April 30, 2009

life in general: whom did i vote for?

Its 9.15 am as I write this and its parlimentary elections day in Bombay today. I went and voted at 7.30 am. So, whom did I vote for? A few posts ago I had written about the fact that I will vote for an independent and explained the whys and hows of it.

Well, I voted for a 37-year old independent candidate named Kalyan Galphade. I went through his affidavit (I downloaded his Election Commission pdf file at

The list of candidates from my constituency (Bombay North, constituency number 26) were as follows:

Candidates Information
Sl NoCandidate NameAgeGenderParty Name
1RAM NAIK74MBharatiya Janata Party
4USMAN THIM41MSamajwadi Party
5KAILAS KATHAJI CHAVAN36MPrabuddha Republican Party
6PARKAR SHIRISH LAXMAN45MMaharashtra Navnirman sena
7RAMESH KUMAR R. SINGH40MSuheldev Bhartiya Samaj Party
8RAJENDRA J. THACKER51MProfessionals Party of India
9DR. LEO REBELLO58MBharipa Bahujan Mahasangha
10SANGEETA SHETTY LOKHANDE38FPeoples Party of India(secular)
11AD ARUN R. KEJRIWAL36MIndependent
18RAKESH D. KUMAR33MIndependent

One quick thought on the election process. The last 2-3 elections has been through electronic voting machines. Today, for instance, I pressed the button against Kalyan Galphade's name and that was that. My vote was cast. Now, all this is cool. But it only makes it convenient for a voter to cas his/her vote. What about safety against rigging?

We saw how Bush and company rigged the electronic voting machines in some states in the US presidential elections of 2000 and 2004. The same thing can happen in India and BJP, Congress or any other party which has a large fan following among software professionals and senior electoral officers) can rig the election voting and counting.

To prevent it, a unique numbered printed receipt should be issued to each voter with a copy kept in Election Commission's files. If there is a dispute then the recounting can cross check with the printed receipts. Rigging normally happens such that no matter against which candidate you click the button the machine will register your vote against the candidate in favour of whom the machine would be rigged/programmed to do so.

So, thats that. More later.

April 28, 2009

life in general & financial markets: agricultural commodities production is falling in india

Here is something I contributed (for the magazine I write for) a story on agricultural commodities' production and prices:

No price crop in crop prices!

Even as the last one month's rally in equity prices on the stock market has activated many investors' imagination again, there has been a quiet upswing in the commodity markets, both spot (mandis) and derivatives. This has been happening since two months now (see chart below).

(click on the image below to see it enlarged and clearly:)

While the equity market's recent upsurge has been predominantly due to spike in liquidity of global equity investors the commodity markets have been affected primarily due to fundamentals. " Lower crop prospects and arrivals have led to an increase in the prices of farm products," says Madan Sabnavis, chief economist at National Commodity and Derivatives Exchange (NCDEX). "This holds for both products that are traded and not traded on the futures platform."
The Ministry of Agriculture's recently-released Second Advance Estimates for 2008-09 production figures reveal a sharp drop in many important agri crops as compared to the 2007-08 actual. Of the five most dominant cereals – wheat, rice, maize, jawar and bajra – except for rice the production estimates are lower by anywhere between two and 10 per cent. A similar situation holds in pulses crops such as tur, urad and moong.
The situation is perhaps the worst worse in oilseeds where the total production estimate for 2008-09 is 259.60 lakh tonnes as against 297.55 lakh tonnes actual production in 2007-08. Among these, groundnut and soybean have been the worst affected. In other agri crops, sugarcane has been the worst hit. Its production estimate for 2008-09 is down sharply to 2904 lakh tonnes compared to an actual of 3481 lakh tonnes in 2007-08 and the earlier government 2008-09 target of 3400 lakh tonnes.
Lower production has meant that both the agri commodities are facing an upward pressure on prices. This has resulted in a rise in trading interest in some commodities in spot and derivatives markets. For instance, the aggregate sugar futures volume on NCDEX has gone up by 36 per cent from Rs 94,942 crore in October-December 2008 to Rs 1,29,593 crore in January-March 2009.
Due to the upswing, some lobby groups, particularly the sugar lobby, have once again started a campaign against futures trading in agri products. "Futures trading and futures prices are a barometer which tell us the state of the market and we cannot blame this barometer in case the market fundamentals are not favourable," says NCDEX's Sabnavis.

