Briefing paper
A farmers’ response to
Bounteous Karnataka
Sustainable Agribusiness and Food Processing Summit
held in Bangalore on 1st &2nd of December, 2011.
Published by
Karnataka Rajya Raitha Sangha (KRRS) & Hasiru Sene
South Indian Coordination Committee of Farmers Movement (SICCFM)
La Via Campesina
Bangalore, December 2011
Compiled by
Chukki Nanjudaswamy
S. Kannaiyan
...20 years ago, prof Nanjundaswamy had warned us of the dangers of WTO and multinational companies, but only today are farmers feel their full impacts. Let’s not wait anymore, lets act IMMEDIATELY to stop the agribusinesses from taking over Indian agriculture!
Karnataka State Farmers Association (KRRS) and Green Brigade
Agri-Livelihood Summit opposing the
Global Agri-Investors and Food Processing Summit
Summary:
1) The Agri-Investors' Agenda
2) Integrated Agribusiness Development Policy 2011
3) Agriculture Budget 2011-2012
4) What is Bounteous Karnataka?
5) Incentives
6) Sectors proposed for investment
1) The agri-Investors’ Agenda:
- To transform Karnataka’s farmer-based agriculture into an investment-heavy form of agriculture: capital-intensive, high-tech, large scale, chemically-mediated, corporate-led food production.
- To increase farmers’ market dependency and strangle them out of existence.
- To steal 40,000 acres of land from small farmers, to be lent out to agribusinesses, from which the displaced and dispossessed farmers will never benefit.
- To create 30 lakhs skilled jobs in urban areas, and a mere 3 lakhs jobs in villages.
- To resolve the 'labour crisis' by replacing what is left of farm workers by machines. The result will be more and more farmers being forced to move to cities, whose poor infrastructure and lack of employment opportunities is already unable to provide a decent livelihood for unskilled labourers.
- To make state government, agribusinesses and agricultural universities the main stakeholders of Karnataka’s agriculture, and to make farmers as their puppets.
- To increase foreign exports, while a great majority of Indians are starving or below the poverty line.
- To “boost economic growth” through increasing domestic and international exports of exotic, off-season and processed food and agricultural products for middle and upper class urban consumers. All this at the expense of farmers’ livelihood and dignity.
2) What to know about the Government of Karnataka (GoK)'s Integrated Agribusiness Development Policy 2011?
1. The policy considers small, traditional, subsistence and rainfed farming as ‘backward’ technological constraints. We, farmers, acknowledge these as sustainable practices relying on low input agro-ecological practices that, if adequately promoted and supported, can bring Karnataka to attain food sovereignty.
2. Farmers’ knowledge on farming is perceived as unproductive and insufficient to meet the growing demands of agricultural products. GoK believes that universities, scientists and IT industries have the knowledge on which the future of farming has to rely. This knowledge is to be 'delivered' to the farmers through widespread training campaigns in the villages. The villages will be subject to their aggressive promotion of chemical farming.
3. The practices to be studied and developed by GoK and private partners (hybrids, genetic resources, greenhouses, etc.) will further instrumentalize and commodify farmers' livelihood for the sole purpose of economic growth. The Green Revolution has showed that high-input, intensive chemical farming depletes soil fertility and results in declining yields. Instead of learning from past experiences, GoK prefers to continue with these counter-natural technologies. The outcome of The Integrated Agribusiness Development Policy will be not only disastrous for soils, climate and biodiversity, but for small farmers who will be further pushed to buy chemical or organic fertilizers and pesticides as well as improved and hybrid seeds. (1.4)
4. While implementing organic farming is promoted, the policy is clearly referring only to large-scale monoculture clusters (article 11). The objective is to supply the growing demand from middle-class ‘conscious’ consumers; it is not a concern for farmers’ health, soils’ fertility nor indebtedness of farmers due to rising prices of chemical inputs.
5. Zero Budget Natural farming, Do-nothing farming and peasant based organic farming mitigate climate change through soil and water conservation practices, whereas intensive monocultures and chemical farming are polluting and fuel-dependent.
3) Agriculture Budget 2011-2012
Karnataka is the first State in India to have a Separate budget for Agriculture. However, the allocation of public funds demonstrates, once again, the state government's total dedication to agricultural intensification and modernization, which are to be carried out by agribusinesses and agricultural universities (Agriculture Budget 2011-2012).
- 100 crores for farm mechanisation. Priority to be given to “backward taluks”.
