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India, food, and modernization

As India modernizes, farmers and public health pay the price.

Posted by Tom Philpott at 4:49 PM on 20 Sep 2006

India's current burst of free-market reform and official attempts at "modernization" are by no means the area's first.

As Mike Davis shows in his luminous Late Victorian Holocausts (2001), the subcontinent's 19th century British rulers imposed an economic agenda literally ripped wholesale from the pages of Adam Smith's Wealth of Nations (1776), that bible of free-market dogmatists.

Davis lays out in devastating detail (first chapter available for free here) how in the 1870s, high-living colonial administrators dismantled the old Indian system for handling droughts, replacing it with one in which the price of grain floated freely based on global supply and demand. Thus, when a drought struck a grain-producing region in India, the grain price surged. The only buyers who could then afford it happened to reside in merry olde England.

The subcontinent's railroad system, paid for by taxes imposed on the Indians, very efficiently carried grain being produced in the non-drought areas to ports for shipment to the mother country. Its cutting-edge telegraph infrastructure, also financed by colonial taxes, transmitted price hikes rapidly. Famine thus rippled throughout India, including in non-drought-stricken areas.

Tens of millions perished in a series of famines in late 19th century India; before, when drought struck a certain area, food would move in from luckier areas and famines were rare. Davis claims the English took advantage of these not-so-natural disasters to consolidate its grip on the subcontinent. It was all very efficient, really.

Today in India, modernization is bringing new food-related woes: growing despair among farmers and surging diabetes rates.

While India's high-tech centers boom, its rural areas confront a grave situation. A recent New York Times piece puts it this way:

Changes brought on by 15 years of economic reforms have opened Indian farmers to global competition and given them access to expensive and promising biotechnology, but not necessarily opened the way to higher prices, bank loans, irrigation or insurance against pests and rain.

That "promising biotechnology" is Monsanto's Bt cotton seed, genetically modified to ward off the cotton bollworm. Indian farmers have been desperate to get their hands on it because they think they need it to compete with their lavishly capitalized and subsidized U.S. peers.

But the Monsanto seed, which promises to enable farmers to use 25 percent less pesticide, might not be worth the premium (it goes for about twice as much as conventional seed, the Times reports). The great Indian journalist P. Sainath wrote recently that "despite all the claims made for [Bt cotton], input dealers here have seen no decline in pesticide sales as a result of its use. Some claim higher sales than before."

As prices for seeds and other inputs rise, farmers have seen the price their goods fetch in the marketplace fall or stagnate. The result has been crushing debt burdens, mounting losses, and a stunning surge in suicides among farmers.

The Times reports that "17,107 farmers committed suicide in 2003, the most recent year for which government figures are available. Anecdotal reports suggest that the high rates are continuing."

Well, that's one way to clear the land of "inefficient" farmers.

The above-linked Times piece as well as Sainath's are pungent chronicles of what it's like to farm in a laissez-faire market dominated by gigantic input dealers and buyers.

Farmers live with nearly unbearable risk: you invest time and money to plant a field, and pray that weather, pests, bad seeds, soil disease, or God knows what other menace doesn't prevent  a marketable crop from emerging. "Every year is a gamble," one Indian farmer told the Times. Amen.

Societies that are content to let farmers bear that risk alone gamble with their food supplies, sure that someone, somewhere will produce sufficient food. Such societies treat agriculture essentially as a low-value commodity enterprise best done by low-wage workers elsewhere.

As the agricultural economist Darryl Ray has shown (PDF), the U.S., despite its absurd and costly subsidy system, is the model par excellence of such an attitude. Its $15 billion-$20 billion annual subsidy payout serves as a band-aid over a hemorrhaging farm economy. These subsidies are really a sop to the agribiz giants that buy farm goods and sell farm inputs -- they don't do much for farmers themselves, who face steadily declining prices even as their input prices rise.

Pro-market observers will murmur that it's a shame about all those suicides in India, but that the rural situation there merely reflects the natural course of modernization, which is what people everywhere want. The deaths are merely the "birth pangs of a new order," to borrow Condoleeza Rice's assessment of Israel's assault on Lebanon.

In reality, however, the Indian voting public issued a stinging rebuke to the nation's farm policies two years ago, toppling the government and bringing into power current prime minister Manmohan Singh, who promised to do better by farmers. So far, however, Singh has failed to deliver, and the Times reports that he, too, is facing public anger over farmers' plight.