April 20, 2009

life in financial markets: legalising accounting manipulation

Out goes there again India Inc with a begging bowl yet again and manages to extract much more than a few alms from the shameless Manmohan-Ahluwalias cronies in the central government. The corporate world's hypocrisy is as bad, if not worse, from the hypocrisy of politicians, bureaucracy (IAS, ICS, IPS etc) and religious fundamentalists.

Here is one recent example: (about a month back I wrote about the matter in question in the magazine I work for)

As in AS 11

After an attempt by corporate lobbies to relax an important accounting standard (AS) was thwarted by the Institute of Chartered Accountants of India (ICAI), the lobbies are continuing to exert pressure on the ICAI. AS 11 is the standard for accounting for the effects of changes in foreign exchange rates.

The depreciation of the rupee from Rs 38-39 in 2007-08 to Rs 49-50 currently has meant that companies that have borrowed in foreign currency earlier now have to repay a larger amount in rupee terms in case their forex loans have to be repaid immediately. Those forex loans that do not need to be repaid currently are, as per AS 11, required to, in their balance sheets every year till the loan is repaid, take the difference between the forex rate at which the borrowing took place and the current year-end forex rate and charge it to the Profit & Loss Account.

A depreciating rupee means the company has to repay a higher amount in rupee terms and as per AS 11 they have to show the difference as expenditure in the Profit and Loss Account. “This is consistent with international accounting standards because it makes the P&L Account reflect the going up or down of the liability of loan repayment,” says Jamil Khatri, head of IFRS and global accounting standards at KPMG India.

But since a year some companies have argued that Schedule VI of the Companies Act allowed them to capitalise this difference if the loan moneys were being used to build assets in India. Reliance Industries and some other companies such as Bharti Airtel have been following this practice. But in some cases the companies’ auditors have disagreed with this practice by qualifying the same in the auditor's report. “The AS 11 was actually revised and notified by the National Accounting Standards Committee and this committee gets it powers under the same Companies Act to formulate accounting standards for the companies,” says Khatri.

With profits declining the companies are feeling the pinch of additional expenditure items that takes their profit figures further down. Companies that were till now comfortable with recording the profits when the rupee was appreciating are now lobbying through the CII for a direct ICAI relaxation .

But some companies have borne the other end of the brunt as well. RIL’s 2007-08 annual report, for instance, stated “the Company has continued to adjust the foreign currency exchange differences on amounts borrowed for acquisition of fixed assets, to the carrying cost of fixed assets in compliance with Schedule VI to the Companies Act, 1956 as per legal advice received, which is at variance to… AS11… Had the treatment as per AS 11 been followed, the net profit after tax for the year would have been higher by Rs. 30 crore.” RIL’s net profit for 2007-08 was Rs 19,458 crore.

In presentations made to ICAI in February and early March, the CII had proposed a third alternative of allowing companies to stagger the difference amount across the rest of the loan tenure. But accountants find this proposal ludicrous. “Already, due to the Schedule VI provision there is inconsistency and adding one more layer is definitely not good for investors’ comparability purpose,” says Khatri.

But ICAI has deferred taking a stand on the issue till May. At a meeting of the ICAI’s council on 7 March, Uttam Prakash Agarwal, said that “as there were divergent views of the members of the (Accounting Standards) Board, it was decided to place the views of members before the (ICAI’s) Council at its next meeting.”

Analysts are also pointing to the fact that it is high time that corporate India learns to have some basic financial acumen and hedge their forex exposures through the OTC or exchange-traded derivatives. They should protect themselves and not rely on lobbying when the going is against them. Many foreign currencies have depreciated against the dollar and none of those currency-issuing countries have subverted their accounting standards due to it.

April 19, 2009

life in financial markets: wrong focus by sebi & media in ipo scam

As usual, the attention has got focussed on the small fish (depositories) while the big fish (investment bankers, DPs and banks) in the 2004-05 IPO benami scam case are getting un-noticed.

