Foreign Direct Investment and its Impact on Local Farmers

Foreign Direct Investment (FDI) in retail and its probable impact on local farming and trading communities.

Let us try to understand the phenomenon of FDI in the historical prospective. We can trace the roots of modern FDI in East India Company of Britain and its French, Spanish and Dutch counterparts, some two hundred years ago. Equipped with their newfound power of coal and oil, producing steel and steam engine, building ships, these task forces sailed across the globe. What started as a simple trade of spices, silk and tea etc ended up with full force of Imperial rule over hundred or so previously sovereign/autonomous nations.

Most of these nations went through decades of bloody struggles to regain their political freedom. Majority of these ‘Free’ nations are still finding it difficult to cut the imperial strings from Political, Economic, Educational and other fields of influence.

The Mega Corporations of the past and present Empires are keen to revisit the path treaded by their predecessors for the very similar reasons. This time selling military and consumer items and buying resources and farm produce. Using their Mega-Profits to buy future rights of coal, oil gas and even ground water is not uncommon.

There are some strong objective factors in the present Socio-Economic relations and mode of production that will assist in the introduction of FDI in all developing countries (Emerging Economies). Due to the abundance of cheap fossil fuels, mechanized and chemical based agricultural model have made it possible to produce surplus food in the last few decades.

Hundreds of year old established mode of transportation, trade and distribution was not capable to handle this sudden change and hence disappeared very fast. In the wake of Green Revolution, village as a self-sufficient unit ceased to exist after thousands of years. Super stores that rely on national and international trade have replaced the ancient barter system.

One can observe the outcome of this model in the countries with advanced economies. Mega corporations in the food industry eat small farmers, small traders, medium farmers/traders and eventually large farmers (in that order). In the end only large traders are left in the game along with their contract producers. It is not just a coincidence that presently there are more than 42 million American citizens on Food Stamps. Thousands of farmers committing suicide every year in traditional agrarian country like India are also a proof that there is something fundamentally wrong with the present model.

On the other hand, there is one factor beyond the control of any government or political party, which will ensure the death of international trade and the retail business built on top of it. That factor is the exhaustion of cheap fossil fuel reservoirs in the very near future. Without cheap oil, The Green Revolution, its mechanized, chemical intensive farming model will collapse. So will the surplus produce and trade and retail associated with it.

Despite the obvious dangers to the populace of emerging economies, there is a real possibility that their respective governments will support and promote these foreign direct investments. We must not underestimate the economic power of these Mega Corporations, their capability to buy the elected governments or its decision makers. Mostly through monetary corruption but sometimes through intellectual means where eminent Economists, trained and educated by their select Universities hold senior government positions, actually believe in executing these policies.

I hope it raises few questions in the readers mind unless you are a PhD or Noble Prize winner in Economics.

Agricultural Science, Green Revolution and Farmer Suicides

It seems that many farmers are reaching the dead end of No-Through road of Green Revolution.

Farmers' suicide is a subject too painful to discuss with the grieving families but it demands a public debate discussion about its possible causes and solutions. Wherever the Green Revolution was unleashed in developing countries few decades ago, marginal farmers are paying the ultimate price for its 'success' now. Are farmers the main culprit and deserve this harsh penalty or there are others factors that might have contributed to their demise.

To understand the complete picture, firstly we need to establish and define the major players of this game and their respective roles in it. 

Farmers of modern agricultural model are not farmers in true sense. They can be classified as miners because they are mining their soil and water. They can also be classified as petty-industrialists relying on cheap fossil fuels as their energy source along with other petro-chemical poisons and fertilisers as their farm inputs. Modern farmers can also be classified as 'Suicide-Bombers', going by the number of cancerous disease related deaths they bear in the process of perusing chemical farming.

Food production and politics of any country cannot be looked in isolation.  Whoever controls the political power (State) of any country, also controls the food production and distribution. Using subsidies, licenses and minimum support prices, not only they indirectly control which crop is grown from which seed, which chemical is sprayed to kill the weeds but where the farmers sell their produce and at what price. State also controls the research cum educational institutions like Agricultural Universities thus controlling what is taught to the next generation of scientists and what is recommend to the present generation of farmers.

The whole exercise of Green Revolution was like copying the idiots in the 'advanced economies'. Farming community was locked up in the cage of industrialised civilisation. They were like prisoners who were free to choose between doom and extinction. Agricultural scientists, in conjunction with the government department of Agriculture and with the help of foreign 'aid', taught them in such a way that they unlearned their traditional knowledge accumulated over hundreds of generation and started to behave like conquerors of the nature. We were not just another species on this planet but master of all others who are only there to serve our material needs. We did not believe anymore that Sun, air, rain and forests are there for all the inhabitants, not just for the sake of Homo sapiens.

