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	Cash Grants help secure Food Access by Keya Acharya, Terna Gyuse Inter Press Service & agencies   Sept 2011   Studies by the India-Brazil-South Africa (IBSA) Academic Forum on food security issues in the three countries suggest that providing food access works best when backed by cash transfers.   A paper on food security brought out by the UNDP’s Brasilia-based International Policy Centre for Inclusive Growth (IPC-IG), under the Forum, shows that despite the great strides in food production made by India people in this country are just not eating enough.   Citing indices of the World Bank, Food and Agriculture Organisation (FAO) and International Food Policy Research Institution, the paper shows that India needs to improve on poverty, hunger, nutrient intake and per capita consumption.   Ramesh Chand, director of New Delhi-based National Centre for Agricultural Economics, who was involved in preparing the paper, said the Indian situation calls for a mix of food distribution and cash transfers.   Chand told IPS that India’s decline in cereal production since 1995 is a cause for concern.   "Either we ensure access to nutrition through livestock foods, production of which has increased, or we address the decline in cereal intake by the poor," says Chand. "Since the markets can’t support this huge intake, I feel a mix of cash and grains is necessary," explains Chand.   India’s main tool for access to food, besides a mid-day school meal scheme, is its targeted public distribution system (TPDS), the world’s largest food distribution mechanism benefiting 160 million families.   Food subsidies in the 2010 – 2011 annual budget saw 14 billion dollars allocated to meet the difference between the actual cost of foodgrains and sale prices fixed under welfare schemes including the TDPS and also to maintain buffers stocks of wheat and rice.   The TPDS, however, is acknowledged, even by the government, to have huge infrastructural and systemic flaws, with significant numbers of the poor being excluded from its subsidy ambit.   P.V. Satheesh, founder of the Deccan Development Society, a voluntary agency which has successfully shown that indigenous grains are an infallible method of addressing overall food security, suggests introducing locally grown millets into India’s PDS.   Currently, the transportation of rice and wheat to all parts of the country in the PDS is expensive, and deterring the production of nutritious millets. Production of white, polished rice is also environmentally destructive, being water and chemical-intensive agriculture.   "Millets address food, health, fodder and livelihoods by being cultivable almost everywhere," Satheesh explained to IPS.   Brazil-style cash transfers, suggested by the IBSA Academic Forum, are currently somewhat controversial in India, with the new Food Security Bill, tabled to be passed in parliament in the coming weeks, recommending it as one of several measures.   A group of research scholars, including prominent development economist Jean Dreze, wrote to Prime Minister Manmohan Singh, In July, opposing cash transfers as an alternative to the PDS.   "We urge you to ensure that the National Food Security Act includes the strongest possible safeguards against a hasty transition from food entitlements to cash transfers", the letter requested the prime minister.   "Brazil’s position is not the same as that of India," Satheesh told IPS.   As per FAO’s Hunger Map 2010, undernourishment actually increased in India, from 20 percent in 1990 to 21 percent in 2007, whereas it dropped from 11 percent to six percent in Brazil during the same period.   Brazil’s food security measures are an integrated mix of its zero hunger strategy of over 20 programmes in strengthening access to food, family agriculture and income generation.   One significant strategy has been Brazil’s Food Acquisition Programme (PAA), a system of public procurement and distribution under which food was bought from 138,000 farmers in 2009, and donated to 13 million people. Its budget in 2009 was 300 million dollars.   But Brazil’s proven strongpoint has been its Bolsa Familia (PBF) programme of conditional cash transfers launched in 2003, using over eight billion dollars to reach 12 million households in 2010.   PBF gives monthly cash payments to pre-defined poor families provided they fulfill education and health stipulations, basically related to pre- and postnatal care, school attendance and immunization.   The IBSA paper suggests India’s National Rural Employment Guarantee, ensuring work for pay for rural households, as a feature worth emulating.   In South Africa, as per its General Household Survey 2009, 20 percent of households have inadequate or severely inadequate access to food.   "The largest expenditure is on social welfare programmes, grants and cash transfers which assist in providing people money with which to buy food," said Josee Koch, contributor to a 2011 policy document by the Wahenga Institute on public support for food security in India, Brazil and South Africa.   "The social grants are critical," Koch says. "If you look at an analysis of what poor households spend on food, it''s between 50 to 70 percent of income that goes towards food. With rising food prices, there is little chance that this proportion will drop."   Brazil’s Interministerial Chamber on Food and National Security and the National Council of Food and Nutritional Security, both at high political levels, have been significantly effective in a co-ordinated effort at all the related indices to food security.   India, says the IBSA paper, can in turn offer its experience in consolidating a rights-based approach to food security.   Indian civil society’s Right to Food Campaign has used the courts to guarantee basic entitlements. Visit the related web page
