Final oil & foods october 2013 by Advance Info Media & Events

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Advancing Freezing Technology Protects Baked Boods

Bharti-Walmart Breakup 13 from the Most Talked about Retail Affair

Various Stages of Oil Seeds

Buhler is known for its Excellent Cleaning, Grading and Sorting Systems

Influence of Soybean Storage Conditions on Crude Oil Quality

Indian Agriculture Performance and Challenges

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Oil & Food Journal Vol. 08, Issue 12, October 2013

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Oil & Food Journal Vol. 08, Issue 12, October 2013

Vol 8 Issue 12 October 2013

he global oilseed market has been forecast to increase at a compound annual growth rate (CAGR) of 12% over the next five years, increasing from a value of $33.3 billion to reach a total value of $64.1 billion by 2018. The global seed market has undergone rapid transformation in recent years with the advent of biotechnology in agriculture. Genetically Modified (GM) seeds offer economic advantages to farmers, and are sold at a premium in relation to conventional seeds. Despite resistance from several sectors, this market has fiercely penetrated the agriculture sector. The global seed market is projected to grow driven by rising standards in global farming. Farmers in various countries are showing increased preference for certified seeds and innovative high-yielding varieties. In the global arena oilseed crushing probably will climb to a record in the next season as harvests accelerate in the Northern Hemisphere and production is set to rise in South America. About 401.08 million metric tons of 10 major oilseeds will be processed in the 2013-14 season that begins Oct. 1, up from 387.07 million tons a year earlier, the Hamburg-based researcher said in an e-mailed report. Oilseeds including soybeans and rapeseed are crushed by processors to make vegetable oils and meal used to feed livestock. World production of seed oils probably will rise by 3.7 million tons from the previous year, while meal output will climb by 10.1 million tons.. Oilseed processing in China, the world’s biggest soybean consumer, will rise 1.6 percent from a year earlier to 90.72 million tons, “still significantly trailing the country’s huge crush capacity. While crushing in Brazil may climb 10 percent from the previous year to 41.08 million tons, while processing in Argentina rises 9.8 percent to 40.2 million tons, Oil World said. Brazil is the world’s top soybean exporter and Argentina ranks third, after the U.S. While South American farmers usually start planting soybeans in the next few weeks, major growing areas of both countries have experienced dry weather recently. According to a recent report, ‘Oilseed & Grain Seed Market: Global Trends & Forecast to 2018,’ North America is the largest market. More than 80% revenue in North America is generated by the US. Latin America is the fastest growing region within the oilseed market and Brazil holds the major market share within Latin America. China is the largest market in Asia-Pacific followed by India. Soybean dominates the global oilseed seed market. Soybean and corn crops represent the fastest growing segments within the oilseed market, respectively. North America and Europe are major producers of corn, and Latin America is the largest producer of soybean. Asia-Pacific is the leading market for rice and cotton, and ROW for sorghum. The maximum production of wheat, canola, and sunflower is found in Europe. The market is likely to be shaped by a number of favourable factors, such as the growth in garden and lawn expenditure of consumers, a general shift towards narrow planting of rows, and expanding new uses of crops. In regard of success, the Indian Government proposes to spend Rs 3,507 crore during the 12th Five Year Plan to boost oilseeds output and bring additional area of 1.25 lakh hectares under oil palm. Besides enhancing the oilseeds output by 6.58 million tonnes, the Mission would also bring additional area of 1.25 lakh hectares under oil palm cultivation with increase in productivity of fresh fruit bunches from 4,927 kg per hectare to 15,000 kg per hectare and increase in collection of tree borne oilseeds to 14 lakh tonne. The Mission would emphasise on increasing the Seed Replacement Ratio with focus on varietal replacement; increasing irrigation coverage under oilseeds from 26 per cent to 38 per cent and diversification of area from low yielding cereals crops to oilseeds crops. The oil palm mission is built upon the achievements of the existing schemes of Integrated Scheme of Oilseeds Oil Palm and Maize, Tree Borne Oilseeds Scheme and Oil Palm Area Expansion programme during the 11th Plan period. Since we are fully desi how can we not high light the distinguished achievement happening in India at BARC. Do you know that when we eat a dosa or idli from anywhere in Maharashtra, there is 90 per cent chance that the urad dal in them came from mutation breeding, a promising technology developed by the Bhabha Atomic Research Centre (BARC), Trombay. Since we import 40 per cent oilseeds and 20 per cent pulses, BARC focused its attention primarily on these crops. Heritable mutations of genes occur spontaneously in all living beings; but their rates are extremely low — of the order of one in a million. Isolating living organisms with beneficial characteristics from nature and multiplying them by selective breeding is a very slow process. Scientists speed up the mutation rate a thousand fold by exposing seeds or in some instances parts of the plant to ionising radiation. Breeders produce plants from these irradiated seeds. They combine plants with different desirable characteristics to develop high yielding, early maturing and disease resistant plants. BARC scientists set up linkages with farmers to produce quality breeder seeds and participate actively in Kisan Melas held in farmers’ fields to popularize the technology. They developed 41 new crop varieties (Trombay varieties) by radiation induced mutation and cross-breeding; these have been released and officially notified by the Ministry of Agriculture, Government of India for commercial cultivation. BARC has also developed early maturing, confectionary grade, large seed groundnut seed varieties (100 seeds more than 60 grams) suitable for export. In developing and applying mutation breeding using ionising radiation, India has a leading role among all nations. Many varieties of mutant crops cultivated on tens of thousands of hectares enhance income in rural areas, contribute to environmentally sustainable food security and improve human nutrition in India.

Oil & Food Journal Vol. 08, Issue 12, October 2013

CONTENTS

Advancing freezing technology protects baked foods

Bharti-Walmart breakup from the most talked about retail affair

Various Stages of Oil Seeds

Buhler is known for its excellent Cleaning, Grading and Sorting systems

Influence of soybean storage conditions on crude oil quality

Indian Agriculture Performance and Challenges

News Govt to spend Rs 3,507 cr in 12th Plan to boost oilseeds, oil

Stock holding limit for pulses, edible oil, oilseeds extended by one year

Mutation breeding of oil seeds, pulses and cereals

Oilseeds output seen at record high: Farm Minister Sharad Pawar

Global Oilseed Crush Seen at Record by Oil World as Crops Rise

Cooking Oil Refiners Seek Levies as Plants Idle: Corporate India

‘Better post-harvest handling can help save 25 mt foodgrains’

Kharif 2013 pulses harvest touches 7 million tone 51 10 ways til or sesame seeds add more to your life than just flavour!

India may set record wheat output this year on good rain: Government

The economics of hybrid rice in India 53 Amethi to have first mega food park of UP

India’s Saudi rice import share reaches 63 percent

Japan looking for rice bran oil from India, joint ventures

Mrs. Bector’s Food to sell its biscuit business 56 For biscuit makers, growth drops to a third in just a year as slowdown bites

Baking fresh business pan India 57 McDonald’s to roll out McCafés in India 58 India becomes leading rice supplier to Singapore 58

Oil & Food Journal Vol. 08, Issue 12, October 2013

FREEZING BAKERY

Advancing freezing technology protects baked foods

hile mixing, makeup and baking play major roles in the final quality of baked foods, so does freezing. If frozen too quickly, at improper temperatures or in unsanitary environments, a productâ&#x20AC;&#x2122;s quality will be adversely affected. Bakeries freeze raw, par-baked and fully baked foods to extend shelf life,

retain moisture and flavor, and increase distribution capabilities. While cold storage holding areas can freeze pallets of packaged baked foods, often processors opt for continuous automated systems because of the advantages that they offer in handling during packaging or for subsequent processing such as icing of cakes.

The challenge for industrial bakers has always been to find ways to freeze their product as fast as possible while maintaining the productâ&#x20AC;&#x2122;s taste, texture and appearance. Bakeries need continuous freezing systems that allow extended production runs without requiring downtime for defrosting. Today, its Ultra Series Freezing Systems use direct drive

Oil & Food Journal Vol. 08, Issue 12, October 2013

FREEZING BAKERY

technology, eliminating drive chains, sprockets and frequent oiling inside the freezer. Companies also seek equipment that can be sanitized using less time and man-hours. Bakeries must select a freezing system that’s right for their products and facilities. They need to deliberate space concerns, start-up and operational costs, future product expansions and throughput. Maintaining flavor Bakers often mistakenly believe that fast freezing by spiral or tunnel systems vs. a cold storage area will negatively change the color, water activity, moisture content, taste or appearance of the product. If the product is properly precooled and/ or packaged prior to entering a spiral or tunnel freezer, generally the intrinsic properties of the food are maintained and can be verified by using sensory testing, baking color meter and moisture analyzer. In today’s time it is very important to improve the designs and components of blast freezing systems so that bakeries can increase production runs and better control operating costs. I J White is one company that formed new Extended Production System (EPS) features Automatic Pressurization Systems (APS) at infeed and out feed openings to prevent outside warm moist air infiltrating the freezer and causing frost to build up on coils. The company is are even retrofitting this new technology onto existing blast freezers, and their customers’ blasts freezers are able to now maintain freezing temperatures longer and reduce the frequency of defrost. Also, EPS-equipped freezers use a patented Thermal Pak finned coil design to provide greater efficiency. The coil’s elliptical tube design includes closer tube spacing for a greater surface area than the typical round tube designs. Because of its lower resistance to airflow, the Thermal Pak coil permits greater water loading, making it the most effective design available. Thermal Pak coils also require less horsepower to operate, feature a more compact design and increase capacity. In addition, IJ White’s blast freezers use completely enclosed, fan-cooled, highefficiency motors on the direct-driven fans to provide high-velocity multipath airflow and baffling for uniform freezing, he said.