We forgot to notice that billions of plant seeds were somehow germinating and reproducing for millions of years even before the first tractor was rolled into a field. It didn't occur to us that if you do not harden the soil running heavy farm machinery on it, you don't need to plough it to soften it up.

By developing some chemical poisons that can kill the insects and plants who compete with humans food production goals, these scientists start to believe that humans are not just one of the millions of other species but are somewhat different and special with super natural powers.

It seems that no one can misunderstand the crisis of scientific agriculture more than the highly trained agricultural scientist himself. One can imagine the condition of a mature man who was adopted by a fanatic religious group in his early childhood. What are the odds that he can break away from his masters and join another religion? An advanced degree of modern agricultural science is no different. These scientists are far too committed in their beliefs and far too dependent on the financial rewards for sticking to their guns that it doesn't make sense for them to change the course.

The grip of modern educational institutions is so tight that only a few can escape without severe constraints in their ability to think independently once they are fed through this mass production shaft. First of all a new scientist cannot graduate/post-graduate from a university unless he submits a thesis in line with the prevalent line of thinking of that institution. His score, scholarship, degree and finally job prospects depends on it.

Those who excel in such studies and do further research enhancing these scientific intervention techniques, secure high decision making executive positions in various government agencies and departments. At the top level a nexus is thus build between those officials, their political masters and multi national corporations that eventually benefit from the sale of their seeds, fertilizers, chemicals and farm machinery. Even if an agricultural engineer or a farm scientist reaches to the conclusion that his interference into eternal laws of nature is unwarranted and destructive, he cannot advocate the uselessness of his profession without losing his livelihood.

The followers of the sect of scientific agriculture are certainly capable of making the natural balance undone for a while but Mother Nature is not mother Teresa. Sooner or later Nature will use its veto power and force the equilibrium. We cannot sustain for long whilst exceeding the carrying capacity of our local environment, first and foremost its land and water. 

May be its not the fault of farmers or scientists after all. It was not long ago we all were hunter-gatherers and in the face of daily needs and threats our genes are still programmed to worry about the short-term survival in the immediate environment and not think beyond that.

It’s painful for the farmers to admit that their governments and universities, all of who promoted mechanised, energy intensive and chemical based farming practices, has fooled them. This 'Green Revolutionary' model of farming not only ruined their land and water but also forced them to go in a deep hole of debt, making it virtually impossible to get out without committing suicide.

Current political turmoil in Africa, Middle East is in fact an expression of a food crisis. Any modern scientific model of farming, whether operating under a Socialist or Capitalist economic system is in danger of collapse without unlimited supply of limited cheap fossil fuels.

Efficiency of modern scientific techniques such as tractors, pesticide power sprayers and tube-wells all help us to make our journey to the finish line faster, more efficient. 


It is not easy for an inmate to plot the prison break, not first without realising that he has been imprisoned. Only then he can think of the possible escape routes. Scientific farming is like fighting a War against Nature, no chance of winning. Sooner we admit our defeat and return to age-old traditional natural farming, better are the chances of averting more suicides in the farming families.


daradhillon@hotmail.com

Bankruptcy of Oil Based Agriculture

End of fossil fuels can Bankrupt Green Revolution

(This article was published by The Tribune on 24 March 2010)

‘Green Revolution’ was a phenomenon that dominated the developing countries since 1950s. As it was associated with increased food production which was believed to be the saviour of the world’s poor and hungry, not many people challenged its sustainability. Was it due to new inventions of crop varieties, chemical pesticides and fertilisers; or was there something else more fundamental that caused this boost in agricultural production?

Agriculture, like any other production process needs a certain amount of energy input to produce something more useful as output. One of the major portions of farm energy input has always been available in the form of solar energy. This is consumed by plants using their photosynthesis capabilities and the rest of the input was filled in by animal/human energy in the shape of their physical labour. That model wasn’t capable to feed 7 billion humans presently inhabiting this planet but nonetheless, it was sustainable. Sustainable system is one which over its lifetime produces enough energy to maintain, grow and reproduce itself.

Then with the availability of relatively cheap fossil fuels (hydro-carbons) and the farm machinery that runs on these fuels, the farmers were more than happy to switch to this new ‘Green Revolutionary’ system of non-renewable-energy intensive farming. This new model made farmers totally dependant on ever increasing energy consumption thus increasing fossil fuel content of our food chain. Fossil fuel (Oil) is simply the solar energy stored as hydro-carbon deposits under the crust of earth over a period of millions of years.