Meanwhile, as the government throws farmers to the wolves and facilitates the industrialization of the food supply, India is being riddled by surging diabetes rates.

Here is the Times:

Though 70 percent of the population remains rural, Indians are steadily forsaking paddy fields for a city lifestyle that entails less movement, more fattening foods and higher stress: a toxic brew for diabetes. In Chennai, about 16 percent of adults are thought to have the disease, one of India's highest concentrations, more than the soaring levels in New York, and triple the rate two decades ago. Three local hospitals, quaintly known as the sugar hospitals, are devoted to the illness.

If present trends continue, the Times reports, the number of diabetes cases will more than double over the next 20 years. "Diabetes unfortunately is the price you pay for progress," one Indian doctor tells the newspaper.

But there are other benchmarks for progress besides GDP rates or stock-exchange averages. Is your farm economy robust, or dismal? Is the food supply making people healthy, or sick? What's it doing to the environment? Are your regional cuisines flourishing, or being homogenized into oblivion?

Indian citizens flatly rejected the government's neoliberal ag agenda in 2004. May they continue to do so -- and may the nation's leaders heed them.

Tom, as a "free-marketer"...

I reject your notion that "we" think that suicide rates are simply an acceptable byproduct of modernization. This is a bizarre and ahistorical view of economists that feeds into unhelpful and truly horrid steroetypes. Amartya Sen is one of those "free-marketers" and he does more than anyone to argue for the right government policies to mitigate risk and advance many forms of development aside from GDP. (i.e. "free-market" doesn't mean zero government) In fact, it is mostly the work of development economists that have expanded notions of human welfare among the largest ngos and international organizations. Isn't it time that environmentalists stopped the straw man arguments and were a little more sophisticated in their discussions? The fact remains that for India to develop a strong middle class and get large numbers of people out of poverty many people will have to move out of agriculture. Since the agricultural life for poor farmers is extremely hard and grueling I think this is a good thing, just as I'm glad the U.S. isn't still 90% farmers, but the Indian government should do a much better job of providing support during the transition. There is not a single economist or "free-marketer" I know that would disagree.

J.S.

Economic Illiteracy Harms The Planet! www.voicesofreason.info.

OK, Jason...

I'm glad to hear that our latter-day market zealots have become more enlightened than Lord Lytton, viceroy of India in the late 19th century. Here is how Mike Davis describes him (pardon the long pullquote, but it's impressive stuff):

But in adopting a strict laissez-faire approach to famine, Lytton, demented or not, could claim to be extravagance's greatest enemy. He clearly conceived himself to be standing on the shoulders of giants, or, at least, the sacerdotal authority of Adam Smith, who a century earlier in The Wealth of Nations had asserted (vis-à-vis the terrible Bengal drought-famine of 1770) that "famine has never arisen from any other cause but the violence of government attempting, by improper means, to remedy the inconvenience of dearth." Smith's injunction against state attempts to regulate the price of grain during famine had been taught for years in the East India Company's famous college at Haileybury. Thus the viceroy was only repeating orthodox curriculum when he lectured Buckingham that high prices, by stimulating imports and limiting consumption, were the "natural saviours of the situation." He issued strict, "semi-theological" orders that "there is to be no interference of any kind on the part of Government with the object of reducing the price of food," and "in his letters home to the India Office and to politicians of both parties, he denounced `humanitarian hysterics'." "Let the British public foot the bill for its `cheap sentiment,' if it wished to save life at a cost that would bankrupt India." By official dictate, India like Ireland before it had become a Utilitarian laboratory where millions of lives were wagered against dogmatic faith in omnipotent markets overcoming the "inconvenience of dearth." Grain merchants, in fact, preferred to export a record 6.4 million cwt. of wheat to Europe in 1877-78 rather than relieve starvation in India. [Emphasis added.]

I'm glad you support a "transitional" safety net for farmers to ease their eviction from the land. But I wonder how it is that you see it as natural that public policy should push Indian farmers into selling into a global market (and buying dubious inputs from a global market), and thus off the land in droves; but you find it socialistic or God knows what that public policy should work to rebuild local food-production networks, and to fortify the agricultural economy rather than to depopulate it. Even when such policies have the blessing of the voting public.

