Are India.docx

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Are Indias Farmers Victims of a Global Land Rush?

Rising food prices have sparked protests in India and elsewhere in thedeveloping world. But, according to humanitarian group Oxfam, costs areincreasing because of a new menace

On Wednesday, tens of thousands of landless farmers lined up in Gwalior, a city innorthern India, and started a very long walk. Under a flapping canopy of green-and-white flags, demonstrators from several Indian states vowed to spend the next threeweeks marching over 320 km from this fort town to New Delhi. They are taking tothe road to demand the right to land for shelter and growing food, something theysay countless rural Indians have been losing to powerful private players.

The demonstration kicked off just as the U.N. is poised to announce new global foodprices. Food prices have been on a steady upward trajectory for years, a worryingdevelopment in light of the deadly 2008 riots that broke out in over 30 countries and

added tens of millions of people to the worlds list of chronically hungry. Less thanthree years later, high food prices again helped spark the unrest that unfolded intorevolutions across North Africa and the Middle East in the winter of 2011. And againtoday, after a drought badly affected crops, corn and wheat are more expensivethan they were when the Arab Spring got into full swing. Some analysts warn that itmeans more unrest is on the way.

Indians too are feeling the crunch of higher food prices, though for slightly differentreasons. India is not a major food importer and has plenty of its own grain stocksdespite a less-than-stellar monsoon. (Why so many Indians are going hungry, then,is another question.) That has traditionally insulated domestic food prices fromfluctuations in the global market, and yet food prices in the country too have beenon the rise, partly as a result of more speculation tied to the global food market.According to recent World Bank figures published in the Hindu, India recorded thesecond highest spike in wheat prices after Sudan in the year ending in July 2012.

An Oxfam report released on Oct. 3 argues that these rising food prices are part ofwhats forcing more and more farmers in developing nations off the ir land in aglobal land rush. According to Oxfams calculations, the amount of land boughtaround the world by private investors from 2000 to 2010 could produce enough foodto feed 1 billion people, and yet it is having the opposite effect. After the food scarein 2008, investors rushed to pour money into land deals. From mid-2008 to 2009,reported agricultural land deals by foreign investors in developing countries rocketed

by around 200%, the report reads. Much of whats produced on that land,particularly in Africa, is destined for export. Meanwhile, the small farmers fromwhom it was acquired are no longer able to feed themselves.

India is suffering a similar fate, according to Ekta Parishad, the group organizing themarch. Because of an easing of restrictions over urban land ownership in the past 20years, smaller cities around India have been growing at unprecedented rates,cannibalizing the land belonging to villages around them. Some 50,000 villagesaround India have disappeared from 1995 to 2010, says Ramesh Sharma, one of thegroups campaign coordinators. He says the rise of contract farming, when smallfarmers grow crops on their land for private companies, and corporate farming,when the government leases tracts of land to corporations on long-term contracts,have also led to the consolidation of land in industrys hands. Its completelyunproductive for the people who are dependent on the land, says Sharma.
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Whenever the government needs land, they simply go and grab land from thecommunity It creates a very big conflict for society.

Oxfam has called on the World Bank to put a temporary freeze on investmentsinvolving large-scale land acquisitions in order to set an example for governments

and the private sector to ensure investments benefit the poor. In India, Sharmaand the tens of thousands of farmers hes on the road with today have a long list ofdemands that theyre bringing to New Delhi. Chief among them is the creation of abill that would constitutionally guarantee Indians the right to land to live and growfood on. The group is also calling for the government to act on a long-ruminatedland policy that defines the rights of residents whose land is taken over for publicuse. The bill has been languishing in the legislature, facing fierce opposition from thebusiness community that says it will impede business prospects. We are not askingfor a [handout], says Sharma. We want to grow food for ourselves.

Global Food Prices Increases DuringSeptember

According to the United Nations Food and Agriculture Organization, globalfood prices saw an increase during September to the highest level in sixmonths as meat and dairy producers passed the higher feed costs to theconsumers.

The FAO tracked 55 food items and noted that the index was to 215.8points, up three points from 212.8 in August. Dairy costs increased the

most in over two years.

According to FAO economist Abdolreza Abbassian, dairy farmers andlivestock breeders are passing the costs of the higher feed to consumersafter grain prices increased in June and July. He said there is noimmediate food crisis even with the higher prices.

Although the market is difficult right now, the rudiments are not there tosuggest there is a food crisis. Rather, he said, the market looks at thehigh prices as a rule, not an exception.

The dairy-price index jumped to 187.7 points up from Augusts 175.6points. Its the biggest gains since April 2010. The price of meat increasedto 175 points. Grains prices also saw a 17 percent increase; its biggestincrease since February 2008.

Abbassian said the FAO expected the increases in both dairy and meat. Ofcourse, how much it goes up before consumers begin to reduce theirconsumption still remains to be seen.

Higher food costs were a contributing factor to the civil unrest in manyregions including North Africa and the Middle East. It even led to the


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toppling of the Egyptian and Tunisian governments. According to the U.S.State Department, increases in food prices led to over 60 riots between2007 and 2009.

World food prices near crisis levelsPrices driven higher by US drought along with production problems inRussia and other exporting countries

World food prices rose in September and are moving nearer to levelsreached during the 2008 food crisis.

The United Nations food agency reported on Thursday that the worstdrought in more than 50 years in the United States had sent corn and

soybean prices to record highs over the summer, and, coupled withdrought in Russia and other Black Sea exporting countries, raised fears ofa renewed crisis.

The Food and Agriculture Organisation's (FAO) price index, whichmeasures monthly price changes for a food basket of cereals, oilseeds,dairy, meat and sugar, rose 1.4% in September, mainly due to higherdairy and meat prices.

"It's highly unlikely we will see a normalisation of prices anytime soon,"

said FAO senior economist Abdolreza Abbassian.

Parmjit Singh, head of the food and drink sector at London law companyEversheds, said higher prices would place further pressure on squeezedinternational food supply chains.

"Manufacturers and producers will naturally want to pass on increasedcosts to their clients but they will meet with stiff resistance from retailerswho are reluctant to increase checkout prices for increasingly value-conscious customers," Singh said.

