Infertile farms
Lan Xinzhen

Yu Dazhuang has gone back home with an empty wallet. Yu, from northeast China’s Heilongjiang Province, had ventured for nothing during his one-month stay in Beijing.
“I came to Beijing in the hope of finding a way to sell my soybeans,” Yu said. “But not only did I fail, I have also spent all my money.”
Yu lives by selling agricultural products. And Heilongjiang is one of the major soybean and rice production areas in China. Normally, Yu purchased the soybeans and rice from local farmers and sold them to other regions, buying low and selling high for a profit.
However, this is obviously not Yu’s year.
Although he wore a fake smile when negotiating with clients, Yu was sad for the rest of his trip.
“I lost a lot this year,” Yu said.
In China, the price of soybean dropped drastically in 2004 and 2005, and about 20 percent of the soybean output was stocked with Heilongjiang farmers in 2005. In the 2006 growing year, the planting area of soybeans in Heilongjiang was cut by 25 percent compared to 2005.
Yu assumed that after two years’ price fall and the shrinking planting area, the soybean price this year would have been increased.
Guided by this judgment, Yu collected 120 tons of soybean at the price of 2.5 yuan per kg. When he tried to sell them some 10 days later, the price fell to 2.22 yuan, while the per-kg purchasing price was 3 yuan and sometimes even hiked to 3.72 yuan where it stood four years ago.
Being in the same position as Yu, many soybean growers now get almost nothing from the plant. Due to recent price hikes of seed, fertilizer, pesticide and land rent, soybean should have been sold at 2.4 yuan per kg to strike a balance for growers. Currently, there are still large quantities of soybean for sale.
If you think the situation is unique to soybean, think again. A very similar situation also applies to cotton. And-let’s face it-there’s one big culprit: imported agricultural products.
Enormous pressure
While Yu Dazhuang and others were worried about the price fluctuation of soybean, so was international trade Professor Liu Fuxiang of the University of International Business and Economics. Liu’s conclusion is that since China’s accession to the WTO in December 2001, the Chinese agricultural market, just like auto and electronic industries, has become a globalized market full of competition. As such, domestic market forces like production area and output have had much less influence on soybean prices. “Currently, imported soybeans have absolute control over the Chinese soybean market,” Liu said. “This kind of influence was formed two years after China’s entry into the WTO.”
Liu noted that in 1996, China was already a net soybean import country. At that time, China adopted an absolute quota system for the product and the influence of imported soybeans was not that distinctive. At the end of 2001, China entered the WTO and adopted the tariff quota system, which had no boundaries regarding how many soybeans China could import. From then on, the influence of imported agricultural products has been on the rise.
In 2002, the first year after China’s WTO accession, the country imported 11.34 million tons of soybean, not much difference from the previous few years. However, beginning in 2003, the import volume exceeded 20 million tons for three consecutive years.
In 2005, China imported 26.59 million tons of soybean while the total domestic output was 16.35 million tons. That meant China had become the largest soybean importing country, with the import volume accounting for one third of the world’s total soybean trade. In China, where soybeans mainly are used to extract oil, the price of imported soybeans is usually 5-10 percent lower than the domestic product. Hence many oil factories choose to buy imported soybeans, forcing the price of domestic soybeans to plummet.
Currently, while the price of domestic soybeans is still near the level of imports, due to high operational and preservation fees, the cost of oil factories using domestic soybeans is 170 yuan more than that of those using imported soybeans for the production of each ton of oil. Therefore, oil factories still prefer to use imported soybeans.
“In Heilongjiang, nearly every soybean grower is overstocked,” Yu said. “Dealers dare not to purchase their soybeans, as once they do it, they might be in the same boat as I am.” In 2002, the State Council drafted a “soybean rejuvenation” plan. But apart from subsidizing farmers for fertilizer, the government had in effect done nothing more. The farmers had to buy quality soybean seeds from seed breeding institutions, which added to the cost of production. It was the soybean growers who shouldered all the cost of production, and the unsold portions took a toll on their income. “The majority of imported soybeans are from the American continent, especially the United States,” said Liu.
The same situation also applies to cotton.
Wang Huaigui, President of the China National Cotton Exchange, noted that since 2004, imported cotton has dominated the domestic cotton market.
The import volume was 870,000 tons in 2003, but shot up to 1.9 million tons in 2004, and to 2.57 million tons in 2005. The price of imported cotton is 2,000 yuan lower per ton than domestic product, putting downward pressure on domestic prices. So again, the majority of cotton companies are losing money. The Chinese Government does apply a protective price policy to cotton.
