A Recipe For More Farmer's Suicides, More Hunger And More Disease
Wheat is called "Kanak" or gold in India, both because fields of
wheat look like fields of gold as the "Rabi" (Winter) crop ripens
in North Indian farms, and also because wheat is the farmers gold in the land
of the 'roti' and 'chapatti'.
As the wheat ripened in 2006, India's harvest of wheat was hijacked by global
corporation with help from the Government. The hijack occurred through a two
pronged strategy of capturing India's wheat market domestically and through
Dismantling Market Democracy, Creating Market Dictatorship
The domestic market has also been hijacked by global corporations through deregulation.
MNC's are now making direct internal assault on domestic markets by manipulating
the government to impose changes in the APMC (Agricultural Produce Marketing
Cooperatives) Act of different states.
Agriculture, under the Indian Constitution is a state subject. However, the
center is using funds as a conditionality to force states to change marketing
laws. As a report in Indian Express titled "Centre to States : Reform only
then you get money for improve farmers markets" (Indian Express, 21.10.2004)
"For the first time a central scheme has been linked to the progress a
state has made on reforms.
The Cabinet today cleared a programme that would make available money for developing
and strengthening agricultural markets in the country. But it is only for those
states that have made certain changes the center has been asking for over two
These changes driven by trade liberalization benefit MNC's but remove protections
to prevent exploitation of farmers. The changes are a combination of more freedom
for MNC's operations and more centralized control over indigenous, domestic
trade and marketing by state bureaucracies. The changes replace democratic structures
by state structures, which then create rules that favour MNC's, and displace
local traders while also leaving MNC's free to exploit small famers.
The old Agricultural Produce Marketing Acts were designed by states and their
main objective was to ensure farmers get a proper price and traders and brokers
are not free to exploit producers by buying their produce at a lower price.
The "mandis" (markets) governed by the Acts also offered farmers transportation,
storage, grading, besides guaranteeing a just price.
The markets and mandis were governed by elected market committees with predominance
of agriculturalists for the management of the market.
Agriculturalists in the old acts were defined as those "whose livelihood
depends solely on farming".
The "model" act that the center is imposing on the states, replaces
the elected committees having predominance of farmers with a Chief Executive
Officer, appointed by the government. Other members will also be appointed by
The definition of agriculturalist has also been changed. Whereas earlier it
was those who depend on farming as a livelihood, in the model act "Agriculturalist"
means a person who is a resident of the notified area of the market and who
is engaged in production of agricultural produce by himself or by hired labour
The most significant changes in the marketing law is the removal of regulation
of MNC's for location of purchase, price and volume. The APMC acts prohibited
purchase from producer by traders outside the "mandi" or market yard.
In the "mandi" or market yard the sale of agricultural produce was
only by open auction, commission agents were barred from auction on behalf of
the producers, payments had to be made the same day, or a penalty interest of
1% per day for five days was imposed. If payments were not made, licenses were
cancelled. The mandis also gave facility for storage of agricultural produce
in case of non-sale.
The marketing laws were thus primarily laws for prevention of exploitation
of farmers. That exploitation happens inspite of the law is part of the corruption
that seeps through our society and needs to be addressed. However, amendments
in the Marketing Acts are designed to remove legal instruments for preventing
farmers exploitation. In affect, the model act is an act to legalize exploitation
by removing all regulation on price and volume of purchase. By having many traders,
and a ceiling on volume traded, monopolies could not emerge in mandis. The model
act promotes the creation of monopolistic buying by agribusiness. Giant corporations
can now set up private markets, not regulated by the market committee. Act 5(1)(iii)
of the Model Act allows :one or more than one private yards / private markets
managed by a person other than a market committee". This is how ITC has
set up its e-chaupals in Madhya Pradesh against which there are protests and
statewide strikes. Nothing in the law exists to prevent ITC to buy cheap from
farmers after one or two years of getting them hooked into a dependency on seeds
and chemicals from the ITC chaupal. Since input costs have out stripped prices
of produce, without market regulation agribusiness corporations will make profits
selling costly seeds, buying cheap farm produce, and locking farmers in debt.
This has been the process by which the small family farmer has disappeared in
U.S.A, Argentina, Europe.
The Act regulates trading through mandis but allows corporations free to determine
terms of trade. 40(1) has an exemption for agribusiness which states "provided
further that it will not be necessary to bring agricultural produce covered
under contract farming to the market yard / sub market yard / private yard and
it may be directly sold to contract farming sponsor from farmers fields".