FAO's index is below a peak reached in February 2011, when high foodprices helped drive the Arab spring uprisings in the Middle East and northAfrica, but current levels are very close to those seen in 2008, whichsparked riots in poor countries.

World food prices rose 1.4% inSeptember, FAO says

World food prices rose 1.4% in September, pushed up by higher meat, dairy andcereals prices, according to the UN's Food and Agricultural Organization (FAO).
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The rise followed two months where prices held steady, the FAO said.

There has been concern this year about possible food shortages as drought hashit grain crops in the US Midwest, Europe and central Asia.

The FAO also forecast a decline in global cereal production this year.

It now predicts 2.286 billion tonnes of cereal to be produced, slightly down fromthe 2.295 billion tonnes it estimated a month ago.

The current forecast would mean a 2.6% fall in cereal production from 2011'srecord crop.

The FAO said this would result in a significant reduction in world cereal stocks bythe end of 2013, but added that very early indications for wheat crops in 2013were encouraging.

Price volatility

Abdolreza Abbassian, senior economist at the FAO, said that food prices werelikely to remain high and volatility could increase.

"Prices are sustained. It is highly unlikely we will see a normalisation of pricesanytime soon," he told Reuters.

"Volatility is not going to go away, if anything it may even intensify further incoming months," he said.

The FAO's Food Price Index rose 3 points to 216 in September, but this is stillwell below the record 238 reached in February 2011.

Cereal prices rose 1% from August, as gains in wheat and rice offset a decline inmaize.

Meat prices were up 2.1%, with particularly strong gains in the "grain-intensive"pig and poultry sectors.

Dairy prices rose 7%, the sharpest monthly increase since January 2011. "World

demand for milk products remains firm which, combined with increasing feedcosts, is underpinning world quotations," the FAO said.

But sugar prices fell 4.2%, reflecting an improved sugarcane harvest in Brazil,the world's largest sugar exporter.

Oil prices dipped 0.4%.

New biofuels offer hope to hungry

world
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The poorest people in the world face additional hunger as the price of staplefoods soar.

The growth of crops in 2012 has been badly affected by drought in the US andRussia and prices have risen 50% since June.

According to a report about the hike in food prices, from the internationalagency Oxfam, 40% of US corn stocks are currently being used to produce fuel.

The US Renewable Fuel Standard mandate requires that up to 15 billion gallonsof domestic corn ethanol be blended into the US fuel supply by 2022.

The chairman of the world's largest food producer is highly critical of the rise inbio-diesel.

Peter Brabeck-Letmathe of Nestle says crops produced for biofuel use land and

water which would otherwise be used to grow crops for human or animalconsumption.

His comments have ignited discussion about the second generation of biofuels.

Another concern is the driving of the agricultural system to use larger quantitiesof pesticides and insecticides known to be responsible for the destruction ofhabitat.

Quite often it is cheaper to do the unsustainable thing than to do the sustainablething

End Quote Dr Doug Parr Greenpeace

"In Indonesia there has been the destruction of rainforests and in Brazil it is bothrainforests and grasslands," says Dr Doug Parr of the environmental groupGreenpeace.

He further maintains that any reduction in greenhouse emissions, in partbecause of the way the land is being used, is not as efficient as previouslypredicted.

Converting waste

But Lars Hansen of Novozymes in Denmark, which produces enzymes to breakdown the crops used for biofuels, says there are currently large amounts of bio-mass not being used.

Speaking about the second-generation of biofuels, he says: "The way forward isto convert the residue part of the crop into sugars which can then be used forfuels."

By residue, he means the part of the crop which is not eaten - the stalks and

husks, and also wood chippings.


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He says that technology is ready now and should be deployed to provide asolution to many problems.

"If you take just 20% of the agricultural and forest residue available in Europe,which can sustainably be taken away from the fields, you can make half of

Europe's gasoline demands," he says.

"The technology is in place," he says, "what we now need is for governmentpolicies to move in the right direction."

What is needed is governments, and institutions such as the European Union,giving subsidies to new advanced technologies to combat carbon issues.

"Such a move would help the transport sector in Europe to become sustainable,"he says.

"We are moving from a world with 750 million cars to double that number inonly 10 years, so we need an alternative to fossil fuels," he notes.

Doug Parr of Greenpeace agrees there are opportunities in second generationbiofuels, although he maintains it still does not address the issue of how land isused.

"My worry is that what we have seen with the first generation of biofuels, is thatthey tend to be sourced from developing countries," he says.

He does not believe there is the institutional capacity to cope with the big

commercial interests.

"Quite often it is cheaper to do the unsustainable thing than to do thesustainable thing even though it is serving the policy objectives in the long run,"he laments.

He says that the issue of sustainability should have been sorted out beforegovernment mandates were introduced regarding the percentage of biofuelsreplacing fossil fuels.

"At the moment it is the tail wagging the dog," he says.

Job opportunities

Progress is already being made on the second generation of biofuels.

"It is not a pipe-dream any more, this technology is actually being deployed,"says Mr Hansen.

"There is a factory opening in northern Italy to convert agricultural waste, thereare factories in China, and we are working with partners in the US and Brazil,"he explains.


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The technology will not only address the transport sector, but it can also replaceproducts such as plastics which the oil and chemistry sectors have beensupplying over the past 150 years.

Another positive aspect of the new technology, is that it can supply jobs and

energy independence around the world.

"Biofuels created well in Africa is an excellent opportunity to create jobs in theagricultural sector, thereby creating income for smallholder African farmers," hesays.

He cites a project Novozymes is running in Mozambique, where farmers makecassava starch which can either be used as food, or any excess can be sold to asmall factory where it is transformed into a fuel which is then used in cookingstoves or running transport.

"We are creating economic activity in the rural areas of Africa, we improve theenergy independence of the countries by helping them import less fuel," he says.

"At the same time we green their transport sector and we green the cookingstoves which cause tremendous health problems," he says.

He adds: "I see biofuels as an opportunity for agriculture more than a problem."

Global Food Prices Rise 1.4 Percent RaisingCrisis Concerns

Global food prices increased 1.4 percent in September after two stable monthsmainly due to rising dairy, meat and cereal prices, said UN's Food andAgricultural Organisation (FAO).