Every year, the government will set up a protective price for cotton. When the market price is lower than the protective price, farmers can sell cotton to the government at the protective price. When the market price is higher than the protective price, farmers can either sell the product in the market or to the government.
However, as domestically produced cotton is unmarketable, the purchasing capability of the government drops considerably.
And just as with imported soybeans, the majority of imported cotton is from the United States. Certainly, when the average Dick and Jane American farmer has a good cotton or soybean harvest, they’re not morally responsible for the plight of Chinese farmers.
But, practically speaking, their gain is indeed Chinese pain.
Unfair competition
Liu pointed out that Chinese agriculture is still traditional, with smaller scale and lower technology application, compared with agriculture of foreign countries.
That makes domestic agricultural products uncompetitive. Tang Renwu, professor of management with the School of Management of Beijing Normal University, noted that agricultural production is based on occupying land, water, air and sunshine resources.
On average, Chinese farmers occupy much fewer resources than their counterparts in developed countries, and also in terms of science and technology. China’s Agricultural Research Intensity (ARI) ratio is only 0.25 percent, much lower than that of most developed countries whose ARI ratio hovers between 2-3 percent. ARI is the ratio of agricultural research expenditures to agricultural gross domestic product. And while the advancement of technology is the major reason for modern agricultural growth, in China, technology only contributes about 45 percent to agricultural production, while that of developed countries reaches 60-80 percent.
But even with their technology advantages, developed countries still resist cutting or eliminating agriculture subsidies.
Tang stated that the United States subsidizes about $10 billion each year to its agricultural products so as to help export its products overseas. Every American farming family can get $21,000 in subsidy each year. The price of wheat exported by the United States is only one-third of the cost. Similarly, every European farming household can get $16,000 in subsidy each year, and the exporting price of EU dairy products is only half of the cost.
Meanwhile, in developing countries, the annual income of farmers is generally below $400, and their subsidies from the government are only 7 percent of that of farmers of developed countries. What’s more, developing countries have to cut the subsidy by half in order to conform to trade demands raised by developed countries.
Liu Lifeng, associate professor with the College of Economics & Management of China Agricultural University, pointed out that over the past five years, Chinese agricultural subsidy expenditure only accounted for 1.23 percent of the total gross agricultural product, while that of the United States and the European Union reached 50 percent and 60 percent respectively. Japan recorded the highest rate of 76.7 percent. “Developed countries carry out a high subsidy and high protective policy for their agriculture, forming an unfavorable trade environment for Chinese agricultural development,” Tang said. “Because of this, China imports more agricultural products than it exports, resulting in a trade deficit in 2004 for the first time.”
The cost of foreign agricultural products, on the whole, is lower than that of Chinese products due to the production scale, industrialization degree, government subsidies, geography and weather. Statistics show that the production cost of Chinese soybeans was 1,592 yuan per ton in 2003, while that was 1,395 yuan for the United States and 984.4 yuan for Brazil. The situation doesn’t change much even at present.
But even while China’s agricultural products are not competitive, the Chinese agricultural market has opened considerably after its accession to the WTO to fierce competition.
Following its commitment to the WTO, China dropped its average agricultural tariff from 23.2 percent in 2001 to 15.35 percent in 2005, much lower than that of developed countries like the United States, Japan and European Union countries. The rate is also lower than the global average 62 percent tariff of agricultural products. Thus, China is now one of the countries with the lowest agricultural tariff. Indeed, barriers in the Chinese agriculture market are generally eliminated, Liu Lifeng said.
What should we grow?
Corn might be the next agricultural product to be hit hard. On August 1, a U.S. cargo ship with 52,000 tons of corn dropped anchor at Qingdao port. With the arrival of this ship, the quantity of corn imported by China this year rose by at least 14 times over that last year.
Since the Chinese Ministry of Agriculture approved the import of U.S. genetically modified corn in July 2005, enterprises from Shenzhen, Shandong and Sichuan have ordered about 60,000 tons of American corn.
Industry insiders contended that the Chinese corn sector is now under attack and estimated that soon China will become a net import country of corn.
Corn has traditionally been used as feedstuff in China, but is now being used more widely to make ethanol gasoline. Currently, many cities in China allow the usage of ethanol gasoline, which leads to a substantial demand for corn. Once the ethanol industry takes off, no one could hold off the import of corn. It is actually not good news for Chinese farmers, as the huge surge of corn will further cut the price of their product.
The list of endangered agricultural products goes on. Labor-intensive agricultural products, such as flowers, vegetables, fruit and meat, were once considered to have a competitive edge compared with foreign products. People expected to see an export boom of those products. However, restricted by non-tariff barriers like environmental standards, those products are having a hard time to make headway abroad.
