The Tuberculosis (tb) bacteria kill two people every three minutes. The bacteria uses iron from the human body to survive. But the mechanism by which they source the iron was not known. Researchers from the University of Hyderabad have recently cracked the mechanism. Their research paves the way for new medicines to treat the disease better.

The tb pathogen sources its iron through molecules called siderophores, which have high affinity for iron. First, the pathogens release these molecules, which extracts iron from human cells, leaving them iron-scarce. The molecules are then transported back to the pathogen, which synthesizes the iron to sustain and grow at the cost of the host. These actions are dependent on two proteins that help complete the transportation cycle of siderophores. Blocking this transportation through medicines can be a breakthrough to cure tb. First, it will stop the iron uptake and secretion. Since there will be no export pathway for siderophores, it will extract iron from the microbe itself.

“A proper pool of iron needs to be maintained because low or even high concentration of iron is harmful to the cell,”

says Aisha Farhana, the lead author of the study published in the May 7 issue of PLoS One. The other concern, she says, is that anaemia is often an offshoot of tb. This is because iron is a major component of blood.

According to K K Chopra of the New Delhi Tuberculosis Centre,

“Till now, the anti- tb drugs that we have been using target protein uptake, not iron uptake. If developed and compared with a placebo, the drug might be more effective than the currently available drugs.”

Treatment at present involves a combination of drugs introduced in India in 1997, according to who recommendations. Also, who surveys in 1997 and 2007 found that multi-drug resistance tb strains were present in 63 of the 72 countries surveyed.

OVER 120 nations have agreed to have legally binding measures to control the pollution by mercury, a neurotoxin. Formal negotiations for the treaty will begin in 2010.

The agreement, reached at the 25th session of the Governing Council of the UN Environment Programme (unep) in the Kenyan capital, Nairobi, is a change from previous years, when major powers, including the US, China and India, sought voluntary reductions. On February 18, they agreed to consider the binding treaty.

Some countries, including India, had earlier said a legally binding agreement is not necessary for unintentional mercury emissions. It was supported by China and Indonesia.

“Switzerland agreed that different mechanisms were necessary for unintentional and intentional emissions, but stressed that all mercury emissions must be addressed under the legally binding measures,”

said Prashant Pastore of Toxic Link, Delhi-based non-profit, who attended the meeting.

A consensus was reached after the US supported the call to ban mercy use worldwide. Changing its stand, the new US administration under President Barack Obama wanted a legally binding international treaty to reduce the toxic pollutant’s content in the environment. Till now, the US had supported only voluntary and partnership measures.

“This came as a surprise,” said Pastore. “Several non-profits said they were floored during the US announcement,” said a press release of the Earth Negotiations Bulletin (enb), a news service for environment and development negotiations. “The US said the measures should address all significant sources of mercury, especially sectors with the greatest global impact including coal combustion,” said the press release.

The treaty would mandate signatory countries to follow measures to phase out the toxic pollutant.

An Inter-governmental Negotiating Committee will begin formal negotiations on the treaty in 2010, which will be wrapped up by 2013. The committe will devise modalities for phasing out mercury in terms of addressing the anthropogenic sources of the chemical, capacity building and technical and financial assistance to countries.

On behalf of developing countries, India called for a committed financial assistance to introduce mercury-free technologies. The EU rejected the proposal initially, but after consultations delegates agreed that developing countries and transition economies should be provided with technical and adequate financial assistance to help them implement the legally binding obligations effectively.

Widely used in chemical production and small-scale mining, mercury is also known to affect the cardio-vascular system. It persists in the environment once released and can travel long distances. Thus even countries which release little or no mercury and areas far away from industrial activities are at the risk of being contaminated. The Arctic, for instance, has high mercury levels, although it is far from major release sites. Its toxic forms such as methylmercury can cross the placental and blood-brain barrier affecting foetuses and children.

ENVIRONMENTALIST G D Agarwal has managed to stall the controversial Loharinag Pala power project coming up speedily on the Bhagirathi, a tributary of the Ganga. On February 20, the Ministry of Power assured him work on the dam would be suspended immediately. Following this, Agarwal who was into the 37th day of his hunger strike, broke his fast.

This was the second time Agarwal, former member secretary of the Central Pollution Control Board, went on a hunger strike demanding a ban on hydropower projects on the crucial 125 km stretch of the Ganga between Uttarkashi and Gangotri and to allow the river to flow naturally (see ‘Myth of power’, Down To Earth, September 1-15, 2008).

