Asia-Pacific Research: India: The State of Independence. British Colonialism Replaced by a New Hegemony
by Colin Todhunter, Asia-Pacific Research | August 08, 2018
India celebrates its independence from Britain on 15 August. However, the system of British colonial dominance has been replaced by a new hegemony based on the systemic rule of transnational capital, enforced by global institutions like the World Bank and WTO. At the same time, global agribusiness corporations are stepping into the boots of the former East India Company.
The long-term goal of US capitalism has been to restructure indigenous agriculture across the world and tie it to an international system of trade underpinned by export-oriented mono-cropping, commodity production for the global market and debt. The result has been food surplus and food deficit areas, of which the latter have become dependent on agricultural imports and strings-attached aid.
Whether through IMF-World Bank structural adjustment programmes, as occurred in Africa, trade agreements like NAFTA and its impact on Mexico or, more generally, deregulated global trade rules, the outcome has been similar: the displacement of traditional, indigenous agriculture by a corporatized model centred on transnational agribusiness and the undermining of both regional and world food security. The global food regime is in effect increasingly beholden to unregulated global markets, financial speculators and global monopolies.
India of course has not been immune to this. It is on course to be subjugated by US state-corporate interests and is heading towards environmental catastrophe much faster than many might think. As I outlined in this previous piece, the IMF and World Bank wants India to shift hundreds of millions out of agriculture and has been directed to dismantle its state-owned seed supply system, reduce subsidies and run down public agriculture institutions.
The plan for India involves the mass displacement of people to restructure agriculture for the benefit of western agricapital. This involves shifting at least 400 million from the countryside into cities. A 2016 UN report said that by 2030, Delhi’s population will be 37 million.
One of the report’s principal authors, Felix Creutzig, says:
“The emerging mega-cities will rely increasingly on industrial-scale agricultural and supermarket chains, crowding out local food chains.”
The drive is to entrench industrial agriculture, commercialise the countryside and to replace small-scale farming, the backbone of food production in India. It could mean hundreds of millions of former rural dwellers without any work (India is heading for ‘jobless growth’). Given the trajectory the country seems to be on, it does not take much to imagine a countryside with vast swathes of chemically-drenched monocrop fields containing genetically modified plants or soils rapidly degrading to become a mere repository for a chemical cocktail of proprietary biocides.
The plan is to displace the existing system of livelihood-sustaining smallholder agriculture with one dominated from seed to plate by transnational agribusiness and retail concerns. To facilitate this, independent cultivators are being bankrupted, land is to be amalgamated to facilitate large-scale industrial cultivation and those farmers that are left will be absorbed into corporate supply chains and squeezed as they work on contracts, the terms of which will be dictated by large agribusiness and chain retailers.
Some like to call this adopting a market-based approach: a system in the ‘market-driven’ US that receives a taxpayer farm bill subsidy of around $100 million annually.
The WTO and the US-India Knowledge Initiative on Agriculture are facilitating the process. To push the plan along, there is a strategy to make agriculture financially non-viable for India’s small farms. The result is that hundreds of thousands of farmers in India have taken their lives since 1997 and many more are experiencing economic distress or have left farming as a result of debt, a shift to cash crops and economic liberalisation.
The number of cultivators in India declined from 166 million to 146 million between 2004 and 2011. Some 6,700 left farming each day. Between 2015 and 2022 the number of cultivators is likely to decrease to around 127 million.
For all the discussion in India about loan waivers for farmers and raising their income levels, this does not address the core of the problem affecting agriculture: the running down of the sector for decades, spiralling input costs, lack of government assistance and the impacts of cheap, subsidised imports which depress farmers’ incomes.
Take the cultivation of pulses, for instance. According to a report in the Indian Express (Sept 2017), pulses production increased by 40% during the previous 12 months (a year of record production). At the same time, however, imports also rose resulting in black gram selling at 4,000 rupees per quintal (much less than during the previous 12 months). This has effectively driven down prices thereby reducing farmers already meagre incomes. We have already witnessed a running down of the indigenous edible oils sector thanks to Indonesian palm oil imports on the back of World Bank pressure to reduce tariffs (India was virtually self-sufficient in edible oils in the 1990s but now faces increasing import costs).
On the one hand, there is talk of India becoming food secure and self-sufficient; on the other, there is pressure from the richer nations for the Indian government to further reduce support given to farmers and open up to imports and ‘free’ trade. But this is based on hypocrisy.