Oil & Food Journal Vol. 08, Issue 12, October 2013

Prolonging production The Continuous Production System (CPS) takes extended manufacturing runs in its blast freezers a step further. CPS includes sequential defrost coils that can be independently isolated and defrosted. Traditional systems require extensive horizontal baffling and structure to accomplish this. The new coil Isolation Technology (CIT) eliminates the labyrinth of internal structure and horizontal decking that is very difficult to clean.” CIT improves efficiency and elevates total system hygiene. “As the coils build up with snow and ice, the PLC-controlled CPS performs a sequential defrosting of the coils, one at a time and with this system, bakers can run their freezers for a week, two weeks or even longer without ever stopping for defrost.” However, CPS requires the refrigeration system to handle the heat load for the extra coil being defrosted. The energy you use to defrost coils sequentially is tremendous, so EPS is generally the choice bakeries will make unless they need to run continuously for more than a week. Because many bakeries run six days a week or longer before defrosting and cleaning the freezer, the freezers need to be equipped with an effective airbalance system, sufficiently large coils

and measures to continuously keep the coils relatively free of thick frost and ice accumulation to achieve the desired runtime. To increase uptime on its GyroCompact spiral freezers, JBT FoodTech optimized the design of its fan-driven air-balance tunnel to minimize the amount of moisture entering the spiral through the infeed and outfeed openings. In addition, the equipment manufacturer introduced a sequential defrost system for its Gyro Compact that can be operated based on timing or triggered by monitoring the pressure differential across the coil to maximize the length of time between defrosts. This system uses hot gas to defrost coil banks and allows a full redundant coil and fan so that capacity and/or outfeed temperatures are maintained during periods of sequential defrosting. Limited plant space and continuous maintenance requirements are also the among the top challenges for bakeries’ freezing systems. Traditionally, spiral freezers include refrigeration units around or above the spiral conveyor, but the Spiral Evolve does not have a rotating centre drive drum. G&F Systems, Roosevelt, NY innovatively places refrigeration units inside the spiral, saving bakeries valuable floor space. Also, where ceiling height limitations do not allow overhead

FREEZING BAKERY 12

hung refrigeration units, companies can design a spiral freezer system for a bakery that has very low ceilings,” he said. Freezing with gases Bakeries also rely on cryogenic systems that use liquefied gases, generally nitrogen or carbon dioxide, for automated continuous freezing of baked foods in either spirals or tunnels. Manufacturers of these systems claim that one of their primary advantages over mechanical systems is the upfront costs; however, cryogenic systems also have higher operating costs because plants have to replenish cryogen gas supplies. Praxair, Inc., Danbury, CT, recently improved its ColdFront-branded cryogenic freezing systems to include an ultra-performance tunnel freezer that reduces tunnel lengths by at least 30% while providing improved sanitation. The company offers three types of tunnel freezers and builds them using a modular design so bakeries can expand them as they grow. Praxair has installed systems as short as 9 ft to as long as 81 ft based

on product freezing rates, heat removal and desired production rates. Available in three sizes, the company’s cryogenic spiral freezers can be prefabricated and shipped over-the-road or built in place at the bakery. A common misconception about cryogenic freezing is that it diminishes baked foods’ quality and taste performance. Cryogenic freezing quickly locks in flavor and quality to minimize any loss from the freshly baked taste. Additionally, a small cryogenic system can quickly set up coatings or frosting on finished goods to preserve the appearance through the packaging process. Another concern bakers have, according to Mr. Martin, is that a cryogenic system requires a tremendous amount of capital and space and would mandate significant downtime to install. Praxair cryogenic freezers have low capital requirements, take up less valuable plant space and can be installed in a few day. Linde is another company that also provides a range of cryogenic technologies that can freeze, crust-freeze

or chill a variety of baked foods quickly and efficiently. Its technologies includes entry-level box spirals, its patented Cryoline XF cross-flow spiral freezers and high-efficiency Cryoline tunnel freezers with modular designs so that sections can be added as a bakery grows. The company’s engineers design and test systems according to exact product needs. The food team listens to the specific issues a baker is facing, and we perform an engineering assessment of the existing chilling or freezing process and they look at a host of variables and make a recommendation on cryogenic technology at that location. This companyWe provide a before-and-after on the overall cost to freeze, and we also examine operational efficiencies.” Bakeries must consider many variables when selecting a freezing system that is right for their products and operations. But freezing products properly should not have adverse effects on baked foods and can increase distribution so bakers can expand geographically.

Oil & Food Journal Vol. 08, Issue 12, October 2013

he Bharti and Wal-Mart partnership in India is officially over but both companies will independently pursue retail business in India. Wal-mart will get 100 percent ownership of the ‘Best Price’ Modern wholesale cash and carry business while Bharti Retail will continue to operate ‘Easyday’ retail stores across all formats following the split. Wal-Mart formed an equal joint venture with Bharti in 2007 under which it runs its Best Price Modern Wholesale Stores in India and the US retailer will now acquire Bharti’s stake in Bharti Wal-Mart Private Limited. It had opened its first wholesale cash-and-carry store under the brand “Best Price Modern Wholesale” in Amritsar in May 2009. The US firm Oil & Food Journal Vol. 08, Issue 12, October 2013

has also been managing Bharti’s retail chain Easy Day. The agreement is subject to finalisation of definitive agreements and receipt of the requisite regulatory approvals. The mandatory 30 percent sourcing from Indian small and medium enterprises (SMEs) and a minimum $100 million investment into fresh facilities of which 50 percent would be in the backend, was said to be a roadblock for Wal-Mart. Post the break up, Bharti will acquire compulsory convertible debentures held by Wal-Mart in Cedar Support Services, a company owned and controlled by Bharti. The break up was expected, especially after recent statements by Bharti chairman Sunil Bharti Mittal and Wal-Mart Asia CEO Scott Price, that the

RETAIL BREAK

Bharti-Walmart breakup from the most talked about retail affair

two partners were evaluating the joint venture. Wal-Mart plans to continue to grow this business while working with the government and interested stakeholders to create conditions that enable foreign direct investment in multi-brand retail. Wal-Mart would be operating independently and internally they believe that this would be beneficial to both companies. Wal-Mart pledges to to continue to make important social and environment contributions to India, seeking conditions that will boost retail FDI in India. Through WalMart’s investment in India, including cash and carry business, supply chain infrastructure, direct farm programme and supplier development, this International retail firm wants to serve India and its people, and continue to make important social and environmental contributions to the country. “Bharti is committed to building a worldclass retail venture and will continue to invest in Bharti Retail across all formats. This Indian retail giant believe that with current footprint of 212 stores, they have a strong platform to significantly grow the business and delight customers. The government permitted foreign retailers to own 51 percent of their Indian operations in September 2012, but ambiguity around rules governing the policy has led to a situation in which no foreign retailer has so far applied to enter the country. Moreover, Wal-Mart’s investment in Bharti had come under the scanner amid allegations that the global retail chain may have entered India’s front-end multi-brand retail business twoand-a-half years before the government actually lifted the ban on foreign investors in the sector last year. So in essence, ever since its inception in 2010, Wal-Mart’s Indian operation has been mired in turmoil. In November 2012, Bharti Wal-Mart suspended its chief financial officer and other employees as it investigated alleged violations of US anti-bribery laws. A few months ago, Wal-Mart’s India head, Raj Jain, was replaced by Ramnik Narsey as interim chief. At Bharti Retail also, Chief Operating Officer Mitch Slape, an old Wal-Mart hand, was sent back to WalMart US recently. A bigger headache was Wal-Mart’s investment of $100 million in Cedar, the parent company of Bharti

RETAIL BREAK 14

Retail, in March 2010 in the form of compulsory convertible debentures. The debentures were sold, and indirect control and management ceded to Wal-Mart by the Indian company at a time when FDI wasn’t allowed in multi-brand retail. This investment is being investigated by the Enforcement Directorate for alleged FEMA (Foreign Exchange Management Act) violations. Critics termed the transaction clandestine and illegal direct investment in the retail company. As an Indian lawyer rightly told the Business Standard, “You’d be surprised to note that having an Indian partner can actually increase the risk for a foreign promoter. Why? Because the foreign promoter more than not has no control over the business here. If an Indian partner then is involved in fraud or misappropriation of funds, it can actually set the international company back impacting its potential to do business in India and nearby countries. Not to mention that there is an impact on its brand name and credibility as well.” Little wonder that Wal-mart wanted to distance itself from any controversy in India as it fears the US Foreign Corruption Practice Act (FCPA) may come down hard on it. And given the policy hurdles, especially confirming to the 30 percent local sourcing norms, the divorce between the two retail majors was just waiting to happen. But even though Wal-mart promises to stay invested in India, it had put expansion plans on hold since mid 2012. WalMart debuted in India with its first wholesale store in 2009 but has not added a single cash-carry outlet since October 2012. Despite a potential market of 1.2 billion

people, no large foreign chains have formally applied to open supermarkets and other multibrand stores in India since the government changed the law last year to allow them to invest more in the $400 billion sector previously reserved mostly for Indian companies. The new law allows international companies to open multibrand retail stores with 51 percent ownership and an Indian minority partner. Foreign companies can operation 100 percent-owned wholesale chains. Opening the door to foreign retailers like Carrefour, Tesco and IKEA was hugely controversial in India, with opponents saying it could ruin millions of small traders and family-run shops where most Indians now buy their goods. To soften the blow, the new law requires foreign retailers to source 30 percent of the products they sell from small and medium-sized Indian businesses. Wal-Mart Asia CEO Scott Price believes that the rule of sourcing from local small and medium businesses is the ‘’critical stumbling block’’ to its plans to open retail stores in India.Wal-Mart operated 20 stores in partnership with

