There is clearly no reliable “market price” in a volatile world driven by greed and profits, with no social regulation. The idea that the management and distribution of and access to a scarce and vital resource like water can be left to the market—and that the market can assign a reliable price reflecting the real value of water—is both absurd and irresponsible.

All cultures have viewed water as the basis of life. Marketisation, however, allows water to be perceived as no different from any other commodity in the global market place–to be owned and bought and sold at arbitrary, unreliable prices.

The commodification of water shifts the focus from the water cycle on to water markets – diverse species, ecosystems and water systems adapted to millions of years of evolution are replaced by instantaneous relationships between “sellers” and “buyers” negotiating a commodity transaction which determines how water will be used, where it will flow, and where and to whom it will stop flowing. It is assumed that water will flow from “low value” to “high value” use. This increase in “value” (which refers to price) is supposed to magically overcome water scarcity and allocate water equitably.

We need to focus our thinking on water cycles rather than water markets, on human rights to water rather than profits to be made from commoditising a scarce resource. It is our relationship with the ecology of water that has the capacity to sustain water supplies for us and other species. Trade in water can help water markets grow in the short term, but unregulated markets will make our scarce and fast-disappearing water resources disappear ever faster. It is the discipline of ecology and hydrology that we need to guide our efforts at conservation, not the ecological indiscipline of markets.

The anarchy of the water market can be a good guide to profits – but it is a bad guide for the equitable, just and sustainable use of our precious water systems.

In the years ahead, the ecological and commercial paradigms will clash intensely as globalisation displaces cultures of water conservation and replaces them with a commercial monoculture of water as a commodity.

The commodification of water resources is being promoted by the World Bank and free-trade agreements like NAFTA and WTO. The World Bank is using Structural Adjustment programmes to privatise water resources. Free-trade agreements are defining water as an environmental service covered by rules of free trade in services. Privatisation and commodification are threatening to accelerate the processes that have led to the growing crisis of drought, desertification and water famines.

The market paradigm of water involves the assumptions that:

1. Increase in price is increase in value.

2. Increase in water trade is increase in water supply and hence free trade in water can overcome the water crisis.

The assumption that water markets will overcome the water crisis is, however, fallacious and malicious. Firstly, water markets cannot reduce water use and conserve water because commercial exploitation has created water scarcity by fuelling over-exploitation. In a world of inequality, higher prices do not tame consumption–they increase the luxury consumption by the rich and deprive the poor even of survival needs.

Secondly, water trade cannot increase water supplies. Water cannot be created by markets. It can be stored, diverted, polluted and also over-exploited, but its overall availability cannot be enhanced.

Water is defined by the water cycle and renewed if the water cycle is maintained. The ecological paradigm recognises that:

1. Water is the basis of all life on the planet including diverse species and all human communities.

2. Non-sustainable water use spurred by non-sustainable economies and technologies which violate the limits and the integrity of the water cycle are creating a water crisis.

3. The current water crisis can only be overcome by respecting the limits on water use that are enforced by the water cycle.

Markets driven by commercial values can neither recognise or respect the ecological limits set by the water cycle, nor give water its real value as the very basis of life. The real value of water is assigned by culture, which treats water as sacred; it is also assigned by rules of social equity and justice which recognise that everyone has a human right to water.

Water Markets Violate the Water Cycle

Water markets define “value” only as commercial and market value, and try and maximise this value as profits through commercial transactions and trade.

In nature’s economy, the primary value is sustainability and maintenance of nature’s essential ecological processes. Conservation is the imperative in nature’s economy for maximising ecological values.

In the sustenance economy, meeting people’s biological and livelihood needs for water are the primary objectives. Equity, justice and human rights are the primary values. Sharing of scarce water equitably is the imperative in the sustenance economy.

When water's social and ecological values are ignored and markets determine how water flows, it starts to move against the law of gravity. It moves upwards – to money – from the poor to the rich, from agriculture to industry, from the countryside to the city. In water markets, water moves from having a high ecological and social value, but a low market value, to having a low ecological and social value, but a high market value.

Water markets take water from where it is needed by nature’s economy, people’s economy and the countryside, to where there is purchasing power for water as a commodity—the urban areas, industry and industrial agriculture. Managing a scarce and precious resource like water requires conservation, equity and the recognition that as the basis of life, water is priceless.

“Anyone who can solve the problems of water,” John F. Kennedy once said, “will be worthy of two Nobel prizes—one for peace and one for science.”

Sadly, as moderator of the latest of The Economist’s online debates, I do not have any Nobel prizes to hand out. But there is no doubt that Kennedy was right: water has always been a pressing issue, and one that involves many different disciplines. Some see it as a matter of morality—a human right—and others as a purely practical concern. And even among pragmatists, there is little agreement about how to get clean water to the 1.1 billion people around the world who lack it.