Writing on the ‘Down to Earth’ website in late 2017, Sachin Kumar Jain states some 3.2 million people were engaged in agriculture in the US in 2015. The US govt provided them each with a subsidy of $7,860 on average. Japan provides a subsidy of $14,136 and New Zealand $2,623 to its farmers. In 2015, a British farmer earned $2,800 and $37,000 was added through subsidies. The Indian government provides on average a subsidy of $873 to farmers. However, between 2012 and 2014, India reduced the subsidy on agriculture by $3 billion.
According to policy analyst Devinder Sharma, subsidies provided to US wheat and rice farmers are more than the market worth of these two crops. He also notes that, per day, each cow in Europe receives subsidy worth more than an Indian farmer’s daily income.
How can the Indian farmer compete with an influx of artificially cheap imports? The simple answer is that s/he cannot and is not meant to.
In the book ‘The Invention of Capitalism’, Michael Perelmen lays bare the iron fist which whipped the English peasantry into a workforce willing to accept factory wage labour. A series of laws and measures served to force peasants off the land and deprive them of their productive means. In India, we are currently witnessing a headlong rush to facilitate (foreign) capital and turn farmers into a reserve army of cheap industrial/service sector labour. By moving people into cities, it seems India wants to emulate China: a US colonial outpost for manufacturing that has boosted corporate profits at the expense of US jobs. In India, migrants – stripped of their livelihoods in the countryside – are to become the new ‘serfs’ of the informal services and construction sectors or to be trained for low-level industrial jobs.
Even here, however, India might have missed the boat as it is not creating anything like the number of jobs required and the effects of automation and artificial intelligence are eradicating the need for human labour across many sectors.
India’s high GDP growth has been fuelled on the back of debt, environmental degradation, cheap food and the subsequent impoverishment of farmers. The gap between their income and the rest of the population, including public sector workers, has widened enormously to the point where rural India consumes less calories per head than it did 40 years ago.
Amartya Sen and former World Bank Chief Economist Kaushik Basu have argued that the bulk of India’s aggregate growth occurred through a disproportionate rise in the incomes at the upper end of the income ladder. Furthermore, Global Finance Integrity has shown that the outflow of illicit funds into foreign bank accounts has accelerated since opening up the economy to neoliberalism in the early nineties. ‘High net worth individuals’ (i.e. the very rich) are the biggest culprits here.
While corporations receive massive handouts and interest-free loans, they have failed to spur job creation; yet any proposed financial injections (or loan waivers) for agriculture (which would pale into insignificance compared to corporate subsidies/written off loans) are depicted as a drain on the economy.
Making India ‘business friendly’
PM Modi is on record as saying that India is now one of the most business-friendly countries in the world. The code for being ‘business friendly’ translates into a willingness by the government to facilitate much of the above, while reducing taxes and tariffs and allowing the acquisition of public assets via privatisation as well as instituting policy frameworks that work to the advantage of foreign corporations.
When the World Bank rates countries on their level of ‘ease of doing business’, it means national states facilitating policies that force working people to take part in a race to the bottom based on free market fundamentalism. The more ‘compliant’ national governments make their populations and regulations, the more ‘business friendly’ a country is.
The World Bank’s ‘Enabling the Business of Agriculture’ entails opening up markets to Western agribusiness and their fertilisers, pesticides, weedicides and patented seeds with farmers working to supply transnational corporations’ global supply chains. Rather than working towards food security based on food sovereignty and eradicating corruption, building storage facilities and dealing with inept bureaucracies and deficiencies in food logistics, the mantra is to let ‘the market’ intervene: a euphemism for letting powerful corporations take control; the very transnational corporations that receive massive taxpayer subsidies, manipulate markets, write trade agreements and institute a regime of intellectual property rights thereby indicating that the ‘free’ market only exists in the warped delusions of those who churn out clichés about letting the market decide.
Foreign direct investment is said to be good for jobs and good for business. But just how many get created is another matter – as is the amount of jobs destroyed in the first place to pave the way for the entry of foreign corporations. For example, Cargill sets up a food or seed processing plant that employs a few hundred people; but what about the agricultural jobs that were deliberately eradicated in the first place to import seeds or the village-level processors who were cynically put out of business via bogus health and safety measures so that Cargill could gain a financially lucrative foothold?