In June 2008, he had called off his nine-day fast after the Uttarakhand government suspended work on two hydropower projects at Pala Maneri and Bhairon Ghati, upstream of Uttarkashi district. However, work on the Loharinag-Pala hydropower project, being executed by the National Thermal Power Corporation in Uttarakashi, did not stop. Agarwal resumed his hunger strike on January 14.

To pacify him, the Union power ministry sent him a letter on February 5 promising to keep a minimum flow of 16 cubic metre per second (cumecs) at the Loharinag-Pala dam site during the lean season in winter. The ministry assured no other project would come up on the Bhagirathi.

In his reply to power minister Sushil Kumar Shinde, Agarwal said he had been “duped” by the ministry. Citing a similar letter written by the ministry on June 30, Agarwal said he was led to believe the ministry was committed to conserving the Bhagirathi.

“I broke my annshan (fast). But now, I have realized where the commitments of your ministry lie,” said Agarwal. He was referring to the report of the expert committee, set up by the ministry, which said only four cumecs water flow can be maintained at the site once the dam comes up.

“I doubt the power ministry’s credibility and do not plan to enter into any contact or communication with it until all work on Loharinag Pala has been completely stopped,” the environmentalist said.

Managers for Ganga
The Centre has notified the Ganga River Basin Authority, which will be responsible for comprehensive management of the Ganga river basin. It will be headed by the prime minister. The authority will have chief ministers of the five Ganga basin states—Uttarakhand, Uttar Pradesh, Bihar, Jharkhand and West Bengal—on board. The ministers of water resources, environment and forests, finance, urban development and science and technology will also be members.

“The body will see that development requirements (such as construction of hydropower projects) are met in a sustainable manner while ensuring ecological flows,” said a press release issued by the prime minister’s office (pmo) on February 17. The body will not be a separate additional clearance mechanism. Rather, it will develop a management plan for the river basin and address pollution abatement measures by ensuring adequate ecological flow in the river. Specific interventions for sewage treatment have also been planned.

Environmentalists have been quick to criticize the notification.

“The term ‘ecological flow’ is tricky,” said Pavitra Kumar, a close associate of Agarwal. “Ecological flow means maintaining adequate water flow in the river just for its ecological health. The authority should have used the term ‘environmental flow’ which also accounts for human needs such as groundwater recharge potential of the river,”

said Kumar.

Others said the notification is just another political ploy.
“Announcement to set up a new authority ahead of the elections is merely a move to prevent the (opposition) Bharatiya Janta Party from cashing in on the Ganga controversy,” said Vimal Bhai, head of Matu People’s Organization, an environmental group active in Uttarakhand. The matter will be dragged on till the elections and then forgotten because even the Congress is not against the dams, Vimal Bhai said.

The settlers were from Uttar Pradesh and Bihar. They grew vegetables, flowers, wheat and rice on the land rented from people who once held land lease given by the irrigation department. Pappu of Kaimur district in Bihar had rented about 6 ha at Nayabaans close to the Okhla Bird Park and DND flyway for Rs 6,000 per hectare for a year. While he farmed, his younger siblings studied in a makeshift school. He lost his month-old vegetable crop and has nowhere to go.

“They just came in the evening and trampled all over the vegetables and flooded the fields. Had they at least given us a notice we would not have sown crops. I had invested Rs 15,000-20,000 on wheat.”

said Sauraj Singh Kashyap of Hapur in Uttar Pradesh. H C Malhotra, a member of literacy organization Gyan Jyoti Vidyalaya, which set up the makeshift school in the area, said “These people have not made permanent structures on the riverbed. They were merely making a living out of agriculture.”

The irrigation department said it had cancelled all leases in 1999 but people continued to possess the land. “About seven people had pattas over this 25 ha. They filed cases in court and the hearing is on,” said a department official. “This was not a demolition exercise, so a court order was not needed. We just removed people who had encroached upon the department’s land,” added the official.

Sohanpal of Dallupura village in Noida does not agree.

“The land was given to us in 1948 when the British left, and ever since my family has been cultivating it. My case is being heard in the sub divisional magistrate’s court in Dadri,”

he said.

What development?

