food and you control the people."
© Copyright Michel Chossudovsky, Global Research, 2008
The url address of this article is: www.globalresearch.ca/index.php?context=va&aid=9191
There are many complex features underlying the global economic crisis pertaining to financial markets, the decline in production, the collapse of State institutions and the rapid development of a profit-driven war economy. What is rarely mentioned in this analysis, is how this global economic restructuring forcibly impinges on three fundamental necessities of life: food, water and fuel.
The provision of food, water and fuel is a precondition of civilized society: they are necessary factors for the survival of the human species. In recent years, the prices of these three variables has increased dramatically at the global level, with devastating economic and social consequences.
These three essential goods or commodities, which in a real sense determine the reproduction of economic and social life on planet earth, are under the control of a small number of global corporations and financial institutions.
Both the State as well as the gamut of international organizations --often referred to as the "international community"-- serve the unfettered interests of global capitalism. The main intergovernmental bodies including the United Nations, the Bretton Woods institutions and the World Trade Organizations (WTO) have endorsed the New World Order on behalf of their corporate sponsors. Governments in both developed and developing countries have abandoned their historical role of regulating key economic variables as well as ensuring a minimum livelihood for their people.
Protest movements directed against the hikes in the prices of food and gasoline have erupted simultaneously in different regions of the World. The conditions are particularly critical in Haiti, Nicaragua, Guatemala, India, Bangladesh. Spiraling food and fuel prices in Somalia have precipitated the entire country into a situation of mass starvation, coupled with severe water shortages. A similar and equally serious situation prevails in Ethiopia.
Other countries affected by spiraling food prices include Indonesia, the Philippines, Liberia, Egypt, Sudan, Mozambique, Zimbabwe, Kenya, Eritrea, a long list of impoverished countries..., not to mention those under foreign military occupation including Iraq, Afghanistan and Palestine.
Deregulation
The provision of food, water and fuel are no longer the object of governmental or intergovernmental regulation or intervention, with a view to alleviating poverty or averting the outbreak of famines.
The fate of millions of human beings is managed behind closed doors in the corporate boardrooms as part of a profit driven agenda.
And because these powerful economic actors operate through a seemingly neutral and "invisible" market mechanism, the devastating social impacts of engineered hikes in the prices of food, fuel and water are casually dismissed as the result of supply and demand considerations.
Nature of the Global Economic and Social Crisis
Largely obfuscated by official and media reports, both the " food crisis" and the " oil crisis" are the result of the speculative manipulation of market values by powerful economic actors.
We are not dealing with distinct and separate food, fuel and water "crises" but with a global process of economic and social restructuring.
The dramatic price hikes of these three essential commodities is not haphazard. All three variables, including the prices of basic food staples, water for production and consumption and fuel are the object of a process of deliberate and simultaneous market manipulation.
At the heart of the food crisis is the rising price of food staples coupled with a dramatic increase in the price of fuel.
Concurrently, the price of water which is an essential input into agricultural and industrial production, social infrastructure, public sanitation and household consumption has increased abruptly as a result of a Worldwide movement to privatize water resources.
We are dealing with a major economic and social upheaval, an unprecedented global crisis, characterized by the triangular relationship between water, food and fuel: three fundamental variables, which together affect the very means of human survival.
In very concrete terms, these price hikes impoverish and destroy peoples lives. Moreover, the Worldwide collapse in living standards is occurring at a time of war. It is intimately related to the military agenda. The war in the Middle East bears a direct relationship to the control over oil and water reserves.
While water is not at present an internationally trade commodity in the same way as oil and food staples, it is also the object of market manipulation through the privatization of water.
The economic and financial actors operating behind closed doors, are:
- the major Wall Street banks and financial houses, including the institutional speculators which play a direct role in commodity markets including the oil and food markets
-The Anglo-American oil giants, including British Petroleum (BP), ExxonMobil, Chevron-Texaco, Royal Dutch Shell
-The biotech-agribusiness conglomerates, which own the intellectual property rights on seeds and farm inputs. The biotech companies are also major actors on the NY and Chicago mercantile exchanges.
-The water giants including Suez, Veolia and Bechtel-United Utilities, involved in the extensive privatization of the World's water resources.
-The Anglo-American military-industrial complex which includes the big five US defense contractors (Lockheed Martin, Raytheon, Northrop Grunman, Boeing and General Dynamics) in alliance with British Aerospace Systems Corporation (BAES) constitutes a powerful overlapping force, closely aligned with Wall Street, the oil giants and the agribusiness-biotech conglomerates.
