The SEZ versus the 'unrewarding' small farm By Aseem Shrivastava Inforchangeindia.org
The chief promoter of the SEZ is Kakinada realtor K V Rao who used to be the secretary of industrial promotion (AP) till not so long ago. The land to be acquired has been declared ‘infertile’ -- lush paddy fields notwithstanding.
It is no surprise that the SEZ promoter wants precisely this area of land: water is accessible less than 10 feet below the ground and there are plenty of springs and waterholes in the area (the Godavari, Pampa and Suddagadda rivers are not far either). Government officials continue to argue that these are ‘dry’ lands.
We sit down and do the economics of farming together. We discover that after paying each of his 10 workers Rs 100 a day during the sowing season and Rs 80 a day during the harvest, Murthy earns about Rs 18,000 every month, apart from the rice and vegetables that grow on his land. Thus, he runs an operation of almost Rs 4 lakh a year, which supports 11 working people and their families. In other words, 50 people are dependent on these five acres of cultivation, each living on an average of around Rs 800 a month, more than twice the official rural poverty line of under Rs 356 a month. Such a local subsistence economy falls beyond the cognitive horizons of our policymaking economists.
The question arises: Why should a farmer like Murthy be willing to surrender his land for what are being heroically advertised as greener pastures outside agriculture? Also, what sort of guaranteed employment can the government or the SEZ corporations offer the landless workers who will inevitably be jobless once the land is taken over? (One may ignore, as has become the habit in this country, the loss of community ties and culture that such dislocations invariably involve.)
Displacing Farmers: India Will Have 400 Million Agricultural Refugees By Devinder Sharma, 22 June, 2007, STWR.net
Acerbating the crisis are the policy initiatives that promotes privatization of natural resources, take over of farm land, integrating Indian agriculture with the global economy, and moving farmers out of agriculture – in essence the hallmark of the neo-liberal economic growth model.
Agricultural reforms that are being introduced in the name of increasing food production and minimising the price risks that the farmers continue to be faced with, are actually aimed at destroying the production capacity of the farm lands and would lead to further marginalisation of the farming communities. Encouraging contract farming, future trading in agriculture commodities, land leasing, forming land-sharing companies, direct procurement of farm commodities by amending the APMC Act will only drive out a majority of farmers out of subsistence agriculture.
Although the land holding size is diminishing, the answer does not lie in allowing the private companies to replace farmers. Somehow the entire effort of the policy makers is to establish that Indian agriculture has become a burden on the nation and the sooner the country offloads the farming class the better it will be for economic growth.
Contract farming therefore has become the new agricultural mantra. Not realising that private companies enter agriculture with the specific objective of garnering more profits from the same piece of land. These companies, if the global experience is any indication, bank upon still more intensive farming practices, drain the soil of nutrients and suck ground water in a couple of years, and render the fertile lands almost barren after four to five years. It has been estimated that the crops that are contracted by the private companies require on an average 20 times more chemical inputs and water than the staple foods.
Allowing direct procurement of farm commodities, setting up special markets for the private companies to mop up the produce, and to set up land share companies, are all directed at the uncontrolled entry of the multinational corporations in the farm sector. Coupled with the introduction of the genetically modified crops, and the unlimited credit support for the agribusiness companies, the focus is to strengthen the ability of the companies to take over the food chain.
================ Special Economic Zones: Lessons From China By Bhaskar Goswami, 13 February, 2007, Countercurrents.org
China's record economic growth rate fuelled by the Special Economic Zones (SEZ) is often advocated as the reason for India to adopt this approach. The Chinese experience offers a valuable lesson for India.
While rural China is up in arms against acquisition of land, SEZs like Shenzen in Guangdong showcasing the economic miracle of China, are beset with problems. After growing at a phenomenal rate of around 28 percent for the last 25 years, Shenzen is now paying a huge cost in terms of environment destruction, soaring crime rate and exploitation of its working class, mainly migrants. Foreign investors were lured to Shenzen by cheap land, compliant labour laws and lax or ineffective environmental rules. In 2006, the United Nations Environment Programme designated Shenzen as a 'global environmental hotspot', meaning a region that had suffered rapid environmental destruction.