The FAO's price index, which takes stock of cereals, oil seeds, dairy, meat andsugar, jumped to 216 points from 213 in the previous month. Prices of sugarand oils have fallen.

The index shows a year on year fall by 9 points while remaining 22 points fromthe peak level of 238 points reached in February 2011. But the current level isaround the same reported in 2008.

Meat prices rose prices rose 2.1 percent while dairy and cereal prices gained 7and 1 percent. Following better harvests in Brazil, sugar prices dropped 4.2percent while oils eased 0.4 percent

The FAO has also cut its forecast for cereal production this year. It expects2.286 billion tonnes of cereal in September, down from the 2.295 billion tonnes

predicted in August.


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"Prices are remaining high... prices are sustained, it's highly unlikely we will seea normalisation of prices anytime soon," FAO senior economist AbdolrezaAbbassian told Reuters.

He said the monthly rise may not necessarily mean an upward trend, but the

prices are expected to remain more unstable in the coming months.

Concerns of a food crisis continue following the severe drought in the UnitedStates, which pushed up soya bean and corn prices along with droughts inRussia and parts of Europe.

Speaking to Reuters, Parmjit Singh, head of the food and drink sector at law firmEversheds, said the increased prices may put more pressure on food businesses.

"Manufacturers and producers will naturally want to pass on increased costs totheir clients but they will meet with stiff resistance from retailers who arereluctant to increase checkout prices for increasingly value-conscious

customers," he said.

Home Economics: Will Rising Food Prices Ruin theRecovery?

Here we go again. On two occasions since 2007, the world economy has enduredrapid and extreme increases in food prices that have inflicted great pain, especiallyon the poor. Now, with drought in the Midwestern U.S. burning through one of themost important food-producing regions in the world, get ready for a dizzying feelingof dj vu. Corn and soybean prices recently reached record highs. Wheat has also

spiked. Jim Kim, President of the World Bank, is already warning that rising foodprices can cause families to eat cheaper, less healthy food or pull kids out of school,steps that can have catastrophic lifelong effects on the social, physical, and mentalwell-being of millions of young people.

That is bad news for the global economy. We are already facing all sorts of hurdlesin our so far futile efforts to climb out of the Great Recession. Joblessness in the U.S.and Europe remains high. The euro-zone debt crisis continues to boil. The worldsemerging markets are slowing down. Rising food prices will just add to the gloom,since they can kill growth in two important ways. First, there is a consumption effect.When families are forced to allocate a larger share of their weekly income to milk,bread and other basics, they are unable to spend as much on clothes, toys and otherstuff, dampening overall consumer spending. This could be a big issue in theadvanced economies, where unemployment is already straining the finances of theaverage household. Second, there is a policy effect. Rising food prices often causehigher inflation, which could force central banks to react by hiking interest rates tocontrol the upward pressure on prices, slowing down growth in the process. Thiscould prove a big problem in the developing world. With economies in China, India,Brazil and elsewhere cooling off, central banks have been encouraged to cut rates tostimulate growth. Higher inflation, though, could stymie that effort by forcing centralbankers to keep rates high to control inflation even if growth continues to sag. Sinceemerging markets are playing a larger role in overall global growth, a continuedslowdown in China, India and other big developing nations could dampen the entire

global outlook.
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How likely is that? So far, economists are taking the position that higher food priceswont stop central bankers in China and elsewhere from easing money to spur moregrowth. Heres Capital Economics on this, from a late July report on China:

The recent surge in global agricultural commodity prices if sustained will add to

the downside risks to Chinas economy but it is unlikely to be a decisive factor.Overall inflationary pressures are weak and the authorities will not be deflected fromloosening policy further The Peoples Bank [Chinas central bank] has raisedinterest rates and reserve requirements in the past when food price inflation hassurged, but only when the Chinese and global economies were strong. Thisemphatically is not the case today. If the Chinese authorities want to alleviate foodprice inflation they are now more likely to do so via subsidies and stock releases,rather than tighter monetary policy.

Some economists feel similarly about the entire global economy. They are so farstaying calm about the impact the recent surge of food prices could have on globalgrowth. Economists at Bank of America Merrill Lynch, in a recent report, argued that

slower growth and other factors could limit how elevated food prices would translateinto increased inflation, and thus limit their impact on overall economic growth.

Despite the significant jump in crop futures prices, we see a host of factors helpingto delay and/or mitigate the impact on inflation On the policy front, our EM[emerging markets] team expects local central banks to remain focused ongrowth But even if higher food prices constrain central banks on the margin, theimpact on global growth should be limited.

Economists, however, always like to leave themselves an escape route to changetheir outlook down the road, and they are doing so again. The impact of high food

prices on global growth will depend on how high those prices go. That will depend onfactors that are impossible to predict the weather, for example. A bit more rain inthe U.S. Midwest might salvage some of the corn crop and bring prices down, forexample. Or continued drought in the U.S. combined with problems elsewhere in theworld (for example, a feeble Indian monsoon) could conspire to deal a harder blowto the global economy. Personally, Im more negative than the Merrill gang aboutthe effect of rising food prices. I think consumer sentiment, especially in theadvanced economies, is so fragile right now that bigger bills at the supermarket,even only slightly bigger bills, could convince many families of the need to retrench.

Generally, though, this third food-price scare in five years shows yet again howbadly we need to invest in global agriculture. The problems were facing today are

an outgrowth of long-term trends greater wealth in the developing world, a lackof investment in rural infrastructure, falling yield growth that are altering thesupply-demand equation in world food markets, making them more susceptible tobad harvests, natural disasters and other unexpected shocks. So be prepared to getthat sickening, familiar feeling again and again.
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Why the Falling U.S. Birth Rates Are So Troubling

Werebecoming Europe. At least, thats what a long line of U.S. birth-rate figuresseems to being telling us. And thats bad news for the future of the country.

New numbers released by the U.S. government on Tuesday show record-low birthrates in 2011: the general fertility rate (63.2 per 1,000 women ages 15 to 44) wasthe lowest ever recorded; the birth rate for teenagers ages 15 to 19 declined; birthrates for women ages 20 to 24 hit a record low; and rates for Hispanic and non-Hispanic black women dipped. Some birth rates remained unchanged, like those ofwomen in their late 40s. Only women ages 35 to 39 and 40 to 44 are more likely tohave babies now than in the past.

