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The Urban-Rural Prosperity Gap in India

Aired January 5, 2010 - 15:00:00   ET



CHRISTIANE AMANPOUR, CNN ANCHOR: Tonight, India at a crossroads. The world's largest democracy and star of the global economy, but are hundreds of millions of people who live off the land paying the price?

Good evening, everyone. I'm Christiane Amanpour, and welcome to our program.

Sixty-three years ago, at the founding of modern India, Prime Minister Nehru spoke of a tryst with destiny, but he said that freedom and opportunity could not come at the expense of endemic poverty and inequality. A booming India has provided the good life for millions in Mumbai, Bangalore, and other cities, jobs in coal centers, high-tech, lifestyles scripted out of a Bollywood romance.

But for the vast majority directly tied to agriculture and the land, debt and despair have driven some 200,000 to suicide in the last decade. So can India reconcile these two worlds? We take a look with CNN's Sara Sidner, who's in Dahanu, just two hours outside Mumbai.


SARA SIDNER, CNN CORRESPONDENT (voice-over): This is Mumbai, home of bright lights, Bollywood films, and a population of 13 million and growing. This is Dahanu, a few hours north of Mumbai, a lush beach town known as the fruit basket of the region, two worlds colliding over one of India's most sought-after resources, electricity.

This coal-fired power plant sits on Dahanu's wetlands and powers Mumbai's suburbs. The power company says, to meet demand, it needs to nearly triple its capacity. Nergis Irani has fought since the plants opened 20 years ago to stop expansion. She says pollution from the plant is destroying Dahanu's sensitive ecology.

NERGIS IRANI, DAHANU RESIDENT: Like President Obama stated, yes, we can. And I said, yes, we can, and we will win this battle.

SIDNER: It is a battle between rural areas and industry that is being waged across the developing world. Irani has already won the battle once, winning a supreme court order in 1996 designating the area ecologically fragile, prohibiting expansion of the plant, and ordering conversion from coal to cleaner natural gas.

The plant's owner since 2003, Reliance Infrastructure, is controlled by Anil Ambani, one of the world's richest men. The company did not respond to CNN's request for comment, but previously denied the plant damages the environment and wants to expand. The 1996 court order did not determine which industries were polluting Dahanu, but Irani won't budge from her belief that the plant is the culprit, and he's continuing to fight.

(on-screen): Why do you think you can win a battle against one of the world's richest men?

IRANI: He may be the richest in money, but I'm richest in integrity and commitment. I think they're going to get the comeuppance. I think they have no heart, no integrity, no shame.

SIDNER (voice-over): Farmers and fishermen say, even before expanding, the plant is ruining their livelihoods.

AJAY BAFNA, FARMER: I'm just cursing all the industrialists and the politicians and the government itself. They go to Hell.

SIDNER: Ajay Bafna is a big farmer in Dahanu. To make his point, he picks a piece of fruit he says is damaged by pollution. It's dusted in black power. Bugs crawled out of it.

(on-screen): How do you know this power plant has caused some of this?

BAFNA: Because there's lots of ash deposit on the leaves.

SIDNER (voice-over): Bafna says his trees bear less fruit, the farm loses money, and he is now deep in debt on land his family has farmed for eight generations.

BAFNA: After 10 years, you're going to see that this farmer has hanged himself, because we are going to have much more debts on us then.

SIDNER (on-screen): The fishermen and women who work in the shadow of the Dahanu power plant say they have noticed changes over the years. The water, they say, seems to be warmer, and they can't catch as many fish, and the big fish seem to have disappeared.

(voice-over): "It has caused so much damage for those of us who fish," she says, "we don't want the plant to expand any further. If it expands farther, we fishermen and the villagers will set fire to that plant. We won't even care if we lose our lives. At least we'll be happy that our children will live and eat peacefully."

But there has been no scientific proof the plant has caused any of these problems.


(on-screen): Some of the people here in Dahanu think the power plant is perfectly fine. In fact, they say it's a necessity and they want it to expand.

(voice-over): This factory makes stainless steel kitchen tools.

SANJIV AGGARWAL, BUSINESS OWNER: Already our state is (inaudible) electricity. The more generation is there, the more we (inaudible) less power cuts, less problems.

SIDNER: Sanjiv Aggarwal says regular six-hour power cuts to his manufacturing plants cost him thousands of dollars a month. He says what is bad for industry is bad for India. On its Web site, Reliance points out that the plant has won several environmental awards.

Activist Nergis Irani says awards do not reverse the court order prohibiting plant expansion and the required conversion from coal to natural gas, but Mumbai, one of the world's biggest cities, just keeps expanding, and so does its hunger for electricity.

Sara Sidner, CNN, Mumbai.