The Uttar Pradesh Irrigation Department got some land in the National Capital Territory along the Yamuna Pushta road in 1956 for its maintenance. It is now transferring 362 ha of it in Delhi and 32.5 ha in Noida to the New Okhla Industrial Development Authority, also called Noida authority. The places where the land is being transferred are Madanpur Khadar, Sarita Vihar, Jamia Nagar and patches between Chilla Regulator and the Shahdara railway bridge. About 55.5 ha in Madanpur Khadar and 128 ha in Sarita Vihar and Jamia Nagar have been transferred.

The Noida authority said the land is being transferred for development but refused to specify the kind of development.

“The irrigation department is unable to do any development there because it does not come under its purview. We will take up development in accordance with the Masterplan of Delhi 2021. I cannot comment on the land in Noida,”

said Rajpal Kaushik, senior town planner of the authority.

Kaushik also said the Noida authority would request the Delhi Development Authority for change of land use, deepening people’s suspicion that it plans commercial development on the floodplain. Under the Delhi master plan most land near the Yamuna is for greenery and recreation.

An official of the irrigation department said the Noida authority would develop a green belt on the land. “Why can’t the department do so? By next year, I am sure there will be construction near the Okhla Bird Park,” said Anand Arya, a bird watcher who regularly visits the park.

The waste has been lying at the plant since 1984 when the Bhopal gas tragedy occurred. The 350 metric tonnes of waste is at the centre of a legal wrangle between Madhya Pradesh and Gujarat governments.

The Gujarat government did not comply with similar orders passed by the high court in October 2007. A fire at the hazardous waste treatment facility (managed by Bharuch Enviro Infrastructure Ltd. or beil) and opposition from local non-profits were cited as main reasons for non-compliance.

The high court then got the beil site inspected by the Central Pollution Control Board (cpcb) which said that a backlog of 6,964 tonnes of waste would have to be cleared first. This finding was taken into account by the court when it said its order should be complied with in six weeks. Back of the envelop calculations however show that beil will have 2,464 tonnes excess waste to dispose and not 1,564 tonnes waste as estimated by cpcb in its affidavit. Therefore the plant will not be in a position to take in more stocks of toxic waste in January despite court deadline.

S K Nanda, state principal secretary for environment, said there was no question of

“allowing the waste to be brought to Gujarat”.

He was hopeful the issue would be resolved in the Supreme Court that is hearing an appeal of the state against contempt proceedings for not complying with earlier orders.

The apex court on November 8 had directed that chief secretaries of Madhya Pradesh and Gujarat and officials of the Union Ministry of Commerce should jointly decide on the modalities for disposing the waste. A joint report will be filed in the Supreme Court in January end when the case is scheduled for hearing. This will be much before the High Court deadline expires, Nanda said.

When her husband took chronically ill after communal riots drove them to Juhapura, a ghetto on the outskirts of Ahmedabad, poverty made life seem unmanageable. Free will then became a matter of Rs 8,000 for 40-year-old Zainab Bi. For a sum like that she was willing to swallow an unknown pill once in three months. It wasn’t much they were asking for really, so she gladly gave her thumb impression on the dotted line.

For companies researching new drugs the thumb impression was proof that Bi submitted herself to the experiment of her own free will. It was far more expensive to have such proof in countries where the multinational drug companies that sponsored the research had their headquarters. They were far more cumbersome, involved lengthy documentation and rigorous insurance plans. Clinical research organizations (cros) made the task far easier for these companies by carrying out their research in the ghettoes of India’s big cities. Drug trial was far less daunting; and inexpensive. People were more than willing to offer their bodies for bio-chemical experimentation. The official guidelines warned against monetary inducement.

It took Bi, and so many like her in Juhapura, only moments to make up their mind when a woman agent from a newly opened cros, Lambda Therapeutic Research Ltd, approached them for participation. She explained they would be required to take newly developed drugs for diseases like malaria, chikungunya, hiv/aids even. The agent spoke of possible risks, side effects and what not. Not all of it made sense to Bi. What did sink in was that she was going to be paid Rs 8000 for some new medicine that could cure hiv/aids. She had heard of this disease in radio messages.

In the beginning, Juhapura’s women were not sure how they would get their family’s permission to spend a night, or may be two, at the clinical research lab on the national highway not far from their slum area. When they learnt they were going to be paid between Rs 4,000 and Rs 10,000 the deal was too sweet to resist. The family could not afford to object either.

The transition from the city centre, where they earlier lived, to Juhapura made economic refugees of most people living here. Before the riots many of the 5 lakh inhabitants of Ahmedabad’s largest Muslim ghetto lived in thriving bustling areas like Naroda Patiya, Gulbarg Society, Vatwa. But Juhapura was a world apart, where the community was both the consumer and the vendor. The tailors, vegetable and meat sellers, small time hair-dressers and watch repairers that practised their trade sold services and products to one another. The vibrant market of the city centre was absent here.

