INDIA: feed the hungry - invest in their futures! part one.

 "In Africa poverty is a tragedy;  in India it is a scandal". Martin Wolf, of The Financial Times.

India is at a crossroads.   It is not sure which way to go!  Growth rates are at an all time high. India has been a nuclear power (along with its neighbour) since 1998.  Bollywood thrives - the films show across the Indian Diaspora.  Indian call centres and IT industries are thriving;  more Indian engineers work in California's Silicon Valley than they do in India. Yet, "its modern and booming service sector (is set) in a sea of indifferent farmland" Edward Luce (In Spite Of The Gods).

Indian chaos: 

Agriculture is in a mess.  Today, about 750 million people live in India's 680,000 villages.  Half of them do not have have all-weather roads.  Huge numbers do not have effective health care centres, or competent  primary schools. Nearly half of India's women can neither read or write.  The 'literate ones' often can write only their names. Nearly a million  Indian infants die of diarrhoea each year.  Almost half of all India's children under five are 'chronically malnourished' by UN standards. (And malnourished children are usually permanently damaged)).

Today, 300 million Indians will not know when or where they will next find food to eat. And 150,000 small farmers will kill themselves because of debt and depression.  Usually with weed killer:  a very painful way to die. Yet India is awash with grain stocks.  In 2003 it had a fifth of world grain stocks.  India had more than sixty million tonnes of grain stored away.  Enough to provide a tonne of  to every family living in poverty in 2003. At the time of Independence, 'at the stroke of midnight' on August 15th, 1947, Gandhi, in a letter to Jawaharlal Nehru, said: "if India is to attain true freedom, ....people will have to live in villages, not towns, in huts, not in palaces.... people will never live in peace with each other in towns and palaces".  Everyone in India believes that India's villages are the building blocks of its society. Yet no one wants to live in them. Nehru decided, at the time, that the answer to India's problem, was huge dams, big steel plants and  aluminium smelters, and five year plans. This economic model was praised at the time across the world.  But the plans failed.   Few dams got built, and the investment almost bankrupted India. 

When I was studying how the put the world to rights through economic development (in Manchester, the centre of the free trade ideology), in the early Sixties, we all decided that India was and always would be a basket case!  In 1950, South Korea had the same living standards as India (roughly $50 a year at 2005 prices). Fifty years later,  South Koreans earn on average more than $10,000.  That is ten times what an average Indian will earn today.  In 2006, the average income per head was still below $750. To survive, more than a third of India's rural households rely on 'non-farm' incomes from family members working off the farms.  In Rajasthan, India's largest (and poorest) state, the average annual income  in 2001 was $150 a head. There, the average daily surplusto spend on extra food supplies was six rupees (10 cents) and three rupees for tea and bidis! In the past, India's 5-year plans got things badly wrong.  But times have changed.Or have they?

A farming snapshot:  

Some Indian farmers are hugely successful.  In the well irrigated wealthy states of Punjab and Haryana, some farmers can collect almost all the Indian support farm system.  Two-thirds of the pro-poor subsidy given to farmers is 'non-merit' (it goes to farmers who are not poor: the rich and the very rich).  India's poorest states (like Uttar Pradesh, home to 8 percent of the world's poorest people), development programmes spend 70 rupees direct spend to every 100 rupees spent on officials' salaries.  Overall, the national amount "spent on officials' salaries is far greater than what is spent on all the anti-poverty measures for hundreds of millions of people" (Edward Luce).

India has 450 million farm workers.  Today, more than 100 million of rural Indians own no land and 90% of Indian farms are about an acre or two.  The average in Rajasthan is half an acre.This is simply not big enough. Yes, as many argue, small farmers are more productive than large mechanised farms.  They produce more per acre of land.  But that misses the point. 

Per person, their productivity is a disaster. Family farms must be able to increase productivity per person (not per acre) if they are thrive, to save enough money for the bad times, and  invest in future improvements.  Many of these small farms have negative marginal productivity.  If you measure the added productivity of the last worker in the family; that person took food from the farm and produced nothing extra! I know too many farmers like this, in other Asian countries, trying to eke out an existence, with simply too many hungry stomachs to be filled.  It does not work! Living on a small family farm is a precarious existence.  Trying to grow enough to eat, with some of the harvest left over to sell, is hard. Sometimes, the rains fail. When the children go to school, they need clothing and exercise books. These farms are at the bottom of the food chain. In farm families, the bread winner's need for food come first.  They have to conserve their strength. Manual work - ploughing, sowing, hoeing, and harvesting - is tough. But family farms also need enough capital to weather the 'storms':  unforeseen droughts, poor harvests, plagues of locusts, and other pests, family sickness, marriage of their children.