The motion before us suggests one possible solution: “This house believes that water, as a scarce resource, should be priced according to its market value.” Arguing in favour is Steve Hoffmann, of WaterTech Capital, an investment bank that specialises in the water industry. In his opening statement, he argues that water should be priced precisely because it is of such fundamental importance to health, development and the environment. Although there is lots of fresh water in the world, it is not always available at the right times and in the right places. Treating it and transporting it to those who would use it is expensive. The market, in Mr Hoffmann’s view, provides the only reliable test of how much money should be spent on water, and where.

Indeed, Mr Hoffmann sees pricing as the key to the sustainable management of water. It ensures that water is allocated to the most productive use, and can help to prevent its over-exploitation. His opponent in the debate, Vandana Shiva, author of “Water wars” and founder of Navdanya, a non-governmental organisation that campaigns to protect the poor’s access to water, also invokes sustainability in her opening statement. But she sees the market, with its profits and losses, its booms and busts, as too unstable to provide for sound, long-term management of the world’s water.

Moreover, Shiva worries that markets for water, far from instilling thrift, simply reallocate it from the frugal poor to the prodigal rich. In her view, the market does not recognise the importance of providing livelihoods to impoverished farmers, nor does it ascribe an appropriate value to health of the environment. In short, putting a price on water reverses the natural order of things, allowing it to flow “uphill”, away from the places where it is most useful to society as a whole.

The two debaters agree on one point at least: that water is critical to development, and to the fortunes of the world’s poorest citizens in particular. But otherwise, their views seem utterly at odds—the perfect start to a vigorous debate. For the next ten days, the arguments will ebb and flow, and all are welcome to add thoughts of their own. Then we will put the motion to a vote: sink or swim, as it were.

Water is a critical factor in poverty, has a fundamental impact on human health, and is increasingly crucial in economic development. The World Health Organisation reports that 1.1 billion people worldwide lack access to safe drinking water and 2.7 billion people lack basic sanitation needs. Yet despite its stature as a prerequisite for life and for living, the price of water remains artificially low based on an institutional ideology that developed when accessible freshwater was relatively abundant and when contamination was mitigated by the ubiquity of the resource.

Sustainability is the mantra behind many emerging regulations, water-policy initiatives and technological advances. And nowhere is the market price of water more critical than in the concept of sustainability. Efficiency is critical in achieving sustainability and a market-driven price is paramount to the efficient allocation of water resources. The sustainability criterion suggests that, at a minimum, an allocation must leave future generations no worse off than current generations. Economics has much to say about the efficiency of the allocation.

The pricing of water must go beyond the mechanical and political aspects to the basic factors that affect the relationships between producers and consumers, and that are implicit in the rate structure. The principle of sustainability is critically dependent upon efficiency in water use. And efficiency cannot be achieved without the proper signals included in market prices. Market value is equivalent to water rates based on economic principles of water-resource pricing. In that regard, resource economics requires the convergence of two key principles: equimarginal value in use and marginal cost pricing.

Economic principles of resource allocation dictate that when costs are incurred in the acquisition, treatment and transport of water supplies to customers, the principle of equimarginal value in use should be combined with the principle of marginal cost pricing; that is, market value must govern. Additional units of water can always be made available by expending more resources to acquire and transport it, that is, at a given marginal cost.

The question of where to stop in increasing the supplies made available is then added to the question of how to arrange for the allocation of the supplies in store at any point in time. On efficiency grounds, additional units should be made available as long as any customers are willing to pay the incremental or marginal cots incurred. To meet the criterion of equimarginal value in use, however, the price should be made equal for all customers in a class.

It is precisely because of practical considerations such as alternative supplies, location, use patterns, types of service etc, that the marginal costs of serving all customers will not be the same. Pricing should be arranged, then, so that all customers within a class served under identical cost conditions pay the same amount equal to the marginal cost or market value. Between classes, however, prices should differ, and the difference should be the difference in marginal costs involved in serving the two. In general, the economic principles of resource allocation indicate that customers served under identical cost conditions should be charged equal prices and that the water should be supplied and priced in such a way that the price for each class of service equals the marginal cost of serving that class.

Water rates should be designed to fully recover the costs of providing water by charging customers in accordance with how they contribute to the costs. Schedules of water rates that charge customers in accordance with the cost of service would be efficient from the economic point of view, in that the price of a unit of water would be equal to the cost of the resources used to obtain and deliver that water. Further, they would be equitable in that no customer would be required to subsidise any other customer. To sum it up, the dictates of efficiency are clear: water should be allocated so that the marginal net benefit is equalised for all users. If marginal net benefits are not equalised, it is possible to increase net benefits by transferring water from those uses with low net marginal benefits to those with higher net marginal benefits. Again, the pricing of water at the ‘market’ value is the only way to make these determinations.