Naturally therefore, if a tailor was making Rs 200 a day in Naroda Patiya, he could barely manage Rs 50 a day in Juhapura, said Noorjahan, community leader attached to a group ambitiously called Bharatiya Muslim Mahila Andolan, Indian Muslim women’s movement. Once Bi’s husband fell chronically ill, it was hand to mouth for the couple and their four children. Under the circumstances, nitpicking over side  effects and other safety issues was a luxury. Rs 8000 was what mattered most.

Did they not worry at all? Jannat Bibi said she had heard they were tested for drugs for diabetes, asthma, cancer and even neurological disorders. Noorjahan said some women did complain of stomach problems and rashes on the body. Bi, who has been doing this for three years, said there was no reason for worry. “It is perfectly safe. I haven’t had a single problem in all these years.”

“…All eyes are on the women after a paper printed their photos. But what can they do? Going for these trials is their main source of income” NOORJAHAN, Community leader

Exposé leads to gossip

The problem Bi and her co-travellers in clinical trials faced was of a very different nature and not anticipated by any of the 300-odd women who made an occasional windfall by offering to participate in drug trials. In June this year an Ahmedabad Gujrati daily published an article on clinical drug trial and reported how multinationals made guinea pigs of the city’s poor; the article carried photographs of the Juhapura women with their names. In the uproar that followed, the women became the subject of gossip and criticism for venturing in the night to experiment with unknown drugs. Embarrassed by the fingers pointed at them, 55-year-old Amiya Bano’s son and daughter-in-law made her leave the house.

“These women are angry with me for bringing the newspaper reporter here. They are troubled because all eyes are on them now. But what can they do? Going for these trials is the main source of income for their families,”

said Noorjahan.

The trial

The drug trials were indeed a bit like Kafka’s trial for these women. They were not very clear, like the protagonist in the novel, what they were being tried for. Nor were they sure who was behind the trial. “They make us stay overnight, take our blood samples and then we have to take the pill next morning. We are not supposed to seek remedies anywhere else but the company if some ailment crops up,” said Bi.

So far nothing dramatic has taken place, said Noorjahan. But who can tell what manifestations will show up may be years later? And links between cause and any devastating side-effect will be lost in the hurly burly of India’s ghettoes, where clinical trials are gaining popularity as a livelihood option.

India offered just the perfect setting and plenty of business sense for conducting clinical trials. The subjects and patients who could be recruited at low cost made India a favourite destination for global pharma companies like Pfizer, GlaxoSmithkline, BristolMyers, and others. Add a technically competent workforce and a friendly drug control system and the clinical trial business was set to touch us $1 billion by 2010, up from us $200 million in 2007, estimated India’s Associated Chambers of Commerce and  Industry.

The drug regime would become even friendlier when regulations proposed by the Drugs Controller General of India were formalized; this was likely to be soon. The proposed regulations recommended phase i trials that tested safety and tolerability of a dosage of drugs developed outside India be allowed if the manufacturing company collaborated with an Indian one. At present India allowed phase i trials only for drugs formulated in India and drugs to treat hiv or cancer.

However, phase ii and iii trials for drugs formulated abroad were allowed in the country as they had already been tested safe. Phase ii trials checked the efficacy and side effects of a drug while phase iii trials confirmed its benefits and side effects on a wider sample. “Phase i and ii are the most dangerous stages of clinical trials in human beings.

Opening the doors to these trials will only increase exploitation of the poor. Why should we allow phase i trials of medicines which may not even be used in India and even if they are, it will only be the richer sections that will benefit,” said a public health activist.  “If these trials were for diseases that affected the masses, like tuberculosis and kala azaar (leishmaniasis), then we could support them as the result was going back to them and not feed corporate interest,” said Mira Shiva, chairperson of the ngo Health Action International, Asia Pacific.

An official of the cro, Lambda, was upbeat about the proposed regulations “This will only benefit the community. Even if the mncs do not share their intellectual property now, they will eventually have to come to India to market the drugs.”