AMANPOUR: And joining me now for two very different views of the impact of globalization on India, Vandana Shiva, author and environmental activist who's in our New Delhi bureau, thanks for joining us. And here in our studio, Jagdish Bhagwati, professor of economics at Columbia University and a former adviser to the Indian government.

Welcome to you both.


AMANPOUR: Thanks for joining us. Let me ask you first, Ms. Shiva, is this going to stand, this plant just outside Mumbai?

VANDANA SHIVA, ENVIRONMENTAL ACTIVIST: You'll have to say that again, Christiane. I didn't hear you clearly.

AMANPOUR: The package -- the report that Sara Sidner just told us about, the discrepancy between the plant and the effect it's having on some of the local farmers, do you think that it's going to continue to stand there? Or will there be some meaningful opposition to it?

SHIVA: Well, you know, there's meaningful opposition across the country on the issue of land grab, as power plants, mining companies, steel plants, aluminum smelters keep expanding, feeding the limitless appetite of a globalizing world, and the outsourcing of pollution. It's not just information technology that's been outsourced; it's also the polluting activities.

Right outside Delhi, we had a clash between the same Ambani empire and villagers of Dadri (ph). The high court recently ruled that the Ambani land grab was totally illegitimate, and they've been ordered to give the land back to farmers.


SHIVA: In other places, where violence is being used to crush such protests, we now have literally a civil war inside this country, and they're all land-related conflicts.

AMANPOUR: So let me ask you, Professor Bhagwati, as a former adviser to the government, what is the future? You're -- you're hearing Ms. Shiva talk about land grabs. You see the rural population talking about how their farms and their activities are being ruined by this industrialization. What is the future here?

BHAGWATI: Well, I -- I think there's several things in the -- in the account. One, of course, globalization as such has very little to do with what's going on in the main -- you know, the Reliance in Maharashu (ph), which you were talking about. This is electricity generation, OK?

We have what we call takings, not grabbings, in the sense that for social purposes, which vary depending on which country, like even in the United States, you -- you have continuous taking, my own university is in trouble right now because it's trying to expand into Harlem and taking over land.

AMANPOUR: But -- but hang on a second. Does that make it right? And beyond just this plant, what about the real fact, that there is a major division in India between those who have been dragged up by globalization into a really thriving middle class and the vast majority of Indians who have not felt the benefit?

BHAGWATI: No, but I think that's -- that's a false choice, in my opinion, because what's -- when you're trying to raise electricity production, it's not just for increasing output, which actually is not a bad thing, because when you increase output and productivity like every once a week, you're not allowed to use your fan (ph) because of blackouts, there's not enough electricity. As the system grows more rapidly, we know that it provides more and more employment to the poor and underemployed people in -- in India.

But leaving that out, there's also the fact that a lot of the electricity is going to be actually available to a whole lot of people, not necessarily middle class, but a whole lot of people who are actually not into electricity. Forty percent of India's households, many of which are in rural areas, are, in fact, not receiving electricity.

AMANPOUR: Let me ask you, Ms. Shiva -- we're going to talk about farmers and the land in a moment -- but does Professor Bhagwati have a point, that in fact the whole country needs electricity, including those on the land and -- and the rural poor?


BHAGWATI: Well, first and foremost, people need right to the resources that generate a livelihood. People need homes. Electricity comes much later. I have studied and become a physicist and a doctorate in quantum theory studying in childhood with lamps. Lack of electricity is not the end of life, but lack of food, lack of agricultural land is the end of life, as the 200,000 farmer suicides you mentioned.

And the point is, if you rob the people of the homes and their land and turn them homeless, what are you saying about lighting their homes with electric bulbs? You need homes for running your light bulbs in the homes. Homelessness is the biggest crisis in India. Destruction of livelihoods is the biggest crisis in India. And that is why rural India is rising from Namdegram (ph) to Singuil (ph) to Dahanu to Dadri (ph) to Jadjer (ph). You cross -- including the tribal lands, where now there's an Operation Green Hunt to squash the tribal process, protests against land grab.

AMANPOUR: Well, let me -- let me...

BHAGWATI: This is not development.

AMANPOUR: Let me just -- let me just...

BHAGWATI: This has been called the biggest land grab since Columbus.

AMANPOUR: All right. Let me just talk about -- let me talk about this. But, first, I want to put up something that your own prime minister, Manmohan Singh, has said, that as infrastructure struggles to keep pace with the demand, urban chaos is becoming a way of life. Our cities and towns are not an acceptable face of a rapidly modernizing and developing economy. This must clearly change and change for the better.

So, Professor, your own prime minister is saying much of the same as what Dr. Shiva, Ms. Shiva has just said.