The lead managers (investment bankers) to IPOs have got away with sheer murder. They had, and still continue to have, complete disregard for their responsibility to incorporate simple software-driven checks on applications with similar addresses that will easily weed out multiple application bids. But no! They do not care! Because Sebi handles them with the softest gloves. Even the current Sebi chairman, C.B.Bhave, has been a coward in bringing them to book.

Here are the excerpts from the IPO norms that impose the responsibility to weed out multiple application bids on the lead managers:




I. The Lead Merchant Bankers shall make interse allocation of the activitie s / sub


II. The lead merchant banker shall ensure that activity wise allocation is properly

delineated and that the Board is advised the name of the Lead Merchant Banker

responsible for each set of activities / sub -activities, well before opening of issue.

This advice must be signed by all Lead Merchant Bankers to issue.

III. Where the circumstances warrant joint and several responsibility of Lead

Merchant Bankers for a particular activity, a co-ordinator designated from among

the Lead Merchant Bankers shall furnish to the Board, when called for, with

information, report, comments etc. on matters relating to the activity (of joint and

several responsibility).

IV. The activities / sub-activities may be grouped on the following lines:

(a) Capital structuring with the relative components and formalities such as

composition of debt and equity, type of instruments.

(b) Drafting and Design of the offer document and of advertisement / publicity

material including newspaper advertisements and brochure / memorandum

containing salient features of the offer document.

(c) The designated Lead Merchant Banker shall ensure compliance with the

Guidelines for Disclosure and Investor Protection and other stipulated

requirements and completion of prescribed formalities with Stock Exchange,

Registrar of Companies and SEBI.

(d) Marketing of the issue, which will cover, inter alia, formulating marketing

strategies, preparation of publicity budget, arrangements for selection of (i)

ad-media, (ii) centres of holding conferences of brokers, investors etc. (iii)

bankers to issue, (iv) collection centres (v) brokers to issue and (vi)

underwriters and the underwriting arrangement, distribution of publicity and

issue material including application form, prospectus and brochure, and

deciding on the quantum of issue material.

(e) Selection of various agencies connected with issue, namely Registrars to

Issue, printers and advertising agencies.

(f) Follow-up with bankers to the issue to get quick estimates of collection and

advising the issuer about closure of the issue, based on the correct figures.

(g) The post-issue activities will involve essential follow -up steps, which must

include finalisation of basis of allotment / weeding out of multiple

applications, listing of instruments and despatch of certificates and refunds,

with the various agencies connected with the work such as registrars to the

issue, bankers to the issue, and the bank handling refund business.

(h) Even if many of these post-issue activities would be handled by other

intermediaries, the designated Lead Merchant Banker shall be responsible

for ensuring that these agencies fulfil their functions and enable him to

discharge this responsibility through suitable agreements with the issuer


(i) Ordinarily, one Lead Merchant Banker shall be responsible for post issue


This month, I wrote two articles on the issue in the magazine I work for.

The second article written by me in mid-April:

As the spotlight in ongoing saga in the 2004-05 IPO benami scam remains only on the dispute between Sebi board and its own two-member board committe, other serious offenders are giving the regulator a slip in the dark.

The Sebi board, in a meeting held on 13 April, decided to refer to a legal counsel the dispute arising from the 4 December order of the committee which was appointed last year to take forward Sebi's investigation of the role of NSDL and CDSL in the IPO scam. C. B. Bhave, as usual, reclused himself from the meeting due to a conflict of interest.

The referment was induced by a single dissenting vote of a Sebi board member who is understood to be one of the two members of the special board committee. He had earlier raised objections in Sebi not issuing the committee's order against NSDL and also about not making it public. Other Sebi board members are of the view that the two-member committee has not properly complied with the terms of reference given to it. There are six board members in Sebi in addition to the chairman.

What is more concerning is the fact that other intermediaries involved in the scam are getting away from Sebi's focus. These include over 50 entities that created over 50,000 benami demat accounts with same addresses in about 20 IPOs, about 15 financiers, the lead managers in these IPOs who failed in its mandated responsibility to weed out multiple application bids and the two depository participants, Karvy Stock Broking and Pratik Stock Vision, who accounted for about 90% of benami demat accounts.