The pharma giants collaborated with an Indian research agency for clinical trials that did the job for them at dirt-cheap rates, said a senior sales manager of a leading Ahmedabad based pharma company. In 2005, the government also passed the Patents (Amendment) Act, which assured protection of patents held by foreign companies, thus encouraging them to conduct trials in India. If and when something did go wrong, there was no punitive mechanism. “It is a long chain where work has been sourced down from the company to a clinical research organization to a hospital and finally to doctors. If a problem occurs, all of them will pass the blame to the other. There have been cases of suppression of mistakes in the past,” said Shiva.

Remunerations for clinical trials were also an issue. Volunteers were not supposed to be lured with payments.

“Participants may be paid for the inconvenience and time spent… However, payments should not be so large…as to make prospective participants consent readily to enroll in research against their better judgment, ”

said Indian Council for Medical Research guidelines on clinical trials. Clearly, the guidelines had no bearing on the brisk business of clinical trials in distant Juhapura.

The guidelines also stated a government-registered institutional ethics committee, comprising doctors, activists, lawyers and pharmacologists, would ensure there were no monetary inducements. With a gush in the number of clinical trials, several private ethics committees sprang up overnight. The cros needed an approval from an ethics committee before they could initiate a drug trial. It was simple. These  committees approved of trials for a fee. cros were only too happy to pay.

It’s official. The Central Pollution Control Board (cpcb), the nodal body for regulating environmental norms in India, is being “reduced to a near-defunct body”. The parliamentary standing committee on science and technology, environment and forests for the first time took note of the problems ailing cpcb in a report tabled in Parliament on October 21.

Issues like unqualified members and lack of enforcement power have long plagued the central and state pollution control boards (spcbs), a fact acknowledged by the board heads. The committee also noticed that the scarcity of technical staff was affecting the functioning of the boards.

“The key posts in cpcb and spcbs are being manned by officers of the Indian Administrative Service or bureaucrats who neither possess the necessary capabilities and expertise in properly managing and planning pollution control activities nor have enough time to pay attention to these activities,”

the report said.

In 2004-05, of the total cpcb and spcb staff, only 48 per cent were technical. An earlier report by a Supreme Court monitoring committee had stated that 77 per cent of the chairpersons and 55 per cent of the member secretaries of spcbs were not qualified to hold the post. The parliamentary committee report also criticized having part-time chairpersons by many state boards and said that only a full-time chairperson with adequate knowledge, background and experience in environment management could do justice to the post.

Dilip Biswas, former chairperson of cpcb, said during his tenure he had quite a few members on the board who were unqualified for the post.

“Meetings were more like a ritual than platforms for discussing important issues because many members were illiterate as far as environment was concerned. Many a times they would not even turn up for meetings.”

The law was to be faulted, said Biswas not the people as it did not define the exact qualifications of the board members. “Also, there is drastic shortage of general staff,” he said.

Though cpcb is an autonomous body, it is controlled by the Ministry of Environment and Forests. Most of its members are ministry representatives. The acting chairperson of the board is the joint secretary of the ministry. The Water Act, under which the board was formed, allows the Central government to supersede cpcb in certain cases. “Such a provision renders cpcb to act as mere puppet in the hands of the Centre and does not allow any space for independent and autonomous functioning,” the report said. Citing the ministry’s 2002 decision to delegate punitive powers to cpcb with the condition that if need be the Centre may revoke the decision, the report said, “If all the powers and functions were to be concentrated in the hands of the ministry …such an apex body is untenable.”

The report has raised concerns about the cpcb data on air and water monitoring. It said hazardous pollutants like volatile organic compounds, ozone and aromatic hydrocarbons were not being monitored. Of the 332 monitoring stations in the country, several are not working and the data is not updated regularly. There is no central agency to set standards for emissions.
Even if the standards are finalized by a technical body, the ministry takes a long time to notify them, as has happened in the case of the sponge iron industry.

Low salaries to the technical personnel and lack of training also contributed to cpcb’s failure, it stated.

The trade talks at the World Trade Organization headquarters in Geneva collapsed in the last week of July. The Union minister for Commerce, Kamal Nath, said India would not accede to the demands of developed countries at the cost of Indian farmers. Nath seems to have become a hero in many quarters in the country and in other developing countries—and a villain amongst developed countries for allegedly scuttling free trade negotiations. But in reality, he has virtually complied with all conditions of the wto agriculture text, including almost zero farm subsidy reduction by developed countries. And the talks actually collapsed because the us did not want to make any commitment to cut massive subsidies to cotton growers.