The data are part of a broader postfinancial crash trend. Every year since 2007,when the number of births in the U.S. hit 4.3 million, Americans have brought fewerbabies into the world. Much of that has to do with the recession: Americans

apparently decided that they couldnt afford to have as many kids in an unstableeconomy, even if they were married.

Such declines are typical during economic crises. During the Great Depression, birthrates dropped significantly, and the same thing happened during the stagnation ofthe 1970s.Weve seen this previously throughout the last 100 years, says MarkMather, a demographer for the Population Reference Bureau. Fertility rates drop inperiods of economic stress.

It appears that the decline in birth rates has at least begun to slow, likely reflectingthe fact that Americans are feeling more confident about their economic future. Thebirth rate fell by 1% in 2011, as opposed to the 2% and 3% drops in prior years.

Even so, the trend toward fewer births is likely to continue over the long term,mirroring whats been going on overseas for decades.I would suspect that fertilityrates over the long term would start to resemble those of Europe, says Mather.

Europes birth rates have been declining for decades, especially in its mosteconomically stable country. Germanys rate 1.36 children per woman is thelowest in all of Europe and one of the lowest in the world. There were fewer Germanbirths in 2011 than at any other time recorded.

Even before the euro crisis, experts were sounding the alarm overEuropes gloomy

demographic future. How is the continent supposed to take care of an agingpopulation when its birth rates are pointing toward a shrinking workforce in thedecades to come?

The U.S. rate hasnt fallen to European levels yet. The birth rate of children perwoman in the U.S. is about 1.9. But the downward trend will almost certainly forcethe U.S. to rethink how to financially support the elderly and fund programs likeSocial Security and Medicare, ongoing economic debates that will take on even moreweight as the country ages.

Some experts are more optimistic about the latest figures. While birth rates havebeen sliding since 2007, officials from the Centers for Disease Control andPrevention say they arent worried about a possible demographic time bomb. Tokeep the population stable, countries need to have a birth rate of about two children
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per woman, which is close to the current U.S. rate. One CDC official told theAssociated Press, We havent seen any studies that show couples want to havefewer children or no children.

Unfortunately, it may not be a matter of whether families wantto have children, but

whether they can.

Declining Birth Rates Raising Concerns inAsiaHONOLULU (April 10) There has been both good and bad news coming out ofAsia on the population front. The good news is many Asians are living longer.The bad news is not only are many living longer but there are fewer new Asianscoming on to the scene. And, that demographic transition is rife with importantimplications for economic growth and living standards in many Asian countries,

especially in Northeast and East Asia.

Andrew Mason, senior fellow at the East-West Center (EWC) in Honolulu and aprofessor of economics at the University of Hawaii, points out that Japan is nowthe oldest population in the world, but others are catching up. The reasonsothers are snapping at Japans heels for the dubious title are not only improvedliving and health conditions but rapidly declining birth rates. Mason notes thatSingapore has reached 1.2 births per woman (and) South Korea has thelowest fertility rate in the world slightly less than 1.1 births per woman.Mason adds that China may not be far behind, already boasting an anemic birthrate of 1.6, and it will soon begin to experience rapid aging just how rapid isunknown and will depend in part on how quickly China moves to relax the one-child policy.

Policy decisions undoubtedly play a major role in the directions birth rates takein many countries. But other just as important factors rear their heads as thedesire to have and rear children declines.

Minja Kim Choe, EWC senior fellow and family and gender expert, says tounderstand the issue, especially in Korea, a closer look must be taken atattitudes on marriage, childbearing, and gender roles, with economics playinga large role, too. In a recent study, she notes that the traditional Korean familysystem, based on Confucian ideology and formalized by the Yi dynasty in the

mid-17th century, has undergone major changes with the industrialization andmodernization of the country over the past few decades. It is not surprisingthen, Choe says, that women in modern Korea, who have (a) high level ofeducation and therefore have the potential for economic independence, havedeveloped non-traditional views on marriage, and childbearing.

But it is not just Korean women.

Choe says that studies found that an increasing proportion of men and womenview marriage as not necessary for (a) full and satisfying life. In fact, ofKoreans of prime marriage age, between 20 and 34, surveyed in 2003 one thirdof the women and one in six men had, what Choe calls, a neutral attitude on

marriage, meaning they believed marriage did not matter one way or the other.Perhaps not the Confucian attitude their ancestors would have liked, but one
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that clearly shows the realization that marriage demands more changes andadded responsibilities, especially for women.

But, those changing attitudes are causing problems for the majority of Koreanswho still want to marry. The window of marriage opportunity is not a large one.Choe says, the appropriate age for marriage (is) for women beginning in theirlate 20s by their own choice, and ending before age 30 by the choice of (their)potential husbands.

Attitudes toward childbearing also bear out the changing environment in Korea.

Choe notes that, according to survey data, preferred family size expressed as(an) ideal number of children or intended number of children has changed littlesince 1980, decreasing only slightly from 2.1 to 1.9. But, she points out, theview that it is necessary to have children has declined substantially. A trend,Choe believes, suggests that (an) increasing proportion of women will beevaluating costs and benefits of having children vis--vis other options in life

such as having more time for employment and other non-familial activities.

And perhaps, according to Choe, that is because young men and women in theirearly thirties grew up during the period when South Korea experienced itsmost rapid economic growth. It is likely they have formed a taste for a high levelof consumption and high expectations of social and economic advances in theiradult life. Now experiencing slower economic growth and higher unemploymentrates, many of those same young people as they become of marriage age maybe taking pause. She notes, The new and prospective parents are likely to havebenefited from a high level of education, and an improved standard of living,and want to provide their children similar advantages. Something they may

not be able to do.The Korean government is aware of the growing birth rate decline problem andhas advanced numerous policies in the past few years to attempt a solution,including improved maternity leave, childcare subsidies, and baby bonuses. But,Choe says, These measures may have some effect on couples merelypostponing childbearing, but they are likely to be short lived at best. She adds,for a sustained reversal in the falling birth rate, More long-range policies onimproving economic conditions of the young adults, reducing the cost ofchildrens education, and supporting egalitarian gender roles need to beestablished and implemented.