Bharti under the brand name ‘Best Price Modern Wholesale’. Each of these stores employed around 200 people and also provided indirect employment for a similar number of people. The locations of a lot of these stores were kept near Bharti’s ‘Easyday’ stores as the front-end store sourced 25% of its goods from the cash-and-carry venture, but now whether Wal-Mart feels it will be feasible to continue with those locations remains to be seen. For example in Zirakpur, the Best Price store is already seeing a lot of competition from Metro Cash-and-Carry which entered that market earlier and it will be difficult for Easyday to continue to source as much from Wal-Mart’s cashand-carry unless there is a significant advantage in pricing.” In the retail sector, whenever there has been a buyout or a merger or any such change in ownership, the thought process on the store locations completely changes as do the priorities. The new team, the new management will have its own priorities for the markets they want to be present in and where they want to exit from.

Oil & Food Journal Vol. 08, Issue 12, October 2013

SEED PHASES

Various Stages of Oil Seeds By: Sanjay Indani

ndia is the largest producer of oilseeds in the world and the oilseed sector occupies an important position in the countryâ&#x20AC;&#x2122;s economy. The country accounts for 12-15 per cent of global oilseeds area, 6-7 per cent of vegetable oil production, and 9-10 per cent of the total edible oils consumption. Besides the nine major oilseeds cultivated in India, a number of minor oilseeds of horticultural and forest origin, including coconut and oil-palm, are also grown. In addition, substantial quantities of vegetable oils are obtained from rice bran and cotton seed along with a small quantity from tobacco seed and corn. Oilseeds area and output are concentrated in the central and southern parts of India, mainly in the states of Madhya Pradesh, Gujarat, Rajasthan, Andhra Pradesh and Karnataka. Among different oilseeds, groundnut, rapeseed-mustard and soybean account for about 80 per cent of area and 87 per cent of production of oilseeds in the country (2010-11). Although, India is

a major producer of oilseeds, per capita oil consumption in India is only 10.6 kg/ annum which is low compared to 12.5 kg/ annum in China, 20.8 kg/annum in Japan, 21.3 kg/annum in Brazil and 48.0 kg/ annum in USA. Oilseed Handling, Storage and Pre-treatment Oils are essential components of all

plants. However, commercial oil production facilities only utilize plants that accumulate large amounts of oil and are readily available. Currently, the largest source of commercial oils from oilseeds is the seeds of annual plants such as soybean, rapeseed, cottonseed, sunflower, peanut, cotton seed and flax. The second largest source of plant oils includes coconut & palm oil.

Oil & Food Journal Vol. 08, Issue 12, October 2013

about 0.5 percent free fatty acids. However, if seeds are damaged mechanically or by frost or become wet during harvest, handling and storage, then the acidity of oil can be much higher. • Sprouting, considered a damage factor, is another important issue during storage of high-moisture seeds. Sprouted seeds may have lower oil and higher free fatty acid content as compared to sound seeds. Today, air dryers are essential components of modern storage facilities to maintain oilseed quality. Most oilseed storage bins are equipped with aeration ducts and ventilation blowers to cool the seeds. Since oxidation reactions are aerobic processes, a low oxygen atmosphere in storage bins helps to slow down oxidation and quality deterioration. Mature seeds can be stored longer than immature seeds because of the lower activity of oil-splitting enzymes in mature seed. Proper storage of harvested oilseeds also may contribute to desirable changes. For example, oil extraction yields from fresh soybeans can be lower than for soybeans stored more than five months. Preparation of Seeds for Oil Extraction Unit operations for preparation of seeds for oil extraction vary slightly depending on the physical properties and oil content. However, most oilseeds go through the process of cleaning, drying, de-hulling, size reduction, flaking, cooking and tempering. Cleaning • Oilseeds need to be cleaned to

• •

•

remove extraneous matter such as plant stems, sticks, and leaves before storage. Foreign materials in seeds are typically separated out by scalping (i.e. a combination of rotating or vibrating coarse screens, reels and aspiration). Sand and dirt are removed by fine screening. Magnetic devices remove metal contaminants from seeds. Plate magnets, drum magnets or electromagnets installed over conveyor belts are commonly used. Some oilseeds such as peanuts may contain stones which are similar in size to the seeds which cannot be separated by screening. Therefore seeds need to be separated from stones by gravity. Special “destoners” are available to remove stones and mud balls.

SEED PHASES

Handling and Storage Proper handling and storage of oilcontaining materials are very important to minimize deterioration and maintain good quality of both contained oil and meal. Whole, intact, low-moisture oilseeds (about 8-10 percent moisture) may be stored for an extended time under suitable conditions. But there are certain challenges faced by the industry in effective handling & storage of oilseeds. • Many a times it is found that the oilseeds are kept in direct contact with the floor instead of storing them on pallets. • At places, where storage is done in open areas, the oilseeds get contaminated with bird droppings due to no control over the entry of birds & crows in storage area. This eventually leads to microbial contamination of the oilseeds by salmonella. • High moisture content (above 1415 percent moisture) in seeds has an adverse effect on oil and meal quality. • Microbial growth (mold and/ or bacterial growth) and enzyme activity in high moisture seeds leads to acid generation and oil splitting. • Infestation by rodents, insects and mites due to inadequate pest control activity during storage also are important factors which affect oil and meal quality. • Activity of native enzymes present in oilseeds leads to deterioration in the quality. • Oil in mature seeds may contain

Seed Drying • The moisture content of oilseeds often needs to be re duced to minimize degradation in storage and to improve the effectiveness of downstream processing. • Large, vertical, open-flame grain dryers can be used for oilseeds as well. These dryers have multiple columns of oilseeds which slowly migrate downward. The upper portion of the column is used for drying and lower section is for cooling. Dehulling The amount of hull on oilseeds varies significantly. Hulls and shells of oilseeds do not contain a significant amount of oil (less than 1 percent). Most oilseeds

Oil & Food Journal Vol. 08, Issue 12, October 2013

SEED PHASES

need to be sepa rated from their outer husk or shell prior to oil extraction. De hulling also is referred to as shelling or decorticating. • De-hulling increases oil production efficiency, capacity of the extraction equipment and reduces wear in the expeller as the husks are abrasive. • If not removed, hulls reduce the total oil yield by absorbing or retaining oil in the pressed cake. • Furthermore, wax and color compounds present in the hulls end up in the extracted oil. These compounds are not desirable in edible oils and need to be removed during the refining process. • De-hulling reduces fiber and increases protein content of the meal. • De-hulling efficiency of a system often is measured by the residual fiber content in the meal and the residual oil content in the hulls. Size Reduction and Flaking Most oilseeds are reduced in size to facilitate hull removal, heating, drying and flaking prior to oil extraction. Canola, rapeseed and corn germ do not require size reduction as they are already sufficiently small. • Cracking mills are used for seed size reduction. High capacity cracking mills can process up to 1,000 tons per day of oilseeds. • Oilseeds also can be flaked prior to solvent extraction. Flaking ruptures seed cellular structure and reduces the distance that solvent has to travel to reach the oil in the cells. • Flaking of oilseeds increases surface area for increased contact between solvent and seed

•

during the solvent extraction process. Oil from the cracked or flaked seeds should be extracted as quickly as possible (within 24 hours) to minimize meal and oil quality deterioration.