The Oil Price Bubble
The movement in global prices on the New York and Chicago mercantile exchanges bears no relationship to the costs of producing oil. The spiraling price of crude oil is not the result of a shortage of oil. It is estimated that the cost of a barrel of oil in the Middle East does not exceed 15 dollars. The costs of a barrel of oil extracted from the tar sands of Alberta, Canada, is of the order of $30 (Antoine Ayoub, Radio Canada, May 2008)
The price of crude oil is currently in excess of $120 a barrel. This market price is largely the result of the speculative onslaught.
Fuel enters into the production of virtually all areas of manufacturing, agriculture and the services economy. The hikes in fuel prices have contributed, in all major regions of the World, to precipitating tens of thousands of small and medium sized businesses into bankruptcy as well as undermining and potentially paralyzing the channels of domestic and international trade.
The increased cost of gasoline at the retail level is leading to the demise of local level economies, increased industrial concentration and a massive centralization of economic power in the hands of a small number of global corporations. In turn, the hikes in fuel backlash on the urban transit system, schools and hospitals, the trucking industry, intercontinental shipping, airline transportation, tourism, recreation and most public services.
Inflation
The rise in fuel prices unleashes a broader inflationary process which results in a compression of real purchasing power and a consequent Worldwide decline in consumer demand. All major sectors of society, including the middle classes in the developed countries are affected.
These price movements are dictated by the commodity markets. They are the result of speculative trade in index funds, futures and options on major commodity markets including the London ICE, the New York and Chicago mercantile exchanges.
The dramatic price hikes are not the result of a shortage of fuel, food or water.
This upheaval in the global economy is deliberate. The State's economic and financial policies are controlled by private corporate interests. Speculative trade is not the object of regulatory policies. The economic depression contributes to wealth formation, to enhancing the power of a handful of global corporations
According to William Engdahl;
"... At least 60% of the 128 per barrel price of crude oil comes from unregulated futures speculation by hedge funds, banks and financial groups using the London ICE Futures and New York NYMEX futures exchanges and uncontrolled inter-bank or Over-The-Counter trading to avoid scrutiny. US margin rules of the government's Commodity Futures Trading Commission allow speculators to buy a crude oil futures contract on the Nymex, by having to pay only 6% of the value of the contract. At today's price of $128 per barrel, that means a futures trader only has to put up about $8 for every barrel. He borrows the other $120. This extreme 'leverage' of 16 to 1 helps drive prices to wildly unrealistic levels and offset bank losses in sub-prime and other disasters at the expense of the overall population. (See More on the real reason behind high oil prices, Global Research, May 2008)
Among the main players in the speculative market for crude oil are Goldman Sachs, Morgan Stanley, British Petroleum (BP), the French banking conglomerate Société Générale, Bank of America, the largest Bank in the US, and Switzerland's Mercuria. (See Miguel Angel Blanco, La Clave, Madrid, June 2008)
British Petroleum controls the London based International Petroleum Exchange (IPE), which is one of the world's largest energy futures and options exchanges. Among IPE's major shareholders are Goldman Sachs and Morgan Stanley.
According to Der Spiegel, Morgan Stanley is one of the main institutional actors in the London based speculative oil market (IPE). According to Le Monde, France's Société Générale together with Bank of America and Deutsche Bank have been involved in spreading rumors with a view to pushing up the price of crude oil. (See Miguel Angel Blanco, La Clave, Madrid, June 2008)
Spiraling Food Prices
The global food crisis, characterized by major hikes in the prices of basic food staples, has spearheaded millions of people around the World into starvation and chronic deprivation.