The problems Choe outlines in Korea are familiar to another population expert,Robert Retherford, who has done extensive studies on similar phenomena inJapan in collaboration with colleagues from Nihon Universitys PopulationResearch Institute in Tokyo. The EWC senior fellow and coordinator of the EWCsprogram on Population and Health, says the problems are serious withpotentially alarming consequences. How Japan responds to these challengescould have a profound influence on health care, elderly care and economicgrowth in the decades ahead, he notes.

Retherford points out since the early 1990s Japanese policymakers have beentrying to coax Japanese into marrying earlier and raising bigger families. They

have met with little or no success. He notes that the present pattern of age -


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specific birth rates, if unchanged in the future, will eventually cause Japanspopulation to decline at a constant rate of 38 percent every 30 years.

Japans largely unsuccessful attempts at breathing life into its baby bust havebeen ongoing since 1990 and have relied on providing subsidies for childbearingand encouraging employers to creating policies conducive to raising families,including such steps as childcare leave, expansion of daycare centers, and after-school programs. The problem is that these pronatalist programs are very costly.And, as he points out, The danger in placing much of the burden onemployers is that employers may avoid hiring women. The added costs couldalso lead the firms to become less efficient and less competitive in the globaleconomy.

The dilemma for Tokyo is not only how to fill the maternity wards again, but tofigure out how to restructure the economy to make it more efficient andcompetitive, while at the same time, as Retherford points out, restructuringsociety to be more marriage and child friendly without jeopardizing womens

hard-won gains in education and employment. He admits it wont be easy andit wont be cheap.

And, it will be a dilemma facing more and more developing countries. Retherfordnotes, and developments in Asia bear him out, Its not just Japan. A lot morecountries are in the same boat.

U.S. Birth Rate Drops asEconomy StrugglesThe U.S. birth rate continued its decline in 2011, according to a preliminary reportfrom the Centers for Disease Control, and researchers link a part of the downturn inbirths to the economy.

Last year, the number of births hit a record low after declining 1 percent from 2010to 3,953,593. It is the fourth year straight year of decline in total fertility rate. Thebaby boom that was once a part of U.S. culture has fizzled as the general fertilityrate fell to a historic low in 2011, measured at just 63.2 births per 1,000 women age15-44 years old. That figure peaked in the mid-1950s at about 120 births per 1,000women in that age group.

The economy is definitely having some effect on fertility and we know that fromprevious decades during the Great Depression we saw a pretty significant drop infertility and then again in the 1970s, Mark Mather, a demographer for PopulationReference Bureau, a nonprofit population research organization, told ABC News. Wewerent too surprised to see a decline in fertility during this most recent economicdownturn, he continued. If you look at European countries you can also see impactof high unemployment and when uncertainty about jobs, you tend to see fertilitydrop.


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One family decided to take precautionary steps to avoid increasing their family sizebecause of the high cost of raising children. Shortly after the birth of their secondchild, Joanna and Jack Mazewski decided the best option to maintain their family offour would be a vasectomy.

The cost of raising a child these days is just too expensive for us to consider havinga larger family, wrote Joanna Mazewski, a blogger for Babble, a parenting website.Im not just talking diapers here: education, extra-curricular activities, insurance,etc., are all factors we considered before ultimately deciding on his surgery.

The cost of groceries is outrageous these days and I sometimes find myselfspending up to $200 on food for my family of four, said Mazewski, who is based inCoconut Creek, Fla. Its really difficult to try and eat healthy and organic whenprices are so high. With a third child, it would be difficult to continue feeding myfamily quality, healthy meals with the sky rocketing prices on simple things such asmilk, yogurt, and bread.

The trend of opting for more children began before the recession but may have beenexacerbated by the downturn.

According to the preliminary report from the CDC, teens, Hispanic, and AfricanAmerican saw birth rates decline in 2011. The birth rate for teenagers between theages of 15-19 declined by 8 percent last year. The birth rate for non-Hispanic blackand Hispanic black women was the lowest ever.

The drop in teen birth rates may not be due to the economy, said one researcher.

It could be changes in contraception and social norm, said Mather. The recession

may have played a role in Hispanics experiencing the steepest drop in fertility, headded.

I think the recession is playing a role there especially since Latino men were hitvery hard by the recession and the loss of jobs.

What's Really Behind Europe'sDecline? It's The Birth Rates, Stupid

The labor demonstrators, now an almost-daily occurrence in Madrid andother economically-devastated southern European cities lambast austerityand budget cuts as the primary cause for their current national crisis. Butlonger-term, the biggest threat to the European Union has less to do withgovernment policy than what isor is nothappening in the bedroom.

In particular, southern Europes economic disaster is both reflected andis largely caused by a demographic decline that, if not soon reversed,all but guarantees the continents continued slide. For decades, thewealthier countries of the northern countries notably Germany have

offset very low fertility rates and declining domestic demand by attracting
http://babble.com/http://www.cdc.gov/nchs/data/nvsr/nvsr61/nvsr61_05.pdfhttp://www.cdc.gov/nchs/data/nvsr/nvsr61/nvsr61_05.pdfhttp://babble.com/


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migrants from other countries, notably from eastern and southern Europe,and building highly productive export oriented economies.

In contrast, the so-called Club Med Countries Greece, Italy, Portugal andSpainhave not developed strong economies to compensate for their

fading demographics outside pockets of relative prosperity such as Milan.Spain was once one of Europes star performers, buoyed largely by real

estate speculation and growing integration with the rest of the EU. Sixyears ago the country was building upwards of 50% as many houses asthe US while having 85% less population. Roughly six million immigrantscame to work in the boom, even as roughly seven to eight percent ofSpaniards preferred to remain unemployment.

When the real estate bubble broke, there was only limited productiveindustry to step into the breach. In Spain, private sector credit has

dropped for a remarkable eighteen straight months while industrialproduction has fallen precipitously7.5 percent in March alone. Spainsunemployment rate has scaled over 23%, more than twice the EUaverage. Unemployment among those under 25 in both Spain and Greecenow reaches over fifty percent.