The amount of easily accessible freshwater is coming under increasing pressure as a result of global population growth, particularly in developing countries where urbanisation and industrialisation are underway, and the degradation of existing supplies. The amount of readily accessible freshwater is a minuscule percentage of the Earth’s total water budget. If per capita consumption of water continues to increase at its current rate, we will be using over 90% of all available freshwater with 20 years.

Scarcity, spatial and temporal, must be reflected in a pricing mechanism. Water is like any other economic good for which there is supply and demand and a pricing mechanism that seeks equilibrium between the two.

This is not a process-oriented enchantment with the free market that it may appear to be. While this might sound like so much economic rhetoric, the reality is that market pricing is central to enabling the forces that allow the efficient allocation of the resource. It is simply a recognition that market prices convey a great deal of information; information with respect to incentives, efficiency and allocational considerations. The pricing of water based on its true market value is also critical in resolving the issues associated with its allocation among competing beneficial uses.

Desalination is an example of where the market value of water plays an important role as a catalyst for problem resolution. In regions of the world where water is permanently scarce, desalination has emerged to meet demand. And it has done so only because there are few options. Granted, desalination is more attractive where energy is cheap, but it points to the reality that if water is simply unavailable, the market value argument is easy to acknowledge. It stands to reason that water priced at the market value (which includes scarcity, regulatory costs, treatment costs and resource management considerations) would be beneficial for the entire spectrum of conditions.

The signals and incentives contained in pricing water at its market value also enable the processes of recycling, reuse and conservation that are central to achieving sustainable water use. That water is not priced (valued) at its market value is the main reason why we are experiencing many of our severe water-quality and -quantity issues. Resource economics dictates the allocational efficiency of market-driven pricing.

If the authorities can and do collect such bits of data, piecing them together offers the tantalising prospect of foiling terrorist conspiracies. It also raises the spectre of criminalising or constraining innocent people’s eccentric but legal behaviour.

In November 2002 news reports revealed the existence of a big, secret Pentagon programme called Total Information Awareness. This aimed to identify suspicious patterns of behaviour by “data mining” (also known as “pattern recognition”): computer-driven searches of large quantities of electronic information. After a public outcry it was dubbed, perhaps more palatably, Terrorism Information Awareness. But protests continued, and in September 2003 Congress blocked its funding.

Civil-liberties defenders are trying hard to stop data-mining becoming a routine tool for the FBI to spy on ordinary Americans. They say that the administration is racing in its final months to formalise in law programmes that have run solely under authorisation from the White House that bypasses Congress. One pending change would authorise more intelligence sharing between federal and local officials. In a federal court filing made public on September 20th, America’s attorney-general, Michael Mukasey, sought legal immunity for telecoms firms which have provided details on international phone calls. What happens in practice, and what the law permits, is a hot and unresolved issue.

Last month, after a briefing by the Department of Justice about a secret data-mining plan for the FBI, a group of American lawmakers wrote to Mr Mukasey complaining that the plan would allow the FBI to spy on Americans “without any basis for suspicion”. The proposed project could be made public in coming weeks.

No similar pan-European data-mining programme is operating, at least to public knowledge. Yet under an agreement signed in July last year airlines flying from the European Union to America have had to provide the authorities there with reservations data, as well as information obtained by airport-security screeners. This can include passengers’ race, religion, occupation, relatives, hotel reservations and credit card details. Internet service providers and telecoms firms in the EU must now keep for up to two years, though not automatically hand over, data on websites visited and phone calls made and received (but not the content of conversations).

Fast company

FAST, a Norwegian company bought by Microsoft this year for $1.3 billion, collects data from more than 300 sources (including the web) for national data-mining programmes in a dozen countries in Asia, Europe and North America. In April British members of Parliament learned that almost a year earlier the home secretary, Jacqui Smith, had secretly authorised the transfer of licence-plate data recorded by roadside cameras to foreign intelligence agencies. In June the Swedish Parliament voted into law a data-mining programme strongly backed by the defence ministry. From January 1st it will provide sweeping powers to monitor international electronic messages and telephone traffic.

The staggering, and fast-growing, information-crunching capabilities of data-mining technology broaden the definition of what is considered suspicious. In June America’s Departments of Justice and Homeland Security and a grouping of American police chiefs released the “Suspicious Activity Report—Support and Implementation Project”. Inspired in part by the approach of the Los Angeles Police Department, it urges police to question people who, among other things, use binoculars, count footsteps, take notes, draw diagrams, change appearance, speak with security staff, and photograph objects “with no apparent aesthetic value”.