Sebi had itself stated in its earlier orders in 2006 the need to probe the details of these intermediaries. For instance, the 12 January 2006, interim order in the IDFC IPO case, Sebi member, G. Anantharaman, stated "Further probe is required for examining the systemic fault, if any, of the registrar Karvy-RTI i.e. Karvy Computer Shares P Ltd. and the lead managers Kotak Mahindra Capital Company Ltd., DSP Merrill Lynch Ltd. and SBI Capital Markets Ltd. in identifying and weeding out the benami applications." Nothing has come out of that so far.

The first article written in the first week of April:

A two-member independent panel, in December, found the National Securities Depository (NSDL) guilty of negligence in the IPO (initial public offer) benami application scam and financial fraud of 2003-05. Over 40,000 fake and fraudulent demat accounts were opened by a handful of depository participants of NSDL as well as of the other depository, Central Depository Services (CDSL). But this panel's adjudication order has not been public by Sebi and allegations of Sebi's board members being responsible for the non-disclosure are being made.

It is exactly the sort of conflict that current chairman of the Securities and Exchange Board of India (Sebi), C.B. Bhave, had apprehensions about when, in February last year, he was offered the chairman's job. At that time he was the managing director of the National Securities Depository (NSDL). Sebi had passed a Rs 116 crore disgorgement order against NSDL in April that was stayed in November 2007 by the Securities Appellate Tribunal (SAT) on an appeal by NSDL.

He had made a precondition of his accepting Sebi chairman's job ofer that all pending Sebi cases against NSDL will be handled by an independent committee or person, outside of Sebi office but with special powers to adjudicate in the matter. In August last year such a committee was formed with two members which four months passed its verdict in the matter. The order does not appear to levy any financial penalty against NSDL but imposes on it a responsibility to levy responsibility on individuals within NSDL that caused it to be negligent during the IPO scam period.

It is not clear yet whether this order has been delivered to NSDL and, if it has, whether NSDL has appealed to SAT. It is also not clear who, in Sebi, is preventing the panel's order from being made public. All Sebi orders have to be displayed by Sebi on its website. Queries sent to Sebi and NSDL were not immediately answered.

It is also not clear whether Sebi's April 2006 interim order of disgorgement against NSDL and CDSL has been reversed by the special panel. Disgorgement amounts from over 10-15 financiers and execuants (who were non-DPs and not connected with the two depositories) have already been collected by Sebi in the last one year through the consent order mechanism. Sebi needs to disclose the details in the case very soon.

April 18, 2009

life in general: india elections - whom will i vote for?

One of five phases of national parliamentary elections in India got over this Thursday. Next 4 Thursdays will see the other four phases. Bombay's turn is Thursday, 30 April. Whom will I vote for in my constituency?

Like in 2004, I am going to vote for one of the few independent candidates after going through their candidature records filed with the Election Commission of India (ECI) on ECI's website. I do not believe in any of the politicial parties.

The Congress, NCP, and their gang of allies are destroyers of the lives and properties of Indian citizens staying in remote villages, forests and mountains. They are also savvy in extracting money subtly from companies by giving them excessive concessions like SEZs, tax-breaks, subsidised land etc. They are also the biggest protectors all of those who illegally and massively pollute the air and water (and chop down hills and mountains through very high levels of mining) in India through their companies and industries. They are also expert opportunists when it comes to religion -- they manipulate the minorities by pretending to be their justice-providers when in reality they are the silent supported of the actions of the other political party group (the BJP). Ocassionally, like in 1984, they take the lead in committing mindless and brutal violence against minorities.

The BJP, Shivsena (and their thugs associates in the VHP and Bajrang Dal) and their gang of allies are vulgar murderers of humanity. Having observed their demonic behaviour in Bombay, Surat and other places during December1992-January1993 and in Gujarat in 2002, I have no choice but to say that they are evil people. Further, if they get more experience of being in power they will emulate the Congress-NCP in brutalising the remote Indian people (they already have a shameless precedent in Gujarat and Madhya Pradesh through the Narmada dam project) out of their habitats and also, similar to Congress, destroy the fragile ecology balance of Indian land, rivers, seas, mountains, valleys etc.

The communist parties are also no viable option (I have written 3 posts on the Left's Modi last year -- here, here and here that explains my thoughts about them). The Samajwadi Party (Mulayamsingh Yadav--Amar Singh) are a bunch of thugs that collaborate with the extremism of minority groups in the UP, particularly the deadly Muslim extremists and hate-mongers. Bahujan Samaj Party (Mayawati) exploits the helplessness of Dalits but provides them no true justice. It has become as corrupt and inept as others before it in the UP.

