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Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

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Location: Northwest Arkansas, United States

Thursday, March 16, 2006

Corporate Welfare for Third World Agribusiness

Via Mark Monson's LVT News Digest, on Land Theory. When you think of cozy arrangements between government and agribusiness, like subsidized irrigation water from blockbuster dams, you probably think of the big corporate farms in California. But the hogs at the trough are pretty much the same all over.

In Pakistan, for example, the big landowners seek new dams to provide more subsidized water for their agribusiness plantations. And since they don't pay for it themselves, they're not very careful about how they use it. Surprise, surprise, surprise! Here are the details, from an interview with Simi Kamal, a geographer who specializes in development issues:

We, as a nation, tend to build, neglect and throw away, only to build again. There is no concept of maintenance. Pakistan has the largest contiguous irrigation system in the world. It is supposed to be a miracle of engineering that has helped increase our food production. But we don't maintain it. Operation, maintenance, and replacement costs a lot of money. Where is that money coming from?

Some of the data in the recent World Bank report, "Pakistan's water economy running dry," is quite frightening. When comparing Pakistan with Australia, the report shows that in Australia, the entire cost of efficient operation, maintenance and replacement is paid by the actual users, whereas taxpayers pay the interest on any loans that may have been accrued in putting that water system into place.

In Pakistan, taxpayers - not users - are paying most of the operation and maintenance costs, no one is paying for replacement.... When we can't even look after our existing infrastructure, is there even a case for building new infrastructure?....

We have little additional water to mobilise. We've already used up everything that exists in our water cycle so when we say we're putting up another dam or reservoir, it doesn't necessarily mean there will be additional water coming in, we are just re-appropriating what's already in the system. Who's going to pay for the additional investment? We've taken so many loans to be returned over a long term period, how much more can we sustain? Our water resource base is severely degraded because of pollution and atrophying and overuse, groundwater is being over-exploited. Flooding and drainage problems are also going to get worse, partly because of climate change but also because of the way we manage our water system. The water infrastructure is in terrible disrepair - everything is broken, there are leakages, powerful people create their own direct links. We have poor governance, low levels of trust, water productivity is extremely low, what we produce per acre, regardless of the crop, is still less than what others are producing....

Water rights in Pakistan is tied to ownership of land, so in spite of so many reforms, we still have very big farms owned by very powerful people, (rather than smaller farm owners) and landless peoples who actually work the land. The biggest farms are in southern Punjab and upper Sindh, while northern Punjab has smaller, more owner-worked farms. Where we have bigger landlords with their rent-seeking behaviour on the land, their payment for water is not a major consideration. Where sharecropping arrangements have been perpetuated, there isn't much impetus to change because the system suits the landowners.

So all we hear about is a demand for more water. The entire world is going on to use less water and grow more crops but here we are shouting for more water to maintain some of the lowest productivity not only in the world, but also in the subcontinent. There are so many cheap technologies available - drip and sprinkler irrigation and there are already people here producing this equipment. In our rural economy, the whole use of labour on farms suits those in power, while others have no voice.

Hey, maybe this is one of those "accoutrements of emerging markets" Balko was talking about.


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