Comment: Tractors and other machinery are not what Karnataka’s mainly landless or marginal farmers need. More than anything, they need land, social security and protective market prices and policies.
- 20 crores to provide one vehicle for each taluk, in order to reach all farmers, train them, inform, give advices and “solve their problems”. This is to be implemented in partnership with agricultural universities as well as government and private sectors.
Comment: Scientists and experts’ knowledge is subject to corporatist and capitalist interests. Their recommendations serve the specific interests of corporate agriBusiness, not the farmers'.
- 60 crores to provide a subsidy of 50% on “quality seeds” and 5 crores to triple seeds production capacity in every university
Comment: However the ancestral practice of seed-saving is free. It builds autonomy and native varieties are more nutritive and adapted to local agri-conditions
- RS 1000/month stipend per student that enroll in diploma and certificate courses in Agricultural science, Horticultural, Fisheries, Animal husbandry universities.
Comment: These universities are known to work hand in hand on biopiracy with giant Agri-BioTech firms like Monsanto, Mahyco and Syngenta. In the name of science and development, they push forward genetic engineering, with the great threat of biodiversity loss, contamination and damaging human health.
4) WHAT IS BOUNTEOUS KARNATAKA ?
This Global Agri-Investment and Food Processing Summit is organized by the Government of Karnataka to attract massive investment for Karnataka’s agricultural sectors. The Government of Karnataka is looking for not less than 51,000 crores to be invested by foreign and national agribusinesses. The Global Agri-Investment Meet will be a seduction show to convince hundreds of potential partners to invest in all stages of agricultural production, marketing and distribution, in order to realize Karnataka’s Integrated Agribusiness Development Policy 2011.
Recognizing that agriculture has always been and will continue to be the motor of India’s economic growth, the Objective of the Integrated Agribusiness Development Policy 2011 is to reach a growth rate of 4.5% in agriculture GDP. This means doubling the growth rate obtained during the 10th Five Year Plan. In order to achieve this rate, the Government of Karnataka is planning, with the help of its new investors, to modernize and liberalize the following targeted sectors: Agriculture, apiculture, animal husbandry, floriculture, horticulture, fisheries and food processing.
The Government of Karnataka promises to link its potential investors with 3 categories of service providers:
1. Technologies, machineries, project installation support, marketing support for the produce, strategic partnership support and knowledge provider.
2. Research and Innovation partners providing educational, research and knowledge support.
3. Institutional and large retail buyers as well as marketing support provider.
To realize the Policy, the Government of Karnataka created the Karnataka Agribusiness Development Corporation (KABDC). The management of KABDC will be ensured by The Karnataka State Agricultural Produce Processing & Export Corporation Limited (KAPPEC).
5) Incentives
Instead of strengthening and expanding the cooperative system, the Government of Karnataka is about to invest huge amounts of public money to provide financial incentives and subsidies to its agribusiness partners, whose profits will never be re-invested in public sectors. This investment will only create more wealth for the corporate elite.
For all Micro, Small and Medium Enterprises (MSME), Large and Mega agro based industries and agri infrastructure:
1. 100% Exemption from Entry Tax for first 3 years, and 5 years for the Export oriented industries
2. 100% Exemption from electricity duty/tax for the first 3-5 years (according to zone)
3. Exemption from Stamp Duty for loan agreements, credit deeds, mortgage and hypothecation deeds, and lease deeds and lease-cum-sale.
4. Concessional Registration Charges of Rs 1 per 1000
5. Exemption of agriculture produce market committee (APMC) cess / fees: a reduction to 0.25% for 5 years
6. One time 50% Subsidy of the cost for setting up Effluent treatment plants (ETP)
For Large and Mega agro based industries:
- Interest Free loan of 25-50% of assessed gross Value Added Tax (VAT)
Special incentives for Agro based industry
- Subsidy of `100 lakhs for the first two agro based industry with minimum employment of 100 members and minimum investment of `50 crores in each of the taluks coming in Zone-1, 2 & 3
- Interest subsidy on Technology Upgradation, Quality Certification and Patent Registration loans for Micro & Small manufacturing agro based industries
Other incentives and subsidies
a. Reimbursement of 50% cost of preparation -ceiling of `5 lakhs - for project to set up new agro based industrial units
b. Cover up to 50% cost -ceiling of `20 lakhs- of research and development activities by reputed research
c. Land at concessional rate and 50% initial seed capital - ceiling of `5 Crore- for crop development institutes
…And how much for the farmers???