China also abolished agricultural tax in 2006 and increased subsidy for food grain production by 10 percent. To boost rural income, the selling price of grain was increased by 60 percent in 2005. In 2004, out of a total 900 million farmers in China, 600 million received US$ 1.5 billion (Rs.6,630 crores approximately) as direct subsidies. 52 million of the Chinese farmers have joined in the rural old-age insurance system and 2.2 million received pensions in 2005. More than 80 million farmers had participated in the rural cooperative medical service system by the end of 2004, and 12.57 million rural needy people had drawn allowances guaranteeing the minimum living standard by the end of 2005.
India, on the other hand, either does not have any of these safety nets or is in the process of dismantling the few that exist. There is much to learn as well as unlearn from the Chinese experience. Until that is done, millions of poor across the country will be made to pay an even higher price than the Chinese did for following this flawed approach.##
============================= SEZs: The Problem By Aseem Shrivastava 19 February, 2008, Seminar ‘Few cities anywhere have created wealth faster than Shenzhen, but the costs of its phenomenal success stare out from every corner: environmental destruction, soaring crime rates and the disillusionment and degradation of its vast force of migrant workers…’ – The New York Times, 19 December 2006, describing the world’s leading SEZ in China
‘SEZs are here to stay.’ – Prime Minister Manmohan Singh, 24 March 2007, after the Nandigram massacre
Sitting in pampered precincts of urban privilege few people can appreciate or even find credible the way globalizing India Inc. is actually working in the countryside, as it goes about gouging the earth for resources and accumulating land banks, uprooting its residents from modest livelihoods. Land acquisition for SEZs is only the latest instance of such a predatory style of growth – involving the loss of livelihood, land, forests, pasture and water sources for millions of rural families who live by agriculture and related occupations.
However, there are pre-acquisition issues involving SEZs, to do with environmental losses, displacement and the loss of livelihoods. In a time when climate change is fast becoming an everyday concern of policy-makers, what could justify the clear-felling of 10 million ecologically sensitive natural growth trees on a coastline prone to erosion by the sea? An oil refinery vital for the survival of the nation? A critical steel plant? A port-based SEZ?
The last answer appears to be the correct one. In Mundra, Gujarat, in clear violation of the Coastal Regulation Zone and various environmental laws, large tracts of land have been cleared and granted by the Gujarat government to a well-known business group to inaugurate an SEZ. Thousands of farming, grazing and fishing families have been adversely affected by the launching of the project. No social cost-benefit analysis worthy of economic science has been carried out for this (or any other SEZ) project.
An entire arsenal of methods are being deployed by different state governments across the country to acquire land, water, forests and rangeland for purposes of mining, industrialization and construction of infrastructure. SEZs constitute one among many such species of land acquisition. However, it would be wrong to see land acquisitions for SEZs as a mere continuation of the process by which so much land has been acquired for non-agricultural use in the past. Given that SEZs will be governed by a special set of laws and rules created for the purpose and that incomparable autonomy will be granted to the (unelected) SEZ Authorities, there are fresh issues of governance that arise.
Concern for marginalized rural communities and their habitat is often misconstrued as sentimentalism in the face of necessary and inevitable industrial advancement and progress. It is taken for granted that just as happened in the West, there will be a transfer of the huge agrarian population to urbanized occupations in the industrial or the service economy. However, there are good reasons to be sceptical of such a widespread view. First, when the western economies were industrialising and urbanising there were abundant global markets, including in the captive markets of colonies held by Europe. Markets were ‘free’ for companies from the metropolitan countries. This is not true for poor countries today. Markets in the West are saturated and protected, despite the WTO.
It is nothing but hubris to imagine that humanity can replace ten million naturally growing trees concentrated in an ecologically sensitive area. In blindly adopting the destructive template of industrial modernity with incomparably poorer safeguards than the West, India is exposing itself to terrifying dangers in the future. Acquisition of land for SEZs is to be understood in this sobering perspective.
=================== SEZs: Behind The Curtain By Aseem Shrivastava
20 April, 2007
Countercurrents.org “Few cities anywhere have created wealth faster than Shenzhen, but the costs of its phenomenal success stare out from every corner: environmental destruction, soaring crime rates and the disillusionment and degradation of its vast force of migrant workers…” - “Chinese Success Story Chokes on Its Own Growth”, The New York Times, December 19, 2006.
