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A lecture at University of Texas, Austin by P. Sainath, sponsored by the University of Texas School of Journalism, the South Asia Institute, AID-Austin and the Society of Professional Journalists UT.

Part 1 || Part 2 || Part 3 || Part 4 || Part 5

We are also buying land - vast tracts of land in Brazil, in Kenya and in Ethiopia. These are the three places. China has bought them in about 20 other countries. They are way ahead of us in that absolute race to the bottom.

It's very, very curious that India that we are going to buy farmland in Ethiopia to grow food in India considering - and this is part of the economics of our time - we shifted millions and millions of farmers in the last twenty years from the cultivation of food crop to the cultivation of cash crop.

Millions of subsistence level farmers, small farmers, medium farmers, guys with 5-9 acres, being shifted from growing food crop like paddy, like rice, like wheat to growing vanilla for you, because you are the vanilla nation. 70% of the world's consumption of vanilla is right here. 70% of the coffee India produces - the Robusta - you know there are two families of coffee - robusta and arabica. So we produce mostly robusta. 70% of our robusta is consumed in Europe. Not in India.

So the farmers are getting into very high risk zones because they don't have an internal market. They are being shifted to very high risk crops. If you move from producing paddy to producing vanilla as many people did in 2003, so I'm giving you the 2003 figure, your cost of cultivation goes up 16 times. The bank loans you pay go up accordingly and the banks will not give you that amount of loan, so you go to the moneylenders.

We shifted millions and what is the result of that? How many of you have looked at the Indian budget - the latest Indian budget online? Economics Survey online? I'll save you the time so that you don't have to dig through it. There's a table. Table 1.17 under the tables section, page A17 to 22.

What does it show you? It shows you that the average per capita availability of foodgrain 2005 to 2009 is less than it was from 1955 to 1959. 436 grams for the last five years, 444 grams in 1955 to 1959. That's about 3 million tons in real terms.

In 1991 we reached a peak of production when we had 510 grams per Indian. That's when we started what they call the reforms. From 510 grams we have come to 436 grams in 20 years. That means an average Indian family has access to about a hundred kilograms of grain less than they did ten years ago.

That's how serious the food crisis is. We are still encouraging crops for export in the name of an economics that says grow cash crops make hard currency dollars, and do better.

So that's what's happening.

By the way, the food and hunger issues have grown massively in a country called the United States. According to the USDA - that is the United States Department of Agriculture - it brings out a report on food security in the United States 2009. If you look at that report, it shows you some very spectacular things.

2009 marks the highest number of people ever in food and security in the United States since they started doing the surveys in 1995. It marks the highest. One of every seven American households had difficulty providing food to all their members in 2009 according to the US Department of Agriculture study. One third of these families had very low food security. What does that mean? It means, members in 6.2 million households had reduced food intake or had completely disrupted eating patterns due to lack of money to buy food.

Over 36% of all female headed households in the United States - that is, with children - female headed households with children - means more than one household in every three female headed households with children in the United States were declared food insecure by the USDA's report.

Black and Hispanic households were more than twice as likely to be food insecure than white non-Hispanic households.

5.6 million households - an increase of 18% over the previous year were going to soup kitchens. And it isn't just the United States. I came to the United States via Brussels.

What is Brussels? Heart of Europe. Heart of NATO. One of the most prosperous nations in Europe. Top 20 of the Human Development list. You know what the figures out there are? One in every three women enthrepreneurs in entire Belgium is below the poverty line of the European Union and below the poverty line of Belgium as well.

The Flanders daily had this splendid news item on this subject. Inequality has grown faster in the last fifteen years than at any time in the preceding fifty, anywhere in the world.

In the United States, 2009 brought the number of people below the poverty line to 43.6 million.

In this country, the crisis has about one in every four children is below the poverty line and 22% - over one in five of every American below the age of 18 is hungry is hungry or is at risk of being hungry.

You know, one of the most interesting examples of inequality cited about the US is if you compare it to say - Argentina - in the 1940s Argentina was one of the most unequal countries in the world. 1% of Argentina's population controlled 20% of incomes. Today, that's down to 15%, but United States 2007 - 1% of the population controlled 24% of the National Income. That is, the United States in 2007 is more unequal than Argentina in the mid-1940s.

Yet, in the same country, despite the crisis, despite your recession, would anyone like to give me a number on what the top ten hedge fund managers are earning per hour? [inaudible audience response] 900 thousand bucks.

And then come to the champion of grooming unequality on our continent - that's us. As I said, my favorite list is Forbes, right? It shows us that we have now 55 dollar billionaires. There are a few inconveniences in it in that we are ranked fourth. Above us, the usual irritating faces of China and Russia.