After decades of expansion, even fashionable Madrid is littered with storevacancies and ubiquitous graffiti; many young people can be seen on thestreet in the middle of the week, either doing nothing or trying to pick upan odd Euro or two performing for tourists.

A Change In Values

Economists tend to explain this decline in terms of budget deficits andfailed competitiveness, but some Spaniards believe the main cause lieselsewhere. Alejandro MacarrnLarumbe, a Madrid-based managementconsultant and author of the 2011 book,Elsuicidiodemogrfico de Espaa,says todays decline is almost all about a change in values.

A generation ago Spain was just coming out of its Francoist era, astrongly Catholic country with among the highest birth rates in Europe,with the average woman producing almost four children in 1960 andnearly three as late as 1975-1976. There was, he notes, no divorce, nocontraception allowed. By the 1980s many things changed much for the

better better, as young Spaniards became educated, economicopportunities opened for women expanded and political liberty becameentrenched.

Yet modernization exacted its social cost. The institution of the family,once dominant in Spain, lost its primacy. Priorities for most young andmiddle-aged women (and men) are career, building wealth, buying a

house, having fun, travelling, not incurring in the burden of manychildren, observes Macarron. Many, like their northern European
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counterparts, dismissed marriage altogether; although the population ishigher than it was in 1975, the number of marriages has declined from270,000 to 170,000 annually.

Now Spain, like much of the EU, faces the demographic consequences.

The results have been transformative. In a half century Spains fertilityrate has fallen more than 50% to 1.4 children per female, one of thelowest not only in Europe, but also the world and well below the 2.1 ratenecessary simply to replace the current population. More recently the ratehas dropped further at least 5 percent.

Essentially, Spain and other Mediterranean countries bought into northernEuropes liberal values, and low birthrates, but did so without theeconomic wherewithal to pay for it. You can afford a Nordic welfare state,albeit increasingly precariously, if your companies and labor force are

highly skilled or productive. But Spain, Italy, Greece and Portugal lackthat kind of productive industry; much of the growth stemmed from realestate and tourism. Infrastructure development was underwritten by theEU, and the country has become increasingly dependent on foreigninvestors.

Unlike Sweden or Germany, Spain cannot count now on immigrants tostem their demographic decline and generate new economic energy.Although 450,000 people, largely from Muslim countries, still arriveannually, over 580,000 Spaniards are heading elsewhere many of them

to northern Europe and some to traditional places of immigration such asLatin America. Germany, which needs 200,000 immigrants a year to keepits factories humming, has emerged as a preferred destination.

Declining Population

As a result Spain could prove among the first of the major EU countries tosee an actual drop in population. The National Institute for Statistics (INE)predicts the country will lose one million residents in the coming decade,a trend that will worsen as the baby boom generation begins to die off.The population of 47 million will drop an additional two million by 2021.By 2060, according to Macarron, Spain will be home to barely 35 millionpeople.

This decline in population and mounting out-migration of young peoplemeans Spain will experience ever-higher proportions of retired peoplerelative to those working. This dependency rate, according to INE, willgrow by 57 % by 2021; there will be six people either retired or in schoolfor every person working.

If Spain, and other Mediterranean countries, cannot pay their bills now,

these trends suggest that in the future they will become increasinglyunable or even unwilling to do so. As Macarron notes, an aging electorate
http://www.hs.fi/english/article/GUEST+COLUMN+European+recession+can+be+seen+in+declining+birth+rates/1329104118676http://blogs.forbes.com/carljohnson/http://www.thinkspain.com/news-spain/20188/spanish-population-falling-as-birth-rate-drops-and-emigration-riseshttp://worldcrunch.com/europe-s-economic-gap-sparks-new-internal-immigration-spain-germany/3494http://worldcrunch.com/europe-s-economic-gap-sparks-new-internal-immigration-spain-germany/3494http://www.thinkspain.com/news-spain/20188/spanish-population-falling-as-birth-rate-drops-and-emigration-riseshttp://blogs.forbes.com/carljohnson/http://www.hs.fi/english/article/GUEST+COLUMN+European+recession+can+be+seen+in+declining+birth+rates/1329104118676


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is likely to make it increasingly difficult for Spanish politicians to tamperwith pensions, cut taxes and otherwise drive private sector growth. Votersover 60 are already thirty percent of the electorate up from 22 percent in1977; in 2050, they will constitute close to a majority.

Without a major shift in policies that favor families in housing or taxpolicies, and an unexpected resurgence of interest in marriage andchildren, Spain and the rest of Mediterranean face prospects of aimmediate decline every bit as profound as that experienced in the 17thand 18th Century when these great nations lost their status as globalpowers and instead devolved into quaintlocales for vacationers, romanticpoets and history buffs.

Long before that happens, todays Mediterranean folly could drive the rest

of Europe, and maybe even the world, into yet another catastrophic

recession.

Falling birth rates mean Japan 'won'thave any children under 15 by 3011'

Japan's people could become extinct in 1,000 years becauseof declining birth rates, academics say.

The population of Japanese children aged up to 14, currentlystands at 16.6million in the country but is shrinking at a rateof one every 100 seconds, researchers in Sendai said.

They warned that at the current rate, Japan would have nochildren left within a millennium.

'If the rate of decline continues, we will be able to celebratethe Childrens Day public holiday on May 5, 3011 as therewill be one child,' Hiroshi Yoshida, an economics professor atTohoku University,' told AFP.

'But 100 seconds later there will be no children left,' he said,adding: 'The overall trend is towards extinction, whichstarted in 1975 when Japans fertility rate fell below two.'

Professor Yoshida has now created a population clock toencourage the 'urgent' matter to be discussed.


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Enlarge

Predictions: The graph shows predictions that Japan's population willcontinue to decline into 2055

Timely reminder: Hiroshi Yoshida, an economics professor at TohokuUniversity has created a clock that shows the population falling as theclock ticks down to encourage the 'urgent' matter to be discussed

Japan's government projects the birth rate will be just 1.35children per woman within 50 years - well below the healthyrate.
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But while fewer babies are being born, the country's elderlypopulation is growing.