The process resembles what Michel Chossudovsky notes in his 1997 book about the ‘structural adjustment’ of African countries. In ‘The Globalization of Poverty’, he says that economies are:
“opened up through the concurrent displacement of a pre-existing productive system. Small and medium-sized enterprises are pushed into bankruptcy or obliged to produce for a global distributor, state enterprises are privatised or closed down, independent agricultural producers are impoverished.” (p.16)
The opening up of India to foreign capital is supported by rhetoric about increasing agricultural productivity, creating jobs and boosting GDP growth. But India is already self-sufficient in key staples and even where productivity is among the best in the world (as in Punjab) farmers still face massive financial distress. Clearly, productivity is not the problem: even with bumper harvests, the agrarian crisis persists.
India is looking to US corporations to ‘develop’ its food, retail and agriculture sectors. What could this mean for India? We only have to look at the business model that keeps these companies in profit in the US: an industrialised system that relies on massive taxpayer subsidies and has destroyed many small-scale farmers’ livelihoods.
The fact that US agriculture now employs a tiny fraction of the population serves as a stark reminder for what is in store for Indian farmers. Agribusiness companies’ taxpayer-subsidised business models are based on overproduction and dumping on the world market to depress prices and rob farmers elsewhere of the ability to cover the costs of production. They rake in huge returns, while depressed farmer incomes and massive profits for food retailers is the norm.
The long-term plan is for an overwhelmingly urbanised India with a fraction of the population left in farming working on contracts for large suppliers and Walmart-type supermarkets that offer a largely monoculture diet of highly processed, denutrified, genetically altered food based on crops soaked with chemicals and grown in increasingly degraded soils according to an unsustainable model of agriculture that is less climate/drought resistant, less diverse and unable to achieve food security.
Various high-level reports have concluded that policies need to support more resilient, diverse, sustainable (smallholder) agroecological methods of farming and develop decentralised, locally-based food economies. There is also a need to protect indigenous agriculture from rigged global trade and trade deals. However, the trend continues to move in the opposite direction towards industrial-scale agriculture and centralised chains for the benefit of Monsanto, Cargill, Bayer and other transnational players.
Devinder Sharma has highlighted where Indian policy makers’ priorities lie when he says that agriculture has been systematically killed over the last few decades. Some 60% of the population live in rural areas and are involved in agriculture but less than 2% of the annual budget goes to agriculture. Sharma says that when you are not investing in agriculture, you are not wanting it to perform.
It is worth considering that the loans provided to just five large corporations in India are equal to the entire farm debt. Where have those loans gone? Have they increased ‘value’ in the economy. No, loans to corporate houses left the banks without liquidity.
‘Demonetisation’ was in part a bail-out for the banks and the corporates, which farmers and other ordinary folk paid the price for. It was a symptom of a country whose GDP growth was based on a debt-inflated economy. While farmers commit suicide and are heavily indebted, a handful of billionaires get access to cheap money with no pressure to pay it back and with little ‘added value’ for society as a whole.
Corporate-industrial India has failed to deliver in terms of boosting exports or creating jobs, despite the hand outs and tax exemptions given to it. The number of jobs created in India between 2005 and 2010 was 2.7 million (the years of high GDP growth). According to International Business Times, 15 million enter the workforce every year. And data released by the Labour Bureau shows that in 2015, jobless ‘growth’ had finally arrived in India.
So where are the jobs going to come from to cater for hundreds of millions of agricultural workers who are to be displaced from the land or those whose livelihoods will be destroyed as transnational corporations move in and seek to capitalise small-scale village-level industries that currently employ tens of millions?
Development used to be about breaking with colonial exploitation and radically redefining power structures. Now we have dogma masquerading as economic theory that compels developing countries to adopt neoliberal policies. The notion of ‘development’ has become hijacked by rich corporations and the concept of poverty depoliticised and separated from structurally embedded power relations, not least US-driven globalisation policies resulting in the deregulation of international capital that ensures giant transnational conglomerates are able to ride roughshod over national sovereignty.
Across the world we are seeing treaties and agreements over breeders’ rights and intellectual property being enacted to prevent peasant farmers from freely improving, sharing or replanting their traditional seeds. Large corporations with their proprietary seeds and synthetic chemical inputs are trying to eradicate traditional systems of seed exchange. They have effectively hijacked seeds, pirated germ plasm that farmers developed over millennia and have ‘rented’ the seeds back to farmers
Corporate-dominated agriculture is not only an attack on the integrity of ‘the commons’ (soil, water, land, food, forests, diets and health) but is also an attack on the integrity of international institutions, governments and officials which have too often been corrupted by powerful transnational entities.