The Chinese I will dismiss briefly, because their average net worth of their billionaires is a piffling 2 billion dollars. Ours is four and a half. It used to be 6.5 until those twits on Wall Street blew it for everybody in 2008.

As for the Russians, there is our obvious moral superiority with the Russians, because the Russians after ten years send all their billionaires to prison. We send ours to Parliament. Where now we have about 11 of them.

That's a civilized democracy. We send them to Parliament.

The corporate giveaway in the current Indian budget is 18-19 billion dollars in direct income tax and if you add other corporate concessions under excise and customs, it crosses over a hundred billion US dollars. According to UNDP, that's the amount you require every year to solve all the basic problems of the human race.

But the same Indian budget cuts 4,500 million rupees from food security. Last year the same amount, nearly 10,000 million rupees had disappeared in 24 months from food subsidies in a country which has the largest number of hungry people in the world.

Now lastly, and I'm going to close on this note, what did it do? These policies - I said food crisis and farm crisis. I brought you to the farmland. All over the world, the policies of giant corporations getting massive subsidies. In the United States 7 in every 10 dollars going in farm subsidies goes to Fortune 500 companies.

There are very few farmers in the United States. The family farms left in the United States are less than 700,000 that's a 2006 figure and they were going bankrupt at the rate of one sixty a week according to the associated press.

By the way, it means, that you have three times the number of people in prisons than you do in farms. Count it. Fedral, state, penitentiaries and parole. If you include the parole. The people in the criminal justice system, under restraint are three times the number of people you have on the farms of this country.

In India, the gigantic subsidies of the United States and EU have destroyed millions of farmers in Western Africa in the cotton producing countries because all these people had been shifted, remember? To cash crop. In India and elsewhere.

So this system of economics, the system of subsidies, basically, the system of running the world by corporations has really caused damage. In India, from the last 15 years, from 1995 have seen the death by suicide of over 200,000 farmers. If you include two years of 95-96 it comes to nearly a quarter of a million.

And suppose we divide these figures into two halves, in the second half, the number of deaths is much, much higher. Very much higher. It means, its getting worse, not getting better.

A quarter of a million human beings, is the largest recorded wave of suicides in human history. That may have been bigger, but they are not recorded. These are recorded by the government of India. They have huge exclusions of large numbers of people and they still come up to 2,16,500 people if we take the period from '97 to 2009.

All these data are avaliable to you online, they are the data of what is called the National Crime Records Bureau.

The Crime Records Bureau keeps data on suicides. In India, suicide is a crime. If you commit it, we'll teach you never to do it again. And if we take the 95-96 figures, which are incomplete, because many states did not report, and if we take 2010 an average figure, way below the average of the last six years, then you cross a quarter of a million.

That's how the figures work. It means, that in the last six years, the rate of suicide is one farmer taking his or her live every 30-31 minutes. That's the scale of human distress. That's the scale of...

Oh ya, but it creates unique buying opportunities. You can buy farmland in India now. Unfortunately our legislation does not allow corporations to hold vast tracts of agricultural land, but don't worry, that will change. They are lobbying for it.

Now the same country that has 55 dollar billionaires - that's Forbes - let's take the Government of India's report. We don't want to always be with Forbes. The Government of India's constituted three committees between 2007 and 2010. For my.. since I was a member of one of those committees.

The first committee was National Committee for enterprises in the UnOrganized sector. First page of the report. The report is online. You can reach it in moments. It's called NCEUS Report on livelihoods and poverty headed by... now you might ask, why should a government have several reports and committees on the same subject.

On farm suicides, there are 13 commissions of inquiry in the state of Maharashtra alone. Indian governments have a very specific way of functioning on enquiry commissions. They will set up multiple enquiry commissions until one of them gives the government the report it wants to hear.

So the first committee they set up under the very safe tutelage of Prof. Arjun Sengupta, veteran of the World Bank, IMF, Planning Commission. With those sort of credentials they thought he would say all was wonderful, India is shining. Arjun Sengupta ended up putting on the first page of his report "836 million Indians live on less than 50 cents a day." 20 rupees or less.

Incidentally if you live on less than 20 rupees in India, you don't qualify as poor. To qualify as poor, you have to live on less than 11 rupees a day, because that's the poverty line in India. So 836 million people, less than 20 rupees a day. So they were disgusted with this report, which also said 88% of all tribals, 88% of all dalits, and 85% of all Muslims fall into this category of ultra poor.