India had three main demands before the commencement of the meet. It wanted reduction in subsidies to farmers in developed countries and increase in the number of special products—items on which developing countries have flexibility to raise import tariff because these items are important for food, livelihood security and rural development. India also wanted a simplified Special Safeguard Mechanism (ssm) that would allow developing countries to raise tariffs to protect farmers from surging imports. But at Geneva, India did not raise the first two issues at all. The issue of ssm was stonewalled by the us.

The real spoilsport

On the eighth day of the ministerial, the European Union brokered a proposal on ssms. The proposal said that developing countries could hike import duties/ tariffs to any level, if they could prove, in 60 days, that glut in imports or fall in prices of imported goods is inimical to domestic livelihoods, food security and rural development. The draft circulated before the meet talked of limits on hikes in import duties.

Six of the G-7 countries including China and India agreed to the proposal but the us blocked it. US trade representative Susan Schwab said ssms in the present form “were very protective for developing countries and could not be accepted”.

“This was an excuse because if all countries had agreed to the us proposal, the next issue on the agenda would have been cotton subsidies which the us wanted to evade”

said Bhaskar Goswami of the Delhi-based think tank Forum for Biotechnology and Food Security.

“In 2007, the us doles out three billion dollars as cotton subsidy. This came down to one billion in 2008 because 38 per cent of land under cotton had been diverted to corn and other bio-fuel crops. At Geneva, the us would have been asked to cut down the subsidy by 70 per cent and that would have created trouble in an election year,” Goswami explained.

The us has already lost a wto dispute on cotton subsidies. “In 2003, it was criticized for protecting its 20,000 cotton growers impoverishing millions of cotton growers in the four African countries—Benin, Burkina Faso, Mali and Chad. The impact has been also borne by Indian cotton farmers who were priced out and committed suicide under pressure of heavy loans,” said Devinder Sharma who is also affiliated with the same think tank.

Withdraw

Meanwhile, farm movements in India are demanding complete exclusion of agriculture from WTO talks.

“Developed countries want to protect their agriculture though heavy subsidies and high tariff barriers and at the same time want access for their products in the developing countries. There can be no agreement unless the developed world drastically changes its attitude. So we believe that wto has become ineffective and needs to be wind up,”

said Krishan Bir Chaudhary, the president of the nationwide farmers’ organization Bharat Krishak Samaj.

“Free market will only lead to more suicides. We have to be completely self-reliant in agriculture and food and not accede to the will of multi-national companies,” said Chukki Nanjunda swamy of another farmers’ organization Karnataka Rajya Raitha Sangha, a farm organization.

The fact that wto director general Pascal Lamy has cut short his autumn break and is visiting India on August 10-12 and the us soon after shows how desperate he is to conclude the Doha Development Round which began in 2001. The talks might restart in September.

Farmers’ associations all over India were holding protests demanding exclusion of agriculture as an agenda in the World Trade Organization (wto) talks, even as the organization’s mini-ministerial debated ways to secure “meaningful market access in agriculture, manufacturing and services”. At the time this magazine went to press, farmers’ groups were apprehensive that the Union minister for commerce might sign a deal at this meet in Geneva allowing the entry of cheap agricultural products from the developed world. “That would be the last nail in the coffin of small farming in India,” said Sheelu Francis of the Tamil Nadu Women’s Collective, an organization representing over a lakh agriculture workers in the state.

The draft for negotiations for the Geneva ministerial—the third draft on the matter—did not accede to most demands of developing countries, the principal one being substantial cuts in subsidies offered to farmers in the us and European Union. These subsidies end up lowering prices of agricultural products in the developed countries below the production cost of farmers in developing countries, giving the former unfair market advantage.

At the time this magazine went to press, the us had made an offer to reduce its permissible subsidies to US $ 15 billion—it had offered 16.4 billion last year. Washington is currently allowed to distribute more than US $48 billion in subsidies under wto’s agreement on agriculture, yes, US $48 billion. But the actual subsidies given to farmers in the us are only about US $7 billion. So the subsidy proposed at Geneva actually gives us the leeway to increase its actual subsidies—not an unlikely possibility given the recent hike in food prices.

There were more strings. The developing countries have to facilitate non-agricultural product market access. Union commerce minister Kamal Nath is not totally averse to the idea. But he also added,

“I hope the proposed subsidy cut is only their opening gambit and not their bottom-line. The subsidy cut really makes no substantial impact.”

“The Prime Minister thinks we should close this issue but unless India’s interests are met, we should not move forward,” Nath said on July 17 before leaving for Geneva. This statement has made farmers’ movements apprehensive that India might end up signing the agreement on agriculture at the mini-ministerial without any major changes.