Cooking/Tempering Oilseeds are cooked or tempered to denature proteins, release oil from the cells and inactivate enzymes. These compounds are soluble in oil and lower the quality of oil. • Cooking also gives seeds proper elasticity for efficient pressing. • Conditioning is done in rotating drums with an internal steam coil. • Tempering improves flaking performance and extraction efficiency. Packing of Oilseeds It is quite often observed in industries that the gunny bags used as primary packaging material for oilseeds are reused for packing fresh lot of oilseeds which can lead to cross contamination. Also, contamination of the oilseeds takes place due to migration of the printing ink which is used on the gunny bags. This printing ink contains malachite green which can affect the cattles when the meal or the oil cake obtained after

the extraction of the solvent & oil from oilseeds is packed in the gunny bags and consumed. Transportation of Oilseeds Oilseeds are liable to damage during transportation as a result of mould growth due to the generation of heat and moisture. Such heating, like that for insect infestation, results in moisture migration that can cause damage to other parts of the stow. Many a times, the oilseeds are transported loose in open trucks without any packaging material which leads to contamination by birds & crows. This should be controlled to prevent the oilseeds from damage & deterioration. Author is Head-Food Safety at Qsafe Consultants (India). He is lead auditor & trainer in food safety. He is empanelled with FSSAI & State FDAs as a trainer & conducted more than 500 training sessions across India. For any query related to food safety or FSSR, he can be contacted on 07666578715 or sbi@ qsafeindia.com

Oil & Food Journal Vol. 08, Issue 12, October 2013

EXCLUSIVE INTERVIEW

Buhler is known for its excellent Cleaning, Grading and Sorting systems B端hler is a specialist and technology partner for plant and equipment and related services for processing basic foods and manufacturing advanced materials. A leading supplier of Grain Milling business Buhler offers customers around the world cutting-edge process technology and innovative engineering services for processing soft wheat, durum, corn/maize, rye, oat, barley, millet/sorghum, buckwheat, soybeans, peas, and beans. This includes comprehensive total solutions as well as stand-alone machines for each process operation. In a recent interview with Prasad Jaripatke, Head of Business Development at Buhler India we explored vast line of services provided by this giant company especially to the oil seed segment. Prasad is informing our readers about their activities in oil seed industry in the below interview.

What are the technological advances in oil seed processing industry? Buhler now offers solutions for complete plants ranging from 1 ton to 6 tons per hour throughput. Constant upgradation on Plant automation, Induction of new Colorvision and Multivision Technology on Sortex, on line production reporting systems are some of the few technological applications introduced to this industry for the benefit of customer. What are the solutions your company is providing for oil seed processing and handling? Buhler is known for its excellent Cleaning, Grading and Sorting systems for this industry. Apart from these traditional supplies, Buhler is also providing storage systems. Our key strength is our engineering and Technological capabilities, which provide our customer complete solution rather than just machines. Oil & Food Journal Vol. 08, Issue 12, October 2013

Buhler is the most preferred brand in the Indian Oil Seed industry when it comes to reliable technology, your comments? Buhler has been a preferred supplier to this Industry because our customerswere able to achieve highest level of purity on out puts with minimum losses with great flexibility to process different origin commodities at equal ease.Plants are well engineered to take care of food safety aspect Our long experience to handle commodities in the most efficient way differentiates us from other suppliers.

Engineering and technology knowledge are pillars of our supply. Whether it is optical sorting or cleaning, we werethe pioneers in introducing many of the bench mark technological advancements in the sector.

EXCLUSIVE INTERVIEW

What kind of R&D support you provide to your customers in India, especially to the oil seed industry? Buhler is spread across the globe; we use this global platform to gather the expertise knowledge from various fields to provide best possible solution to the customer. With the process Know How expertise, Buhler can serve the customer with the proper solutions backed by technology and engineering. A state of the art application lab is developed at Bangalore where we carry out trials in cleaning sterilization etc. to cater the needs of our customers. Indian Oil seed industry is modernizing and it looking for customized turnkey solution from a single company, do you give turnkey solutions to the oil seed industry and how helpful they are for your customers? Buhler in India has got complete infrastructure to support the customer in a best possible way. Buhler has got manufacturing base in India, Buhler India is also well equipped with its own human resources in field of Technology, Engineering, R and D and sales and

Service Support. This makes us possible to support our customer with Turnkey solution at competitive price within prescribed time limit

Oil seed industry especially sesame is export oriented segment, how important is for a sesame seed processors to opt for best quality processing machinery for international standard production?

Buhler with its expertise knowledge in food processing for over 150 years is the best partner for keeping pace with the stringent quality standardsof products in international trade. Its huge experience in field of processing with different commodities benefits the customer in achieving food safety norms, yields, reduction in processing cost & loses. Buhler processing machineries are built to ensure the best safety of your food. Buhler complete automation ensures less human intervention. Our engineering and process is designed for better hygienic and safe processing.

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STORAGE

Influence of soybean storage conditions on crude oil quality

INTRODUCTION Among the 17 commodity fats and oils, soybean (Glycine max (L.) Merrill) is the first most produced vegetable oil in the world (Gunstone, 2001; Farhoosh et al., 2009). Soybean contains about 20% oil, which is susceptible to a deteriorative process due to inadequate grain storage, leading to high losses in the food industry. Depending upon the duration and conditions of storage, physical, chemical and biochemical alterations can occur in the soybeans (Narayan et al., 1988; Hou & Chang, 2002; Hou & Chang, 2005; Kong et al., 2008; Shelar et al., 2008), and such qualitative changes contribute to reduced oil, meal quality and tofu (Liu, 1997; Hou & Chang, 1998; Chang, 2005). The major factors affecting the storability of soybeans include ambient relative

humidity, seed initial moisture content, temperature, and time duration of storage (Kong & Chang, 2009). Storing soybeans with inadequate moisture content (m.c.) leads to deterioration of crude, refined, bleached and deodorized oil. The free fatty acid (FFA) content, iodine and peroxide index, are the parameters generally used to evaluate grain damage and oil quality (Frankel et al., 1987; Lovaas, 1992; Regitano Dâ&#x20AC;&#x2122;Arce et al., 1994). In addition to the losses that occur during oil refinement, the crude oil from severely damaged grains is more difficult to degum and the refined oil is darker than that obtained from healthy grains (List et al., 1977). The oil degradation can be caused by oxidation, hydrolysis, polymerization, pyrolises and absorption of external

flavors and odors. The oxidative reactions can be influenced by several factors such as light, heat, ionization, traces of metals, and metaloprotein, oxygen reaction with unsaturated lipids, and by chemical, and enzymatic mechanisms such as autoxidation, photo-oxidation and lipoxygenases (AraĂşjo, 2004). During grain storage, especially at high moisture and temperature, the lipids are hydrolyzed by lipase into FFA and glycerol, and the process is accelerated by fungal growth (Heaton et al., 1978; Rupollo et al., 2004; Guehi et al., 2007). Storing soybeans with 13% or higher m.c. permits fungal colonization resulting in FFA increase (Christensen, 1967). Although there are several studies about changes in soybean oil quality due to storage conditions, most data come from

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STORAGE

temperate ecosystems where temperatures during soybean storage remain low, and therefore are not applicable under tropical or sub-tropical ecosystems, like Brazil, where temperatures during the storage season remain above 20 ºC, and in some regions can reach over 30 ºC. No data are available regarding the fate and behavior of oil in soybeans stored under such conditions. Therefore adequate grain moisture, for at least 6-month storage under high temperature ranges needs, to be determined to reduce the risk of qualitative loss during storage. Prediction of qualitative grain deterioration is very important, because sometimes it is necessary to store for one year to another, and safe storage period is dependent upon the quantitative relation between deterioration rate, quality and storage conditions (Tang et al., 1999). Thus, the following study was done to determine the temporal changes in the quality of oil extracted from soybeans stored under different combinations of grain moisture and temperature, to help design strategies for handling and storing soybeans under tropical conditions. MATERIALS AND METHODS The study was done in the Pre-Processing and Storage of Agricultural Products Laboratory, Department of Agricultural Engineering, Federal University of Viçosa. Soybean grains were obtained from Almeida Campos district, Nova Ponte, MG. The grains were harvested with m. c. of about 18% (w.b.), and dried to 11.2, 12.8 or 14.8% m.c. in a fixed layer drier with forced natural air, and stored in 3 L plastic containers in chambers held at 20, 30 or 40 ºC. To assure initial grain m.c. during storage, the equilibrium relative humidity (ERH), was calculated using Chung-Pfost model (Navarro & Noyes, 2001) for each temperature-m.c. combination (Table 1), and relative humidity (RH) in each chamber was controlled accordingly. The data were monitored and recorded by the use of a computational system 1-wireTM (Martins et al., 2004).

During storage, the grains were sampled at 45-day intervals for 180 days, to analyze FFA, peroxide, iodine and photometric index according to the protocols Ca 5a-40, Cd 8-53, Cd 1b-87 and Cd 8-53 respectively of AOCS (2009). The crude oil of the grains was obtained according to protocol Ac 3-44. The study was conducted in a completely randomized design in split plot mode with three replications. The main treatments were allotted to the plots and the storage period to the sub-plots, thus the treatment structures corresponded to a 3×3×5 factorial. Analysis of variance considering repeated measures was performed initially to determine the most suited structure of residual covariance. Regression analysis was used for FFA, peroxide and photometric index. RESULTS AND DISCUSSION

Free fatty acid content There was a significant difference (p < 0.05) in the FFA content of oil extracted from grains stored at different m. c. and temperatures, with a significant interaction between m.c., temperature and storage period. The regression curves of the FFA (expressed as % oleic acid) content in oil from grains stored under different conditions are shown in Figure 1. The FFA content of oil from grain with m.c. up to 14.8% stored at 20 ºC did not change significantly during the entire storage period. However, it increased significantly, independently of m.c., if storage was done at 30 or 40 ºC (Figure 1B and 1C), but the increase was more accentuated in grains with 14.8% m.c. The adjusted regression equation with their respective coefficients of determination, relating % FFA content with the grain moisture and storage time, are given in Table 2.