Yet the work these farmers do accounts for less than a fifth of India's total output (her gross domestic product). Chinese agriculture is far more productive. (And labour intensive too).  Vietnam has had a farming revolution. Before, it imported rice:  now it exports rice.  Why not India? Michael Lipton (adviser to the UK's Department for International Development) says that India has a fifth of the world's farmers. Like Edward Luce, he argues that small farmers need far more attention from the international funders if we are to tackle the rising price of food and the small-farm crisis. He has developed a careful plan for small Indian farming (unlike most international funders who believe the future lies with the large mechanised farms). India has never spent enough money on its agriculture from the start. It's first five year plan, in 1952 spent only a third on its farming.  This fell in the second plan to a fifth in 1957 when more than eighty percent of Indians relied on farming as their way of life.  Governments tried hard to push through land reform so that more people had enough land to work for their sustenance.  It largely failed:  The Congress Party at the time was full of upper-caste landowners and notables.  But it failed, too, because Nixon and Kissinger held India to ransom.  India desperately needed food aid.  The US had the food for India:  but it was afraid of all those small farmers turning into 'commies', like those Vietnamese smallholders.  "Stop the land reform", Mrs Gandhi was told, "or you lose the US food and the foreign exchange you need" (US food aid always used US farm foods - never the output of local farmers). "What the Indians need is a mass famine", Nixon said.  'They're such bastards'.  Kissinger called Indira Gandhi 'a bitch'.  Nixon again: 'World opinion is on the Indian side but they are such a treacherous and slippery people'. (Raj Patel has more juicey gossip about what Nixon thought of the Indians, in his excellent book: Starved or Stuffed). And so, Indians farms have always been too small to mechanise.  They still have to make do with their buffaloes and their plentiful supply of dung.  Of course, thanks to the 'Green Revolution' in the 1970s and 1980s, India was able to use improved high yield varieties of wheat and rice, together with new fertilizers and pesticides.  But that success faded after the 1991 devaluation.

Workers - some facts:   

Of all India's 1.1 billion people,  only 470 million of them have jobs (of a sort). 35 million of them (less than seven percent) work in the formal economy.  These are the ones who have job security and pay the taxes.  They are the ones that get registered, monitored, measured and audited.  (these are the ones who account for the high Indian growth rates. Compared with other developing countries, this (economically active) figure is very low. 21 million of these work in the public sector:  civil servants, teachers, postal workers, tea-makers and sweepers in the offices, schools, railways and factories, and then there are the soldiers, the coal miners and, of course, the ticket collectors. If my arithmetic is correct (it usually is), that leaves about fourteen million who work in the private sector.  One million of them (0.25% of the total labour force) work in IT, software, back-office, processing, call centres. Large foreign companies employ about one or two million people (depending how you define 'foreign').

The rest (about 12 million) work for Indian private sector companies.  As Edward Luce points out:  'conventional wisdom in the west...quite wrongly sees Indian employees of foreign (companies)  as exploited sweat-shop labour.... Indian and foreign company employees are the privileged few - India's aristocracy of labour'. He points out that, in 1983, the private sector was six times more productive than workers in the informal sector.By 2000, that had risen to nine times.

The rest of the workers, all 435 million of them,  are invisible. They are the great un-washed workers, working in the 'informal' sector. They have no job security.  Many are milking the family cow, trying to find casual work in the busy seasons on farms, many run smallshops or street-markets, some make incense sticks or bidis (smokes), others drive rickshaws, or work as maids, drivers, gardeners or night security for the rich, or rent their bodies out for sex, and others bash metal as mechanics in small-town garages. Many of those are in what Karl Marx' calls the 'reserve army of labour':  the unemployed, the casual workers, and the part timers.  They are often badly educated, few can read at all.  They have muscle and brawn but few, if any, (transferable) skills.  Most live a long way from any possible work.  And they cling desperately to their plots of land since these are their only hope of a fragile security.  If that!

The villagers:  

Edward Luce gives an account of what happens in the village of Sohangarh, in Rajasthan. He tells of meeting the men in the village to find out how they survived.  "It was a roll-call of agricultural failings. The first was a well digger who travels from village to village. Another worked as a security guard for Reliance.... The next was a cloth worker who had lost his job in the city.  And so on.  Barely any of the men remain in the village because farming is not enough to make ends meet. While they go away, the women and children tend to the family cow and the small plot.  But very few of the men can find secure jobs in the city.... (the employment) is not (secure or long lasting) enough to persuade them to sell their land and migrate".  OK:  Rajasthan state is pretty poor!  But so is Uttar Pradesh. It has the worst roads in India (any Indian readers among you will probably dispute this!).  Bad roads explain why only two percent of India's farm output has any value added to it beyond being harvested or milked.  More than a third of India's vegetables and fruit rot before arriving at markets.  Roads, roads and more bad roads!  The Rajasthan picture is common to many states in India's poorer north.

Capable India: 

So why it it that India seems so incapable of modernising its agriculture?  After all, during the Tsunami, India was well able to organise its troops and rebuild the damaged infrastructure. It even offered to help Sri Lanka. And the Indian Electoral Commission organises and monitors fully computerised national polls that involve 600 million voters! Its free and fair elections are models of how to run them. Then there is Kumbh Mela.  Every twelve years, more than ten million people camp along the sacred River Ganges as it joins the River Jamuna. Policing and sanitation for a temporary city of that size is a logistical miracle! Yet it happens without many incidents each time.

So why not its agricultural infrastructure?

Well:  that is another story! (see:  "India: the politics of food" - but I'm still researching it!) Note:  the facts in this article come mainly from Edward Luce's book mentioned at the start of this piece.  The opinions come from Yours Truly!