There are two factors worth mentioning here about the fossil fuels. Firstly, fossil fuel reserves are of limited quantity due to the fact that they can only exist at a certain temperature and pressure hence found only up to a certain depth under earth’s surface. Secondly, they don’t exist everywhere. Mother Nature did not distribute its resources evenly. She gave oil to Saudis but didn’t provide them with good soil or water. To Punjabis, she bestowed good soil and water but no oil. May be she thought it would be too humdrum if everybody was treated alike.

Farmers are mostly aware of the visible energy inputs in the form of diesel consumed by tractors or electricity consumed by irrigation motors. Beside this, a huge quantity of invisible energy is consumed to manufacture other farm inputs. Consider tractor for instance; right from the time of mining iron ore, making steel, shipping steel, transporting thousands of factory workers to manufacture a few hundred different parts in dozens of different cities, assembling and shipping a working tractor. All this happens well before the machine enters the fields.

The energy cycle is visible only when you start your tractor for actual ploughing, sowing, harvesting and transportation of the farm produce to the markets. Invisible energy cycle starts again when the farm produce is sent to the storage, processing and packaging to be shipped to the end users across the country or even overseas. Other farm inputs such as fertilisers and pesticides have energy cycles of their own. Pumping irrigation water either by diesel engines or electricity produced by coal power plants adds another substantial hydro-carbon foot-print.

Total solar energy received on a daily basis by our planet sets a limit to maximum photosynthesis capacity and thus set the maximum amount of food that can be produced sustainably. The only other way to increase production is to use stored solar energy in the form of fossil fuels.

If we want to continue practicing agriculture for centuries to come, also known as Permaculture, then we better understand the energy cycle, the soil nutrient cycle and the water cycle of the current model of agricultural practices. Are we consuming more energy than we are producing in the form of food crops? Are we returning everything produced on our land back to it? Are we consuming water faster than what is being replaced by Nature?

To answers these questions, one doesn't need a degree from a university. Put these questions to any number of farmers and almost all of them will make out the correct answers. They all know that soil nutrients are being depleted and only partially replaced by petroleum based fertilisers; ground water level is dropping in most locations. What they don’t know or don’t want to discuss is whether this fossil fuel based farming system is sustainable or not?

It is such a daunting thought that majority of us does not want to recognize the problem or even discuss it. Some of us acknowledge the problem but hope that someone else will invent a solution. The public discussion on this topic is certainly absent. What a dangerous fantasy.

The current model of agriculture is severely dependant on adding a huge amount of non-renewable and mostly imported energy in the form of diesel, petrol and gas. As we have consumed more than half of the hydro-carbon stock from the ground in the last century alone, oil and gas are set to deplete within our lifetime. Since we are fast heading to a post-carbon age, consequently the cost of hydro-carbons will increase many fold in the near future. This will have a multiplier effect on the production costs and prices of all food items.

No matter which political party you belong to and no matter how many Andolans or Morchas you put together, you can’t run away from this simple mathematical correlation. We can blindly carry on this path of maintaining or even increasing the agricultural production by tapping the remaining stockpile of fossil fuels until we finish it. Then what? Imagine for a moment, agriculture without fossil fuels. Can a farmer plough, sow, harvest, process and transport wheat or rice crop on a mere 10 Acre land? It is very intimidating for present day farmers to think this scenario but it should also send forewarning to population that rely on surplus production by farming community.

It would be naïve to think that government will do something to fix this. Their prime job is to keep the things as usual, at least till the next elections. It is guaranteed to maintain the status quo, especially if the proposed changes can cause decrease in production, consumption and therefore result in reduced tax revenues. Which section of population is likely to pay the price for this readjustment? Politicians might lose their hungry voters but they can switch sides, some government officials may lose their jobs but they might find a real productive work elsewhere. Ultimately, it will be the farming community that will face the brunt by losing their livelihood. They can’t leave their land and go elsewhere.

Farmers are the one who have no option but to change their operations from mechanised to localise organic farming. But how can we change the system if we can’t even perceive the problem? Like any other grass root movement you might have a small group to start with new way of thinking. Get on with localise farming practices and even start a local trade based on barter system and slowly become fully self-sufficient. Not depending on cheap fossil fuels and any sort of government help. The ultimate achievement for any village community would be to establish an Eco-Village; a complete self sustaining unit. All this might find resistance from the establishment; after all we are talking about Agrarian Reforms.

Most of us can’t handle too much reality and it is devastating when age old traditions shatter for whatever reason. At the same time, if you are not a scientist or a government official, you may have retained the ability to see things in a simple way. We can’t see the predicament of the current farming model and its imminent collapse unless we understand the short life span of fossil fuels and move away from intensive mechanised farming practices that solely rely on it. We can plan ahead now and try for relatively smooth transition or wait for oil to run out at some point in the near future and everything will change for us without seeking our advice. It is a harsh view but there is no easy way out.