Since the Brazilian marketing standard for FFA content of crude soybean oil is 2% (ANVISA, 1999), the oil from grains with 14.8% m.c. stored at 30 or 40 ºC and those with 12.8% m.c. stored at 40 ºC can have FFA content above this limit after 90 and 135-day storage, respectively. The FFA content of oil increases due to lipid hydrolysis by lipases, peroxidases and phospholipases enzymes present in grain tissues or produced by the associated microorganisms (Zadernowski et al., 1999). There are several reports relating FFA increase under storage conditions. Yanagi et al. (1985) reported the influence of storage duration on FFA content of oil from soybeans with

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STORAGE PRO AGRO 28

13.7 or 9.3% m.c. stored at 30 ºC and 80% RH. The changes in FFA content of oil from soybeans stored at different m.c. were also reported by Frankel et al. (1987). The grains stored with 13% m.c showed less FFA increase compared to those stored with 16 or 20% m.c. While the FFA content of oil from soybeans stored at 13% m.c. increased from 0.2 to 1.25% after 49-day storage, that of grains with 16 or 20% m.c. increased from 0.5 to 2.0% after 27 days, and from 0.6 to 2.3% after 28 days, respectively. Narayan et al. (1988) also reported temporal FFA increase in soybeans stored under ambient conditions, from 0.69% to 9.85%, after 58-month storage. According to Dhingra et al. (1998) the FFA content of oil extracted from soybean increased significantly due to the interaction between m.c. and storage period. Peroxide index The oil peroxide index differed significantly (p < 0.05) among samples due to the interaction between m.c., temperature and storage period. The regression curves of temporal changes in peroxide index are shown in Figure 2, with the adjusted regression equations and respective coefficients of determination in Table 3, which correlate the peroxide index to the m.c. at each temperature. Oil peroxide index increased independent of storage temperature, but the increase was less accentuated if the grains were stored with 11.2 or 12.8% m.c. at 20 or 30 ºC (Figure 2A and B), but increased sharply if stored at 40 ºC independently of the grain m.c. (Figure 2C). These findings are similar to those of Narayan et al. (1988), where oil peroxide index increased from 18 to 98 meq kg-1 after 58-month storage under ambient conditions. Lipid oxidation is the major cause of oil and fat deterioration due to formation of hydroperoxides resulting from the reaction between oxygen and the unsaturated fatty acids. Although these hydroxides have no flavor or taste, they rapidly decompose to aldehydes, ketones, alcohols, hydrocarbons, esters, furans and lactones, which impart disagreeable taste and odor (Lovaas, 1992; O’Brien, 2004; Farhoosh et al., 2009). The peroxide index is the most common parameter used to characterize oils and

fats (O’Brien, 2004); a product with peroxide value between 1 and 5 meq kg-1 is classified at low oxidation state; that between 5 and 10 meq kg-1 at moderate oxidation and above 10 meq kg-1 is classified at high oxidation state. The peroxide index obtained in the present study showed that the grains stored with 11.2 or 12.8% m.c. at 20 or 30 ºC yielded oil that can be characterized as having a low oxidation state. On the other hand, the oil from grains with 12.8 or 14.8% m.c. stored at 40 ºC had a high oxidation state after six or three month storage, respectively. It is worth emphasizing that the maximum limit for peroxide value established by the Brazilian legislation for commercialization of soybean crude oil is 10 meq kg-1 (ANVISA, 1999). Iodine index The oil iodine index did not differ significantly among samples (p > 0.05) due to interaction between grain m.c., temperature and storage period, although there was a significant variation along the storage period. Dhingra et al. (1998), while studying the oil quality of soybeans stored at different m.c. at 25 ºC, and colonized by Aspergillus ruber, also did not find significant variation in the iodine index. Photometric color index There was significant variation (p < 0.05) in the photometric color index due to interaction between m.c., temperature and storage period. The temporal increase of photometric color index of oil at each storage temperature is shown in Figure 3, with the regression equations and their respective coefficients of determination in Table 4.

Photometric color index increased along the storage period, independently of the grain m.c. and storage temperature, but the increase rate was positively related to m.c. and storage temperature. These results were confirmed by grain darkening, especially at high m.c. and temperatures. This rapid increase of photometric color index of the oil from grains with high m.c. could be due to colonization by storage fungi as reported by (Wilson et al., 1995). It is worth emphasizing that, at the end of the 180-day storage, 87% of the grains were found to be colonized by Aspergillus glaucus, resulting in a high percentage of sour grains. CONCLUSIONS 1. The combination of high grain moisture and temperature during soybean storage accelerates the oil deterioration process. 2. Storage of soybean grains with moisture content up to 15.0% (w.b.), at 20 ºC, does not affect the quality of the crude oil. 3. Crude oil obtained from soybean grains stored with moisture content up to 13.0% (w.b.), at 30 ºC maintains satisfactory quality up to 180 days. 4. It is not possible to obtain crude oil, within the quality standards demanded for commercialization, from soybean grains stored with moisture content above 11.0% (w.b.) at the temperature of 40 ºC.

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AGRI REPORT

Indian Agriculture Performance and Challenges 1.1 India accounts for only about 2.4 % of the worldâ&#x20AC;&#x2122;s geographical area and 4 % of its water resources, but has to support about 17 % of the worldâ&#x20AC;&#x2122;s human population and 15 % of the livestock. Agriculture is an important sector of the Indian economy, accounting for 14% of thenationâ&#x20AC;&#x2122;s GDP, about 11% of its exports, about half of the population still relies on agriculture as its principal source of income and it is a source of raw material for a large number of industries. Accelerating the growth of agriculture production is therefore necessary not only to achieve anoverall GDP target of 8 per cent during the 12th Plan and meet the rising demand for food, butalso to increase incomes of those dependent on agriculture to ensure inclusiveness. Crop Production 1.2 During 2011-12, there was record production of foodgrains at 259.32 million tonnes, of which 131.27 million tonnes was during Kharif season and 128.05 million tonnes during the Rabi season. Of the total foodgrains production,

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production of cereals was 242.23 million tonnes and pulses 17.09 million tonnes. As per 2nd advance estimates for 2012-13, total foodgrains Production is estimated at 250.14 million tonnes (124.68 million tonnes during Kharif and 125.47 million tonnes duringRabi seasons). The 6.59 million tonnes (about5.02 per cent) decline in kharif production hasbeen on account of late onset of monsoon anddeficient rainfall in several states affecting kharifproduction in Andhra Pradesh, Bihar, Gujarat,Haryana, Karnataka, Maharashtra, Rajasthan,Tamil Nadu and West Bengal. The production ofrice (both kharif and rabi) is estimated at 101.8million tonnes, pulses at 17.58 million tonnes,oilseeds at 29.46 million tonnes, sugarcane at334.54 million tonnes and cotton at 33.80 millionbales (of 170 kg. each). Though, production ofrice, sugarcane and cotton during kharif 2012-13has been lower than that of the last year, these arebetter than the average production during thelast five years. Production of coarse cereals hasbeen severely affected by the deficient

monsoonin Gujarat, Haryana, Karnataka, Maharashtraand Rajasthan, with the result that the overallproduction of Coarse Cereals has been lowerby 3.95 million tonnes as compared to kharif2011-12. Production of jute is estimated at 10.56million bales (of 180 kg each) which is marginallylower than that of last year (10.74 million bales).Production of the major crops since 2007-08 till2012-13 (second estimates) is given in Table 1.1. 1.3 The delayed onset and deficient first halfof South-West monsoon in 2012 had adverseimpact on Kharif crop area coverage and yields.There has been significant improvement in therainfall situation in August and September, 2012, resulting in good soil moisture conditions andimproved prospects for rabi crops for 2012-13.State/UT governments have been advised totake advantage of the good soil moisture andtarget for significantly higher rabi production soas to make good for the loss of production in the kharif season. ICAR has developed technologyfor high yielding and pest resistant varieties ofcrops suitable for different agro-

AGRI REPORT 30

climatic zones.States/UTs have been advised to use the highyielding and pest resistant varieties of crops andpopularize the use of agricultural machineryin farm operations to overcome the problem oflabour shortage. Further, integration of foddercomponent in the State Agricultural Plans,extension services through KVKs/

ATMAs andallocation of at least 25% of the funds under RKVYto promote the livestock and fisheries sector has been recommended. Table 1.1: Production of major crops during the recent years (million tonnes/ bales) Rates of Growth in Area, Production and Yield 1.4 Given the limitations in the expansion of acreage, the main source of longterm outputgrowth is improvement in yield. A comparative picture in average annual growth rates of area,production and yield of different crops for two periods, 200203 to 2006-07 (the 10th Plan period)

and 2007-08 to 2011-12 (the 11th Plan period) is given in Table 1.2. The area under jowar, bajra,small millets, ground nuts, rapeseed and mustard, sunflower and mesta has have witnessed anegative growth during the 11th Plan. Yields of all the major crops have recorded positivegrowth during the 11th Plan period. Average Annual Growth Rates in area, production andyields of major crops at all India level during 11th Plan and a comparison of annual average growth in yield rates during the 10th and 11th Plan periods are depicted in Fig. 1.1 (a) and 1.1 (b) respectively. Impressive rates of growth (more than 4 percent per annum) in production were observed in the case of wheat, bajra, maize, coarse cereals, gram, tur, total pulses, groundnut,sesamum, soyabean, total oilseeds and cotton. The increases in production in the case of wheat, bajra, maize, groundnut and total oilseeds can mainly be attributed to increase in yields, whereas the growth in production in the case of gram, tur, total pulses, soyabean and cotton is driven by a combination of both expansion in area and increase in productivity/yield.

