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3-Food: Surplus wheat for export, and ... animal feed for the hungry

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TITLE:  Monsanto-RiceX tie up for India
SOURCE: Hindu Business Line, by Devinder Sharma
DATE:   June 17, 1999

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Monsanto-RiceX tie up for India

There is money in hunger and malnutrition. For the Indian
government, exporting 'surplus' wheat will bring in some much
needed hard currency and that too by keeping food out of the
reach of the hungry millions. And for two American companies, it
is immensely profitable to convert a traditional animal feed into
a value-added nutritious food for the acutely malnourished

Isn't it a strange paradox? At a time when the Agriculture
Ministry expects the wheat crop to touch a record-high of 72
million tonnes, the World Bank poverty update points to a grim
scenario: in absolute terms, the number of those below the
poverty line who cannot manage two-square meals a day shows a
significant increase in the post-reform era. And while the
government plans to export the 'surplus' and 'unmanageable' wheat
stocks, an American company, RiceX, has entered into a joint
collaboration with the multinational agri-business giant,
Monsanto, to produce and test its patented technology for
nutritious food, treating the Indians as guinea pigs. In simple
words, the technology is being field tested for the first time on

In three to five years, if the tests prove successful, rice bran
conversion into a nutritious food will yield a projected revenue
of US $400 million a year. That would be a welcome contrast to
the company's $5 million-loss last year. Company Chairman Daniel
McPeak has been reported as saying that the deal calls for RiceX
and Monsanto to split the cost of sending two processing units, a
container ship of US grown rice and staff to India. RiceX
employees will process both US and Indian rice bran there during
a six-month test phase.

RiceX has developed a process to extract and stabilize nutritious
rice bran from raw rice kernels. The El Dorado company sees
Third-World rice-growing countries as a fertile product market.
And it has reasons to do so. After all, the number of the hungry
and malnourished in India alone have been steadily rising. In the
rural areas, from 224 million in the early 1990's to 250 million
in the mid-1990's. This corresponds to an almost constant
increase in the incidence of rural poverty and a slow decline in
the incidence of urban poverty, the World Bank report states. But
with the successive governments abdicating their responsibility
to feed the nation, and in a country where poverty and hunger
have proved to be robustly sustainable, the emphasis has shifted
to food exports. In other words, the policy initiative is to
strengthen the national exchequer by depriving the people of the
basic human right ­ the access to food.

In any other country, including the world's only supercop ­ the
United States, food exports are only allowed after the nation's
food requirements have been adequately met. In the US, for
instance, the government spends US $ 45 billion to make available
food to an estimated 25 million people languishing below the
poverty line. In India, on the other hand, food buffers are built
essentially by keeping the food away from the reach of the poor.
With food prices continuously rising, and with the percentage of
the population earning less than a dollar a day also keeping
pace, more and more people are finding it difficult to meet their
daily food needs. The result is obvious: foodgrain buffer
continues to be comfortable and reassuring.

Buffer stock of wheat at the beginning of the procurement season,
on April 1, was already four million tonnes in excess of the
stipulated norm. And with the expectation of an additional six
million tonnes of production, the caretaker government has
allowed the golden grain to be exported. Knowing well that
international prices are not attractive following a good harvest
globally, and given the fact that even countries like Bangladesh
have stopped import of foodgrains, the trade is hoping to earn
foreign exchange from exports to West Asia or from bulk exports
to Southeast countries where it is essentially consumed as cattle
feed !

Aware of the contempt that the government as well as the
country's elite holds for the poverty stricken masses, the
monumental task to feed and meet the growing nutritional needs of
the nation is being left to the market forces. While the country
is busy finding export markets for the golden grain even if it
means selling it eventually for the cattle; western companies are
taking the reverse route -- trying to market cattle feed for
human consumption in India !

Taking a lead, the Monsanto-RiceX project will convert abundantly
available rice bran, which is being used as low-grade animal
feed, into a stable and nutritious food source for the Indians.
Says Mr Charles F.Hough, Business Development Head ­ Nutrition
and Consumer Sector for Monsanto, "We are keenly interested in
expanding our activities in India. The RiceX proprietary
technology could be a vehicle for Monsanto to contribute
significantly to the nutritional well-being of the people of
India." Rice bran is the brown substance that is polished off
brown rice during processing. But the bran interacts with enzymes
that quickly cause the bran to spoil. RiceX said it has found a
stabilizing method to prevent spoilage and to extract nutrients
from the bran.

The goal is to show that the process can extract a nutritious
cooking oil from the rice bran. If successful, the two companies
could establish a commercial joint venture in India. Monsanto is
obviously excited at the prospects of converting a low value
resource like rice bran into a stable and nutritious human food.
After all, what can you expect from private companies when the
government itself fails to provide a healthy and nutritional diet
for the nation? Earlier too, the successive governments had
imported inferior quality wheat, fit enough as animal feed, from
Australia, Argentina and the US. Such is the paradox of plenty
that when there is a healthy growth in domestic foodgrain
production, the caretaker government decides to allow exports.
Admittedly, reaching 'surplus' food to the hungry millions will
mean the subsidy allocation climbing up by a few thousand
crores.This should not evoke any protests. After all, no
questions were asked when the government decided to incur an
additional but unwarranted Rs 8,00,000-million towards revised
salaries for the government employees.

The author is a well-known food and trade policy analyst. Responses to this article can be mailed to
Address: Post Box: 4, Lajpat Nagar-IV, New Delhi-110 024, India.
(Tel: 91-11-6562326)

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