What remains? No one. So whether an independent candidate wins or not I am going to vote for him/her on 30 April.

April 15, 2009

life in general & financial markets: myth of green revolution in agriculture

There are many falsehoods being spread by companies, bureaucrats and politicians with regard to yields in agricultural produce being increased through the use of fertilisers and geneticially modified seeds.

Factory-made chemical-based fertilisers do not add any value to the soil on which they are used. Instead, they hasten the process of extraction of nutrition from the soil by the agri seeds sown and where fertilisers are used.

Below are three (you can also directly get them here, here and here) of many insightful reports on the matter that brings out the facts:


India's Farming 'Revolution' Heading For Collapse

All Things Considered, April 13, 2009 · Farmers in the village of Chotia Khurd in northern India don't realize it, but they symbolize a growing problem that could become a global crisis.

They gathered on a recent morning in a stone-paved courtyard — a circle of Sikhs with brightly colored turbans and big, bushy beards — to explain why the famed "bread basket" of India is heading toward collapse.

Their comparatively small region, Punjab, grows far more wheat and rice for India than any other region. But now these farmers are running out of groundwater.

They have to buy three times as much fertilizer as they did 30 years ago to grow the same amount of crops. They blitz their crops with pesticides, but insects have become so resistant that they still often destroy large portions of crops.

The state's agriculture "has become unsustainable and nonprofitable," according to a recent report by the Punjab State Council for Science and Technology. Some experts say the decline could happen rapidly, over the next decade or so.

One of the best-known names in India's farming industry puts it in even starker terms. If farmers in Punjab don't dramatically change the way they grow India's food, says G.S. Kalkat, chairman of the Punjab State Farmers Commission, they could trigger a modern Dust Bowl. That American disaster in the 1930s laid waste to millions of acres of farmland and forced hundreds of thousands of people out of their homes.

The story of Chotia Khurd is a cautionary tale: Political leaders and scientists can't necessarily transplant a technology from one country and culture to a vastly different one and expect it to flourish without serious side effects.

The 'Green Revolution'

The story begins in the 1960s, when parents in America's well-fed suburbs would admonish ungrateful children to "think about the starving people in India." Occasional news reports told wrenching stories about Indians subsisting on grass and leaves. The country survived on imports, like a beggar.

The public concern prompted a loose coalition of scientists, government officials and philanthropists — spurred and funded, in part, by the Rockefeller Foundation —to launch a "Green Revolution."

In the context of the times, "green" did not refer to what it means today — organic, pesticide-free farming methods. To the contrary, India's farmers were persuaded to abandon their traditional methods and grow crops the modern, American way.

For example, the advisers told farmers to stop growing old-fashioned grains, beans and vegetables and switch to new, high-yield varieties of wheat, rice and cotton. Farmers began using chemical fertilizers instead of cow dung. They plowed with tractors instead of bulls.

The "Green Revolution" of the 1960s and 1970s meant that if farmers embraced chemicals and high-yield seeds, their fields would turn lush green with crops. (An official at the U.S. State Department, William Gaud, apparently coined the term in 1968.)

During the Cold War, the term also implied that if countries like India could stamp out hunger, the population would be less likely to foment a violent revolution and go communist.

A Temporary Fix

In India, ground zero for the Green Revolution was the state of Punjab, which borders Pakistan and the foothills of the Himalayas. And the system seemed to work miracles — for a while.

The United States sent money and technical support, including advisers from one of America's most prestigious agriculture universities. India's government showered Punjab with low-cost chemicals and seeds — and they paid the farmers, in effect, to use them by guaranteeing minimum prices for Green Revolution crops.

It helped India transform itself from a nation that depends on imports and food aid to a budding superpower that often exports grains.

Villages like Chotia Khurd were harvesting three to four times as much grain per acre as they did before.

Many of the farmers and the local government were flush with money. They paved their dirt roads. The farmers replaced their mud houses with bricks and cement. They bought American tractors for a small fortune.

Just about everybody in Chotia Khurd bought cell phones, with a wide variety of ring tones — so it's hard to chat with a farmer without getting interrupted by electronic versions of Sikh chants or theme songs from Bollywood hits.