Victual Reality

Tom...

let me respond with a mix of questions/comments

  1. Do you bemoan the fact that the U.S. has evolved into a modern developed economy? If so, then ok, advocate that Indians stay poor with a 90% agricultural rural economy. I am fine with the fact that only 2% of people in the U.S. work in agriculture- that we have become much more wealthy and most of us have full refrigerators with great food. I have much respect for farmers, but I'm very happy to live in a society where people aren't forced to be farmers because they have no other options.

  2. Glad that you will update your knowledge of economics past the 19th century. However, if you want to go back, read Adam Smith and you'll see his high moral regard for all people and that was 1776.

  3. Where did the socialist label come from? I have always advocated social programs and a strong role for government- news flash- one can be in favor of capitalism and free markets and still want social safety nets and economic security. You are expressing a false dichotomy.

  4. As to Indian farmers being "forced" to do anything- they are not- what they are is being exposed to the forces of globalization that can be very merciless and which is why all economists argue for a strong state that addresses their needs. Keeping 90% of Indians in low efficiency agriculture essentially relegates India to permanent undeveleoped status while helping people make the transition to a modern economy (like the one all farmers in the U.S. are part of) is a better solution.

J.S.

Economic Illiteracy Harms The Planet! www.voicesofreason.info.
Jason: The U.S. food-production model...

  1. relies on an essentially exploited class of farmers;
  2. produces lots and lots of really bad food;
  3. treads quite heavily on the earth;
  4. is highly consolidated within the hands of a few firms with outisized political clout;
  5. and is propped up by regular infusions of government cash.

The celebrated cheapness of our food supply -- we pay for less as a percentage of income than any society in history -- can be shown to rely on a series of false economies.

How do you propose to sustainably import this model to the global south? More important: why?

Victual Reality

P.S.

I've read Adam Smith, and realize that he's been thoroughly vulgarized and distorted by his intellectual offspring. Vulgar Smithism is a crude thing indeed.

Victual Reality
About All Economists


   Dear Jason,

        "All economists" don't support programs that help ease the transition from agriculture to urbanization.

        In fact many of the American free-marketeers (such as many of the famed Chicago school) oppose excessive government support and intervention to help people.

        One of the reasons the IMF has been such a disaster for the poor has been the international (particularly the US (ummm, that's you and me)) insistence on reduced government spending on social welfare programs in developing countries.

patrick

Tom & Patrick....

Tom- you said....

The celebrated cheapness of our food supply -- we pay for less as a percentage of income than any society in history -- can be shown to rely on a series of false economies.

How do you propose to sustainably import this model to the global south? More important: why?

ANSWER: I have never once said that we should import our model to anyone. Where did you get that notion? I have simply said that poor countries should modernize and develop. I have also written quite a lot about eliminating all agricultural subsidies in the U.S. (which economists have been calling for for decades) and increasing regulation of the most toxic pesticides, which would fix nost of the problems you cite above. I have also argued strongly against all forms of factory-farming. With respect to India's development, keeping 90% of the population in agriculture is a recipe for poverty- period- there is not a single historical example of a country developing without a transition OUT OF AGRICULTURE- I want it to be done well, that's all, but it needs to happen.

Patrick:

  1. Provide a single citation or quote from any economist that says that during trade liberalization and modernization the state should not provide any services to poor people whose way of life is jeopardized. Once you find that quote (if you can, which I highly doubt)- ask yourself what % of economists say this and therefore, what the representative opinion on the matter is.

  2. Your knowledge of the IMF is clearly superficial as you don't understand the details involved in structural adjustment programs to make such a blanket statement.

J.S.

Economic Illiteracy Harms The Planet! www.voicesofreason.info.
Jason D thunders yet again: OUT OF AGRICULTURE

Sometimes I wish all farmers would get OUT OF AGRICULTURE and let the high-value knowledge economy workers of the world sort out where their next dinner is coming from.

And Jason, your zero-subsidy prescription might not work the miracles you promise. It wouldn't undo the stronghold over the food supply held by a few corporations; it wouldn't undo 50-60 years of disinvestment in local food-production infrastructure; and it probably wouldn't even compel farmers to stop overproducing a few commodities. Ag economist Daryll Ray has pretty persuasively argued the latter point; I'd like to hear your response.