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AGRI REPORT

Table 1.2: All India Average Annual Growth Rates of Area, Production and Yield of Principal Crops Source: Directorate of Economics & Statistics, Ministry of Agriculture. Fig. 1.1 (a): All India Average Annual Growth Rates in Area, Production and Yield of major crops during the 11th Plan

A perusal of the rates of growth in yield reveals that most of the crops have recorded highergrowth during the 11th Plan than that during the 10th Plan. However, sugarcane, and rapeseed &mustard, soybean and cotton recorded lower rates of growth in yield during the 11th plan than that of the 10th Plan. Growth in yields of sugarcane and rapeseed & mustard suggest that their yields seem to have attained the plateau and need renewed research to boost their productivity levels. Fig. 1.1 (b): All India Average Annual Growth Rates in Yield of Majorcrops during the 10th and 11th Plan

Horticulture 1.5 The horticulture sector has been a

driving force in stimulating a healthy growth trend inIndian agriculture. India is currently producing 257.2 million tonnes of horticulture produce froman area of 23 million ha. Over the last decade, the area under horticulture grew by about 3.8% per annum but production rose by 7.6% per annum. The higher growth rate in horticulture wasbrought about by improvement in productivity of horticulture crops, which increased by about28% between 2001-02 and 2011-12. The special thrust given to the sector, especially after theintroduction of the Horticulture Mission for North East & Himalayan States (HMNEH) andthe National Horticulture Mission (NHM) in the Xth Plan has borne positive results. Given theincreasing pressure on land, the focus of growth strategy is on raising productivity by supportinghigh density plantations, protected cultivation, micro irrigation, quality planting material,rejuvenation of senile orchards and thrust on postharvest management, to ensure that farmersdo not lose their produce in transit from farm gate to the consumerâ&#x20AC;&#x2122;s plate. Livestock Sector 1.6 The agriculture sector in India is predominantly part of a mixed croplivestock farming system. The livestock sector supplementsincome of the farmers, provides employment,draught power and manure. The development oflivestock sector is more inclusive and can resultin a sustainable agriculture system. India is thelargest producer of milk in the world, estimatedproduction of milk in 2011-12 is 127.9 milliontonnes and the second largest producer of fishin

the world with estimated production of 8.85million tonnes during 2011-12. The rate of growthin livestock sector has also been higher than thatin the crop sector in the recent years. Major Schemes for Accelerating AgriculturalProduction 1.7 In order to increase the agricultural growthrates, RashtriyaKrishiVikasYojana (RKVY),launched in August 2007, incentivizes the statesto increase public investment in agriculture andallied sectors taking agro climatic conditions,natural resource issues and technology intoaccount and integrating livestock, poultryand fisheries more fully while providingmore flexibility and autonomy to the states inplanning and execution of the schemes. It hasbecome the principal instrument for increasingthe statesâ&#x20AC;&#x2122; investment in the agriculture sectorwhich now includes several commodity specificmeasures namely Bringing Green Revolutionto the Eastern Region of India (BGREI), SpecialInitiative for Pulses and Oilseeds, AcceleratingFodder Production, Creating Vegetable Clusters,Initiatives for Nutritional Security throughIntensive Millet Promotion (INSIMP), Oil PalmDevelopment, Protein Supplements, RainfedArea DevelopmentProgramme and the SaffronMission. Beside RKVY, National Food SecurityMission (NFSM) and the National HorticultureMission (NHM) have also emerged as the pathbreaking interventions which have helpedin achieving record production of cereals,pulses, oilseeds, fruits, vegetables and spicesduring 2010-11 and 2011-12. With the focusedinterventions under the National Food SecurityMission supported by other programs andschemes and conducive price policy regime,target of 20 million tonnes of additional foodgrains production has been exceeded during the11th five year plan. Not only has the demand beencompletely met particularly for the cereals, thebuffer and strategic reserves are at levels that aremore than double their set limit. There is a recordexport of cereals that has gained not only hugeforeign remittance but has also stabilized globalfood economy through increased availability andreasonable price. To reduce over exploitation ofnatural resources in the north-west

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Growth of Agriculture Sector 1.10 As per the Central Statistics Office (CSO) revised estimates (released on 31st January 2013 of Gross Domestic Product, agriculture and allied sectors grew at 3.6 per cent during 2011- 12, recording an average rate of growth of 3.6 per cent per year during the 11th Plan (2007-12). Further, as per the advance estimates released by CSO on 7th February, 2013, agriculture and allied sectors are estimated to grow at 1.8 per cent during 2012-13 as against 3.6 per cent during the last year. The rates of growth of the economy and the agriculture and allied sectors since 2007-08 are given in Fig. 1.2.

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Fig. 1.2: Growth Rates (%) by Economic Activity

Regional Variations in Growth 1.11 The Indian Agriculture growth pattern has been very diverse at the state level. As agriculture is a state subject, the overall performance of the agriculture sector in India largely depends on what happens at the state level. There is a wide variation in the performance of different states. During the 11th Plan (i.e. 2007-08 to 2011-12) the growth performance of agriculture in Madhya Pradesh (7.6%), Chhatisgarh (7.6%), Rajasthan (7.4%), Jharkhand (6.0%) and Karnataka (5.6%), was much higher than that of Punjab (1.6%), Maharashtra (2.0%), Tamil Nadu (2.2%) West Bengal (2.8%), Uttar Pradesh (3.3%) and Haryana (3.3%). High coefficient of variation (>2) was observed in the case of Himachal Pradesh andMaharashtra. The average annual growth rates (percent) of gross state domestic product fromAgriculture during 2007-08 to 2011-12 (at 2004-05 prices) are given in Fig. 1.3. Fig. 1.3: Annual Average Growth Rate (%) of Gross State Domestic Product from Agriculture 2007-08 to 2011-12 (at 2004-05 prices)

Source: Central Statistics Office, NAD.

Capital Formation in Agriculture 1.12 Investment or capital formation is one of the basic requirements for growth of any sector. Even though the Gross Capital Formation (GCF) in agriculture & allied sectors as percentage ofagricultural GDP has increased from 14.9 per cent in 2006-07 to 19.8 per cent in 201112 (Table 1.3), when compared with the overall capital formation in the economy which is about 40 per cent of the GDP, capital formation in agriculture sector is much lower. Further, the share of public sector capital formation in agriculture & allied sectors has come down from 25 per cent in 2006- 07 to about 15 per cent in 2011-12 where as that of private sector has gone up from 75 per cent to 85 per cent. In fact during the first four years of the 11th Five Year Plan, capital formation in public sector in agriculture as per cent of agricultural GDP has come down from 3.5 per cent in 2007-08 to 3.0 per cent in 2011-12. While a higher share of private sector investment in agriculture is a welcome feature, public sector investment is critical as it is generally found to accelerate private investment. However, from 2006-07 to 2010-11 an inverserelationship is observed between growth in public sector and private sector investment (Fig. 1.4). This may be partly due to the fact that some investment contributed by the public sector gets accounted for under the private sector due to the classification of capital formation under the National Accounts System on the basis of the ownership of the assets created or classified as financial transfers from the public sector if no assets have been created or classified under PublicAdministration such as the expenditure on soil & water conservation, watershed

AGRI REPORT

region and toincrease the productivity of rice, wheat, maize andpulses, BGREI has started involving promotionof innovative production technologies andagronomical practices addressing the underlyingkey constraints of different agro-climatic subregions. System of Rice Intensification (SRI),laser land leveling; hybrid rice technologies andline transplanting of rice seedlings etc. are beingpromoted under this initiative. 1.8 Apart from population pressure, notwithstanding recent surge in productivity and production of cereal crops, there is a need to bridge the yield gaps in low productivity regions by effective technology dissemination which can be combined with an efficient supply and service system, strengthening and reorienting agricultural R&D, reducing regional disparities, targeting rain fed areas and emphasizing development of high potential, resource rich states in eastern India. 1.9 Ensuring stability in food systems through optimal combination of food procurement, stocksand trade, in coordination with price movements needs to be given emphasis to improve economic conditions of farmers. Besides enhancing the production and productivity of our agriculture, there is a need to diversify into high value items â&#x20AC;&#x201C; fruits, vegetables, milk and dairy products to meet the changing dietary references and to realize higher income for the farmers. Towards this end Government is giving special emphasis to the production of pulses, oil seeds and fruits and vegetables, in which we are short of our requirements.

