The Price of Rice

8. Sep 2014

For two Euros any European supermarket can sell you a bag of Basmati rice, but the Indian migrant workers, who carry the heaviest burden, see the smallest profit and remain in poverty.

The Basmati Belt stretches along the foothills of the Himalaya. Here, Indian basmati farmers grow rice for the entire world and every time a bag of rice is sold for 2 euros in a European supermarket, nearly 25 percent of that price will reach the rice farmer and Jogander Singh from Haryana.

However, the price of Jogander Singh’s rice is high. When the basmati season is over, and Jogander Singh has paid for the costs for land, seed, chemicals, machinery and labour, he is left with nothing but red numbers and debts.

Even so, Jogander Singh is a fortunate man who can feed his family and still afford to send four children to school. Millions of Indian migrant workers are less privileged and remain in poverty.

At the bottom of the rice chain

Narashima, who does not wish to disclose his last name,is a contract worker at the rice factory Shiv Shakti Inter Globe Exports, where he loads and unloads trucks with heavy bags of rice for 11 hours a day, 6 days a week for five months straight.

To save money for his family, Narashima lives with 15 other migrant workers in a small room in the dark and filthy dormitories of  the factory. Narashima is at the bottom of the global Basmati rice production chain. He and  other migrant workers bear the heaviest burden but see the smallest profit, if any at all.

We’re in Haryana, India, part of the ‘Basmati Belt’ where the majority of the World’s Basmati rice is produced every year and exported to the Middle East and Europe. The livelihoods of one billion people worldwide depend upon rice production.

This year Narashima has been lucky and found work as a carrier at a rice mill in Haryana. Narashima receives 0.02 € per bag. On a good day, when the season is at its highest,  he is able to carry more than two hundred 25-50 kg bags and gets 3,40 € in return.

Migrate to survive

Narashima is one of a million Indian migrant workers, who travel to India’s Northeastern provinces in search for seasonal work every year. It is estimated that 30% of the Indian population are migrants. Each rice season, men from the poorest rural areas leave their villages and families for four-five months, explains migration expert Parimal Maya Sudhakar, Society from Labour and Development in Delhi.
“The people working in the rice fields are the most deprived. If they don’t migrate, they won’t survive. They do not have sufficient means to support their families, therefore part of the family moves and part of the family stay in the villages,” he says.

“Working at the rice fields does not improve their situation. After five months of hard labour the workers may be able to take 640€ back to their families. That is only enough to survive for 4-5 months,” says Parimal Maya Sudhakar.

Audits are manipulated

The Labour department in Haryana is responsible for monitoring that labour laws are implemented and workers rights are not violated at the rice mills. Dalbir Singh, part of a team of three inspectors, says they manage to visit two to three mills per month out of 70 under their authority.

“The managers at the factories are responsible for registering their workers, so there is no problem with contractors and migrant workers. We monitor whether people receive their pay according to the labour laws,” he says.

However, Dalbir Singh and his team do not inspect whether living conditions for migrant workers are up to standard. The inspections are not sufficient, says Parimal Maya Sudhakar.

“No one is interested in solving the problems many migrants have. The workers have no agency and audits are manipulated. The law is in favour of the workers, but it is not being implemented.”

Contracting is a shady business

For Basmati traders, rice is not a question of survival. In the parking lot of Dunar Foods LTD – one of Haryana biggest Basmati rice traders, migrant workers like Narashima can witness how others gain value from his hard work.

Basmati is the only rice crop with no price regulation by the Indian government. Therefore, the trade is almost entirely in the hands of the traders, who control the prices.

By hiring migrant workers to process and pack the rice, traders keep their costs low, while doubling the prices when selling to European and Middle Eastern markets. Traders and farmers hire migrant workers through contractors without contracts. Farmers pay contractors to find migrant workers to plough and sow their fields, 28€ per acre in Jogander Singh’s case, but he does not take responsibility for the workers.

“I have no responsibility for them, I pay him and tell him to finish on time”

Many contractors are not registered and operate without a license. Thousands of migrant workers never sign a contract which guarantees their rights.

“Contracting is such a shady business. Many contractors do not have any kind of license and don’t want the government to interfere, because they fear to be held responsible. It is completely uncontrolled,” says migration expert Parimal Maya Sudhakar.

ThemeInvesteringer i Indisk gældsslaveri

Film og undersøgelse om højrentelån til fattige indiske bønder

FocusFood Production

Food production in developing countries is closely linked to the consumption of food in developed countries. In 2050 the world will feed 9 billion people, which means great corporate social responsibility demands on companies and investors. DanWatch looks at the consequences of our consumption in the poorest countries.