There are more things in heaven and earth than are dreamt of in college econ textbooks--which assume perfectly free markets and other fantasies.

Victual Reality

Jason,

It seems to me that you haven't thought your argument through.  You say that you are against factory farming.  You say that you are against subsidies.  Yet you also say that you are glad that only 2% of the people in the US farm and that you want India to be able to move away from farming.

Clearly, the US model of modern farming is unsustainable, as you seem to agree.  You say you do not necessarily want to import this model to India.

If, however, there are not to be large, centralized, (i.e. "factory") farms, how on Earth will India feed it's 1 bilion people if 90% of it's people are to move "out of agriculture?"

Indeed, if the US is to move away from factory farming, will we not need more farmers? In order to provide sufficient food supply for our nation that is also sustainable will not farming need to diversify more than consolidate?  And with diversification & sustainability will come smaller farms, each growing or raising a greater variety of crops and/or livestock (in order to reduce off-farm inputs as well as maintain the integrity of the soil) and with smaller farms, each farm will produce less food, so there will have to be more farms (and hence, farmers) in order to supply adequate food.

Am I missing something obvious here?  (Could easily be, as I know next to nothing about farming, and even closer to nothing about economics).

I whole-heartedly agree with you that we don't want to force people into no choice but a grueling, manual labor, scrape-by existence.  But what if farming did not have to be that way?  What if farming was a job, much like teaching, or being a doctor, at which one could do what they love (be outdoors, create delicisous food), accept the fact that at certain times of the year there would be long, hard days, accept all the inherent risks involved, but still at the end of the day make a decent living?  Fill the fridges of America with fresh, wholesome, delicious food, and still be able to take a vacation with your family once a year, send a kid to college?  Maybe buy yourself that play 1972 Triumph convertible, and have a Sunday or two to be able to tool around your country backroads.

How hard can it be to structure our nation's food policy such that farmers can make a decent living farming?  More importantly, how can we afford not to do so?  If we, you & I, are against factory farms, and against consolidated mega-farms, then must we not advocate for more small farms, and hence more farmers?  And if we are to advocate for more farmers, don't we have a responsibilty to ensure farmers a living wage?

Kaela

By factory farming...

I am talking specifically about largescale animal feedlots. I have no problem with "industrial" agriculture if it's regulated and efficient and free of subsidies. Just because something is big doesn't make it bad.

J.S.

Economic Illiteracy Harms The Planet! www.voicesofreason.info.

Tom...

I will read the paper you mentioned but could you please stop assuming that because I believe in markets and capitalism that this means zero regulation, it doesn't and I specifically state that it doesn't. Also, you continually bemoan markets and capitalism but what are your solutions? In your perfect world do we all go "back to the land" and live out a meager existence? Or do we do as you and others have done, which have a small highly efficient group of farmers, work within the larger economic system? You do realize it's one thing to CHOOSE to farm and another to have no other options right?

J.S.

Economic Illiteracy Harms The Planet! www.voicesofreason.info.

Tom, I read the executive summary...

of the report and it was all I needed. I don't agree with most of the recommendations since they are contradictory. Getting rid of subsidies is essentially getting rid of price supports, but the authors argue for enstating price supports so this makes no sense whatsoever. The acreage set asides are fine and we've been doing that with the CRP, which I support. Something that economists have thought about a lot is income supports, not price supports, which makes much sense (I'm amazed that any ag economist would support price supports anymore)- they are much less distortionary, fairer, and better for the environment. But they are welfare pure and simple. I'm fine with welfare for farmers since it's a pretty risky business, but let's call if what it is and then cap it so that it really goes to small farmers. This would be much better than anything suggested in the report you mentioned.

J.S.

Economic Illiteracy Harms The Planet! www.voicesofreason.info.

By price supports...

...Ray means acreage set-asides and government-financed storage. Both support price by limiting supply. Direct payments (ie, subsidies) are not price supports, but the opposite. They encourage farmers to produce as much as possible because they know the government will pay the difference if the price falls under production costs.

Ray argues that if you take subsidies away, farmers will keep producing as much as possible to make up on volume what they're losing on price--what I call the devil's bargain of industrial agriculture.

