Tuesday, August 30, 2005

Globalization and Poverty

Recently a friend of mine posted a link to Vandana Shiva's "Globalization and Poverty" on his blog. This post is a response to some of the issues she's raised in the article. Ofcourse, due to the poverty of my ideas, I am forced to retain the same title as hers.

Read her article here

You can't argue with her when she says that our farmers are ruining their crops by excessive use of pesticides. Nor can you disagree when she talks about people growing water-intensive crops because they are profitable.

However, when she blames globalization, you got to sit up and take notice. See the text of what she says:

"...The drought is not a “natural disaster”. It is “man-made”. It is the result of mining of scarce ground water in arid regions to grow thirsty cash crops for export instead of water-prudent food crops for local needs. It is experiences such as these which tell me that we are so wrong to be smug about the new global economy..."

Its funny how the laws of causality never apply to Ms. Shiva's writings. Well, yes, the drought was caused by farmers growing crops like rice and sugar in water-starved regions like Telangana and Hyderabad-Karnataka. But why did they grow those crops? Was it because of the "global economy"? Why do our farmers use more fertilizer? Is it because of Monsanto? Fortunately for Ms. Shiva, no one asks these questions. Everyone is so taken by her form and fury that they forget to ask ... why? Having asked the questions here, let me try and answer them.

Our farmers use more fertilizer because historically they've done so. And they started doing so because of the "green revolution" that encouraged them in this direction. From 0.55 kgs/hectare, the green revolution brought up fertilizer consumption to nearly 20kgs/hectare in the early 70s ( FAO figures). During those days, chemical fertilizers and pesticides were thought of as the solution to the problems of low soil productivity and pestilence. In fact, comics were produced that drove home this fact! So yes, we were mistaken then - but why do we still use fertilizers and pesticides at such high levels? Well, now this has become a permanent clique of politicians and businessmen who take subsidies to manufacture chemical fertilizers and pesticides, so need a market for them, therefore dumping them at our farmer's doorstep - when was the last time you saw an ad on TV or the newspaper discouraging farmers from using chemical inputs? Pray, what do any of these have anything to do with globalization? BTW, the thirsty cash crops for export that Vandana Shiva mentions are rice and sugarcane - and no, they are not exported (at least not in quantities that lets the farmers profit). Farmers grow rice and sugarcane because of our food procurement laws, lack of infrastructure to store value-rich produce like fruits and vegetables, and guaranteed returns for these crops. So, if you want to blame someone, blame the government for not providing the infrastructure or freeing up internal markets, not "the global economy".

This is a typical tactic used by the eco-terrorists, anti-globalists and communists of all hues. Blind your opponent with flashy English (Arundhati Roy) or tragic scenes (almost everybody). Rant about how farmers are killing themselves, particularly to a largely western audience, and then blame it all on Bush, on globalization, on the WTO, on the BJP, on communalism et al.

Watch this space...


Sham said...

Well, I don't know what logic vandana shiva used.. but there is huge chunk of what ismissing (which you thought did not exist)

Funding agencies hate governments to get into marketing of farm produces. (because govts are inefficient in this, and it is quite true)--> They instead want governments to make credit available for poor farmers, provide the basic necessities like irrigation, fertilizers and other inputs---> If governments can not do too much within the marketing of the farmer produced goods, they can not guarantee that the food products farmers grow will bring the farmer anything. But cash crops sell themselves (farmers get into trouble here too.. but this big business, not subsistence)---> Hence the implicit push for cash crops. ---> Farmers grow anything commercial because that's the only way they can survive. Because they are growing things that they do not know about (offcourse the farmer in Medhak does not know as much about rice as he knows about jowar), they try to maximize their profits by trying all kinds of input combinations (and hence the overuse of pesticides) this is normal economic behavior when information is incomplete. ---> hence the loss -->hence globalization is partly responsible.

Also, Our agri-exports are not as big as they are supposed to be because industrialized nations have found loopholes in international trade laws (which they themselves framed) that allow them to protect their markets from foriegn (third world) competition. this works for their political economy. hence globalization is largely one way. Hence bad for the lowest strata in our society.

Now, why won't funding agencies listen to the poor countries? Because poor countries do not give them money. Money to them comes from big industrialist countries. They think they are successfull because they industrialized their systems. They believe in the age old 2 sector model which says that as many people should be moved out from agriculture and be obsorbed by the industry.
Each country pushes it's corporations as the first step of globalization. Now you may call this conspiracy theory but it's true.

Every major official working for his government in an international trade sector somehow lands up in the offices of corporate companies when he *voluntarity* retires after he has *served* international community. This linkage is unbelievably strong and persuavasive, biased towards the big brothers.

You are right in pointing at the government. If their eyes were open this they would not do it. But it's also the entire nation's mentality that our jaws drop for anything western. Even for the few indians protesting against this, foreigners had to teach them about the illeffects of globalization.

Again, the concept of globalization itself is not bad; as are concepts of capitalism or communism or even for that matter, religion.

But in practice, it has offered too little for us and too much for them (as the other concepts mentioned above)

Gops said...

Hi Sham,

Nice to read your post. First off, thanks, for taking time to read and post on my blog!

Actually, this post was the first part of a series of response I wanted to give to Vandana Shiva's opinions. So, yes, some things are missing, which I want to examine in detail later.

I agree when you say that governments are inefficient. However, they _can_ guarantee that the food products produced by farmers will bring them something. That is done through the MSP or minimum support price. Pray, tell me with the godowns overflowing for the past 10 years, why do we still have record rice and wheat outputs? (If you agree with Vandana Shiva's logic of lower fertility, it should be even more suprising!) We have record outputs, because rice, wheat and sugar are three crops covered under the MSP. So, farmers know they'll get a minimum price for their crop, irrespective of the market situation. And they are forced into this because cash crops that consume less water and less power suffer from needing excellent storage and transport facilities (Mangoes, for instance, grown heavily in my hometown), which are not available.