According to the FAO, the price of grain staples has increased by 88% since March 2007. The price of wheat has increased by 181% over a three year period. The price of rice has increased by 50% over the last three months (See Ian Angus, Food Crisis: "The greatest demonstration of the historical failure of the capitalist model", Global Research, April 2008):
The price of rice has tripled over a five year period, from approximately 600$ a ton in 2003 to more than 1800$ a ton in May 2008. (see chart below)
"The most popular grade of Thailand rice sold for $198 a ton, five years ago and $323 a ton a year ago. In April 2008, the price hit $1,000. Increases are even greater on local markets — in Haiti, the market price of a 50 kilo bag of rice doubled in one week at the end of March 2008. These increases are catastrophic for the 2.6 billion people around the world who live on less than US$2 a day and spend 60% to 80% of their incomes on food. Hundreds of millions cannot afford to eat" (Ibid)
The main actors in the grain market are Cargill and Archer Daniels Midland (ADM). These two corporate giants control a large share of the global grain market. They are also involved in speculative transactions in futures and options on the NYMEX and the Chicago Board of Trade (CBOT). In the US, "the world's largest grower of GM crops, Cargill, ADM and competitor Zen Noh between them control 81 per cent of all maize exports and 65 per cent of all soyabean exports." ( Greg Muttitt, Control Freaks, Cargill and ADM, The Ecologist, March, 2001)
Background of Agricultural Reform
Since the early 1980s coinciding with the onslaught of the debt crisis, the gamut of neoliberal macroeconomic policy reforms have largely contributed to undermining local agriculture. Over the last 25 years, food farming in developing countries has been destabilized and destroyed by the imposition of IMF-World Bank reforms.
Commodity dumping of grain surpluses from the US, Canada and the European Union has led to the demise of food self-sufficiency and the destruction of the local peasant economy. In turn, this process has resulted in multibillion dollar profits for Western agribusiness, resulting from import contracts by developing countries, which are no longer able to produce their own food.
These preexisting historical conditions of mass poverty have been exacerbated and aggravated by the recent surge in grain prices, which have led in some cases to the doubling of the retail price of food staples.
The price hikes has also been exacerbated by the use of corn to produce ethanol. In 2007, global production of corn was of the order of 12.32 billion bushels of which 3.2 billion were used for ethanol production. Almost 40 percent of corn production in the US will be channeled towards ethanol
Genetically Modified Seeds
Coinciding with the establishment the World Trade Organization (WTO) in 1995, another important historical change has occurred in the structure of global agriculture.
Under the articles of agreement of the World Trade Organization (WTO)), the food giants have been granted unrestricted freedom to enter the seeds' markets of developing countries.
The acquisition of exclusive "intellectual property rights" over plant varieties by international agro-industrial interests, also favors the destruction of bio-diversity.
Acting on behalf of a handful of biotech conglomerates GMO seeds have been imposed on farmers, often in the context of "food aid programs". In Ethiopia, for instance, kits of GMO seeds were handed out to impoverished farmers with a view to rehabilitating agricultural production in the wake of a major drought.
The GMO seeds were planted, yielding a harvest. But then the farmer came to realize that the GMO seeds could not be replanted without paying royalties to Monsanto, Arch Daniel Midland et al.
Then, the farmers discovered that the seeds would harvest only if they used the farm inputs including the fertilizer, insecticide and herbicide, produced and distributed by the biotech agribusiness companies. Entire peasant economies were locked into the grip of the agribusiness conglomerates.
The main biotech giants in GMO include Monsanto, Syngenta, Aventis, DuPont, Dow Chemical, Cargill and Arch Daniel Midland.
Breaking The Agricultural Cycle
With the widespread adoption of GMO seeds, a major transition has occurred in the structure and history of settled agriculture since its inception 10,000 years ago.
The reproduction of seeds at the village level in local nurseries has been disrupted by the use of genetically modified seeds. The agricultural cycle, which enables farmers to store their organic seeds and plant them to reap the next harvest has been broken. This destructive pattern – invariably resulting in famine – is replicated in country after country leading to the Worldwide demise of the peasant economy.
The FAO- World Bank Consensus
At the June 2008 FAO Rome Summit on the food crisis, politicians and economic analysts alike embraced the free market consensus: the outbreak of famines was presented as a result of the usual supply, demand and climatic considerations, beyond the control of policy-makers. "The solution": channel emergency relief to affected areas under the auspices of the World Food Program (WFP). Do not intervene with the interplay of market forces.
Ironically, these " expert opinions" are refuted by the data on global grain production: the FAO forecasts for world cereal production point to a record output in 2008.
Contradicting their own textbook explanations, World prices are, according to the World Bank, expected to remain high, despite the forcasted increased supply of food staples.
State regulation of the prices of food staples and gasoline is not considered an option in the corridors of the FAO and the World Bank. And of course that is what is taught in the economics departments of America's most prestigious universities.
Meanwhile, local level farmgate prices barely cover production costs, spearheading the peasant economy into bankruptcy.