In recent years, some Chinese agricultural products like tea, vegetables, fruit and poultry have been confronted with anti-dumping accusations, giving rise to a substantial increase in cost, which in turn makes these Chinese exports uncompetitive.
So while products such as corn and soybean don’t have a competitive edge domestically, those with a competitive edge cannot be sold overseas. Under such circumstances, China has become a dismal land for farming.
“What should we grow?” Yu questioned.

(The Daily Mail-Beijing Review Articles Exchange Item)


The missing Muslims of India
Momin Iftikhar

Six decades have passed since the Indian politicians, including titans like Gandhi and Nehru, have been extolling secular credentials as the bedrock of Indian democracy which provided level playing fields to all minorities. The Quaid had challenged this enticing chimera by claiming that Muslims in an undivided India would always be at the mercy of the Hindu majority unless constitutional guarantees were provided to secure the community’s political and economic interests. He set the course for the struggle’ for Pakistan by enunciating his Two Nations Theory after exhausting all options of reconciliation with the Hindu leadership and trying out all options and avenues for a political settlement. How farsighted and true was he in his analysis of the complex situation is brought out by the statistics gleaned by the Sachar Committee, whose leaked out details have begun to rake trouble by reflecting the grinding misery and squalor in which the Muslims in India are finding themselves.
Sachar Committee, headed by Justice (Retired) Rajinder Sachar, owes its existence to the electoral promise of the incumbent UPA Government and has been mandated by the Indian Prime Minister to carry out a national survey of the social, educational and economic status of Muslims in India. Committee’s report is based on facts collected from eight States; namely Uttar Pradesh, Bihar, Rajasthan, Gujarat, Karnataka,Kerala, Andhara Pradesh and Delhi. The Muslim population in these St<=:1tes comprise 56% of the around 14 million Muslim population of India. The Report was due to be published in June this year but leaking out of some of its findings caused such a furor that compelled the Indian Government to stall its formal presentation on one pretext or the other. It is now scheduled to be released. during the current month. Leaked o!Jt findings of the Sachar Report make appalling statement concerning the pathetic state of Muslims living in India. If education forms the basic block of social advancement of a community then Muslim community stands out starkly as the lowliest of the low - even behind the scheduled castes (SC) and Scheduled tribes (ST) of India. As many as 54.6% Muslims in rural India and 60% in urban areas have never attended any school and are illiterate. Only 0.8% of Muslims in rural areas are graduates while this figure is 3.1 % in urban areas. Only 1.2% Muslims are post graduates. Officialdom in India and the political hierarchy across the spectrum of ideological divides is likely to shrug off such harrowing backwardness to Muslim propensity for Madrassah education and lack of motivation and cerebral vigor. However the inadequate or rather abysmal state of educational facilities provided by the Government in the Muslim majority areas in various towns and cities tells a totally different story. The Sachar Committee has Cited the case of a suburb of Jaipur where, for about 1.2 lac Muslims, there is only one primary school with “improper building” and insufficient number of teachers. This state of neglect and marginalization is an apt reflection of trickle down effect that is reaching the Muslims Community in a supposed “India Shining”.
Discrimination in the education sector, as brought out by the Sachar Report, is only matched by the scanty share of Muslim population in Government jobs and Public Sector Units (PSU) vis-a-vis their population percentages (12 % at national level). As a sample of the obtaining state of affairs it is instructive to browse through the share of Muslims, in the jobs pie, in States having the greatest share of Muslim population. Assam (30.9% Muslim population - highest in any Indian State), West Bengal (25.2% - second in Muslim density) and Uttar Pradesh (18.5 - 4th in Muslim preponderance) have only 11.2%, 4.2% and 5.1 % share of Muslims in the State sponsored jobs. It should be instructive to note here that the low percentages of jobs tell only partial story of Muslim deprivation and backwardness. This is so because bulk of the jobs held by the Muslim community belong to the lowest strata of the organizational ladder. The highest percentage of
Muslims in “higher positions” in State PSU is in Kerala (9.50/0) - the most forward looking and liberal of the Indian States - while the lowest is West Bengal which has zero representation of Muslims in the higher echelons of the management.