The meaning of the Indian SEZ phenomenon “When I expand, it is always in a capital-intensive, and not in a labor-intensive direction.” - Dinesh Hinduja, to Edward Luce of The Financial Times.
It takes only a little imagination to sense the despair among Indian policy-makers today. They have had to actually believe their own rhetoric – meant otherwise exclusively for public consumption. Thus, despite mounting facts to the contrary, it has become a virtual article of faith – with them as much as with the politicians and the media – that trickle-down economics actually works: that the only way to achieve economic development is via corporate-led industrial growth which will generate employment. Never mind that the modern sectors of the economy are destroying jobs.
And the political implications of SEZs? Far-reaching and monstrous. A real-time pilot experiment in corporate totalitarianism is being launched through the high offices of the nation-state which, if successful, will reduce the latter to a mere clearance window between the corporate superstate in Washington and the emerging archipelago of fiscally autonomous post-modern city-states strewn across the country. As flags are raise once again in rajwadas and princely states, the long-slumbering glories of Indian feudalism may once again rise from the ashes under newly coined corporate brands, fitting snugly into the needs and imperatives of global finance, shoring up what would otherwise appear nakedly as capitalist stagnation worldwide.
============================== Special Economic Zones: Profits At Any Cost By C.R. Bijoy 22 October, 2007 Countercurrents.org
A number of patch work remedies are proposed. Avoidance of acquisition of prime agricultural land, improvement in the compensation package offered in rehabilitation, offer of shares in the companies in the project to the displaced, compensation for agricultural labourers and sharecroppers besides land owners, ceiling on the area of SEZ's and no land acquisition by the state governments but instead the private developer to buy land at the market price directly from the land owners are some proposed remedies. The Parliamentary Committee on Commerce has demanded a freeze on new SEZs pending a fresh look at the policy, ban on use of irrigated crop land, a ceiling on the extent of land for SEZs and that too on lease rather than purchase. The Commerce Ministry meanwhile issued a new notification making SEZ developers responsible for the rehabilitation of displaced persons “as per the policies of the State government”. At the same time the Commerce Ministry has further liberalized exemption to now include contractors in SEZ units to claim exemptions to further promote SEZs while the Finance Ministry on the other hand is trying to tighten tax exemptions.
The Manufacturing of SEZ, the High-Speed Engine of Growth
However, what is noteworthy is that SEZ policy, followed by SEZ Act and Rules, emerged and established without much parliamentary debate over the last eight years across both the National Democratic Alliance and the United Progressive Alliance regimes. The SEZ has, as its predecessor, the Export Processing Zones (EPZs) which are ‘industrial zones with special incentives to attract foreign investment in which imported materials undergo some degree of processing before being exported again’ (The International Labour Organisation, 1998). Foreign Direct Investment (FDI) to the total investment in EPZ was a low at 16.7 percent. The share of EPZ in the country’s export was a mere 5 percent in 2004-05 accounting for 1 percent of employment in the factory sector and 0.32 percent of factory investment. All these indicate that the hype over EPZ has no basis as far as India is concerned.
Unraveling SEZ: A Boon or A Bane
The Act provides for drastic simplification of procedures and for single window clearance on matters relating to central as well as state governments for generating additional economic activity; promoting exports of goods and services, investment from domestic and foreign sources; creating employment opportunities; and developing infrastructure facilities.
366 SEZs were granted formal approvals granted as on August 2007 covering a land area of 48,968.9724hectares. Of this, 142 have been notified as on 24 August 2007 for an area of 18,933.83908 hectares. Further in-principle approvals have been granted for an additional 176 for 157,169.0131hectares. The Ministry of Commerce claims that these zones would attract investment of about Rs.100,000 crores including Foreign Direct Investment (FDI) of US$5-6 billion creating 500,000 jobs by end of 2007. Total investment expected by end 2009 is Rs 300,000 crores creating additional 40 lakh jobs, by December 2009.
