What ruined Indian cultures

Beans Bubble: How the US fracking boom is ruining Indian farmers


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Rajasthan is one of the poorest regions in India. But last summer the desert state experienced an economic miracle. The remote towns flourished. Farmers left their mud huts and moved into stone houses. Cars parked in the driveways, new tractors chugged across the fields.

There was an inconspicuous fruit behind the sudden prosperity. "It is the gift of the tuft bean," said the farmers. The price of the bean, which is traditionally grown as fodder in Rajasthan, had increased tenfold in a very short time. The farmers wanted to use the gift wisely and make more of the unexpected boom. They bought more seeds than usual. Many went into debt for it.

That could ruin them now. Because prices are falling just as quickly as they were rising before. If the trend does not reverse, "there could be a disaster," says Ankur Paliwal, an employee at the Thinktank Center for Science and Environment in Delhi.

The reasons for the violent price fluctuations are geographically far away. The story of the broad bean farmers of Rajasthan shows how quickly people can rise and fall in a globalized economy - driven by forces beyond their control. The story is about the power of large corporations and the immeasurable energy needs of the rich industrial countries. And it tells of the dependency and the needs of small farmers like those from Rajasthan.

Energy revolution only with beans

For a short period of a few months, the Indian farmers had become important suppliers to some US energy companies without any action on their part. Up until a year and a half ago, their main product, the tuft bean, was mainly used as fodder for goats and cows. A small part of the harvest was processed into food and toothpaste.

Then the fracking boom in the US came and changed everything. For the drilling technique of fracking, a rubber obtained from the tuft bean is indispensable. All of a sudden, US corporations needed tufted beans, and in huge quantities. The major bank UBS estimates that around 90 percent of the stocks were bought up by energy companies last summer. Prices skyrocketed.

Previously unattractive gas fields can be exploited profitably through fracking. The technology has given the USA a new energy boom: thanks to the expanded supply, gas prices in the USA have been reduced by more than 60 percent compared to 2008. Experts predict that the US will soon transform from a gas importer to a gas exporter. The global natural gas market is facing major upheavals.

In fracking, a liquid is pressed into cracks in the rock, from which the coveted natural gas is supposed to escape. But it is only through guar gum, which is extracted from the tuft bean, that the drilling fluid gets its perfect viscosity. Without the bean, the fracking revolution would not be possible.

Beans were running out

In the spring of 2012, cluster beans were starting to become scarce in the United States. The energy managers turned their attention to the wasteland of Rajasthan in northwestern India, where around 80 percent of the global bean crop came from. The company executives realized that the future of their companies could depend on this corner of the world. "The US group Halliburton and other companies have entered the market more strongly and have pushed prices into extreme heights," says Stephen Schork, editor of the American energy industry service Schork Report.

Some of the companies gathered huge stocks. Halliburton reached so deep into his pocket that the company then had to revise its profit outlook downwards. The company said it was spending up to 30 percent of the cost of the guar gum per well. "Halliburton had bought way too much in his panic," says Schork. Prices skyrocketed faster and faster.