“The minister seems keen to sign the Doha agreement of the wto when he says that it should be finalized soon. This when the Indian government knows that the us Farms’ Bill, 2008, promises up to us $ 307 billion in subsidies to farmers over the next five years,”

says Yudhveer Singh of the Indian Coordination Committee of Farmers’ Movement, New Delhi.

The Geneva meet is the latest in the Doha Round of wto negotiations—named after the venue of its first meet. The talks, which began in the Qatari capital in 2001, aim to slash subsidies and other barriers to trade “to help reduce poverty and spur economic growth in developing countries”.

According to wto’s categories, there are three kinds of subsidies of which only one is considered to distort production and trade, the Amber Box. With developing countries pressuring the developed countries to cut down on Amber Box subsidies, many subsidies have been move to the Green Box category—deemed as not trade distorting—and the Blue Box—trade distorting but permitted with certain conditions. Over 80 per cent subsidies are in the green and the blue box.

Singh put the reclassification in perspective.

“I asked farmers in Switzerland, if subsidies were cut down there. I was told that the same subsidy that was being given in the name of agriculture yesterday, comes in the name of environment now,”

he said. Bhaskar Goswami of the Delhi-based collective of scientists, policy makers and farmers, Forum for Biotechnology and Food Security offered further explanation.

“Countries are allowed to dole out subsidies to their farmers for food security. This is a Green Box subsidy. The us and the eu give out subsidies for cereals, oilseeds and pulses in the name of food security. But 60 per cent of all this is fed to dairy animals. So a subsidy given in the name of food security becomes trade distorting,”

he said.The latest text talks about disciplining such Green Box subsidies. “But there are no specifics as to how they will be disciplined. So this seems to be hogwash,” Goswami said.

In fact, if the draft for the Geneva ministerial is an indicator, some pro-developing country mechanisms of the wto could be on their way out. Amongst them is Special Safeguards Mechanism (ssms), which allows developing countries to protect their producers from losing out to imported products. Whenever a developing country faces a sudden surge in imports or a depression in domestic price beyond a given threshold, it can invoke ssms and slap additional import duties to protect its market. The new text, however, mentions that the tariff allowed under ssm cannot exceed the pre-Doha round level—they were very low then. Even Nath expressed disappointment at the new ssm rules in Geneva. “Are we expected to stand by, see a surge in imports and do nothing?” he asked in his speech on July 23. Negotiations were on when this magazine went to press.

At a time when efforts are being made in the West to bring back small retailers into the mainstream, the Indian government has come up with a study that lauds the role of big retail chains. It claims that the growth of supermarts in India will not harm street vendors and small shop owners, and will only spur a healthy competition in the retail sector.

“Both unorganized and organized retail are bound not only to coexist but also achieve rapid and sustained growth. Both will see a massive scaling up of their activities. In fact, the retail sector, left entirely in the unorganized and informal segment of the economy, could emerge as a major bottleneck to raising productivity in agriculture and industry,” states the study, Impact of Organized Retailing on Unorganized Sector, commissioned by the Department of Industries Planning and Promotion, commerce and industry ministry.

The government asked the Indian Council for Research on International Economic Relations (icrier) to carry out the study after protests in a few states last year against new grocery and fruits and vegetable retail chains. Several development observers and economists, however, do not agree with the study’s conclusions. They say small retailers are already being edged out by organized retail houses, especially because the government’s policies are biased against the unorganized retail sector that employs about 30 million people. After farming retail is the biggest occupation in India.

Study of contrast

The study estimates that the total retail business in India will grow at 13 per cent until 2011-12. The unorganized retail sector is expected to grow at approximately 10 per cent per annum. Organized retail, which constituted 4 per cent of the total retail in 2006-07, is estimated to grow at 45-50 per cent per annum and attain a 16 per cent share of the total retail by 2011-12, says the report. At the same time, it notes, 4.2 per cent of small retail shops close down every year and 1.7 per cent of them close down because of severe competition from retail chains. The study stressed that small shop and retail dealers will make losses initially and in five years will come up with innovative techniques to survive alongside organized retail.

“Even in the medium run I don’t see a positive spin-off,” says Praveen Jha, associate professor, Centre for Economic Studies and Planning, JNU, Delhi.