So they set up a second commission. The N C Saxena, BPL expert group. I was one of the experts. And it was wonderful, it was scintillating. Some of the expert discussions we had were riveting. 17...

[contd in Part 5]

A lecture at University of Texas, Austin by P. Sainath, sponsored by the University of Texas School of Journalism, the South Asia Institute, AID-Austin and the Society of Professional Journalists UT.

Part 1 || Part 2 || Part 3 || Part 4 || Part 5

In 1999, Egypt came under the structural reforms regime of the World Bank and IMF, but for some reason, they didn't push it. Maybe because the ministers of that time were a little smarter.

2004 - Mubarak sacks most of his cabinet, brings in guys, trained - where else? - land of the free, home of the brave. Brings them in, and they ruthlessly implement the economic reforms and you've got chaos. You've got 80% of those below 30-35 unemployed.

Ya, so democracy is a very important issue. Unlike in say, India, they did not have the option of voting out governments. Please know this, just so that you understand this, how important the food issue is. Election after election in India, many elections in India, I can't even count for you how many, the price of bread has been the price of power.

In 2009 elections, all those governments that provided cheaper rice to their public won those elections. Whether the BJP in Chattisgarh and Madhya Pradesh, BJD in Orissa under Navin Patnaik, the DMK in Tamil Nadu... it made a huge difference, because the public were reeling under food prices.

Understand how important. In Egypt or Yemen, the public did not have the option of using the electoral route of protest.

So yes, the democracy thing was an important driver, but incredibly important was the food issue.

Here we are.

Let's take each one of these countries. So I've given you the Egyptian stats. In the 6 years between 2004 and 2010 the rate of accumulation and concentration of wealth in Egypt is even higher than in between 1999 and 2004. Inequality is a theme. Deepening inequality is a huge driver.

And we come to the United States. Egypt IS the world's biggest importer of wheat. Take Yemen.

According to the World Food Programme... Yeme is by the way one of the very poor countries of the world. 15.7% of Yemen's population lives on less than a dollar a day. 43% live on less than 2 dollars a day. And in three months this year, in three months of 2011 , 6% of Yemen's population went below the poverty line, driven by food prices and drought.

Are we beginning to get the idea that food matters? 6% of Yemen's entire population in the first three months of this year. January, February, March. That's the estimate of the World Food Programme, which has declared that they are broke, because the budget that they had made for Yemen was destroyed by the price rise.

They had a very large budget for Yemen and now estimate they are 28 million dollars short. Those 28 million dollars measure for you the rise in food prices. So they're saying, we are going to have to drop from our list more than 300 thousand hungry people if we are to continue in the same budget.

Let's get to Syria. You know, Assad. President Assad, drew a quick lesson from what was happening in Egypt, drew a quick lesson from what was happening in Tunisia and immediately declared that he would bring down the prices of the staples. But you know what, it didn't work. The crowds are getting bigger.

But it is interesting to me that he recognized it, as always too late. Mubarak also. Too late.

In Yemen, it did not start with Twitter or Facebook, it started in the south with a bunch of students bringing out a public declaration against high food prices. School students. High school students. They took out a protest against... and they were astonished by the number of people who joined them.

When they went out to... because their meals in the canteen, everything was cut by these extremely high prices. That's so much for Yemen.

Take You know, in Syria, immediately after the crisis started, Syria lowered taxes on olive oil by 53% , on taxes on sugar by 25%, lowered taxes across the board on foodstuffs, but the price increase is so high, that it's not having that much of an impact. In fact, the announcement that they would do it, led to rapid hoarding and speculation of food grain, and that has also bitten into the crisis very severely.

The Food and Agriculture Organization estimates that in the year 2008 64 million people went below the poverty line, driven by food prices. The FAO has a food insecurity atlas that you can look at. 2008 was 64 million people. When they bring out their 2011 issue, you will find that it was exceeded in 2010 because much much greater stress on pricess came up in 2010.

Here's an interesting thing. As always, after the horse has bolted the stable the IMF comes out with the study saying that there is a serious link between food prices and political unrest. Gee! We needed to know that. And only the IMF could tell us. They did a study between 1970 and 2007 which said that a 10% increase.... I haven't quite understood ... very written in the jargon of the economists. But what it basically says is that it adds a factor of 0.5 in a given year, in the next year of raising the prices in political unrest. In terms of the average political unrest, that is an increase of 100% - that's basically what they're trying to say is what I understand.

Often, this seems to unfold against not just food price increase, but double digit inflation overall. In India, food price inflation has been ranging between 13 and 18 percent for the last year, year and a half. And overall inflation has been close to double digit, but it's up and down, within a band of 2%.