The Privatization of Water
According to UN sources, which vastly underestimate the seriousness of the water crisis, one billion people worldwide (15% of the World population) have no access to clean water "and 6,000 children die every day because of infections linked to unclean water" (BBC News, 24 March 2004)
A handful of global corporations including Suez, Veolia, Bechtel-United Utilities, Thames Water and Germany's RWE-AG are acquiring control and ownership over public water utilities and waste management. Suez and Veolia hold about 70 percent of the privatized water systems Worldwide.
The privatization of water under World Bank auspices feeds on the collapse of the system of public distribution of safe tap drinking water: "The World Bank serves the interests of water companies both through its regular loan programs to governments, which often come with conditions that explicitly require the privatization of water provision..." (Maude Barlow and Tony Clarke, Water Privatization: The World Bank's Latest Market Fantasy, Polaris Institute, Ottawa, 2004))
"The modus operandi [in India] is clear -- neglect development of water resources [under World Bank budget austerity measures], claim a "resource crunch" and allow existing systems to deteriorate." (Ann Ninan, Private Water, Public Misery, India Resource Center April 16, 2003)
Meanwhile, the markets for bottled water have been appropriated by a handful of corporations including Coca-Cola, Danone, Nestlé and PepsiCo. These companies not only work hand in glove with the water utility companies, they are linked up to the agribusiness-biotech companies involved in the food industry. Tap water is purchased by Coca-Cola from a municipal water facility and then resold on a retail basis. It is estimated that in the US, 40 percent of bottled water is tap water. (See, Jared Blumenfeld, Susan Leal The real cost of bottled water, San Francisco Chronicle, February 18, 2007)
In India, Coca-Cola has contributed to the depletion of ground water to the detriment of local communities:
"Communities across India living around Coca-Cola's bottling plants are experiencing severe water shortages, directly as a result of Coca-Cola's massive extraction of water from the common groundwater resource. The wells have run dry and the hand water pumps do not work any more. Studies, including one by the Central Ground Water Board in India, have confirmed the significant depletion of the water table.
When the water is extracted from the common groundwater resource by digging deeper, the water smells and tastes strange. Coca-Cola has been indiscriminately discharging its waste water into the fields around its plant and sometimes into rivers, including the Ganges, in the area. The result has been that the groundwater has been polluted as well as the soil. Public health authorities have posted signs around wells and hand pumps advising the community that the water is unfit for human consumption....
Tests conducted by a variety of agencies, including the government of India, confirmed that Coca-Cola products contained high levels of pesticides, and as a result, the Parliament of India has banned the sale of Coca-Cola in its cafeteria. However, Coca-Cola not only continues to sell drinks laced with poisons in India (that could never be sold in the US and EU), it is also introducing new products in the Indian market. And as if selling drinks with DDT and other pesticides to Indians was not enough, one of Coca-Cola's latest bottling facilities to open in India, in Ballia, is located in an area with a severe contamination of arsenic in its groundwater.(India Resource Center, Coca-Cola Crisis in India, undated)
In developing countries, the hikes in fuel prices have increased the costs of boiling tap water by households, which in turn favors the privatization of water resources.
In the more advanced phase of water privatization, the actual ownership of lakes and rivers by private corporations is contemplated. Mesopotamia was not only invaded for its extensive oil resources, the Valley of the two rivers (Tigris and Euphrates) has extensive water reserves.
Concluding Remarks
We are dealing with a complex and centralized constellation of economic power in which the instruments of market manipulation have a direct bearing on the lives of millions of people.
The prices of food, water, fuel are determined at the global level, beyond the reach of national government policy. The price hikes of these three essential commodities constitute an instrument of "economic warfare", carried out through the "free market" on the futures and options exchanges.
These hikes in the prices of food, water and fuel are contributing in a very real sense to "eliminating the poor" through "starvation deaths". The sugar coated bullets of the "free market" kill our children. The act to kill is instrumented in a detached fashion through computer program trading on the commodity exchanges, where the global prices of rice, wheat and corn are decided upon.
'The Commission on Population Growth and the American Future'
But we are not dealing solely with market concepts. The outbreak of famines in different parts of the World, resulting from spiraling food and fuel prices have broad strategic and geopolitical implications.
President Richard Nixon at the outset of his term in office in 1969 asserted "his belief that overpopulation gravely threatens world peace and stability." Henry Kissinger, who at the time was Nixon's National Security adviser, directed various agencies of government to jointly undertake “a study of the impact of world population growth on U.S. security and overseas interests.”