The critique of SEZ has largely been around the issue of land acquisition and its fall out in terms of how much land, what kind of land and the compensation package; but SEZ portends much more than these. There is also the anticipation that SEZs will take the country to unprecedented growth levels. Speculations are rife with cynicism alongside that these are misplaced. But what is not being recognized nor debated is that SEZ, more than an ‘economic growth model’, is more of a ‘governance model’ that gives almost full rein to capital, and that too predatory capital.
SEZs are expected to bring in a flood of investment, especially FDI due to the unbridled incentives. Rs.3,000 crores is estimated by the Ministry of Commerce to be invested in the SEZs by the end of the fiscal year 2006 – 2007. In contrast, India received an FDI of Rs. 1.06 lakh crores in 2006 (Union Budget 2007-2008).
Acquisition of prime agricultural land became a major issue with all its serious implication which is now attempted to be restricted with restriction of acquisition on single crop agricultural land alone beside waste and barren land. Double cropped agricultural land, if necessary, is to be limited to 10 percent of the total land. More over such areas have powerful farming interests and is at the heart of agricultural economies. That the category of waste and barren land most often constitute survival resource base for the most marginalized in vast numbers is ignored. Land acquisitions, or alternatively land purchases, are therefore to increasingly focus on the marginal and tribal areas. Official rehabilitation schemes rarely work satisfactorily, be it by the state or the private sector. However, holding the state responsible is easier than the private purchaser in a democracy. The proposition to take the land on lease is also floated to ostensibly ensure permanent income to the oustees.
MASS MOVEMENTS ACROSS INDIA DECIDE TO JOIN HANDS TO INTENSIFY STRUGGLE AGAINST DISPLACEMENT, LAND GRABBING, SEZs AND PRO-IMPERIALIST ECONOMIC POLICIES [Declaration Adopted At The National Convention Against Displacement & SEZs Held At Bhubaneswar During June 26-27, 2007]
7. Development of Agriculture Is Essential:
We believe that development of people of India is impossible without the development of agriculture as for more than 70% of the population of India agriculture and allied livelihoods such as fishing, animal husbandry, forestry are the only sustainable livelihoods. Today the Government is unable to provide any other sustainable livelihood after taking away agriculture and other allied livelihoods. Therefore the Government cannot be allowed to take away land and common property resources such as forests, streams, ponds, grazing lands, etc. from the people, which are the basis of sustainable agriculture and allied livelihoods. Continued domination of feudal forces over land holding and implementation of pro-imperialist agricultural policies in the name of green revolution has led to crippling of Indian agriculture. After the serious ill effects of the first ‘green revolution’ policies the government is talking of second ‘green revolution’ by formulating the ‘National Policy for Farmers’ or ‘Krishi Vikash Yojna’ that the Prime Minister is slated to announce from the ramparts of the red fort on 15th August 2007. Imposition of GM seeds, contract farming and corporate control of agricultural sector are the basic elements of such a policy which where implemented are already destroying the backbone of the peasantry. Such policies will fasten the process of complete corporatisation of agriculture of India as has been done in the USA, Canada, and most west-European countries whereby only 2-5 % of the population control the entire agriculture of the country. Farmers’ suicides are a serious indicator of the great crisis facing Indian agriculture. In spite of the grave crisis in the rural economy of India that is forcing some farmers in some locations to abandon their lands and migrate to urban centres in search of jobs, people across India are giving supreme sacrifices to save their agricultural lands and livelihoods, the common property resources the forests, sources of water, etc. We have to fight for protection and restoration of Indian agriculture. Apart from protecting agriculture-based livelihoods, the objective of not allowing cultivable land and forestland for Industry is to ensure food security for the entire population of India, which is already under tremendous strain. There is a necessity for instilling confidence amongst the peasants and rural folk that alternate economic development is possible. Different groups across India are trying to implement alternate development models on a small scale. Different political forces working amongst people have their own vision of alternate development. The peasants of India realise that even in the prevailing situation of agrarian crisis gripping the country there is no other option but to stick to agriculture and allied occupations. Industrial development of India has to be in the interest of the masses and it can only happen on the basis of development of agriculture and that of the rural economy. We demand development of agriculture and the rural economy in the interest of the vast masses of India.