BHAGWATI: No, it's completely different, actually. What he's saying is that we must, in fact, be encouraging agricultural production, because, you see, when you had the green revolution, we really had an enormous increase in productivity. And a whole lot of sociological and economic studies show that, wherever the green revolution spread (inaudible) bringing about the red revolution by depriving, you know, the landless laborer of work, in fact, it increased multiple cropping and real wages rose.

So that impasse is gone. And I think -- you should ask (inaudible) actually, because we have disagreed on that, because the -- the G.M. foods, actually, which she's...

AMANPOUR: Genetically modified.

BHAGWATI: Genetically modified foods are actually the next green revolution. If you had Borlaug on the program, he would say that it is what it is.

AMANPOUR: Well, we'll talk about that as we come back from a break...

BHAGWATI: (inaudible)

AMANPOUR: ... because, in fact, the father of the original green revolution is now saying that there should be some protection for the farmers. Here is what a journalist...

BHAGWATI: Who? Who's saying that?

AMANPOUR: ... P. Sainath is saying, in terms of...

BHAGWATI: Yeah, but he's not the father of the revolution, no.

AMANPOUR: No, no, no, we're going to talk about this after a break, but I want to leave now with something that P. Sainath, a journalist who spent five years documenting the calamity in the farmlands and the calamity of suicides, what he's saying about the latest round of farming.


P. SAINATH, THE HINDU NEWSPAPER: What is this agrarian crisis? Five words. The agrarian crisis, what is the agrarian crisis? The drive towards corporate farming, that is the agrarian crisis. How is this agrarian crisis operationalized? Five words: predatory commercialization of the countryside. What does it achieve? Five words: the biggest displacement in India's history.





SAINATH: The Lakmi (ph) India fashion week was functioning in Mumbai, and you had 512 accredited correspondents covering the event. At the Lakmi (ph) fashion week that year, the girls were displaying cotton garments in Mumbai. One hour's flight away (inaudible) the men and women who grew that cotton were taking their own lives at the rate of six to eight each day.

Three people in that household have committed suicide. We were talking about 166,000 people in debt taking their lives by their own hand. And you're talking about families which have seen a second suicide and a third suicide in wave upon wave of suicide.


AMANPOUR: That was Indian journalist P. Sainath covering the epidemic of suicides in parts of rural India. It's a clip from the powerful documentary called "Nero's Guests."

And joining us again, Vandana Shiva in Delhi and Jagdish Bhagwati here in the studio in New York.

Let me ask you, Professor Bhagwati, I mean, isn't this a real crisis, where the government, yes, has created a middle class, but look at the vast majority of the people in the countryside trying to live off the land who have been driven to his kind of despair and calamity?

BHAGWATI: Yes, but you've got to connect up the two statements you're making.


BHAGWATI: There's no cause and effect here at all.

AMANPOUR: In what way is there no cause and effect?

BHAGWATI: I'll tell you why, because when you -- you take Maharashu (ph), where there -- you know, which is the one he -- that the clip was concentrating on, cotton seeds were being sold there, OK? And that's related to -- to the suicides you observe.

On the other hand, there are other states in India where cotton seeds have been absorbed and which are really prosperous. So you have to ask, why is it that these are breaking out? My -- my hypothesis is -- and, you know, I've studied this, because I was on a PBS documentary once -- and the -- the -- what's really being brought -- what's happening is very much like the subprime mortgages in -- in the United States, where a whole lot of -- bunch of salesmen went out and sold mortgages to people who couldn't afford them.

So we have had something like a casino seeds (ph) sale, where private parties go and say, "Look, you're highly indebted. Here you take this particular, you know, borrow more money, you'll be able to make it and solve your problem."

AMANPOUR: OK. All right.

BHAGWATI: Instead, they get into trouble, because there's no agricultural extension service (ph).

SHIVA: I'm afraid that's not the way it works.

AMANPOUR: Go ahead, Vandana.

SHIVA: You know, the farmer suicides started in 1997. That's when the corporate seed control started. That's when the BT cotton was attempted to be introduced, and it only got delayed, because we had to file cases against Monsanto for introducing BT cotton illegally. If you map the suicide area, it overlaps with the BT cotton seed area.

AMANPOUR: Well, look, I'm mapping it as we talk.


AMANPOUR: I'm mapping it as we talk. Oh, I'm not doing a very good job on here, but there is this suicide cotton belt in central part of India. And the thing is...

SHIVA: There's a suicide belt, and it's a BT cotton belt. And it's directly related to indebtedness, and indebtedness created by two factors linked to globalization. First, as Sainath said, a takeover of the seed supply through the corporate chemical industry, which also sells more chemicals, more pesticides, more herbicides, and then globalization leading to a depression of farm prices worldwide.

The combination is unpayable debt, and it's the day the farmer is going to lose their land for chemicals and seeds, that is the day the farmer drinks pesticide. We work on this issue. We visit the widows. And it's totally related to a negative economy, of an agriculture that costs more in production than the farmer can ever earn.