Companies, and especially credit-reporting firms, generally enjoy more latitude than government bodies do in making personal information available to third parties. They find intelligence agencies are eager clients. Chris Westphal, head of Visual Analytics, a firm in Poolesville, Maryland that operates data-mining software for security and intelligence agencies, says the data provided by such firms is “very significant”. Narayanan Kulathuramaiyer, an expert in data mining at UNIMAS, a Malaysian university, says companies are selling database access to intelligence and law-enforcement agencies “at a level you would not even imagine”.

Legal challenges to governments’ use of personal information held by companies have reached high courts in many countries, including America’s Supreme Court. Rulings, however, have for the most part frustrated privacy advocates. Suzanne Spaulding, a former legal adviser to the Senate and House intelligence committees, says improvements in data-mining technology have enabled intelligence agencies to milk favourable court rulings in ways that exceed judicial intent. For example, such cases typically concern permission to use data from a single source, such as a phone company’s billing records. When different databases are mined simultaneously, the value of information increases exponentially.

Spies are increasingly snooping on private internet use. Katharina von Knop, a data-mining expert at the University of German Federal Armed Forces in Munich, says many systems remotely analyse the content of web pages people visit. A man who has travelled to, say, Peshawar, a stronghold of Islamist extremism in Pakistan, is considered more dangerous if he also reads the blog of an extremist Muslim cleric. If the cleric lives in Peshawar, the man’s suspicion score rises further. Data-mining software develops profiles by taking into account all web pages visited by a computer user; if a suspect visits a stamp-collecting website, the suspicion score is lowered.

Such profiling increasingly relies on “sentiment analysis”. Hsinchun Chen, head of the Artificial Intelligence Lab at the University of Arizona says this technique, which he performs for American and international intelligence agencies, is an emerging and booming field. The goal is to identify changes in the behaviour and language of internet users that could indicate that angry young men are becoming potential suicide-bombers. For example, a person who exhibits curiosity by visiting many Islamist websites and asking numerous questions in online forums might be flagged by sentiment-analysis software if he shows signs of resentment and eventually turns to “radicalising” others by, say, justifying violence and providing links to militant videos. Mr Chen says intelligence agencies in the United States, Canada, China, Germany, Israel, Singapore and Taiwan are customers for this technique.

Does it work?

Donald Tighe, vice-president for public affairs at In-Q-Tel, a non-profit investment outfit that helps the CIA stay abreast of advances in computing, says that data mining is now so powerful it has become “essential to our national security”. But campaigners for privacy have many worries. One fear, prevalent in Britain after incidents in which officials lost huge quantities of confidential personal information, is that the state may be even more careless with data than private firms are. Another is that innocents are flagged for further investigation or added to “watch-lists” that may impede air travel, banking and gaining jobs in places where radioactive materials are used, such as hospitals. The American Civil Liberties Union (ACLU), a lobby, says the list maintained by the Terrorist Screening Centre at the FBI now has more than 900,000 names, with 20,000 more every month. Being removed is tricky.

Data-mining may be bad for national security as well as for civil liberties. The software is often modelled on the fraud-detection applications used by financial institutions. But terrorism is much rarer. So spotting conditions that may precede attacks is harder. Mike German, a former FBI agent who now advises the ACLU, says intelligence agencies too readily believe in the “snake oil” of total information awareness, which drains effort from more useful activities such as using informers and infiltrators.

Abdul Bakier, a former official in Jordan’s General Intelligence Department, says that tips to foil data-mining systems are discussed at length on some extremist online forums. Tricks such as calling phone-sex hotlines can help make a profile less suspicious. “The new generation of al-Qaeda is practising all that,” he says.

Last year two pattern-detection programmes, ADVISE and TALON, run respectively by America’s Department of Homeland Security and the Pentagon, were shut down following privacy concerns and irregularities. Privacy advocates, however, say that other programmes continue—and many are operated, with minimal oversight, by the National Security Agency. The NSA insists that it does keep Congress informed. It also vigorously defends data mining, saying that if today’s systems were in place before the terrorist attacks of September 11th 2001, some of the hijackers would have been identified.

In July, after fierce debate, Congress imposed new limitations on government wiretapping when it renewed the expiring Foreign Intelligence Surveillance Act (FISA) sought by President George Bush after September 11th. The main law governing data mining, this has provided the administration with broad and unprecedented electronic-spying powers. But civil-liberties lobbies such as Amnesty International and Human Rights Watch say the renewed, restricted law leaves largely untouched far-reaching secret “black” programmes, run by the NSA, which crunch data on great numbers of people, including millions of Americans. Much of that is personal financial information collected by the Treasury.

Mr Bush says that FISA helps protect citizens’ liberties “while maintaining the vital flow of intelligence”. Several hours after the president signed the bill into law, the ACLU filed a federal lawsuit, on the grounds that the executive branch’s expanded wiretapping powers violated the constitution.