The underlying problem here is that the grain traders--Cargill, ADM--have all of the price leverage in the market, and the farmers have little or none. Ray's plan would give farmers some leverage by organizing them to manipulate supply.

Victual Reality

Big = bad?

Not necessarily - I would argue that centralized manufacture makes sense for some items; those that require large or intesive manufacturing plants (cars), those that involve toxic substances (computers, cell phones) and those that we don't buy very often.

But food?  We buy food nearly every day.  How can it be sustainable to produce 75% of the nation's lettuce in California?  How can it be sustainable to then ship that lettuce thousands of miles, every day?  BIG farms will necessarily produce more food than a local community can consume, even if they diversify their crops.  This is why I think that small, diversified farms are the most sustainable choice.

Who are these economists...

...who speak with one voice and have everything perfectly sorted out, if only us plebes would just do as they say? Do you really pretend, Jason D. Scorse, that Milton Friedman doesn't bitterly oppose government interventions into the market, including social safety nets, while, say, Robert Reich cheers them on? To speak nothing of my favorite economist, Robert Pollin.

There's a bit more contention within the dismal science on the issue of government intervention/safety nets then you let on.

Victual Reality

Tom...

1. Nothing I have suggested is to say that economists have it "all sorted out" but yes, I do think the world would a lot better off if many basic policies long advocated by economists were followed- for example

  • an elimination of all quotas, tariffs, and export subsidies would umambiguously lead to a huge improvement in the world
  • the elimination of virtually all natural resource subsidies would umambiguously lead to a huge improvement in the world
  • the move away from large burearcracies that require hundreds of signatures to open a business in much of the developing world would umambiguously lead to large improvements in the world
  • the use of prizes to spur innovation in research, specifically medical, would.... you get the picture

  1. Meditate on this fact for a moment: Milton Friedman advocated establishing a minimum income for all people in the U.S. back in the 1970s- that's way more progressive than anything coming out of the left these days- let that sink in- he also is at the forefront of the movement to decrininalize drugs since it has led to nothing but unjust imprisonement, violent crime, and wastes of hundreds of billions...anyway...

  2. Having the federal government micro-manage the the production of food would lead to way more problems than it would solve- just contemplate the complexities and difficulties and explain to me why you think that is a good idea- also, do you have any examples to back this up

  3. As to your contention that producing 75% of the country's lettuce in CA doesn't make sense- I say no- it depends. If you're trying to say that there's all this energy that is "wasted" that goes into transporting it then think of what economists suggest- tax the problem directly- so tax energy or better yet- tax carbon- once the price of energy reflects the true cost then let people produce things where they want- I live in the lettuce capital and I see no reason why people shouldn't get their lettuce from us just like I have no problem getting my wheat from the Midwest- I see no reason a priori that food "should" be grown right next to everyone- computers are not produced next to everyone, cars aren't- why is food so much different? I don't see the logic.

J.S.

Economic Illiteracy Harms The Planet! www.voicesofreason.info.
local control

Here's my final comment in a debate that's rapidly declining (Milton Friedman as champion of the working man?)

Jason writes, a propos of God knows what:

Having the federal government micro-manage the the production of food would lead to way more problems than it would solve- just contemplate the complexities and difficulties and explain to me why you think that is a good idea- also, do you have any examples to back this up.

While I can think of better things the gov't can do with its $15-$20 billion in annual subsidies than prop up corn production, etc., I believe that food production should be controlled at the local level. Period. Y ya.

Victual Reality

Cheers Jason


 Dear Jason,

    Don't you have any classes? (smile).  Where do all you folks get the time to keep up with this!!

    In any case, two things.  I never said that

"Provide a single citation or quote from any economist that says that during trade liberalization and modernization the state should not provide any services to poor people whose way of life is jeopardized."  as you suggested (with the emphasis on "any" services").

    I said ""All economists" don't support programs that help ease the transition from agriculture to urbanization....In fact many of the American free-marketeers (such as many of the famed Chicago school) oppose excessive government support and intervention to help people."

Quotes??

" Lionel Robbins (1932: Ch.6).  He dismissed cardinal utility outright and argued that the Pigovian defense of "equal capacities for satisfaction" was not based on any "scientific" fact.    Robbins (1932, 1938) went on to argue that, consequently, social welfare should not be a subject of economic study at all. "

http://cepa.newschool.edu/het/essays/paretian/paretosocia...