SHIVA: And as far as the green revolution is concerned, again, that was the beginning of a non-sustainable agriculture. The only reason it survived was because there were huge subsidies linked to the green revolution. The BT cotton is not subsidized by government. The farmer bears the debt. The prices jump from 7 rupees a kilogram to 1,700 rupees.


SHIVA: Pesticide use has increased 13 fold in these areas. So we are talking about agriculture that is a suicidal agriculture.


AMANPOUR: All right. Let me just show these pictures...

SHIVA: And the second green revolution is what is causing all this.

AMANPOUR: Let me show some of these pictures which P. Sainath took. These are some of the families who've been -- who've been affected and who have committed suicide, the -- the -- the farmer, for instance. But, Professor Bhagwati, you say it's the fault of the farmers who are being lured into -- into borrowing or -- or -- or seeing stars in their eyes, but surely the government, the system has to protect them.

I mean, globalization seems to be bringing some of the benefits, but none of the protections, protections -- none of the insurances against bad rains, against poor crops, against low prices.

BHAGWATI: But globalization is not part of it in any real sense, except that the supply of seeds is by the private sector, unlike in the time of the green revolution, which was the -- the earlier one, OK? At that time, we had agriculture extension service. We also had price support policies and so on.

So if you -- if you invested in producing some, you know, more agricultural output, I didn't, because I was a small farmer, I could get really undermined. But -- but we had price support policies.

So the government has actually been providing exactly the kinds of things you're talking about. And this time around...

AMANPOUR: Does it need to continue to do more?

BHAGWATI: But this time around, what has happened in this particular area, I think, is that, essentially, the private supply by, you know, corporations has led to lack of support of agriculture extension, by protection...

AMANPOUR: But all of this is details, Professor Bhagwati.

BHAGWATI: No, but those are important in understanding what's going on.

AMANPOUR: But should -- isn't the -- isn't the real issue here, how does a vast and prosperous country like India have prosperity and economic prosperity with justice and equality for all? Isn't that the question, when 70 percent of the people of India are affected, are in the countryside?

BHAGWATI: But -- but -- but when you say 200,000 people have committed suicide...

AMANPOUR: That's a huge number.

BHAGWATI: But you know what the population of India is and how much - - what proportion of that is in Indian agriculture? When I was a student...

SHIVA: How can you talk that way...


BHAGWATI: Excuse me. I -- I can. I can.

SHIVA: How can you talk about 200,000 as an insignificant number?

BHAGWATI: Oh, I mean, that -- that's just rhetoric, OK? I'm simply saying, when I was a student 50 years ago in college, we had -- we had -- we studied agricultural suicides, OK? Because farmers get indebted for a variety of reasons, dowry payment for which many...


SHIVA: There were no suicides when you were a child, Professor Bhagwati.


AMANPOUR: So what is the answer here?

SHIVA: There were no farmer suicides in this...


BHAGWATI: Of course there were, large numbers. There was a whole chapter in the textbook I read.

SHIVA: Not on the mass scale, no.

BHAGWATI: Of course it was.

SHIVA: Even the government of India has had to recognize this as a last -- a phenomena of the last decade of globalization.

BHAGWATI: No, I don't think that's true at all. It's simply not true. If it was so, it'd be far greater. It'd be spread all across India where new seeds have been adopted. And so you do...

SHIVA: Why would it spread across India?


BHAGWATI: It isn't.

SHIVA: The other farmers are not getting into a debt-creating agriculture.

AMANPOUR: We have to...


SHIVA: Seventy percent of the agricultural debt is related to costs of inputs.

AMANPOUR: Vandana Shiva and Professor Bhagwati, we're going to have to continue this conversation another time, because it is essential, and we will talk continually about the inequality and injustice as the world gets more globalized, the opportunities and the challenges, of course, ahead.

And next, our "Post-Script." The cost of the farming crisis on one family and, therefore, on an entire nation.



AMANPOUR: And now our "P.S.," after that spirited discussion between our two guests, we want to leave you tonight with one more look at "Nero's Guests," the documentary that tracks the tragedy of suicides across parts of rural India. Here again is journalist P. Sainath and director Deepa Bhatia. They traveled to one village to visit a young man named Vishnu whose father had just taken his own life.












AMANPOUR: So that tragedy for 50,000 rupees of mortgage. By my quick calculation, that's about $1,000. And as you can see, it's not just about one family's loss; it's about the future potential of a nation if young men like Vishnu and his brother can't even finish university. And $1,000 may not be a huge amount, but for people who pay -- or get paid less than $2 a day, it is.

And that's it for now. We'll be back tomorrow with a different topic, an exclusive interview with the Yemeni foreign minister about Al Qaida. For all of us here, goodbye now from New York.