In 2001 American-led forces routed the Taliban in Afghanistan, destroying al-Qaeda training camps there. Berndt Thamm, who advises Germany’s armed forces on terrorism, says that in retreat the Islamists left valuable clues about their online communications and electronic plotting. It is in following up these leads that data mining and pattern analysis can, and should, be used. Such techniques, says Mr Thamm, are “the only answer” to jihadist extremists. That is the argument which the strenuous objections of civil libertarians need to overcome.

SAVING the world is a thankless task. The only thing beyond dispute in the $700 billion plan of Hank Paulson, the treasury secretary, and Ben Bernanke, chairman of the Federal Reserve, to stem the financial crisis is that everyone can find something in it to dislike. The left accuses it of ripping off taxpayers to save Wall Street, the right damns it as socialism; economists disparage its technicalities, political scientists its sweeping powers. The administration gave ground to Congress, George Bush delivered a televised appeal and Barack Obama and John McCain suspended the presidential campaign. Even so, as The Economist went to press, the differences remained. There was a chance that Congress would say no.

Spending a sum of money that could buy you a war in Iraq should not come easily; and the notion of any bail-out is deeply troubling to any self-respecting capitalist. Against that stand two overriding arguments. First this is a plan that could work (see article). And, second, the potential costs of producing nothing, or too little too slowly, include a financial collapse and a deep recession spilling across the world: those far outweigh any plausible estimate of the bail-out’s cost.

Mr Market goes to Congress

America’s financial system has two ailments: it owns a huge amount of toxic securities linked to falling house prices. And it is burdened by losses that leave it short of capital (although the world has capital, not enough has been available to the banks). For over a year, since August 2007, central bankers, principally Mr Bernanke, have been trying to make this toxic debt liquid. But by September 17th, following the bankruptcy of Lehman Brothers and the nationalisation of American International Group earlier that week, the problem started to become one of the system’s solvency too. The market lost faith in a strategy that saved finance one institution at a time. The economy is not healing itself. If credit markets stay blocked, consumers and firms will enter a vicious spiral.

Mr Paulson’s plan relies on buying vast amounts of toxic securities. The theory is that in any auction a huge buyer like the federal government would end up paying more than today’s prices, temporarily depressed by the scarcity of buyers, and still buy the loans cheaply enough to reflect the high chance of a default. That would help recapitalise some banks—which could also set less capital aside against a cleaner balance sheet. And by creating credible, transparent prices, it would at last encourage investors to come in and repair the financial system: this week Warren Buffett and Japan’s Mitsubishi-UFJ agreed to buy stakes in Goldman Sachs and Morgan Stanley. Some banks would still not have enough capital, but under Mr Paulson’s original plan, the state could put equity in them, or, if they become insolvent, take them over and run them down.

The economics behind this is sound. Government support to the banking system can break the cycle of panic and pessimism that threatens to suck the economy into deep recession. Intervention may help taxpayers, because they are also employees and consumers. Although $700 billion is a lot—about 6% of GDP—some of it will be earned back and it is small compared with the 16% of GDP that banking crises typically swallow and trivial compared with the Depression, when unemployment surged above 20% (compared with 6% now). Messrs Bernanke and Paulson also have done well by acting quickly: it took seven years for Japan’s regulators to set up a mechanism to take over large broke banks in the 1990s.

Could the plan be better structured? Some economists want the state to focus on putting equity into the banks—arguing that it is the best way to address their lack of solvency. In theory you would need to spend less, because a dollar of new equity would support $10 in assets. Yet the banks might not take part until they were on the ropes and, if house prices later fell dramatically more, the value of the banks’ shares would collapse. The threat of the government taking stakes would scare off some private investors. And in the charged atmosphere after this bail-out meddling politicians, as part-owners, would have a tempting lever over the banks.

Mr Paulson’s plan also has its shortcomings. He will find it hard to stop sellers from rigging auctions, if only because no two lots of dodgy securities are exactly the same. Taxpayers may thus pay over the odds and banks may be rewarded for their stupidity. Yet these costs seem small against the benefit of putting a floor under the markets. And fine calculations about moral hazard are less pressing when investors are fleeing risk.

If the economics of Mr Paulson’s plan are broadly correct, the politics are fiendish. You are lavishing money on the people who got you into this mess. Sensible intervention cannot even buy long-term relief: the plan cannot stop house prices falling and the bloated financial sector shrinking. Although the economic risk is that the plan fails, the political risk is that the plan succeeds. Voters will scarcely notice a depression that never happened. But even as they lose their houses and their jobs, they will see Wall Street once again making millions.