But government reports and farmers themselves say that era is over — and today, the Green Revolution system of farming is heading toward collapse.

'Farmers Are Committing A Kind Of Suicide'

To show why, the district director of the Punjab Agriculture Department, Palwinder Singh, leads the way up a narrow dirt road into wheat fields that encircle the village.

On the surface, they look robust. The countryside is electric green in every direction.

But Singh points to a large contraption rising above the crop, like a steel praying mantis. The machine is blanketing the countryside with a percussive, deafening roar.

"That's part of our most serious problem," he says. It's a drilling rig. A young farmer in a purple turban, Sandeep Singh, is standing next to the rig, looking unhappy. (The two men are not related — according to tradition, all Sikh men share the last name "Singh," which means "lion.")

When farmers switched from growing a variety of traditional crops to high-yield wheat and rice, they also had to make other changes. There wasn't enough rainwater to grow thirsty "miracle" seeds, so farmers had to start irrigating with groundwater. They hired drilling companies to dig wells, and they started pumping groundwater onto the fields.

But Sandeep says he has been forced to hire the drilling company again, because the groundwater under his fields has been sinking as much as 3 feet every year.

Government surveys confirm it. In fact, his family and other farmers have had to deepen their wells every few years — from 10 feet to 20 feet to 40 feet, and now to more than 200 feet — because the precious water table keeps dropping below their reach.

Nobody was surprised when environmental activists started warning years ago that the Green Revolution was heading toward disaster. But they were astonished as government officials started to agree.

"Farmers are committing a kind of suicide," warns Kalkat, the director of the Punjab State Farmers Commission. "It's like a suicide, en masse."

Kalkat offers an unsettling prediction in a nation whose population is growing faster than any other on Earth: If farmers don't drastically revamp the system of farming, the heartland of India's agriculture could be barren in 10 to 15 years.


'Green Revolution' Trapping India's Farmers In Debt

Morning Edition, April 14, 2009 · As the world's population surges, the international community faces a pressing problem: How will it feed everybody?

Until recently, people thought India had an answer.

Farmers in the state of Punjab abandoned traditional farming methods in the 1960s and 1970s as part of the national program called the "Green Revolution," backed by advisers from the U.S. and other countries.

Indian farmers started growing crops the American way — with chemicals, high-yield seeds and irrigation.

Since then, India has gone from importing grain like a beggar, to often exporting it.

But studies show the Green Revolution is heading for collapse.

A Thirst For Water

On a recent morning, a drilling rig is pounding away in the middle of a wheat field near the village of Chotia Khurd. The sound, part jackhammer and part pile driver, is becoming increasingly common in the farm fields of northern India's Punjab region.

The farmer, Sandeep Singh, is supervising and looking unhappy as the rig hammers away, driving deeper and deeper under his field in search of water.

When India's government launched the Green Revolution more than 40 years ago, it pressured farmers to grow only high-yield wheat, rice and cotton instead of their traditional mix of crops.

The new miracle seeds could produce far bigger yields than farmers had ever seen, but they came with a catch: The thirsty crops needed much more water than natural rainfall could provide, so farmers had to dig wells and irrigate with groundwater.

The system worked well for years, but government studies show that farmers have pumped so much groundwater to irrigate their crops that the water table is dropping dramatically, as much as 3 feet every year.

So farmers like Sandeep keep hiring the drilling company to come back to their fields, to bore the wells ever deeper — on this day, to more than 200 feet.

Farmers In Debt

The groundwater problem has touched off an economic chain reaction. As the farmers dig deeper to find groundwater, they have to install ever more powerful and more expensive pumps to send it gushing up to their fields.

Sandeep says his new pump costs more than $4,000. He and most other farmers have to borrow that kind of cash, but they are already so deep in debt that conventional banks often turn them away.

So Sandeep and his neighbors have turned to "unofficial" lenders — local businessmen who charge at least double the banks' interest rate. The district agriculture director, Palwinder Singh, says farmers can end up paying a whopping 24 percent.

Another side effect of the groundwater crisis is evident at the edge of the fields — thin straggly rows of wheat and a whitish powder scattered across the soil.