Life expectancy - already the highest in the world - is

expected to rise from 86.39 years in 2010 to 90.93 years in2060 for women and from 79.64 years to 84.19 years formen.

Japan's greying population is causing a headache forpolicymakers battling with a decreasing pool of workers topay for the pensioners.

Unicharm has said that sales of its adult nappies had 'slightly

surpassed' those for babies for the first time since thecompany moved into elderly market in 1987.

The dearth of births

Why are so few young Japanese willing to procreate?

AT 84, Masuyo Hirano happily describes herself as in the spring of my life. The

sprightly woman lives in a nursing home with 50 other pensioners. But she is not idle.She votes. She does acupuncture. She and her friends sing karaoke, their delicate handswrapped around the microphone. She dexterously weaves slippers from multicolouredribbons that take days to finish, and hands them out to visitors like sweets.

There are two reasons for her happiness. The first is that she has made satisfactoryarrangements for the remainder of her long life. In a country where 28m people are over65 and many millions live alone, are bedridden or suffer from dementia, she has foundherself a place that is a model of public-private care and will look after her until she dies.She has no children, and will not need to ask her relatives to do anything further for her.

The second reason she is happy is that she knows what will happen to her remains after

her death. The Yashioen nursing home in Saitama, a district north of Tokyo, offers her aburial club in which she and her friends will be placed in the same tomb together, whichthe nursing home promises to tend. This sort of service is likely to become more popularin Japan as elderly people have fewer children to mourn them. Many Japanese in theirlater years are tormented by the prospect of lying in a lonely and forgotten tomb. I'vetalked this over at length with my nephews and nieces, she says. I don't want to be a

burden on them.

When Ms Hirano was born in 1926, her parents' generation was not expected to livebeyond 50. Today her age is nothing exceptional; life expectancy for women is 86 andfor men 80. Japan has known for decades that it was getting older. Its growing lifeexpectancy, now the longest in the world, was a cause for celebration as far back as1962, when a special report by The Economistdescribed it as possibly one of the mostexciting and extraordinary sudden forward leaps in the entire economic history of theworld. The fruits of this success are now known as hyper-ageing: no other country


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has grown so old so rapidly. The median age is approaching 50. That is surpassed onlyby Monaco, a Mediterranean retreat for wealthy pensioners.

Some of the stories about Japan's enduring centenarians need to be taken with a pinchof salt. This summer Tokyo's supposedly oldest man, 111-year-old Sogen Kato, turnedout to be a heap of bones covered in newspapers dating from 1978. His daughter, now81, had been collecting his pension for decades. That event turned up a few similarcases. But for all the missing centenarians, there are still reckoned to be about 40,000

bona fide ones. So many have reached the age of 100 that the silver sake cups they arecustomarily awarded have been reduced in size.

The darker side of that heartening picture of longevity is Japan's shrinking birth rate,which at 1.4 per woman is the second-lowest in the rich world, after South Korea's. Fromthe start of the Meiji period in 1868 Japan's population rose for about 70 years. Duringthat time Japan cast off its isolationist feudal system, opened its borders and started itsheadlong rush to industrialisation. Then, in the 1950s, fertility started to plummet. Sincethe 1980s, when the birth rate fell below 1.5 children per woman, Japan has, in effect,had a one-child policythough, unlike in China, it was self-imposed.

It came as a shock to demographers when the 2005 census showed that the number ofdeaths exceeded that of births for the first time: the population had started to shrink twoyears ahead of schedule. The 2010 census results are currently being processed andpreliminary results are due in February 2011.

Go on, have another one

Since the mid-1970s, when it became clear that the number of births was resolutelydeclining, Japanese governments have made efforts to encourage people to have morebabies. But for all that they have increased child benefits and provided day-care centresin the past 30 years, the birth rate has remained stubbornly low. One reason is that inJapan, unlike in the West, marriage is still more or less a prerequisite for having children.Only 2% of births take place out of wedlock. And weddings cost a lot of money. Themore elaborate sort may involve renting a chocolate-box church and hiring or buyingat least three bridal outfits. The average cost of a Japanese wedding is about 3.2m($40,000).

Having gone to all that trouble, married couples do, in fact, have an average of slightlymore than two children, just above what is needed for births to exceed deaths. Thetrouble is that fewer and fewer people get married. Women wait ever longer andincreasingly do not bother at all. According to the NIPSSR, six out of ten women in theirmid- to late 20s, which used to be the peak child-bearing age, are still unwed. In 1970the figure was two out of ten. And almost half the men between 30 and 34 wereunmarried in 2005, more than three times as many as 30 years ago.

But the cost of weddings may be the least of the reasons why the Japanese areincreasingly putting off marriage or avoiding it altogether. One weightier one is thatemployment rates among women have increased but private companies implicitlydiscourage mothers from returning to their old jobs. Toshiaki Tachibanaki, an economistwho has written on inequality among Japanese women, finds that about 80% of femalecivil servants return to their old jobs after having children because they get reasonablematernity benefits and help with child care. But in private companies they are typicallyless well looked after, and only about a third go back to work.

So most women are forced to take low-paid irregular or part-time jobs after havingchildren. NIPSSR figures show that the vast majority of working women aged 35-49


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have jobs of that kind, earning 500,000-1.5m a year. Most men in the same age groupwork in regular jobs (with fringe benefits) and are paid 3m-6m.

It does not help that unemployment is high and incomes are low among the youngespecially among young men, who increasingly give up even looking for jobs. One ofJapan's most prominent sociologists, Masahiro Yamada of Chuo University, thinks thatmost young Japanese women still want to be housewives, but are struggling to find abreadwinner who earns enough to support them. He points out that half the youngpeople of prime marrying age20-34still live with their parents. In the 1990s hecoined the term parasite singles to describe them. They seemed to be getting a gooddeal, saving money on rent and spending it on foreign travel and luxury goods instead. Ifthey wanted privacy, they could always go to one of Japan's ubiquitous love hotels.

Leave me alone

Since then the parasites have got older, and a lot of them are living with their parents

not because they want to but because they cannot afford to live independently. They aremoving towards middle age but have remained single, working for low pay orunemployed. Some have even become what Mr Yamada calls pension parasites, livingon their parents' pensions.