In March 1970, the U.S. Congress set up a Commission on Population Growth and the American Future. (See Center for Research on Population and Security). The Commission was no ordinary Task Force. It integrated representatives from USAID, the State Department and the Department of Agriculture with CIA and Pentagon officials. Its objective was not to assist developing countries but rather to curb World population with a view to serving US strategic and national security interests. The Commission also viewed population control as a means to ensuring a stable and secure environment for US investors as well as gaining control over developing countries' mineral and petroleum resources.
This Commission completed its work in December 1974 and circulated a classified document entitled National Security Study Memorandum 200: Implications of Worldwide Population Growth for U.S. Security and Overseas Interests" to "designated Secretaries and Agency heads for their review and comments." In November 1975, the report and its recommendations were endorsed by President Gerald Ford.
Kissinger had indeed intimated in the context of the National Security Study Memorandum 200 (NSSSM 200) that the recurrence of famines, disease and war could constitute a de facto instrument of population control.
Although the NSSM 200 report did not assign, for obvious reasons, an explicit policy role to famine formation, it nonetheless intimated that the occurrence of famines could, under certain circumstances, provide a de facto solution to overpopulation:
"Accordingly, those countries where large-scale hunger and malnutrition are already present face the bleak prospect of little, if any, improvement in the food intake in the years ahead barring a major foreign financial food aid program, more rapid expansion of domestic food production, reduced population growth or some combination of all three. Worse yet, a series of crop disasters could transform some of them into classic Malthusian cases with famines involving millions of people.
While foreign assistance probably will continue to be forthcoming to meet short-term emergency situations like the threat of mass starvation, it is more questionable whether aid donor countries will be prepared to provide the sort of massive food aid called for by the import projections on a long-term continuing basis.
Reduced population growth rates clearly could bring significant relief over the longer term.....
In the extreme cases where population pressures lead to endemic famine, food riots, and breakdown of social order, those conditions are scarcely conducive to systematic exploration for mineral deposits or the long-term investments required for their exploitation. Short of famine, unless some minimum of popular aspirations for material improvement can be satisfied, and unless the terms of access and exploitation persuade governments and peoples that this aspect of the international economic order has "something in it for them," concessions to foreign companies are likely to be expropriated or subjected to arbitrary intervention. Whether through government action, labor conflicts, sabotage, or civil disturbance, the smooth flow of needed materials will be jeopardized. Although population pressure is obviously not the only factor involved, these types of frustrations are much less likely under conditions of slow or zero population growth."
(1974 National Security Study Memorandum 200: Implications of Worldwide Population Growth for U.S. Security and Overseas Interests". (emphasis added)
The report concludes with a couple of key questions pertaining to the role of food as "an instrument of national power", which could be used in the pursuit of US strategic interests.
"On what basis should such food resources then be provided? Would food be considered an instrument of national power? Will we be forced to make choices as to whom we can reasonably assist, and if so, should population efforts be a criterion for such assistance? Is the U.S. prepared to accept food rationing to help people who can't/won't control their population growth?" (Ibid, emphasis added)In the words of Henry Kissinger: "Control oil and you control nations; control food and you control the people."
© Copyright Michel Chossudovsky, Global Research, 2008
The url address of this article is: www.globalresearch.ca/index.php?context=va&aid=9191
Tuesday, June 3, 2008
Commodity futures and Inflation
Karan Sharma*
Commodity futures represent a bet on commodity prices; they are directly linked to the components of inflation. Second, because futures prices include information about foreseeable trends in commodity prices, they rise and fall with unexpected deviations from components of inflation. This is exactly why futures do well when stocks and bonds perform poorly.
Commodity futures returns are negatively correlated with stock returns. Commodity futures have opposite exposures to unexpected inflation from stocks and bonds. It is tempting to put both together and ask: does the opposite exposure to unexpected inflation account for the negative correlation between commodity futures and stocks and bonds? Preliminary findings suggest that this only part of the story behind the negative correlations.