Buckle a little, but do it briefly

In retrospect, Mr Paulson made his job harder by misreading the politics. His original plan contained no help for homeowners. And he assumed sweeping powers to spend the cash quickly. He was right to want flexibility to buy a range of assets. But flexibility does not exclude accountability. As complaints mounted, Mr Paulson and Mr Bernanke buckled—agreeing, for instance, to more oversight. Now that Messrs McCain and Obama have returned to Congress to forge a deal, more buckling may be necessary. Ideally, concessions should not outlast the crisis: temporary help for people able to stay in their houses, a brief ban on dividends in financial firms, even another fiscal package. They should not be permanent or so onerous that the programme fails for want of participants—which is why proposed limits on pay are a mistake (see article).

Mr Paulson’s plan is not perfect. But it is good enough and it is the plan on offer. The prospect of its failure sent credit markets once again veering towards the abyss. Congress should pass it—and soon.

Jatropha contains a toxic protein similar to ricin. It was traditionally consigned to hedgerows, protecting more valuable, edible crops from peckish goats. The Shambaa tribesmen of Tanzania forced suspects to eat it. If they vomited, they were innocent. If they died, they weren’t.

Now the world is being asked to digest big claims for this poisonous plant. It will help meet the world’s demand for fuel, without crowding out the world’s supply of food. It will regenerate dry and denuded soils, and create jobs for impoverished farmers. India accounts for about two-thirds of the world’s jatropha plantations, according to New Energy Finance, a research firm, and a hefty share of the enthusiasm. India’s previous president planted it in his garden and Chhattisgarh’s chief minister runs his official car on its oil.

On September 12th the government followed up these gestures with a new national biofuel policy. By 2017 it aims to meet 20% of India’s diesel demand with fuel derived from plants rather than fossils. That will mean setting aside 14m hectares of land, according to the National Council of Applied Economic Research, a Delhi think-tank. By one count, jatropha now covers less than 500,000 hectares.

Biodiesel is not the only kind of biofuel: India also makes bioethanol from molasses left over from refining sugarcane. And jatropha oil is not the only source of biodiesel. The shrub has a more elegant rival in pongamia pinnata, or Indian birch, a silvery tree revered for its shady canopy and medicinal properties. Its crescent-shaped pods also contain seeds which can yield about 30% of their weight in oil, according to Roshini International Bio Energy, a firm based in Hyderabad. It has joined hands with the Andhra Pradesh government to plant the trees in three of Andhra Pradesh’s 23 districts. It is also venturing into neighbouring states and to Indonesia, Sri Lanka and Uganda. The goal, says Anil Reddy, Roshini’s founder, is “to plant 1 billion trees on this planet”, covering an area half the size of Denmark.

India’s enthusiasm for biofuel may seem odd only months after the country’s finance minister described conversion of food crops into biofuel as “a crime against humanity.” But D1-BP and Roshini point out that their favoured crops need not compete with food crops for land or water. Both are hardy plants that can grow on dry, stony soil. S.K. Kothari, Roshini’s technical director, says 150 acres of pongamia requires only as much water as a single acre of traditional crops.

But sceptics say these crops take too long to bear fruit and their yield is unreliable. Jatropha reaches full maturity in its fourth or fifth year; pongamia in its ninth. It is not easy to convince small farmers to devote care and attention to an untried crop which takes so long to provide a return. But without such care, especially in the crop’s infancy, the yield will disappoint, confirming the farmers’ doubts.

The answer lies in agronomy and sociology. Roshini has painstakingly accumulated a “gene bank” of high-yielding mother trees. Stems from these fecund plants can be grafted onto 200-300 saplings, which will then inherit the mother tree’s desirable properties, fruiting earlier and more reliably.

Breeding confidence and commitment in the farmers is, however, just as important. They require a lot of “handholding”, says Samiran Das of D1-BP. His firm has tried to generate a “community feeling” around its projects. For example, it has hired Dukhiya Yadav, the head of a village self-help group, to collect seeds from the farmers and sort the bad from the good, for half a rupee per kilogram. That gives her a stake in the farmers’ success.

Mr Dhrube, inspecting his jatropha field in Chhattisgarh, confesses some doubts about whether he will see a return this year. The leaves of the plants are drooping mournfully in the 42ºC heat. But an adviser from D1-BP assures him they will perk up when the sun goes down.

High food prices do help poor farmers, but they also hurt the more numerous category of people (poor city-dwellers as well as landless rural folk) who must buy food to survive. That “unintended consequence”—in the words of Gawain Kripke of Oxfam International, a British charity—has caused serious problems for the organisations that bring food aid to the poorest. The World Food Programme (WFP), a UN agency, has just issued an urgent appeal for $500m, to cover higher food costs. America's Agency for International Development (USAID), a huge financer of food aid, is asking for $350m.