The study was conducted in 10 cities over 14 months and surveyed 2,020 small traders, 1,318 consumers, 100 intermediaries and 197 farmers. The organized retail chains studied include Subhiksha, Mother Dairy, itc Choupal, Trent ltd (Westside, Star India Bazaar), Futures Group and Spencer’s Retail, but none of the new ones, like Reliance Fresh, More and 6 Ten that have penetrated small cities, was included. Reliance Fresh was the target of protests in Uttar Pradesh that lead to the study.

Upsetting the apple cart

Advocacy group ACORN-India FDI Watch, which, with Navdanya, studied the Paharganj, Nangloi and Lakhshmi Nagar areas of Delhi, contends that supermarket chains have an immediate and considerable impact on small players. “Many could not compete even for a month,” says Dharmendra Sharma, director, ACORN-India FDI Watch.

“All these chains are following the Wal-Mart strategy of predatory prices, that is to sell at low prices initially and when you have established a monopoly, reverse the trend. Look at what they have done in India; they have introduced ‘predatory’ prices on things like onion, potato and tomato, while making other vegetables expensive, but the impression is that vegetables are cheaper in these shops. And when one comes to these shops in a car, he will not go out with just onions but a lot more,” he says.

The icrier report shows how this strategy is working in India when it mentions that low-income consumers save more than others by shopping at organized retail outlets, whereas overall consumer spending has increased with the entry of the outlets. “This is a result of targeted discount shopping,” it says.

The study has applauded Wal-Mart. “Wal-Mart had become the largest private employer in the world with two million employees. The company’s annual revenue totalled us $350 billion in 2006,” it says.

As Wal-Mart is set to enter the Indian market, with Bharti Group tying up with it, the study ignores cases of the retail giant monopolizing the market and killing local manufacturing industry by sourcing most supplies from China. “The organized sector will similarly open a giant pipeline of cheaply sourced goods from China, Thailand and asean, leading to a massive livelihood loss in the indigenous manufacturing sector and small-scale industries,” adds Sharma. Take Iowa state in the us, for instance. Wal-Mart wiped out 43 per cent of its apparel stores and 37 per cent of its grocery stores between 1983 and 1993.

But organized retail stores in India are still far from employing Wal-Mart’s strategy, says Madhu Kishwar, senior fellow at the Centre for the Study of Developing Societies, Delhi.

“Land is expensive in India. These stores are in stinky small places. They need ac s to run their store and a cold storage chain to keep their supplies from perishing and then there is the parking problem. So how can they provide goods cheap? If one thing is cheap, the other is expensive,”

she says.

Where’s level playing field?

The icrier study calls for modernizing vegetable markets through public-private partnership and facilitating formation of farmers’ cooperatives to directly sell to organized retailers. The study also recommended formulation of a “private codes of conduct” by the organized retail for dealing with small suppliers and simplification of the licensing and permit regime for the organized retail.
According to Kishwar, even if half the facilities provided to the organized retail are given to the street vendor, things will be much better.

“Provide a level playing field to street vendors and then see who comes out the winner. Legalize street vendors, give them space to sell and other amenities as per the national vendors’ policy and they will be better retailers then any of these stores. At present, half their income goes into paying bribes to the police and goons,”

she says. The National Policy for Urban Street Vendors was drafted in 2004 but has not been implemented. The draft policy aims at making street vendors an integral and legitimate part of the urban distribution system.

The study admits that regulatory restrictions on the growth in modern retail are more stringent in developed countries. “In most West European countries setting up of hypermarkets has become very difficult since the late 1990s as governments became alive to the demands of small retailers and non-mobile consumers. Merger and acquisition plans are looked at more critically by competition authorities,” it says.

“In Germany efforts are being made to bring small retailers back into the mainstream by giving them training and other support mechanisms. I don’t think in India we are even looking at all that. Even in the us, there are studies damning big retail chains. So when developed countries are not able to handle this phenomenon, how will developing counties, where there is so much labour surplus, do so?” asks Jha.
“According to the Census 2001, there are 26.9 million main and 2.4 million marginal workers in wholesale and retail trade. Of these nearly 17 million are not even matriculates. If we count the dependents, at least 120 million will be impacted by the retail revolution created by big corporations,” says Sharma.
While the report cites positive spin-offs of the organized retail—investment in support industries like information technology, warehouse, distribution services and agro-processing—critics warn against climate impact of these amenities. “For refrigeration of vegetables and fruits and for air-conditioning the retail outlets will need at least 20,000 megawatt of energy,” says Sharma. But, of course, no one is factoring this cost.