Too old?  How about Joseph Schumpeter who is quoted as arguing that "Any development tending to squeeze profits, such as growing strength of trade unions, progressive income taxes, social welfare programs, or any other government intervention designed to limit profits or to redistribute income, is tantamount to deterioration of the social climate. (Higgins)"

http://www.innvista.com/society/business/economists.htm

You might have read this book

"Steve Keen, Debunking Economics: the Naked Emperor of the Social Sciences"  (see review)

http://www.historycooperative.org/journals/lab/84/br_11.h...

These are just for fun.  Let's go back to the original disagreement.  You said that "the Indian government should do a much better job of providing support during the transition. There is not a single economist or "free-marketer" I know that would disagree."

Ironically, I agree with you about the natural transition from largely rural to largely urban population (there are many reasons for it to happen).

But, you insist on making such sweeping generalizations and then distorting others replies, that you make it very difficult for me to agree even when I do!!!  (ROFLMAO).

As to the IMF, please tell me how they have benefited the poor?  

Are there less poor due to their policies?  Are poor people generally better off due to their policies?

If you wish to affirm their greatness, please feel free to provide some links.

Critics of the IMF?  How about internal ones.

http://www.globalpolicy.org/socecon/bwi-wto/critics/stigl...

Or this

http://www.globalpolicy.org/socecon/bwi-wto/critics/kanbu...

Both of these are links to articles about INTERNAL critics of the effectiveness of IMF policies.

And external critics

http://www.twnside.org.sg/title/louder.htm

http://www.brettonwoodsproject.org/art.shtml?x=15742

After all, many people feel that the monetary crisis in Southeast Asia in the 1990's was directly as a result of IMF policies.

And of course, we haven't even gotten to the many protestors from the left!!!!

patrick

Why is it...

that when people get defensive they start calling me religious? It's kind of weird. And what I find most funny is that all of you who worship at the church of "small is beautiful" / "capitalism is evil" / "local is divine" don't really take much time to understand arguments. And I'm about as areligious as they come.

Patrick- you mentioned Chicago school economists and the only quote that backs up your point is from Schumpeter- who is dead by the way- so yes, there are a few extreme views that I don't share and 99% of economists don't- but which people like you and Tom seem to think indict economists and give you license to right off a field that has done more good for the world then all wishy-washy leftist nonsense combined (and by the way I'm a liberal!)

As to the IMF- of course there are problems and I have never denied those- but structural adjustment programs happen when a country is on the verge of collapse- when there is not a single loan agency besides them left to bail them out- it is essentially when the country is in serious crisis. The IMF actually gives a lot of discretion for how to balance budgets and often it is the governments of the countries that make the hard choices. The key counterfactual is whether the countries would be worse off in there was no IMF- the answer is clearly yes. As to the SE crisis- there is lots of blame to go around and the IMF make big mistakes- many countries have done exactly the right thing, which is build reserves so that they don't need the IMF anymore!

Tom- please read up on Milton Friedman's minimum income platform some day- you may actually learn some history that you are obviously ignorant of. It will put a lot of things in perspective for you.

J.S.

Economic Illiteracy Harms The Planet! www.voicesofreason.info.

Quotes


  Dear Jason,

     You challenged me to find "any", so that's all I did, grabbed the first one I saw (grin).  Are you changing the rules (one of your favorite tactics)?

     You claim that 99% of economists don't share his views (or the Chicago school).  That would be great!!!  If it is true, I am very happy to hear it.  Unfortunately, the MSM mainly seems to find and quote though who do (grin).  Especially folks like FOX NEWS (so-called).  Do you have any polls showing a breakdown of beliefs held by economists?  Just to back up your numbers (grin).

     You wrong me if you think I hate economists (one of my relatives is one!).  

     I have never called you religious, so I am not sure who you are complaining about (you do tend to create straw dogs to distract the audience from time to time).

     Hmmm, let's see, you attack the left as being "wishy-washy" and nonsense, then claim to be a liberal.

     I know some conservatives who claim to be liberals (traditional liberals as defined three hundred years ago).  Is that what you mean?

     Your IMF answer dodges the question, but no matter, you know as well as we all do that the IMF has been no friend of the poor.  I wish it were otherwise!

patrick

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