Tuesday, April 8, 2008


Suman Sahai

A shortage of products that are not genetically engineered (GE free), especially soybean and corn, is forcing countries that are averse to GE produce to change their stand. Countries in Asia like Japan and South Korea, that are traditional soybean users have rejected GE soybean so far but may now be forced to buy genetically engineered soybean, not just for animal feed but also for soy based food products.

Most of Europe demonstrates a near phobic rejection of foods that are genetically engineered. In Asia, affluent sections of society are averse to consuming gene-spliced foods. In the case of soybean, countries like Japan and South Korea have expressed a clear preference for soy products made from GE free soybean. This has raised the demand for non GE soya and increased its price premium. The net result is a situation where the supply of non GE soya is unable to keep pace with the demand. The shortage of GE free soya is created largely due to the fact that China, the largest producer of non GE soy is faced with growing inflation in the food sector and has decided to hold on to its produce for domestic use.

The short supply and the rising price premium on non-GE crops is now forcing food processors in South Korea to buy American GE corn for the first time for their starch and sweetener industry. This is the first ever use of a GE product in the food chain in this region. Following S Korea, Japan is likely to allow the import of GE soybean too. Both countries are reluctant buyers of GE soybean, forced to do it in order to make up the shortfall in domes-tic requirement because not enough GE free soya is available.

This is a golden opportunity for India to step up its production of non GE soybean and enter the international premium niche market. India as the only country after China to produce certified non GE soybean, can position itself as the new source of GE free soya for countries in Europe which seek bulk soya for animal feed and Asia, particularly China, Japan and South Korea which are looking for quality non GE soya for food.

Stepping up production of GE free soybean immediately should not be difficult. India has been cultivating it for some years in places like Uttaranchal, Madhya Pradesh and some parts of Maharashtra. The transition to soybean in Madhya Pradesh came from the Black Toor, a legume similar to soybean which is eaten as a daal. In the hills varieties of soybean are also eaten as daal. This is to say that the cultivation of soybean is not unknown in India so it will not be an alien crop that farmers are not knowledgeable about. The introduction of soybean will have another advantage, that of replenishing the soil. The nitrogen fixing legume will improve soil nutrition, enabling better second crops. A kind of win - win situation for the farmer.

In Vidarbha particularly, soybean could become the alternative to cotton, which has proved to be such a risky crop. A farmer rehabilitation package could be based on promoting soybean cultivation. This will be better suited to the water deficient situation in Vidarbha and will be less risky than the water guzzling cotton, particularly Bt cotton, which demands even more water than other cotton varieties. Soybean has already begun to replace cotton in Vidarbha as farmers move away from the Bt cotton that has brought disaster.

If India is to exploit the market vacancy successfully, the soya package must be carefully organized, with top class planting material and marketing channels stream-lined and tied up from the farmers' fields to the international buyer. Farm training in sanitary and phy-tosanitary measures will be necessary, so that farmers are careful about maintaining the health and purity standards of their produce. Where necessary, government should negotiate markets in other countries, much in the same way as Malaysia negotiates advantageous market condi-tions and low tariffs for its palm oil.

Policy aspects will also have to cover research programs on soybean. There will have to be a clear and explicit ban on any research on genetically engineering soya. The government must be very clear that it cannot dabble in research on GE soya, risk contamination and expect to capture growing international markets for GE free soybean.

It will need just one single instance of contamination with GE soy to bring the GE free niche market crashing down. We saw what happened to US rice exports after the detection of traces of a GE rice from Bayer, called LL 601 in rice consignments. Overnight there were no takers for American rice. Vietnam and Thailand entered with GE free rice and captured the rice market.

The directionless, largely copycat agenda for research on GE crops that is being supported by the DBT (Department of Biotechnology) and the Indian Council of Agriculture Research (ICAR) must be brought under a stringent review to conform with India's food as well as trading interests.

Monday, April 7, 2008

Urgent Need To Monitor The Farm Loan Waiver

Suman Sahai

The farm loan waiver is the least the government can do to begin the process of healing the farm sector. The current agrarian crisis has not been created because farmers shirk work or cannot manage farms. The crisis is the result of insensitive and exploitative policies crafted by successive generations of bureaucrats and politicians in this country.

That farmers continue to produce food under the austere and adverse conditions that we have created for them is nothing short of a miracle.

Post waiver, rectifications have been proposed which should be acted upon to better focus this relief and undoubtedly this will happen when Parliamentary Standing Committees meet to discuss the budget. There is for instance, recognition of the fact that a blanket

limit of 2 hectare land holding to qualify for relief would not be fair. Larger land holdings in rain fed areas should be entitled for relief since productivity is much lower under rainfed conditions compared to irrigated areas. Two hectare in Punjab is not the same as two hectare in Jharkhand.

The other issue is how to help the large numbers of farmers who are indebted to private moneylenders. Kerala has developed a model by setting up a Farmer Debt Relief Commission with powers to find solutions that can be implemented. This kind of exercise would best be undertaken at the state level. State Agriculture Departments, Agriculture Universities, Panchayati Raj Institutions (PRI), and NGOs should be brought together to help identify indebted farmers. The debt with private moneylenders should be negotiated and a compromise formula worked out to make a final settlement.

But the key concern, as the process of providing debt relief gets underway, will be to monitor the allocation of funds. Great vigilance needs to be exercised to ensure that the write offs are not being exploited by fat cat farmers growing grapes and sugar in Maharashtra ! A monitoring and oversight committee of citizens, with a sentinel function should be set up immediately to watch where the money of the loan waiver is going. Keeping in mind the high levels of corruption and the routine siphoning off of government funds by people who were never intended to be beneficiaries, there must be a tremendous effort to ensure that the 'business as usual' method of functioning does not pour the waiver into illegitimate pockets. One of the best monitoring mechanisms is transparency. All banks should be required to publish in the local newspapers and national dailies, details of the farmers whose loans are being written off.

Careful intervention and proper guidance is crucial at this time to ensure that loans are used to increase productivity and the cycle of debt is not repeated. Farmers should be given easy access to critical agriculture inputs needed for productive agriculture.

These could be good quality seed, fertilizer and pesticide. The new loans can be used to create water bodies to provide irrigation for a second crop in single crop rainfed areas. Where appropriate, the new credit can be used to acquire livestock or develop poultry or fisheries for additional off farm incomes. The crux is that the debt relief must be guided in a way that the farmer is enabled to become productive again. If this can be made to happen, this investment in agriculture will alleviate the agrarian distress and lead to increase in food production and a more assured basis for the country's food security and sovereignty.