Whereas some want to bring about a fairer, more equitable system of production and distribution to improve people’s quality of lives (particularly pertinent in India with its unimaginable inequalities, which have spiralled since India adopted neoliberal policies), US capitalism regards ‘development’ as a geopolitical tool.
As economics professor Michael Hudson said during a 2014 interview (published on prosper.org under the title ‘Think Tank Times’):
“American foreign policy has almost always been based on agricultural exports, not on industrial exports as people might think. It’s by agriculture and control of the food supply that American diplomacy has been able to control most of the Third World. The World Bank’s geopolitical lending strategy has been to turn countries into food deficit areas by convincing them to grow cash crops – plantation export crops – not to feed themselves with their own food crops.”
The Regional Comprehensive Economic Partnership (RCEP) could further accelerate the corporatisation of Indian agriculture. A trade deal now being negotiated by 16 countries across Asia-Pacific, the RCEP would cover half the world’s population, including 420 million small family farms that produce 80% of the region’s food.
RCEP is expected to create powerful rights and lucrative business opportunities for food and agriculture corporations under the guise of boosting trade and investment. It could allow foreign corporations to buy up land, thereby driving up land prices, fuelling speculation and pushing small farmers out. If RCEP is adopted, it could intensify the great land grab that has been taking place in India. It could also lead to further corporate control over seeds.
Capitalism and environmental catastrophe joined at the hip
In India, an industrialised chemical-intensive model of agriculture is being facilitated. This model brings with it the numerous now well-documented externalis ed social, environmental and health costs. We need look no further than the current situation in South India and the drying up of the Cauvery river in places to see the impact that this model has contributed to: an ecological crisis fuelled by environmental devastation due to mining, deforestation and unsustainable agriculture based on big dams, water-intensive crops and Green Revolution ideology imported from the West.But we have known for a long time now that India faces major environmental problems, many of which are rooted in agriculture. For example, in an open letter written to officials in 2006, the late campaigner and farmer Bhaskar Save noted that India, next to South America, receives the highest rainfall in the world. Where thick vegetation covers the ground, and the soil is alive and porous, at least half of this rain is soaked and stored in the soil and sub-soil strata. A good amount then percolates deeper to recharge aquifers, or ‘groundwater tables’. Save argued that the living soil and its underlying aquifers thus serve as gigantic, ready-made reservoirs gifted free by nature.
Half a century ago, most parts of India had enough fresh water all year round, long after the rains had stopped and gone. But clear the forests, and the capacity of the earth to soak the rain, drops drastically. Streams and wells run dry.
Save went on to note that while the recharge of groundwater has greatly reduced, its extraction has been mounting. India is presently mining over 20 times more groundwater each day than it did in 1950. Much of this is mindless wastage by a minority. But most of India’s people – living on hand-drawn or hand-pumped water in villages and practising only rain-fed farming – continue to use the same amount of ground water per person, as they did generations ago.
According to Save, more than 80% of India’s water consumption is for irrigation, with the largest share hogged by chemically cultivated cash crops. Maharashtra, for example, has the maximum number of big and medium dams in the country. But sugarcane alone, grown on barely 3-4% of its cultivable land, guzzles about 70% of its irrigation waters.
One acre of chemically grown sugarcane requires as much water as would suffice 25 acres of jowar, bajra or maize. The sugar factories too consume huge quantities. From cultivation to processing, each kilo of refined sugar needs two to three tonnes of water. This could be used to grow, by the traditional, organic way, about 150 to 200 kg of nutritious jowar or bajra (native millets).
While rice is suitable for rain-fed farming, its extensive multiple cropping with irrigation in winter and summer as well is similarly hogging water resources and depleting aquifers. As with sugarcane, it is also irreversibly ruining the land through salinization.
Save argued that soil salinization is the greatest scourge of irrigation-intensive agriculture, as a progressively thicker crust of salts is formed on the land. Many million hectares of cropland have been ruined by it. The most serious problems are caused where water-guzzling crops like sugarcane or basmati rice are grown round the year, abandoning the traditional mixed-cropping and rotation systems of the past, which required minimal or no watering.
Unfortunately, policy makers continue to look towards the likes of Monsanto-Bayer for ‘solutions’. Such companies merely seek to break farmers’ environmental learning ‘pathways’ based on centuries of indigenous knowledge, learning and practices with the aim of getting farmers hooked on chemical treadmills for corporate profit (see Glenn Stone and Andrew Flach’s paper on path-breaking and technology treadmills in Indian cotton agriculture).
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