While local traders will have to buy through open auction in mandis, but MNC's
have freedom to fix prices. Local traders cannot engage in wholesale transactions
but agribusiness can buy any amount from farmers anywhere [41(3)]. Local traders
have to pay upto Rs. 2 for every hundred rupees of the price as market fees.
There is however no market fees for agribusiness buying in private yards. This
unequal taxation was granted to the East India Company through the Farukhsheer
Firman of 1716, called the Free Trade Treaty of that period which destroyed
local trade and local manufacture. Reforms of today as reflected in the "Reform"
of the Agricultural Marketing Laws, has a built in inequality - freedom from
regulation and taxes for MNC's, state regulation and taxes for local traders.
This is a recipe for destroying local markets, and through market destruction,
destroying local production. India produces thousands of crops on millions of
farms. Agribusiness trades in a handful of commodities. Their monopoly on our
markets implies destruction of diversity and displacement of small producers
The new act has contract farming built into its structure. The Model Contract
Farming Agreement refers to corporations as "contract farming sponsor".
Contracts oblige farmers to produce, but do not oblige corporations to buy.
In case of a dispute, farmers cannot seek justice from courts. As the Section-IX
on "Dispute Resolution Mechanism states.
"In majority of cases, it is highly unlikely that a sponsor will take
legal action against a small holder for a breach of contract. The costs involved
are inclined to be far in excess of the amount claims, and legal action threatens
the relationship between the sponsor and all farmers, not just those against
whom action is being taken. Action by a farmer against a sponsor is similarly
impossible. As neither side is likely to seek a legal remedy through the courts,
it is important that quick and easy ways of resolving disputes are identified
in the agreement".
The Model Act puts a bar to civil suits (Act 105) Article 89 states "No
court shall take cognizance of any offence punishable under this Act or any
rule or any bye-laws made there under except on the complaint made by the collector
or chairman, vice chairman, chief executive officer of the market committee
or of any person duly authorized by the market committee in this behalf".
In other words, the farmers are disenfranchised of all legal, civil rights.
This is a system of slavery. This is corporate dictatorship, implemented by
a corporate state. This spells the end of democracy.
The APMC Act was aimed at preventing hoarding and price fixing. Changes in
the Act allow corporations to buy directly from farmers at prices and in quantities
unregulated by the APMC Act. They also pay no taxes. Meantime, local traders
and the government agencies have to buy in 'Mandis' where price and procurement
is regulated and marketing taxes are imposed. This is creating an uneven playing
field with local traders and public agencies being squeezed out of the domestic
Dismantling Food Security
Corporations have bought wheat above the Minimal Support Price (MSP), the government
announced price, in this harvest season. Without any control on hoarding they
have mopped up 90% of the wheat harvest for export and left a hole in the government
procurement system. India's carefully built food security system which was based
on the dual objective of protecting small farmers livelihoods through price
regulation, and the food rights of the poor through the Public Distribution
System is under attack. India has created a network of 500,000 fair price shops
to provide affordable food. However this food security and food sovereignty
network is being deliberately dismantled. In 2001 - 2002, wheat production was
69.8 million tonnes and procurement for food distribution was 20 million tonnes.
In 2006, inspite of production increasing to 71.5 million tonnes, procurement
has dropped to 9 million tonnes.
While wheat farmers have received more than the MSP this year, when government
procurement is dismantled, the corporations will have a market monopoly and
will drop farm prices. Wheat prices will also fall for farmers as imports increase.
100,000 farmers in India have already committed suicide alive to falling incomes
and increasing debts. Further, agribusiness which is a wheat trader is also
an input supplier. Farmers will be forced to buy costly seeds and fertilizers
and pesticides and sell cheap produce, deepening the agrarian crisis, rural
indebtedness and farmers suicides. Meantime wheat and atta is going out of the
reach of the poor. And the growing gap between farmers price and what consumers
pay will translate into corporate super profits.
Having created a scarcity in the public distribution system, the government
is now proposing to increase food prices and reduce ration quotas even for the
households blow the poverty line. As it is, 90 percent of the rural poor spend
60 percent of their income on food, and recently UNICEF has reported that one
third of the worlds mal-nourished children are in India.
The corporate hijack of India's wheat will push more children to hunger, and
even starvation, and more farmers to suicide.
It will also lead to a massive wheat swap - with global corporations exporting,
Indian wheat subsidized by India's tax payer and importing U.S and Australian
wheat, subsidized by U.S and Australian taxpayers and making super profits both
ways, while wheat producers and the poor suffer. The Government has subsidized
wheat exports, which have registered a five fold increase in the first five
years of this decade. In 2001, when the economic cost of wheat to FCI was Rs.