The short-term outlook seems grim, both for the poor and the agencies that supposedly help them. Even before the current price boom started two years ago, food aid was running at historically low levels, perhaps half the real-terms total of two decades earlier. And the WFP says hunger is on the rise in the countries it watches. It classifies as “hotspots” the places—most of central Africa, plus Afghanistan—where more than a third of the people do not get as much food as is needed. A second tier, where between a fifth and a third lack adequate food, includes much of West Africa, the Indian sub-continent and Bolivia. David Kauck of CARE, an American charity, says that pockets of real hunger also exist in many rich countries.

Dismal as all this sounds, there are some grounds for hope. Today's woes may lead to fundamental changes for the better in the world's approach to hunger and food shortages. And not before time, in the view of experts who see something crazy about the way many food-aid efforts are now conceived and executed.

One mistake, arguably, is the very idea of defining the main problem as massive hunger, and hence the solution as providing food by any means necessary. “There is simply no shortage of food,” insists Rachel Nugent of America's Centre for Global Development. Of course, there are places—like North Korea or Darfur—where political (and in some cases ecological) factors cause an intense local shortage of food. In those cases, insists Josette Sheeran, head of the WFP, food aid is the only option. She also fears that the world is getting less resilient in its ability to respond to a growing number of food emergencies.

But leaving aside those extraordinary events, most pundits, including Ms Sheeran, agree that the world now has plenty of food: last year saw a record cereal harvest. And the investments spurred by today's high prices promise even more food in future. Even if one allows for rising demand from Asia's middle classes, the real challenge is not the volume of food available; it is the problem of food being in the wrong place and at a price the poorest cannot afford. Michael Hess of USAID adds that famines are made inevitable by poor governance, not natural disasters. After all, “America has droughts, but not famine.”

Moreover, hunger as such is the wrong target, says Meera Shekar of the World Bank. Hunger is transient and hard to measure, but malnutrition, she notes, is a pernicious killer (with lack of food as only one contributing variable). She points out that South Asia, which has plentiful food, suffers from twice the level of malnutrition as crisis-prone sub-Saharan Africa.

The snag is that tackling malnutrition is harder than sending bags of grain. It means fixing health systems, improving the delivery of nutrients in the food chain, educating people about hygiene and other unpopular and unprofitable jobs. Small wonder, then, that this burdensome task has fewer political cheerleaders.

Oxfam's Mr Kripke holds out hope that today's price shock may yet “help fix a broken system”. The United States, in particular, monetises food aid in a bizarre way. Tax dollars are used to buy food in America, which is then sold by charities in poor-country markets to fund development. Christopher Barrett, an economist at Cornell University, calls this “a clever way to turn a dollar of taxpayer money into 50 cents for a non-governmental organisation to spend.” The requirement that most food aid must be sent on American ships raises costs, and benefits just a few shippers.

Change may be coming. Over the objections of some tough lobbies, George Bush has proposed fixing some of the distorting aspects of America's food policies. The president has called for more emphasis on procuring produce from local farmers in poor countries. And in a bold gesture, CARE has said it will no longer accept any American government donations using the monetisation approach.

Most encouraging are some proposed changes at the WFP. Ms Sheeran hopes to persuade her board at a meeting in June to shift her agency's focus away from emergency food aid and towards a wider remit. She wants to expand its role in surveillance, stockpiling and risk-insurance. She also speaks of targeting subsidies or vouchers “in ways that complement markets rather than distort them”, as current subsidies often do. If this sort of clarity prevails, it would be a silver lining on the dark cloud that now looms over the poor.

It has recommended changes which would base the power of each of the IMF's 185 member countries on the size of their economy, reserves and trade.

The US has expressed reservations about the move but said that it would support it because it represented progress.

However poorer nations and charities have said the plans, which must still be ratified, do not go far enough.

IMF members have spent more than a year negotiating the changes - which would move some sway away from traditional industrial powers including the US, the UK and Germany - to the faster-growing emerging and developing economies.

China, India, South Korea, Mexico and Brazil are among those that will see their voting power increase.

However, under the proposal the likes of Saudi Arabia, Egypt, Russia, Iran and Argentina would lose influence and all five countries either voted against the plans or abstained from voting.

Final decisions will be made after the IMF's spring meeting next month.

"Today's agreement is a major step forward in the modernisation of the Fund and our efforts to adjust its structures to the dynamic and changing realities of the global economy, but it is only a first step," said IMF Managing Director Dominique Strauss-Kahn.

"We are creating a more flexible system for quota and voice, which involves further changes over time as the relative positions of countries in the world economy evolve."

The IMF said the proposed reforms feature simpler and more transparent formulae and some ad hoc quota increases to better represent more dynamic economies.