Now let's take a look at my favorite magazine and website - Forbes.

Was all this an issue of demand and supply? Was all this chaos over riots and food was it entirely an issue of demand and supply? Yes, those were factors. The collapse of the Russian harvest, the drought in Australia had an impact, but nothing like the impact that speculation on commodities is having on world food prices.

Do you remember in 2008 the price of petrol went from 40 dollars a barrel to 170 dollars a barrel and then came down to 120? production didn't change so fast, did it? Food prices if you remember shot up in 2008 and toward the end of 2008 fell dramatically.

Why does that happen?

It's called futures trading. It's called speculation in food grain. The difference about speculating in food grain and.... see now some of the wealthiest investors... I've got to read you a quote from Wall Street Journal on this. What are they...? They are not even acquiring a physical commodity. They are not acquiring so many tons of rice. They are just betting on the price of rice.

They are just betting and they have a very simple bet. Food price goes ... up.

So its driving the prices of food way beyond what the public of many, many nations can afford. That's what's happening. Okay?

So it's really going dramatically up, and Fortune advises its investors ... it says "this is a bet worth dipping into." It's going up.

So I... today I looked at Fortune's list of fastest growing industries of 2009. What was number 1? Food Production. Fastest growing in revenues, food production. Number 2 is Energy, number 3 is petroleum refining, but Number 1 is food production.

In the top 20 there are two other food related... food processing is number 15, and another food related item is in the top 20, but food production is the number 1 in revenues, and in terms of growth of profit, the fourth most profitable industry in the world.

According to Fortune 500, whom I trust implicitly, because they tell me correctly how many billionaires we have each year.

And it's very... Fortune's 2009 results are very important. In a way they tell us what happened and what follows in 2010. When we look at those numbers today, we get a much better understanding of the food crisis.

Here are some of the biggest beneficiaries of that boom. Number 1 company in the world. Profiting from the largest expansion. Number 1 industry in the world and the fourth highest profit making industry in the world is Archer Daniels Midland - ADM.

If you look at it in terms of percentage change in profits, the food industry 2008-09 48% increase 42.8% increase. The next highest is some 14% behind and that is energy.

Here is how Archer Daniels Midland - an American company did. I'm quoting from Wall Street Journal "It not only reported record third quarter profits and windfall as all other food companies including Monsanto did, in the seeds sector, but Archer Daniel's profits included a seven-fold increase - a net increase in its unit that stores transports and trades in grain. Not produces grain.

The highest profits were in the units in those companies storing grain. You can the enhance speculation. You're not producing one morsel of grain. You are trading in it, you are hoarding in it, you're speculating in it, you're storing it and that unit has the highest profits of the fastest growing industry in the world.

Tells you how important food is.

Welcome to the ultimate profit zone. I'm surprised Warren hasn't found it yet or maybe he has investments we don't know about. It's called food and water. You know, if the world has to do without petroleum, it will. Humanity lived without it for millenia, but you can't live without food and water.

The countries that control food grain in the next twenty years will run the world.

The countries that control food grain or the food grain trade, they have the world by its belly. It's literally having the world by its belly. Now if that was Archer Daniel's profits, you know, I won't go into the whole list. the profits became so much, that the United States Senate set up a commission.... what was it called... the commodity futures trading commission. It held a session in Washington with Congressmen participating, I think, because of the kind of damage it was doing.

Today, the point of it is that hedge funds and index funds control between an estimated 50-60 percent of wheat traded on the world's largest commodity markets. So hedge funds and index funds are driving food prices. In India, the volume of futures trade - it's not possible to calculate how many percent it has increased in 18 to 24 months. The percentage and level it has increased in a very, very brief time.

So that's what's happening.

By the way the food production industry increase - I said 42.8% - I'm wrong, it is 48.8%.

Now the fast growing investment is coming. It is moving to another area. Farmland. How many of the Indians sitting in this - or the people of Indian origin sitting in this audience are aware that India is buying vast tracts of farmland in Kenya and Ethiopia. Are you aware of this? [inaudible audience response] Two people. Not bad. That's about the National average.

We're locked in a race with China and we're damned irritated because they've bought more land than us. And what are we buying this land for? To grow food in India. Having destroyed India's food production capabilities over 20 years of neo-liberal economics.

And we're buying... we're going to be buying hundreds and thousands of acres - we've invested 4.3 billion dollars in Ethiopia as a country. We're going to be buying tens of thousands of farmland in Ethiopia - for God's sake, don't you think they have enough problems without us landing up there?

[contd in Part 4]