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AGRI REPORT

management etc. This calls for a detailed study about the nature and quality of investment in agriculture and its impact on agricultural GDP, the relationship between public and private investment inagriculture and their resource use efficiency. Investment in irrigation, rural roads, power,telecommunication, marketing infrastructure, research and extension services generally tendto result in high growth of the agricultural sector and reduction in poverty. Given scarce fiscalresources, agriculture investment strategy should be guided by efficient and equitable resource use with high pay offs. Table 1.3: Gross Capital Formation in Agriculture & Allied Sectors at constant (2004-05) prices

Fig. 1.4: Rates of growth (%) in Gross Capital Formation in Agriculture (Including Animal Hushandary) Sector

Land and Water 1.13 The progressive fragmentation of land holdings, degrading natural resource base and emerging concerns of climate change are escalating pressure on land and water. Landand water resources being finite, increased agricultural production

and a diversified foodbasket to meet the requirement of the increasing population with higher per capita income, hasto emanate from the same limited net sown area by increasing productivity with an optimaluse of available water and land resources. Natural resources viz. arable land, water,soil, biodiversity (plant, animal and microbial genetic resources) are rapidly shrinking due todemographic and socio-economic pressures, monsoon disturbances, increasing frequencies offloods and droughts. Overuse of marginal lands, imbalanced fertigation, deteriorating soil health,diversion of agricultural land to nonagricultural uses, depleting aquifers & irrigation sources, Salinlization of fertile lands and waterlogging are pressing challenges requiring urgent attention. For making agriculture sustainable to meet the countryâ&#x20AC;&#x2122;s food requirement, a prudent land usepolicy, water availability and soil health have to be maintained at levels that are conducive topursue agricultural activities with higher level of productivity. 1.14 Land degradation is major threat to our food and environmental security. As per estimatesof Indian Council of Agricultural Research (2010), out of total geographical area of 328.73 mha,about 120.40 mha is affected by various kind of land degradation resulting in annual soil loss ofabout 5.3 billion tonnes through erosion. This includes water and wind erosion (94.87 mha),water logging (0.91 mha), soil alkalinity/sodicity (3.71 mha), soil acidity (17.93 mha), soil salinity(2.73 mha) and mining and industrial waste (0.26 mha). Besides, water and wind erosions are wide spread across the country. As much as 5.3 billion tonnes of soil gets eroded every year. Of the soil so eroded,

29% is permanently lost to sea, 10% is deposited in reservoirs reducing their storage capacity and rest 61% gets shifted from one place to another. Significant increase in use of chemical fertilizers particularly in the north-western part of the country coupled with imbalanced nutrient application, non-judicious use of pesticides, intensive cropping system, and decline in soil biodiversity and depletion of organic matter in soil are areas of concern requiring urgent attention. 1.15 Furthermore, climate change is likely to impact agricultural land use and production dueto less availability of water for irrigation, higher frequency and intensity of inter and ntraseasonaldroughts and floods, low soil organic matter, soil erosion, less availability of energy, coastal flooding etc. could impact agricultural growth adversely. For proper management of natural resources and to ensure sustainable agriculture growth in the country, there is need for a land use policy which should be integrated with all developmental programs for the holistic development of rural areas, natural resource management and eco-restoration. Considering skewed ownership of land, it is necessary to strengthen implementation of laws relating to land reforms, with particular reference to tenancy laws and leasing, distribution of ceiling surplus land and wasteland, providing adequate access to common property and wasteland resources and consolidation of holdings. Computerization of land records, formulation of policy on diversion of agricultural land for nonagricultural uses, updating of land and soil survey maps, finalization of an enabling frame work for involvement of private sector in natural resource management, and encouraging Public Private Partnership in land and watershed development programs are urgently required. 1.16 The land reforms agenda has not gone beyond the imposition of land ceilings eventhough the incidences of tenancy are too high in most parts of the country. Substantial chunksof scarce land remain untilled because oflandownersâ&#x20AC;&#x2122; reluctance to lease out land for fearof losing its ownership. A significant per cent ofthe tenants are landless and marginal farmers. These tenants would benefit from leasingin sinceit would help them to expand their

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Note: Total may not tally due to rounding off. Table 1.5: Size Group wise distribution of Average Holdings in the country

Note: Total may not tally due to rounding off. *excludes Jharkhand P: Provisional. Source: Agriculture Census 2010-11. 1.18 Increasing demand for industrialization, urbanization, housing and infrastructure isforcing conversion of agricultural land to non â&#x20AC;&#x201C;agricultural uses; the scope for expansion of thearea available for cultivation is limited. As per Agriculture Census 2010-11, small and marginalholdings of less than 2 hectare account for 85 per cent of the total operational holdings and 44 per cent of the total operated area. The average size of holdings for all operational classes (small & marginal, medium and large) have declined over the years and for all classes put together it has come down to

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1.16 hectare in 2010-11 from 2.82 hectare in 1970-71 as can be seen from Fig. 1.5. Fig. 1.5: Average size of operational holdings as per different Agriculture Censuses

1.19 As per the land use statistics, the acreage under different crops and the cropping patternduring the last two decades is given in the following Table. While the net sown area has come down from 143 million hectares in 1990- 91 to 140 million hectares in 2009-10, the gross cropped area has gone up by 6 million ha, from186 to 192 million ha during the same period dueto increase in the cropping intensity from 130 to137 per cent. 22 per cent of the acreage is underpaddy which has remained stable during thelast two decades. Area under wheat has slightlyincreased from 13 per cent in 1990-91 to 15 percent in 200910. Area under coarse cereals hascome down significantly from 19.5 per cent to14.5 per cent during this period. Table 1.6: Cropping Pattern in India (Area in Million Hectares)

Fig. 1.6: Crop-Wise Share (%) in Area

AGRI REPORT

minisculeholdings and allow better use of their labourresources. There is a need to urgently address theissue of legalizing land leasing. 1.17 Provisional results of Agriculture Census2010-11, are available for all States/UTs. Detailsof number, area and average size of operationalholdings in the country as per available data ofvarious Agriculture Censuses are given in tables1.4 & 1.5 respectively. Table 1.4: Distribution of Number of Holdings and Area Operated in India as per Agriculture Census 2010-11

Irrigation and Water Use Efficiency 1.20 Water is a scarce natural resource, fundamental to life, livelihood, food security and sustainable development. Water demandis increasing rapidly due to population growth,urbanization and changing lifestyle. Owingto increasing demand of water for domestic,industrial and energy uses, there is a severeconstraint in the availability of water foragriculture. Climate change might complicatefurther the existing temporal and spatial variationin availability of water. Extreme events like floodsand droughts are occurring more frequently andaffecting livelihood and food security. Low wateruse efficiency, poor maintenance of irrigationsystems and poor recovery of water charges aresome of the major problems associated with themanagement of water resources in the country. Inadequate and sub-optimal pricing of bothpower and water is promoting the misuse ofgroundwater. The decline in the water table acrossthe country is a matter of serious concern. Thereis a need to promote participatory managementof quifers to ensure sustainable and equitableuse of water. Promotion of microirrigationtechniques, alignment of cropping pattern withthe availability of water and greater involvementand empowerment of Water Users associations inthe command areas could lead to improvementin water use efficiency. 1.21 The ultimate

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irrigation potential in thecountry is estimated at about 140 million hectares.Of this, about 58.5 million hectare is from majorand medium irrigation sources, and 81.5 millionhectare is from minor irrigation sources (about64.1 million hectare from groundwater irrigationand 17.4 million hectare from surface water).Groundwater provides about 70 percent ofirrigation and 80 per cent of the drinking watersupplies. The widening gap (about 15 %) betweenirrigation potential created and that being utilizedis also a matter of concern. This gap needs to benarrowed within the shortest possible time. 1.22 Inefficient water use in irrigation is alsoleading to environmental degradation via waterlogging and induced salinity. Micro-irrigationtechnologies like drip and trickle systems, surfaceand subsurface drip tapes, micro-sprinklers,sprayers, micro-jets, spinners, rotors, bubblers,etc. have great potential in improving water useefficiency. However, despite wide promotion,only about 0.5 million hectare are currentlyunder micro-irrigation (NAAS 2009). Moderntechniques such as micro-irrigation, watershedmanagement, rainwater harvesting andgroundwater recharging are vital in utilizing theexisting resources and expanding the irrigationsystem in a viable manner. Major investment inresearch and development that enhance wateruse efficiency is required. Extension servicesthat reach out to farmers to help boost the speedof technology-adoption as well as developspecialized skills and knowledge related to waterapplications are necessary. Inputs for Agricultural Growth 1.23 To enhance productivity, easy and reliableaccess to inputs such as quality seeds, fertilizers,pesticides, access to suitable technology tailoredfor specific needs, the presence of supportinfrastructure and innovative marketing systemsto aggregate and market the output fromlarge number of small holdings efficiently andeffectively are necessary. Use of high yieldingvarieties/hybrids as in the case of Bt cotton andmaize, economy in input use, and cost effectivefarming techniques such as System of RiceIntensification (SRI) are necessary to improvefarm productivity. Seed and Planting Material 1.24 Quality seeds and planting materials arethe key agricultural inputs, which determine theproductivity of the crops. The efficacy of otheragricultural inputs such as fertilizers, pesticidesand irrigation is largely determined by the qualityof the seed used. It is estimated that quality ofseed accounts for 20-25% of productivity. Hencetimely availability of quality seeds at affordableprices to farmers is necessary for achieving higheragricultural productivity and production. Thevaried agro climatic conditions of the countryare suitable for cultivation of large number ofcrops and varieties. This necessitates productionof quality seeds and planting materials for ahuge range of crops for achieving the targeted production. The organized sector comprising ofboth the private and public sector accounts for about 15 to 20% of the total seed distributed inthe country. The remaining portion is contributed by the unorganized sector comprising mainly of farm-saved seeds. Prudent mechanism for seed certification, testing, labeling and enforcement is necessary