6) Sectors proposed for investment
a) Sericulture
The silk cocoon prices plummeted this year due to ill-engineered government policies reducing the import tariffs from 30% to 5%. The silk reelers, in anticipation of cheap silk from China after import duty cuts, were no longer interested in the local produce. A crisis in the Sericulture industry and a wave of suicides have been the results of these policies. Failure of the state and union governments' to halt the massive imports and dumping from other countries has depressed the domestic market. Small and marginal farmers manufacturing silk in capital-intensive process (bank loans, subsidies,...), with technical inputs from Japanese international corporate agencies through the Central Silk Board and the state's Sericulture Departments, are suffering. The sector needs more support for the systematic promotion, productivity improvement and a protected market for farmers. The Central Government's policy relating to silk has been greatly influenced by the traders – not by the farmers, not even by the State Governments, such as Karnataka. The refusal by the central government to bring back the tariff to the level of 30% was declined by Union ministry, while the traders and lobbyists clamored to keep the tariffs at 5%. Ms. Jayalakshmamma, a sericulture farmer, says:
“People have started leaving for Bangalore looking for work.” While it costs about Rs. 250 to produce a kg of cocoon, prices remain low and there is no support from the government. Labour costs are high, water is scarce and power is constantly fluctuating. “How can you expect farmers to remain farmers when such is the case?” she asks.
The Agri-Investors meet is showcasing opportunities in Mulberry cultivation concentrated in Mandya, Ramnagaram, Kolar, Chikkaballapur, Bangalore and Tumkur districts. Karnataka accounts for 40% of the Silk production of Indian States while India is ranked 2nd in the world's production of total silk produce.
b) Dairy and Animal Husbandry Sectors
Strong Cooperative Institutions
We already have strong cooperative institutions at village, district, state and national levels. From experience, the private sector expands only at the cost of the cooperative sector. Any move to corporatize dairy industry will result in the death of cooperative milk producers' societies – primarily farmer-owned institutions.
The monopoly of the “organised retail sector”
The Agri-Investors meet is boasting Karnataka's status as the 11th largest milk producer in India, with the 9th largest bovine population in India. In India dairy farming is practiced by 13.90 million farmers in villages registered as milk producers, under 1,33,349 dairy cooperative societies. Stating that “80 % of milk produced is consumed at farm” or by the “unorganized sector producing traditional milk products”, Karnataka Government showcases this poor distribution to the organized sector as an investment opportunity for the corporations. But Karnataka should be valuing its model of cooperative production rather than offering to sell it off to corporate investors. Its unorganised retail sector, on which the farmers depend for distribution, should be protected from the monopoly of the organized retail sector.
Land Use
In our farming, animal husbandry is essential for fertilizer. However, as farmers we are weary of the trend of industrial scale animal husbandry where land is used to feed animals and not people. Animal husbandry is currently the principal global user of land. Similarly to Bio-fuels which feeds cars and not mouths, any cause that deviates land use away from feeding humans should be carefully monitored.
c) Food-Processing Sector
Obviously, certain areas of food processing are welcome. Those which permit the good food we grow to be less perishable, certain Value Added Products (VAP), for example, are desirable. But the Agri-Investors proposals from the Food Processing industry should be carefully scrutinized.
The marketing of snack foods and convenience foods
The Agri-Investors Meet is counting on the “rapid urbanization of the Indian population”, the emptying of the rural areas, to guarantee a customer base for its processed foods and beverages. They anticipate a “likely increase in demand for prepared meals, snack foods and convenience foods”. The estimated 11% growth in youth population(15-25 years) are highlighted as an opportunity for aggressive marketing. Today, diets relying on processed foods commonly cause obesity and diabetes. High amounts of fats, sugar and salt characterize this diet.
A threat to the “unorganised retail” sector
For these Ready to Eat (RtE) foods, the conference invites the use of the “organised retail market” and the “consolidation the supply chain”. Their plans will be massively damaging to the unorganised retail sector, which is huge and thriving in India (which comprises most current trade outside of supermarkets: markets, vendors, shops....). For example, the “unorganised sector” which provides materials for Bakery products in Karnataka is here showcased as an “investment opportunity”.
Exports
Opportunities for investors in global exports are advertised “due to the existing price competitiveness”. Are these opportunities for taking advantage of the cheap labour of a population often malnourished; to export the food that should feed the people of India?