The white substance is salt residue. Drilling deep wells to find fresh water often taps brackish underground pools, and the salty water poisons the crops.

"The salt causes root injuries," Palwinder says. "The root cannot take the nutrients from the soil."

Destroying The Soil

In the village of Chotia Khurd, farmers agree that the Green Revolution used to work miracles for many of them. But now, it's like financial quicksand.

Studies show that their intensive farming methods, which government policies subsidize, are destroying the soil. The high-yield crops gobble up nutrients like nitrogen, phosphorous, iron and manganese, making the soil anemic.

The farmers say they must use three times as much fertilizer as they used to, to produce the same amount of crops — yet another drain on their finances.

A farmer named Suba Singh has seen the good and bad effects of the Green Revolution.

Clad in a bright blue turban and his face furrowed like a field, he opens a squeaky wooden gate to his compound. He points to a small building made of mud and straw, with faded green doors.

"That's where my family used to live," he says.

During the profitable years of the Green Revolution, he saw that everyone else in the village was building brick houses.

"So I took out a loan," he says, "and built a brick house for my family, too."

He turned the old mud house into his cattle shed. But now he is in debt.

A study by the Punjab State Council for Science and Technology calls it a "vicious cycle of debt."

Suba and the other farmers say they've had to borrow money to buy just about everything that makes them look prosperous — their brick homes, tractors, cattle, even their plastic chairs.

The farmers have also built their Green Revolution farms and lifestyle on another unstable source of money: Family members have moved overseas to find jobs, because they couldn't make a living farming, and now they send part of their income back to Chotia Khurd to support their relatives.

"It's like a disease that is catching on in the world," says Suba, "building a life that is like a house of cards."

A System About To Collapse?

Some leading officials in the farming industry wonder when this house of cards might collapse.

"The state and farmers are now faced with a crisis," warns a report by the Punjab State Farmers Commission.

India's population is growing faster than any country on Earth, and domestic food production is vital.

But the commission's director, G.S. Kalkat, says Punjab's farmers are committing ecological and economic "suicide."

If he is correct, suicide is coming through national policies that reward farmers for the very practices that destroy the environment and trap them in debt.

Kalkat says only one thing can save Punjab: India has to launch a brand new Green Revolution. But he says this one has to be sustainable.

The problem is, nobody has yet perfected a farming system that produces high yields, makes a good living for farm families, protects and enhances the environment — and still produces good, affordable food.


Corn, Soy Yields Gain Little From Genetic Engineering: Study

WASHINGTON - The use of genetically engineered corn and soybeans in the United States for more than a decade has had little impact on crop yields despite claims that they could ease looming food shortages, a study released on Tuesday concluded.

"A hard-nosed assessment of this expensive technology's achievements to date gives little confidence that it will play a major role in helping the world feed itself in the forseeable future," said the report by the Union of Concerned Scientists.

The study evaluated the effect on corn and soybean crop yields of genetically engineered varieties commercialized in the United States over the past 13 years, examining peer-reviewed academic studies that date back to the early 1990s.

"Based on that record, we conclude that GE (genetic engineering) has done little to increase overall crop yields," it said.

The report said genetically engineered soybeans account for 90 percent of soybeans grown in the United States, while genetically engineered corn accounts for 63 percent of the US corn crop.

"Overall, corn and soybean yields have risen substantially over the last 15 years, but largely not as a result of the GE traits," the report said. "Most of the gains are due to traditional breeding or improvement of other agricultural practices."

It found that corn and soybeans that were genetically modified to increase their tolerance to herbicides "have not increased operational yields, whether on a per acre or national basis, compared to conventional methods that rely on other available herbicides."

Corn modified with genes from Bt, or Bacillus thuringienisis, bacteria for resistance to several kinds of insects did provide higher yields, but the study estimated the increase at between 0.2 and 0.3 percent a year on average over the past 13 years.

Overall corn yields in the United States have increased an average of about one percent a year, it said.

"More specifically, US Department of Agriculture data indicate that the average corn production per acre nationwide over the past five years (2004-2008) was about 28 percent higher than for the five-year period 1991-1995," it said.

"But our analysis of specific yield studies concludes that only 4-5 percent of that increase is attributable to Bt, meaning an increase of about 24-25 percent must be due to other factors such as conventional breeding," it said.