India's executive director to the IMF, Adarsh Kishore, said the move fell short of what it "had expected, hoped for and strived for".

Wajeha Huwaider talks of the injustice of the ban and calls for its abolition as she drives calmly along a highway.

She says the film was posted to mark International Women's Day. Thousands have viewed it on the YouTube website.

The last such public show of dissent was in 1990 when dozens of women were arrested for circling Riyadh in cars.

Last year, Ms Huwaider and other activists circulated a petition which was sent to King Abdullah urging him to lift the ban.

In the three-minute clip, she at first drives around a residential compound where she notes that women are allowed to drive because it is not a public road.

But about halfway through, without comment, she executes a left turn onto the main highway and proceeds to drive along it in defiance of Saudi law.

"Many women in this society are able to drive cars, and many of our male relatives don't mind us driving," she says in Arabic.

"I hope that by next year's International Woman's Day, this ban on us will be lifted," she concludes.

In February, two leading Islamic scholars said there was no reason to continue the ban.

However, many conservatives continue to resist reform, arguing it would lead to mingling of the sexes which is banned under Saudi Arabia's strict interpretation of Islamic Law.

The 1990 protest, coming at the height of the Gulf crisis when US forces had come to defend Saudi Arabia, was followed by a crackdown on the women drivers and their passengers.

The women were jailed for one day, their passports confiscated, and many lost their jobs.

King Abdullah has in the past said that he thought a day would eventually come when Saudi women were allowed to drive.

Several governments with breakaway movements of their own are refusing to do so. They are anxious about setting a precedent and argue against recognition on the grounds that there was no agreement between Serbia and Kosovo and no clear UN Security Council mandate.

Others have endorsed the declaration as a unique and justified move for freedom and the inevitable outcome to Kosovo's history, in which Serb troops were forced out after Nato waged war in 1999 and the province was handed over to UN control.

The numbers matter. There needs to be a critical mass of countries recognising Kosovo to enable it to develop and prosper.

The United States, which made its own declaration of independence in 1776, and whose support for Kosovo has not been in doubt, led the way in recognising Kosovo. President Bush said: "The Kosovars are now independent."

The European Union

Several major European Union member states have also swung behind Kosovo, giving it powerful support. The EU as a whole has a key role in supervising the limited form of independence that a UN report recommended for Kosovo and which Kosovo has accepted.

Britain, France, Germany and Italy all see the Kosovo move as a one-off and as the last piece of the old Yugoslav jigsaw being slotted into its new place.

However, the EU, which has no common foreign policy except by agreement, is not unified. Cyprus, Romania and Slovakia are in the No camp. So is Spain, with its own separatist Basque movement.

Foreign Minister Miguel Angel Moratinos said: "Spain is not going to recognise this unilateral declaration of independence... because it does not consider that this respects international law."

Russia

Beyond the EU, Russia is opposing independence, as it always has, again arguing that such a move should depend on there being an agreement with Serbia first.

"We are talking here of the disruption of all the basic fundamentals of international law in Europe, which is a result of years of suffering and wars and strife," said the Russian Foreign Minister Sergei Lavrov.

"It would undermine the basics of security in Europe... It would inevitably result in a chain reaction in many parts of the world, including Europe and elsewhere."

One question is whether Russia will now more actively support the demands of two regions of Georgia for secession.

South Ossetian leader Eduard Kokoyty said: "Both South Ossetia and Abkhazia have more political and legal grounds for their independence than Kosovo... we can clearly see a policy of double standards."

China

China indicated its opposition, perhaps with Taiwan in mind.

"China expresses its deep concern about Kosovo's unilateral declaration of independence," the Foreign Ministry spokesman Liu Jianchao said.

Taiwan spoke in favour of Kosovo. "Our consistent position is that we want to develop relations with any free and democratic country," spokeswoman Phoebe Yeh said.

To which the Chinese spokesman replied: "It is known to all that Taiwan, as a part of China, has no right and qualification at all to make the so-called recognition."

Israel, with negotiations for a neighbouring state of Palestine ongoing, was cautious, refusing to give an immediate position. Israel itself declared its independence in 1948.

Precedent?

Regions with aspirations of independence of their own are using the Kosovo declaration as a potential precedent for them.

"I salute the independence of Kosovo. No people can be forced to live under the rule of another," said Mehmet Ali Talat, leader of the Turkish Cypriots.

Kosovo is "a lesson in how to resolve conflicts of identity and membership, peacefully and democratically," said Miren Askarate, spokeswoman for the Basque regional government in northern Spain.

The chairman of the breakaway Transdniester region of Moldova, Yevgeny Shevchuk, said: "We believe that a new era started and a new system of international relations was formed the moment part of a country, based on a series of historical developments, decided to live independently, and this country can gain recognition."