The Track Record of the Food-Processing Industry
Nestle is one of the pioneers of the food-processing industry. Marketing the premise that there is not enough food to feed the planet (when, clearly, mode of production and distribution are the issues), they are currently modifying foods such as milk powder and salt and selling them as 'enhanced'. Targeting staple foods and their massive markets, in Tamil-Nadu Nestle 'enhanced' salt is already common.
In a worrying collusion between corporations and government, the company Interflour is currently pushing for the mandatory 'fortification' of flour used in Vietnam.
Genetically modifying rice with 'medicinal properties' such as Golden Rice, are expected to reach the market by 2012. Instead of GMC we should instead look to the 1lakh rice varieties and their respective medical proprieties. Members of KRRS have SeedBanks for millets and rice, preserving the scores of varieties that are no longer grown since the aggressive marketing of the Green revolution.
Our Indian diets have evolved with local, seasonal and natural ingredients. AgriBusiness is not invited to ‘enhance’ them.
d) Agriculture
The Agri-Investors meet showcases opportunities in the Agricultural sector without inviting or consulting the farmers of Karnataka!
Despite Karnataka's strong culture and practice in agriculture, the Agri-Meet considers small, traditional, subsistence and rainfed farming as ‘backward’ technological constraints. These are sustainable practices relying on low input agro-ecological practices that, if adequately promoted and supported, can bring Karnataka to attain food sovereignty.
The Agri-investors meet n Karnataka presents agriculture as the means of livelihood for 65% of the population, with a share in the state GDP at 16%, which is higher than the National Average. Rice, maize jowl, wheat, pulses, sugarcane, coton , oilseeds are suggested as targets for investors.
Farmers should also be aware of the invitation to "contract farming", which removes from the farmer all agency and decision making capacities with regards to his land and his crops.
e) Floriculture
While we have a thriving domestic market for flower-consumption, the Agri-Investors' proposal is in conflict with any hopes of food sovereignty. Agricultural land to produce luxury non-edible goods, to be air freighted out for export is a carbon-intensive and wasteful agricultural land use.
"Worldwide", boasts the conference, "large retailers such as Wal-Mart and Tesco have increased the amount of purchases acquired directly from the growers under long-term contracts". This increase in trade through supermarkets and retail outlet has resulted in drastic damage to ecology and the farmers.
Already in recent years a large number of corporate houses like ESSAR group, TATA group, Reliance, ITC and Bharti have began investing in the flower sector.
f) Horticulture
Through its export and zone-specific cropping pattern policies, one can clearly see the Government of Karnataka’s intention to bring its horticultural sector under a centralized and intensive export-oriented production pattern.
Exports and year-round availability
In a context of ‘rising global demand’ for horticultural products, the Government of Karnataka is committed to boost its international exports. Following the capitalist trend to make services their main economic activity, developed and developing countries rely more and more on imports from the world’s last agrarian countries, such as India, to feed their populations. Considering the saturation of developed countries’ markets, food industry is spending billions to bring consumers to hybrid, exotic and off-season food products. The concept of ‘year-round’ availability of food crops, flowers and medicinal plants is totally unnatural, thus require capital and energy intensive technologies and infrastructure. Moreover, food produced in artificial conditions is less nutritive. Still, the state government is calling for agri-investors to bring the state’s horticultural production to supply the demand.
Zone-Specific Cropping pattern
The government of Karnataka has a very rational and profit-oriented way to develop its horticultural sector. Stating that each horticultural crop requires specific agro-climatic conditions to maximize the yield, the state government is establishing Agri Export Zones (AEZ). The purpose of AEZ is to mobilize all farm lands, workforce, industries, as well as research and development institutions of one area towards the production and processing of one crop. Such Agri Export Zones have been created for Gherkins, Rose Onion and Floriculture. Grapes, Mango, Pomegranate, Aromatic and Medicinal plants and Vanilla are identified as potential AEZ.
But monocultures requires much more chemical fertilizers and pesticides to combat pests and diseases, compare to mixed cropping natural farming. Moreover, bringing one whole area to produce only one crop not only brings huge financial distress for farmers in case of crop failure, but is a serious threat to farmers control over their land and crops as well as India’s biodiversity. Food sovereignty is about producing food locally to feed the people. According to this principle, exports are only secondary; giving them such priority is spitting on farmer-based farming system and its ancient wisdom.
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