India's high inflation rate, hitting three-year highs at more than 7% and coming amid record food grain production, is prompting demands for a ban on the increasing trade in food commodity derivatives. The Wholesale Price Index for food grains touched a record 222.8 this month, up from 210.4 a year earlier as the overall commodities derivatives market has climbed to an average of more than US$3 billion in daily trading turnover. The government, which a year ago banned trading of rice and wheat futures, appointed a now 13-month-old, four-member expert committee to check if a future trading is causing food prices to soar. The expert committee, expected to issue its findings on Monday, April 28, was forecast to refrain from recommending an immediate or future ban on futures trading in certain commodities. Futures trading aims to offset market risks and get better prices to producer, marketer and consumer, but the current inflationary crisis has intensified debate as to whether the gap is widening between rosy free market theories and the reality of unscrupulous market manipulation. Statistics point to an increasing rush in investments into the global commodities market, with a Citibank report claiming that investments in commodity indexes increased by $40 billion to $185 billion between January and March this year, a bigger gain than in the entire 2007. Yet commodity futures market keepers deny any link between the increase in investor interest in commodity trading and rising prices. "That futures trading in commodities causes’ inflation is a spurious co-relation," Prabhakar Patil, director of the Mumbai-based regulator Forward Markets Commission, told Asia Times Online. "Historically in democracies, a future trading has often been blamed for inflation and commodities banned from being traded, a trend going back to the 19th century." The Indian government banned futures trading in urad and tur (two popular pulses widely used in Indian cuisine), rice and wheat in February 2007, but government policies increasingly appear caught by conflicting tussles between various economic and political forces, within and outside the government.
Internal conflict has infected the Planning Commission, India's leading economic think-tank. Its deputy chairman, Montek Singh Ahluwalia, has strongly dismissed calls for a ban on futures trading in commodities and instead recommends a better-regulated futures market. But Ahluwalia's Planning Commission colleague Abhijit Sen, who heads the committee studying the impact of futures trading on commodity prices, conceded that the futures market could be responsible for price increases, an admission that immediately prompted a meeting of the committee on April 23 to sort out the difference of views. No consensus was reached. Market analysts believe otherwise. In an article headlined "Who pushes up your food prices? Gamblers!" the India-based trade site Commodities Online says, "The enormous influx of capital has resulted in the futures markets no longer reflecting supply and demand. Ironically, investors have placed their wildest bets on staple foods. Information about supply bottlenecks and famines at the other end of the world is not noted on market quotations." Studies by the Switzerland-based Bank of International Settlements (BIS) have also concluded a clear co-relation between the volume of derivative trading in commodities to sharp rise in commodity prices. India's fast growing commodity exchanges has grown 50-fold in barely five years and could expand to $1.8 trillion by 2010, according to an industry body report. People's Democracy, the weekly mouthpiece of the Communist Party of India (Marxist) demanded in an April 20 editorial that futures trading in 25 agricultural commodities be banned. Not just the communists, but India's leading industry body the Associated Chambers of Commerce and Industry of India also on April 20 called for a temporary ban on futures trading until the price rise crisis is reversed. Farmer groups are not impressed either. "Despite the good [food crop] production, there is a deliberate manipulation of the market," wrote Krishan Bir Chaudhary, president of the New Delhi-based Bharatiya Krishak Samaj (Indian Farmers Forum). "The farmers do not gain in the process as they are paid relatively lower prices than what the corporate houses quote on the futures exchanges or in the spot market, or at what the retail chains sell to the consumers." Chaudhary has called for the government to reject "this neo-liberal and corporate-led agriculture model and replaced it by a farmer-centric one". India joined the global furor and confusion whether commodity speculators and hoarders are part of the problems driving up prices, amid fears of the worst global food crisis unfolding since World War II. Josette Sheeran, executive director of the United Nations World Food Program, said on April 22 that rising food prices would leave 100 million people hungry in every continent.
Soaring food prices of rice, wheat and other staple grains are hitting the world's most vulnerable sections, say aid agency officials. The Rome-based United Nations World Food Program, that serves over 80 million people in 78 countries, revealed that food aid for 20 million of the world's poorest children will be reduced. Rice prices in Asia soared by 68% in a year, provoking the world's leading rice exporters such as India and Vietnam to ban exports of popular rice varieties, a move deepening anxiety of decreasing supply and increasing prices. Suspicions of artificial inflation could increase. Food grain production in India is set to touch record levels of 227.32 million tonnes (mt) this season (July 2007 to June 2008), up 4.6% from the year-on-year period in 2006-07, according to the third Advance Estimates of production of major crops grown in India. India's stance in the commodities market could prominently feature in the next round of the contentious World Trade Organization talks in Doha, Qatar, tentatively slated later this summer. The governmental dilemma seems a no-win situation born out of largely ignoring the agricultural sector until the pre-election year.
*Associate,Bank of America Continuum Solutions
Subscribe to:
Posts (Atom)