8300 per ton, the market price was Rs. 7000 per ton, Cargill bough wheat from
FCI at Rs. 4200 per tonne, giving the corporation Rs. 4100 subsidy per tonne.
Subsidies are thus fattening Cargills profits while the poor starve. Even in
2005, FCI has sold wheat to private corporations inspite of dwindly stocks.
By selling wheat to corporations below the price paid by the poor, the Food
Corporation of India has run into huge loses, further rendering India's Public
Distribution System non-sustainable.
Wheat - Output, Price Support and Trade
(Rs/qtl) Output Procurement- Import Export
(In million tonnes)
1998-99 510 66.34 12.65 1.81 -
1999-2000 550 71.29 14.14 1.37 -
2000-01 280 76.37 16.35 - 1.11
2001-02 610 69.68 20.63 - 2.65
2002-03 620 72.77 19.05 - 3.68
2003-04 620 65.80 15.80 - 4.07
2004-05 630 72.10 16.80 - 1.71
2005-06 640 72.00 14.79 - Na
2006-07* 700 - Na 3.50 na
*The MSP includes the bonus of Rs. 50 per quintal, and the exports include tenders
(Ref : M. Raghavan, "Wheat Imports : Food Security or Politics", Economic
and Political Weekly, Vol. XLI, No. 21, May 27, 2006, p.2058)
Importing Ecological & Health Hazards and Rural Unemployment
India did not need to import wheat this season. We had produced enough for
our needs. The imports were part of a commitment made to the U.S to open up
India's market for U.S agribusiness. However, the quality of the U.S wheat was
so bad that the first tender for imports of 500,000 tons went to the Australian
The government now wants to import another 3 million tonnes and has diluted
the health standards to allow pesticide laden, fungus and pest infected wheat
The imported wheat contains wheat rust which has caused havoc in Africa. It
contains pesticides like Fenitrothion, the pesticide content was 0.25 ppm, around
50 times more than the permissible level. Fenitrothion is highly toxic to insects
and humans. In addition Carboryl, the pesticide that led to the death of thousands
in Bhopal because of a gas leak has also been allowed. Other pesticides include
hydrogen phosphide in organic bromide, Phosphamidon and Dithiocarbamates. The
imported wheat contains 14 weeds, 11 of which are exotic to India. The weed
parthenium which came with PL 480 wheat shipments in the 1960's has become an
invasive species and taken over millions of acres of productive land.
The imported wheat also contains myco toxins such as aflatoxin and Dcoxynivalenol.
The existing standard of 1000 parts per billion has been changed to 2000 parts
per billion to suit the U.S wheat trade. A study reporting human food poisoning
by infected wheat containing deoxivalenal in India showed a range of symptoms
including abdominal pains, dizziness, headache, throat irritation, nausea, vomiting,
diarrhoea and blood on the stool.
The imported wheat also contains ergot fungus. Ergotism is a form of fungal
poisoning caused by the ingestion of the ergot fungus.
In its latest tender for 2.2 million tonnes of wheat, the government is totally
bypassing the plant quarantine order. 31 exotic weeds, which could become invasive
species banned in earlier orders have been allowed. The argument that the wheat
is for consumption and hence will not be sown, and hence the zero tolerance
exotic weeds will not create a second partenium disaster is totally flawed.
Given the seed famine created by corporations like Monsanto, farmers could easily
save some wheat to plant. In our recently organized Bija Yatra through the suicide
belt of Vidharbha, Andhra Pradesh, Karnataka, there was huge demand for the
seeds we were distributing. And in Mexico, where GMO corn was not allowed domestically,
but GMO corn was being imported as food, poor peasants had planted the GM corn
and now the corn in the center of diversity is contaminated.
The government has even allowed import of poisonous weeds like Argemone mexicana
and Lathyrus sativus. Seven percent of foreign matter is also allowed.
Indian people's health is being sacrificed to create markets for U.S agribusiness.
As an official stated "till now our objective was to block imports, for
which stiff quarantine norms were effective non-tariff barriers. But this no
longer the case, we hope the latest relaxation will widen bidder participation"
("Wheat Tender By Passes Plant Quarantine Order, Business Line, Wednesday,
June 14, 2006, p.8)
India's food sovereignty is being given up to hand over India's food system
to global agribusiness.
The corporate hijack of wheat is a recipe for increasing farmers suicides,
inviting famine and public health and environmental hazards.
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