Sachar findings that there is no state where - representation of Muslims matches their population share illuminates another dimension of the Indian politics and the Muslim marginalization. A stark picture emerges where no political party seems to concern itself with the’ decrepit state of Muslim affairs. While the BJP led Government can’t really be blamed for ignoring the welfare of the Muslim community due to its communal leanings, it is the idealistic political segment viz the Leftist Parties and the Congress - patron
saint of secular elements of political dispensation in India - that appear to be doing the maximum damage to the Muslim interest. Or how else one explains the .sorry state of affairs in West Bengal where Left Front Governments have held un interrupted sway for three decades and where second largest preponderance of Muslims (25.2%) is contrasted against one of the lowest share (4.2%) in the Government employment? This also holds true for UP and Bihar where for the past 15 years Governments have been led by political leaders which claim themselves to be the champions of the Muslim interest. The statistics however poignantly serve to lay bare the major culprit for Muslim deprivation that has always pretended to remain in forefront in claims to champion their cause - the Congress Party, which has remained in power during three fourth of the period since partition with scant regard to their welfare and advancement on the social ladder.
If one gets overwhelmed with the depressing statistics reflecting poorly upon the condition of Muslims in India, at least one set of figures provide comic relief - depending upon one’s propensity to indulge in dark humor. Against their share of 120/0 population, prisons happen to be the only place where Muslims are over represented. While Sachar Commission has: made public no figures regarding West Bengal, Uttar Pradesh, Bihar and Andhara Pradesh, those indicated by remaining states are symptomatic of the disgusting state of the prevailing affairs. In Maharashtra, jails hold a chunk of 32.4% of inmate population who are Muslim against a population share of 10.6%; while in Gujarat, percentage of Muslim inmates is 26.2 against a population segment of 9.1. %.
Muslim community constitutes bottom of the heap in India and the reality is lost upon no one. The Sachar Committee is not by any means the first attempt by an Indian Government to gauge the depth and extent of Muslim marginalization in India. A similar Commission; headed by Dr. Gopal Singh was set up in India in 1980, when Indira Gandhi was in power, and which came up with very identical findings. The fact that there has been no action by any following Indian Government to initiate measures to arrest the downward slide of Muslim community stands out to outline the institutionalized apathy that marks the Muslim affairs in India.


India proliferates nuclear technology
Shahid Saleem Afzal

Nuclear proliferation has become a serious issue these days. The West has been particularly perturbed over Iran’s and North Korea’s nuclear programmes, both countries dubbed by Bush as two of the three countries constituting the axis of evil. On 10 February 2005, North Korea announced that it had already produced nuclear weapons. After the announcement, pressure on North Korea to contain her nuclear programme ceased. Now only Iran remains in focus of the West which is being pressurised to roll back her nuclear programme. Much headway could not be achieved in this regard. Though Iran received some assistance from the Khan network in getting access to the nuclear black market, Indian collaboration has been invaluable. India has an agreement on strategic alliance with Iran and assists Iran in the military and scientific fields.
In 2002 retired Indian nuclear scientist Y.S.R. Prasad took up employment in Iran. According to the U.S. State Department, Dr. Prasad and another Indian nuclear scientist, Chaudhary Surendar, provided Tehran with technology that “could make a material contribution to the development of weapons of mass destruction.” The two men, both former heads of the state-run Nuclear Power Corp. of India, have been banned from entering the U.S. and from doing business with American companies. The Bush administration accuses them of passing technology to Iran to extract tritium from heavy-water reactors. Such reactors are used in India and in Canada, where Dr. Prasad studied heavy-water nuclear technology on a three-year scholarship in the 1960s. Tritium can enhance the explosive power of nuclear weapons when heated and compressed by the detonation of a nuclear device fuelled by plutonium or uranium.
India and Iran continue collaboration in nuclear and chemical weapons programs, and satellite and space programmes. India is still actively helping Iran process nuclear fuel, design warheads and fine-tune missile accuracy. Indian scientists are believed to be working at Talkhab and Chah-e-Lashkar, suspected sites of nuclear research laboratories and possible enrichment facilities. At least two Mumbai-based Indian defence companies are working at the site under assumed names. Both sites have a large deployment of India’s Akash missiles.