I agree that farmers try to maximize output by trying different combinations of pesticides and fertilizer. One of the reasons they can do that is because fertilizers (chemical) are heavily subsidized. Organic fertilizers that are better for the soil are not. Also, as I mentioned in my blog, organic alternatives have not been given their due.

Again, the government is responsible - not globalization. Because this cycle started well before we even got into our half-baked attempts at LPG (Lib,Priv,Glob).

I do agree that the industrialized nations have formed 'laws' that curtail agri-exports. However, the WTO, for the first time is giving countries like India (the G-20) a voice against such laws. Because of the WTO, we are for the first time in history, at a position where 3 successive trade talks have failed because India has not agreed to something. So, isn't this villian of globalization actually making a level (not completely level, I concede) playing field?

I also agree with your point that the 2-sector model is nonsense. India can't follow it - which is why we need to re-invigorate agriculture. But how do we do that? Not by cribbing about globalization as Vandana Shiva does, but by educating and empowering our farmers with better infrastructure, equipment and technology. Drip irrigation, organic pesticides (Neem, for godssake!), crop rotation, all these need governmental initiatives if they have to succeed on a large scale.

Finally, I don't think that globalization has offered too little for us and too much for the west. Look at the bread and butter sectors of the west - services. See how much concern outsourcing has raised in their countries. See our own industries - Bharat forge, TVS, Bajaj, Hero group, the pharma companies - each one has made a mark because globalization forced them to do so. The same has happened in every sector thrown open to (sometimes foreign) competition. The reason why we are nowhere near taking full advantage of globalization is because our government has failed in ensuring the basic needs of our people. That is the problem which needs to be solved.

Sham said...

LPG... well, looks like globalization is probably the mildest of all these. (read Globalization and its discontents by Joseph Stiglitz for the most agreed version about the faults of today's globalization)

The truth about LPG is, they look so slick in theory like the pretty Supply demand curve. But, the reality is a totally opposite picture.. (some of which is rightly pointed out by Vandana Shiva)

Anyway, I completly agree that Governments ARE responsible. But a lot has to do with globalization gone wrong (in the name of contract farming, patents, seed selling etc). Again, I know you would point out the government. It is not the government or the corruption that did this. It is the mentality of the people deciding (*ahem* bush, bjp and bigwigs) that everything globalization does is good.

For the issue in question; monoculture of rice (which is low in nutrients) vs biodiversity practiced for several centuries, globalization is invariably to be blamed

The Public distribution system that you talked about is an archaic centrally planned system (gift of the imperialists) and even government officials do not see it as adequate anymore. Infact, glimpses of hope come not from any progressive government but from anti-globalization NGOs like Deccan Development Society.

Yep I agree with the recent developments in WTO have created a level field (again thanks to eco-terrorists et al ;-) )

While globalization has brought an improvement in our standard of living, the profits other nations have made are too high in comparison. The same holds for the software industry. The amount of money they make is much more than the amount of money we make. The amount of money monsanto hopes to make is much more than the amount of money an indian farmer would get.

Gops said...

Hi Sham,

Vandana Shiva is probably right about a few things, but she is again barking up the wrong tree. Also, I don't think 'G' is the mildest of the LPG triumverate. I think internal liberalization is the easiest to carry out. And it probably is the most important. No, I am not talking only of free markets, I am also talking of powerful regulators, who are honest and effective as well.

I should read up Stiglitz's book, but I have read a review by Jagadish Bhagwati and by Surjit Bhalla (separately). I am in no doubt that countries that are corrupt, don't have internal freedom, and don't have institutional frameworks do not benefit from globalization. But the problem again is with the countries, not with globalization.

I don't know about Bush, but I beg to disagree that the BJP went gung-ho for globalization. If they had, and as the 'commonly accepted' result, the rich had gotten richer, they wouldn't have lost in some of the richest areas of the country!

Agree totally about the monocultured variety though. BTW, NCBS in Bangalore has come up with (or was coming up with) genetically modified crops that don't need farmers to buy from the same vendor. They are also supposed to be working on non-monoculture crop varieties. (Heard this from a friend, but am not sure).

Regarding the PDS, I wouldn't brandish words like 'imperalists' with so much ease. Don't forget that the sworn 'anti-imperialists' a.k.a communists are strongly in favour of PDS. And for me, the real glimpses of hope come from stories like those on www.goodnewsindia.com - stories of common people who did uncommon things - not so much NGOs. I have friends who are working for NGOs and having seen the seamier side of some famous ones, I have no hope left in them.

Finally, about the standard of living, in the last 10 years of globalization, it is a known fact that China and India have made rapid strides in improving it. While other than the US, most other industrialized countries are at near-stagnation. I won't quote the McKinsey study which said India will be the third-largest economy by 2050, because it has too many pre-conditions, but there is no doubt that we are catching up with the west at a rapid pace. If only, If only our governments gave precedence to the really important issues instead of temples, minority appeasement, and 'self-improvement' of their fiscal status, we would have kicked butt by now.

Sham said...

Well, I guess we agree to disagree in a few things. But, good discussion though.

My blogs are mostly in Kannada and hence if your system isn't Kannada complaint, you would probably see junk characters. The following link provides useful details on how to view and publish Kannada on the web. It should be pretty easy on an XP or a linux box. http://sampada.net/fonthelp