	There is No Moral Case for Tax Havens by Tax Justice Network & agencies   August 2011   There is No Moral Case for Tax Havens, writes Paul Vallely.   They are the epitome of unfairness and injustice, leaving ordinary citizens to foot the bill for multinational corporations.   There is a building in the Cayman Islands that is home to 12,000 corporations. It must be a very big building. Or a very big tax scam. Tax havens are in the spotlight since the Chancellor, George Osborne, did a deal the other day with the Swiss authorities to slap a levy on secret bank accounts held there by British citizens. Opinions are divided on the move, which could net the Treasury £5bn, but which tacitly legitimizes bank accounts kept secret from the Inland Revenue. It is a de facto amnesty for those guilty of tax evasion crimes. And they will pay less than they would if they declared their income to the British taxman.   Are there any legitimate reasons why anyone would want to have a secret bank account – and pay a premium to maintain their anonymity – or move their money to one of the pink dots on the map which are the final remnants of the British empire: the Caymans, Bermuda, the Turks and Caicos and the British Virgin Islands?   The moral case against is clear enough. Tax havens epitomize unfairness, cheating and injustice. They replace the old morality embodied in the Golden Rule of reciprocity – that we should do as we would be done by – with a new version that insists that those who have the gold make the rules.   The old view, the neocon American Christopher Caldwell wrote recently, subscribes to a religious understanding of money that was universal in the Christian world before the rise of Protestantism, which acknowledges that people are alive but money is not, making it wrong for the latter to take precedence over the former – a notion as outdated as usury, he suggested tartly.   But what is the moral case for tax havens? We can dispense with the argument advanced by their administrators that if they didn"t take the money it would simply move to more distant locations; that is the self-serving logic of a man who sells torture equipment to an oppressive regime. Apologists insist that tax havens protect individual liberty. They promote the accumulation of capital, fair competition between nations and better tax law elsewhere in the world. They also foster economic growth. So much so, the Institute of Directors has said, that Britain should not curb tax havens but emulate them, promoting the growth of more hedge funds in the UK.   Yet even if all that were true – and it is not – does it outweigh the ethical harm they do? The numbered bank accounts of tax havens are notoriously sanctuaries for the spoils of theft, fraud, bribery, terrorism, drug-dealing, illegal betting, money-laundering and plunder by Arab despots such as Gaddafi, Mubarak and Ben Ali, all of whom had Swiss accounts frozen.   The corruption spreads contagion, as the financial writer Nicholas Shaxson showed in Treasure Islands, his book about offshore finance which exposed secrecy, corruption and intimidation in places as seemingly innocent as that land of milk and money, such as Jersey in the Channel Islands.   But the moral bankruptcy of the tax haven runs deeper. Indeed it is intrinsic to its purpose. The British Virgin Islands is the global capital for the incorporation of offshore companies. Though it has a population of just 22,000, it has 823,502 registered companies which make vast amounts of money through the wonder of transfer pricing. It works like this. Suppose I manufacture a product in Africa and sell it in the UK.   If I am a canny businessman I set up an intermediate company in a tax haven. It need do nothing except exist on paper. But through it I can buy all the products I make in Africa, dirt cheap, and then sell them, at a much higher cost, to my UK subsidiary.   The African and British companies do not, thus, make much profit, so I have little or no tax to pay. All the money stays offshore, where taxes are low or non-existent. This is perfectly legal. But it distorts the world economy and means I pay no tax. I can also borrow where rates are lowest and keep my costs where they are most tax deductible.   That is why General Electric paid no taxes in 2010, despite $14.2bn profits. It"s why Barclays, with 181 subsidiaries registered in the Caymans, paid relatively little UK tax on its worldwide profits. Rupert Murdoch"s News Corp, with 152 subsidiaries in tax havens according to the US government, paid no net UK corporation tax between 1988 and 1999.   Half the world"s trade flows through tax havens. Every multinational uses them routinely. So do banks. Almost 70 per cent of international trade now happens within, rather than between, multinationals. Christian Aid reckons that tax dodging costs developing countries at least $160bn a year – far more than they receive in aid. The US research center Integrity estimated that more than $1.2trn drained out of poor countries illicitly in 2008 alone.   Tax injustice is systemic to the tax haven. Barack Obama once understood that. During his election campaign he promised to crack down on corporate loopholes and tax havens. But he and other world leaders have not delivered on bursting open the seedy secret underworld of tax havens that nurtured the hedge funds, derivative trading and off-balance sheet lending that fueled the 2008 global financial crash.   Their malign influence continues, with hedge funds accounting for at least 30 per cent, and perhaps as much as 60 per cent, of current trading on the London and New York exchanges. There, they have quintupled short-selling. They have turned credit default swaps, designed as a protective insurance, into a way of betting on the failure of a company. The Caymans (population 50,000) is home to 70 per cent of hedge-fund registrations worldwide.   And, as rich people waive their taxes, poor people wave goodbye to their jobs. "The rich are different from you and me," Scott Fitzgerald famously said. "Yes," wisecracked Ernest Hemingway in response, "they have more money." Today the difference is that they pay less in taxes.   The real shame of Osborne"s half-baked deal with Switzerland is that it has undermined the revised EU savings tax directive. That would have required an automatic exchange of information on income in bank accounts throughout the EU and in Switzerland, Lichtenstein and Britain"s tax havens.   All the EU member states, but two, had approved it. It would have dealt not just with individuals but also with companies, trusts, foundations and other complex structures.   Some say an attack on tax havens is an attack on wealth creation. It is no such thing. It is a demand for the good functioning of capitalism, balancing the demands of efficiency and of justice, and placing a value on social harmony.   The billionaire investor Warren Buffett recognized that in The New York Times when he scathingly asserted the US Congress is in thrall to the super-rich. Thanks to his clever investment managers he pays only 17.4 per cent in tax – half what his office workers pay. That does not just boost inequality. It undermines faith in the fairness and integrity of the international financial system. Visit the related web page
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