In addition, Bharat Dynamics, a government of India enterprise, is alleged to have provided Agni missile motors and chemical warheads to Iran’s largest missile manufacturer, Shahid Hemmet Industrial Group research facility, for its Shehab. Indian scientists are working with Iranian counterparts on adapting the chemical warheads for the Shehab-3 and Shehab-4 ballistic missiles. Eleven Indian scientists are also known to be working at the Zelzal missile plant in Esfahan, suspected home to a small reactor and a zirconium production facility for cladding reactor fuel. Indian scientists are also believed to be working at the facility in Varan, some 70 kilometers from Tehran, on Iran’s space program. A number of Iranian scientists are also working at the Indian Space Research Organization facilities at Bangalore and Hyderabad in India. With this Indo-Iranian nexus on nuclear co-operation and a pact on ‘Strategic Partnership’, India has transferred nuclear and military technology to Iran.
are other instances of Indian nationals linked to nuclear proliferation. On 7 April 2005 the Indian police arrested two Indian nationals Raj Kumar Mishra and Polasiv. Polasiv who hails from Meghalaya had sold Mishra 850 grams of high grade uranium ore for Rupees 1.5 million. Mishra was trying to find a buyer in the international market when he was nabbed. Meghalaya is known for production of uranium ore. Mishra had sold the uranium ore on two occasions in the past.
The Institute of Science and International Security (ISIS) made some startling revelations in March 2006 regarding India’s poor track record in guarding nuclear technology. The ISIS dispelled statements by Indian government officials that India has an “impeccable” non-proliferation record and that India does not engage in illicit nuclear procurement and has an exemplary record of preventing nuclear secrets from falling into the wrong hands. The ISIS has uncovered a well-developed, active, and secret Indian program to outfit its uranium enrichment program and circumvent other countries’ export control efforts. In addition, ISIS has concluded that Indian procurement methods for its nuclear program leak sensitive nuclear technology.
India signed a nuclear deal with the US on 19 July 2005 in Washington. The deal will allow the US to sell civilian nuclear technology to India. Such sales are prohibited under US law as India has not signed the Nuclear Non-proliferation Treaty (NPT) and is producing nuclear weapons banned by the pact and other agreements. Nevertheless an exception has been made for India and the deal has been ratified by the Congress.
An IAEA report suggests that before the United States and other countries engage in nuclear cooperation with India, Indian procurement and export practices should be closely scrutinized and the Indian government should commit to stop conducting illicit procurement for its nuclear facilities, implement steps to better control its nuclear information, and improve its implementation of national and international export controls. This is a difficult task which is best understood by examining some of the Indian projects involving nuclear proliferation.
Indian Rare Earths (IRE) Ltd. of Mumbai is a public-sector undertaking working under the direction of India’s Department of Atomic Energy. Its task is to recover minerals and process rare earths, procure sensitive materials and technology for a secret gas centrifuge uranium enrichment plant codenamed the “Rare Materials Project” (RMP) outside Mysore, India. The Bhabha Atomic Research Centre (BARC) operates the plant and coordinates procurements for this facility with IRE. RMP itself is rarely acknowledged by the Indian government as a gas centrifuge plant. RMP provides enriched uranium for nuclear weapons.
Since at least 1984, IRE has regularly placed inconspicuous lists of items in Indian newspapers, such as the Times of India, to invite bids from potential suppliers to RMP. This procurement process is commonly referred to as “tendering,” where the tenderer is the company that bids to provide the item. Before submitting a bid, called a tender, a prospective supplier or trading agent can purchase, for a small fee, the detailed blueprints, manufacturing instructions, and specifications of a particular item. Through this procurement system, IRE has sought a wide variety of equipment, components, and materials for RMP from domestic and overseas suppliers.
Proliferant states are known to target India’s industries, according to US officials. India is engaged in many export promotion schemes, as its companies seek foreign markets. Items that IRE imports to outfit RMP are of dual use nature and could be transferred to the private sector. Reverse engineering and marketing of dual-use items is believed to be widespread in India and is expected to increase as India starts to receive advance nuclear technology from the US. Indian national export controls are the main restraints to prevent illegal or dangerous exports from Indian companies. However, India’s control system is poorly implemented, and its export control officials are inexperienced. Many Indian companies are unaware of national export laws, and government outreach programmes are in their infancy. With private Indian companies committed to sales both domestically and internationally, Indian export controls are inadequate to provide assurance that dangerous exports or re-exports will not occur.
The Bush administration accuses them of passing technology to Iran to extract tritium from heavy-water reactors. Such reactors are used in India and in Canada, where Dr. Prasad studied heavy-water nuclear technology on a three-year scholarship in the 1960s. Tritium can enhance the explosive power of nuclear weapons when heated and compressed by the detonation of a nuclear device fuelled by plutonium or uranium.
Under the circumstances, India needs to take stock of its lax policies to control nuclear proliferation. The US also needs to re-assess her agreement with India if she has to ensure that the technology is not proliferated to other countries or for improving and multiplying India’s nuclear arsenal. India will also have to make serious compromises in her nuclear weapons programme and review her strategic alliance with Iran to prevent the Indo-US nuclear deal from being scrapped.