Part of the problem may be that young men, who during Japan's free-wheeling boom erararely saw their workaholic fathers, do not want to fall into the same trap. Some of themhave become grass-eating men who prefer clothes and cosmetics to cars and avoid lifein the fast lane. Others resort to hikikomori, locking themselves in their bedrooms andrefusing to talk to anyone, even the parents who deliver food to them. Many of themhave watched their mothers divorce their fathers on retirement. Those men are cruellyknown as dead wet leaves, whose wives have trouble sweeping them out of the home.

The Japanese are also learning from personal experience that looking after elderlyparents can be more costly and time-consuming than looking after children. That may beanother factor in their calculations.

Florian Coulmas of the German Institute for Japanese Studies in Tokyo, who has made aspecial study of population issues in Japan, has no easy explanations for the low birthrate, but describes it as the bitter fruit of success in Japanese demography. A growing

percentage of the population, both married and never married, without children has novested interest in society, with hitherto unknown consequences for its self-image andsense of purpose, he writes. And even if policymakers managed to reverse thosechoices and persuade the Japanese to have many more children, the benefits to theworkforce would not be felt for 20 years.

Population and recession

Europes other crisis

Recession is bringing Europes brief fertility rally to a shuddering halt

EUROPE'S crisis is worse than it looks. As if the continent's troubled financial marketsand economy were not a big enough burden, a decade-long (and largely unnoticed)improvement in its fertility rate seems to have come to an abrupt end.


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Of the 15 countries that have reported figures so far this year, 11 saw falls in theirfertility rates in 2011 (the fertility rate is the number of children a woman can expectduring her lifetime). Some of the biggest declines occurred in countries hardest-hit bythe euro crisis. Spain's fertility rate fell from 1.46 in 2008 to around 1.38 in 2011.Latvia's fell from 1.44 to below 1.20. Tomas Sobotka of the Vienna Institute ofDemography points out that, in these countries, the fertility rise of the previous tenyears has been wiped out in three. Big declines also occurred in Nordic countries that donot have fast-rising unemployment or big cuts in state spending. Norway's fertility ratefell from 1.95 to 1.88 in 2010-11; Denmark's from 1.88 to 1.76. But whether countrieshave high fertility rates, like Britain, or low ones, like Hungary, the trend is similar: aten-year fertility rise stopped around 2008 as the economic crisis hit, and started to slidein 2011 (see chart 1).

In the markets, three years is an age; in demography, it is the blink of an eye. Ninemonths at least must pass between an event and a corresponding change in the birthrate. Demographic statistics also tend to lag by a year or so. To see such a change intrend so soon after the start of recession is remarkable. But although there is a linkbetween hard times and family formation, its nature is controversial. Adam Smiththought that economic uncertainty was bad for fertility. Others argued that recessionincreases births, by lowering the opportunity cost of children and encouraging women tohave babies they wanted anyway during periods of unemployment.

Europe's recent experience supports Smith. The economy has acted on population trendsthrough migration, marriages and births. In some countries, recession has causedmigrants to return homeand those migrants had high fertility. Spain saw animmigration wave from Latin America in the late 1990s and early 2000s. Partly becauseof this, the number of births in Spain exploded from 363,500 in 1995 to 518,500 in 2008(a 43% rise). But as migrants went home, the increase in births went into reverse,falling to 482,700 in the year to June 2011. Marriages traced a similar course, risingfrom 199,000 in 1995 to peak at 214,300 in 2004 before tumbling to 164,600 in 2011.

Not all migrants have behaved in the same way. Relatively few Poles have left Britain.And some migrants came from places with lower fertility than their hosts (eg, Balts inScandinavia). But in most countries with large populations of untethered migrants, arecession-induced reversal of migration has cut fertility.


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Recession has affected the marriage and birth rates of native-born citizens, too. If youngcouples wait until they have a secure income before setting up home and having children,there will be a link between family formation and unemployment (especially maleunemployment). France Prioux, of the Institut national d'tudes dmographiques, plottedFrench unemployment against couples forming a union (marriage or cohabitation) overmore than 20 years. The result is an almost perfect mirror image (see chart 2).

These numbers go only to 2002, but the pattern seems to continue. America's PewResearch Centre asked 18-to-24-year-olds about their reaction to the recession of 2009:20% said they had postponed marriage. Mr Sobotka plotted the link between

unemployment and fertility in Latvia. He, too, found a mirror image, with births falling asunemployment took off, then rising as jobs flowed back. In Europe there is little doubtthat recession has reduced fertility by cutting migration, marriages and births.

What is in doubt is whether the fall is permanent or temporary. There are different waysto reduce fertility. Couples can decide to have fewer children, or can postpone the birthof a child. Both lower the fertility rate; but in the second case, it may recover later.Demographers call this a tempo effect.

In most of the world, fertility rates have fallen because couples want fewer children. Buta recent paper by Mr Sobotka and John Bongaarts of the Population Council, anAmerican think-tank, argues that in Europe the tempo effect is what counts. As they

note, the average age of first births has risen in most of western Europe since 1970. In1970 the age at which most women had their first child was 22- 25. In 2008 it was 27-29. But from about 2000 to 2008 the pace of increase slowed markedly: women were nolonger deferring children as much, and some were starting to have the children whosebirths they had postponed. Now the number of first births is falling more than laterbirths in some countries, suggesting that people are postponing starting families.

Three broad lessons emerge. First, population trends are more sensitive to the economiccycle than might be expected. Population trends are thought to set the stage foreverything else (demography is destiny said a 19th-century French scientist). Second,the rise in fertility in the 2000s suggests that not all of Europe is caught in a low-fertilitytrap. Scandinavia, Britain and France all have relatively high fertility. Third, governments

may have scope for policy measures to moderate the fall. Old-fashioned demographicpolicies were usually natalist: they rewarded women who had many children. (Russiastill has these.) They almost never work.
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But if demographic tempo is what matters, Europe's fertility might be more susceptibleto government policy. Couples might respond to incentives like cheaper kindergartens ormore parental leave by changing the spacing of children they want anyway. If Europe isto avoid yet another downward twist in its demographic spiral, tempo -adjusted fertilitymay hold the secret.

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