Insatiable US companies want more

American interest in the Indian agricultural sector is intensifying as global food prices go north – 45% in the last year, in contrast to 10% in India. The slow-growing but resilient Indian farm sector is a market for agri-biotech companies and a supply base for trading companies. Swinging past a resistant European market, these global giants are battering insistently on India’s doors.

Faced with barriers like India’s strong farmers’ rights protection laws, and food and export caps, these companies want sweeping changes in the regulatory framework to enable them to do business, US-style.

They have chosen as their vehicle the Indo-US Agriculture Deal or the Knowledge Initiative on Agriculture (KIA). US corporate interests are directly represented in the deal, with three of them — Monsanto, Wal-Mart and Archer Daniels Midland — already on the board of the KIA.

The deal was intended as a joint research, information and technology exchange, training and capacity-building exercise, with the overriding objective of boosting agricultural productivity.

White Paper

Being in a position to directly influence the direction of India’s agricultural research was clearly not enough for the MNCs on the KIA board, however.

The US now wants the deal converted into a complete overhaul of India’s agricultural sector. These ideas were put forth in a “white paper” sent to the Union Ministry of Agriculture.

Entitled A Second Green Revolution: Redefining the US-India Strategic Partnership in Agriculture, the report dismisses the need for research and says the need of the hour is to open up Indian agriculture to the private sector.

To do so, changes in the existing regulatory framework can be effected with the aid of the US, which has considerable experience intervening in this field.

Through “diplomatic engagement at the highest levels”, it will actuate a “paradigm shift that encompasses a broad policy, institutional and infrastructural approach beyond the current initiative.”

But the paper has been strongly opposed by Ministry of Agriculture officials, on the grounds that it turned the entire deal on its head and was based on a “questionable viewpoint”. It has yet to evoke a response from the Planning Commission, more than six months after the fact.

Expanding influence

At the last meeting of the KIA, at which FICCI and CII were inducted on to the board, it became clear that private sector interests were expanding their influence. Needless to say, the paper, not being in the public realm, hasn’t been debated.

Nor, for that matter, was the original KIA. Agriculture policy analysts were suspicious of the deal from its inception in 2006, during Prime Minister Manmohan Singh’s visit to the US. They saw the deal against the backdrop of the six-year confrontation between India and the US over drug patents from joint research on vaccines and diagnostics.

The US demands Intellectual Property Rights (IPR) on the fruits of joint research in countries that do not have IPR regimes. In the confrontation over pharmaceuticals, the US blinked first. But the KIA has never made clear how the outcomes of the joint research in agriculture will be shared.

Frankenstein food

This is important, as India has already committed Rs 400 crore to the programme over a three-year period, whereas the US has yet to put up any money. The research agenda is dictated by the US biotechnology lobby and focuses on transgenics.

This has led to fears that the KIA will be used to introduce genetically modified or “Frankenstein foods” into India. The resistance to such foods in Europe has led to focus on more accessible markets, like India.

The emphasis on reworking policy arises from the frustration of US agri-business giants with India’s refusal to sanction terminator (strictly one-time use only) seeds, to bring farmers under the purview of IPR regimes and allow free trade in agri-commodities without caps imposed by the Essential Commodities Act.

US companies already have a significant share of the Rs 40 billion Indian seed market, currently the eighth-largest in the world. But 85% of seeds in India are not purchased from the market and it is this segment they wish to erode by “converting” traditional farmers to hybrid and transgenic seeds.

This would push up input costs substantially, the perils of which are already manifest in the rural suicide epidemic; and expose farmers to restrictive and coercive IPR regimes.

Terrorist Monsanto

A recent issue of a leading US magazine, Vanity Fair, carried a spine-chilling report on the terrorising of US farmers by Monsanto, which has a strong presence in India.

Indian farmers, as long as they are shielded by the Protection of Plant Varieties and Farmers Rights Act, need not have such fears. The Seed Bill, which has debatable provisions and has thus not yet become law, is another vital target legislation for agri-MNCs, which would like the ban on terminator technology lifted.

For Monsanto, purveyor of 95% of the world’s GM seeds, biotechnology regulations are important. It was charged with conducting field trials for Bt Cotton without appropriate approvals about 10 years ago and has since been lobbying for deregulation.

The proposed National Biotechnology Regulatory Authority Bill is intended to dilute existing bio-safety regulation and allow easy clearances for biotech products, including GM foods. What has set alarm bells ringing is the demand by Monsanto and others to keep bio-safety data hidden under a “confidentiality” clause. Indeed, the companies have approached the Delhi High Court for insulation from the Right to Information Act.

Given Monsanto’s dangerous track record — the British media ran a campaign charging the company with trying to hide its own research that indicated adverse health effects of genetically modified corn — the data confidentiality demand is bound to arouse suspicion.

Deconstructing Finance minister’s dream

Interestingly, Union Agriculture Minister Sharad Pawar — a staunch supporter of biotechnology — recently called for studies on the possible adverse effects of GM crops on human and animal health and the environment. This raises the stakes for companies seeking to bury bio-safety data, rather than prove their products are safe.

For Big Food or “Seed to Shelf” giants like Cargill and Archer Daniels midland — believed to control 65% of the global grain trade — who are facing higher wheat prices at home, domestic purchase and sale makes sense. Thus, regulatory hurdles like the Essential Commodities Act and the Mandi need to be overcome. The flip side is that this is energy inefficient, adding unnecessary food miles to agricultural produce.

Export caps and future trading bans on selected commodities also annoy the US lobby. Recently, India was charged with triggering an almost threefold rise in global rice prices by banning low-value, non-basmati rice exports.

This is not to say that the prospect of US-style vertically and horizontally integrated agri-businesses does not attract the Indian government.

Finance Minister P. Chidambaram told this publication in a recent interview that his dream was to see just 15% of Indians engaged in food production. The sign of a mature economy is having a small proportion of the population in the farm sector.

Clearly, this means mechanisation and industrialisation, which would require just the kind of policy readjustments the MNCs would like the Indo-US agriculture deal to accomplish.