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Integrated Nutrients Management (INM) 1.25 Chemical fertilizers are the immediate source of nutrients in soils. Consumption ofnitrogenous (N), phosphatic (P) potassic (K) fertilizers has increased from 1.1 million tones in1966-67, The year preceding the green

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revolution to 27.7 million tonnes in 201112. The all-India average consumption of fertilizers has increased from 105.5 kg per ha in 2005-06 to 144 kg per ha in 2011-12. However, our consumption is much lower than that in Bangladesh (118), Pakistan (205) and China (396). The world average consumption of fertilizer was 107 kg per hectare in 2009. Further, very high variability has been observed in fertilizer consumption across the states and crops. While per hectare consumption is 243.56 kg in Punjab and 266.11 kg in Andhra Pradesh, it is comparatively low in MP (88.36 kg/ ha), Orissa (56.52 kg/ha), Rajasthan (62.35 kg/ha) and Himachal Pradesh (55.18 kg/ha) and below 5 kg/ha in some of the North Eastern States. 1.26 With a view to encourage balanced use of fertilizers, government introduced NutrientBased Subsidy (NBS) policy from April 2010 where under a fixed rate of subsidy is announcedon nutrients, namely, nitrogen (N), phosphate (P), potash (K) and sulphur(S). Price of urea isadministratively decided whereas prices of other fertilizers are market determined. Consequently, price of urea is much lower than that of other fertilizers. This has resulted in excessive use of urea, thereby distorting the balanced norms of fertilizer application. Balanced fertilization would have ensured adequate availability of nutrients in soil to meet the requirement of plants at critical stages of growth. This calls for promoting soil test based balanced and judicious use of chemical fertilizers in conjunction with organic sources of nutrients to sustain and improve soil health and its productivity. Further, lack of awareness about soil testing and intensive agriculture is leading to widespread deficiency of micronutrients such as zinc, iron, manganese and boron. Similarly, Fig. 1.7 : State wise Fertilizer consumption, Kg/Ha

Imbalanced NPK application, rising multi nutrient deficiency and lack of application of organic manure are leading to reduction in carbon content in the soil. Soil Organic Carbon (SOC) is central to soil health as it influence soil structure, water retention, microbial activities, soil aeration and nutrient retention. Depletion in soil organic carbon is leading to poor fertilizeruse efficiency (FUE) of the soil which on average is estimated to be 33% for N; 15% for P; 20% for K and micronutrients as against 50% for N; 30% for P and 50% for K with the best management practices. Intensive agriculture, while increasing food production, has at the same time caused second generation problems in respect of nutrient imbalance including greater mining of soil nutrients, depletion of soil fertility, emerging deficiencies of secondary and micronutrients, decline of the water table and quality of water, decreasing organic carbon content, and overall deterioration in soil health. Government is promoting Integrated Nutrient Management (INM), advocating soil test based balanced and judicious use of chemical fertilizers in conjunction with organic sources of nutrients for improving soil fertility. Introduction of customized fertilizers on the basis of soil testing and the agronomic multi-locational trials which are crop specific and area specific are recommended. Promotion of INM which includes soil test based balanced and judicious use of chemical fertilisers in conjunction with bio-fertilisers, and organic manures like FYM, compost, vermi-compost, green manure, Fruit and Vegetable Waste Compost, MSW compost etc.; use of complex fertilisers (NPK) and customized fertilisers which are consideredto be agronomically better and more balancedfertilisers in place of straight fertilizers; use offertilisers fortified with micro-nutrients; use ofBiofertilisers - phosphate solubilizing bacteriaAzospirillum, Azotobacter, and Rhizobium potash mobilizing biofertilizers which cansupplement upto 2025% of chemical fertilizers(NPK). In this context seed supplying agencies may consider provision of bio-fertilisers and seed treating material along with seed packets.

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to maintain seed quality. Varietal development, plant variety protection, seed production, quality assurance, creation of infrastructure for seeds, transgenic, import of planting material, export of seeds and promotion of domestic seed industry are necessary for a vibrant seed industry. An enabling environment for speedy trial and evaluation of imported seeds for the betterment of agriculture production in the country is necessary. The Seeds Bill, 2004 has been introduced in the Parliament to overcome the limitation of Seeds Act 1966, and provides for the regulation of seed quality and planting material of all agricultural, horticultural and plantation crops with the view to ensure availability of true to type seeds to Indian farmers; curb sale of spurious and poor quality seeds; protection of rights of farmers, increase private participation in seed production, distribution and seed testing; liberalize imports of seeds and planting material, and align with World Trade Organization (WTO) commitments and international standards, needs to be enacted with utmost urgency. The seed multiplication ratio from Breeder seed to Foundation seed and from Foundation seed to certified seed needs to be addressed by all theseed producing agencies, both in public and private sectors. Comprehensive and authentic database on seed production and distribution in India by public and private sectors needs to be built for the benefit of all the stakeholders. There is need to ensure adequate and timely availability of seed through appropriate tie ups with NSC, SFCI, State Seed Corporations etc., popularize Good Agricultural Practices (GAP), enhance Seed Replacement Ratio to 20-25% in pulses and 20% in case of groundnut, popularize new farming techniques like ridge-furrow sowing, deep ploughing, zero seed drill and seed treatment for enhancing agricultural production in the country.

AGRI REPORT Integrated Pest Management 1.27 The protection of crops from depredations of pests and diseases is a sine qua non for higher agricultural productivity, increased farm incomes and enhanced food security for the nation. This is especially significant for a nation like India which is faced with rising demand for food and agricultural produce for a growing population. In a scenario where agricultural productivity in India is below global bench marks and per capita availability of agricultural farm land is diminishing, risk of production loss upto 30% from incursion of pests and diseases needs to be averted. It is noteworthy that use of chemical pesticides in India is very low and estimatedat only 381 grams per hectare (technical grade pesticide) when compared to the global average of 500 grams of technical grade pesticide per hectare. Information provided by State Governmentsreveal that around 90 million hectares of croppedarea is within the ambit of pesticides usageleaving out significant swathes of agriculturalland in the country where pesticides are notbeing applied to crops. Different

estimates showthat more than 50% of consumption of pesticidesis garnered by insecticides, whereas herbicidesand fungicides together contribute about 3040% of total pesticide consumption. The usage ofchemical pesticides which had fallen drasticallysince 1991 has witnessed a revival during the 11thFive Year Plan. Bio-pesticides usage has shown asteady increase in the last two decades to reach aconsumption level of more than 6000 MTs during2011-2012 as per information provided by theStates. Among the crops, cotton, rice, vegetablesand fruits account for the largest share of pesticideconsumption in the country. 1.28 It is evident from the above that whilespread and dosage of pesticide application inthe country is low, yet in the context of risingconcerns centered around hazards associated withpesticides residues in food and environment, thereis a need to adopt strategies and practices that areconsistent with principles of good agriculturalpractices. Recognizing the imperative of safeand judicious use of pesticides, the Governmentof India and the State Governments have

beentrying actively to promote Integrated PestManagement. IPM advocates adoption of culturaland mechanical tools and need based applicationof bio-control agents and bio-pesticides, whilesafe and judicious use of chemical pesticides isrecommended only as a measure of last resort.IPM is being promoted by the Governmentof India and State Governments primarilythrough training and demonstrations in farmersfield schools, capacity building programmesfor extension personnel and support to StateGovernments for setting up of Bio-control andBio-pesticides testing laboratory facilities. 1.29 Whereas efforts are being made to controlpests and diseases in crops, it is equally importantin the liberalized global trade environment toshore up our defences against introduction ofexotic pests and diseases into the country throughagricultural imports which have the potentialto threaten agricultural/ horticultural cropsand bio-security of the country. The quarantineregulatory framework is built around the PlantQuarantine Order 2003 which has

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Mechanization 1.30 Availability of adequate farm power is verycrucial for timely farm operations, increasingland and labour efficiency, increasing productionand productivity and reducing crop producelosses. Farm mechanization can also addressthe issues of scarcity of farm labour during peakagricultural seasons like sowing and harvesting.It has been observed that farm power availabilityand foodgrain yield have a direct relationship.States with higher farm power availability have,in general, more productivity. 1.31 The tractor density in India is about 16 tractors for 1,000 hectares, as against the worldaverage of 19 tractors and that in USA 27 tractors per one thousand hectare of croppedarea. The increasing threat to natural resources, notably land and water, has further necessitated switching over to machine assisted resource conservation techniques such as zero-tillage, raisedbed planting, precision farming, etc. Even though farm mechanization is increasing in India, it is mostly region specific. The decreasing trend in operational land holdings is an impediment in the growth of agricultural mechanization. Small and marginal farmers who cultivate about 85 per cent of the holdings and account for nearly 44 per cent of the total cultivates area cannot afford high cost agricultural machines. High cost of mechanization and lower credit worthiness results in the ‘exclusion’ of majority of small and marginal farmers in India from the benefit of farm mechanization The use of farm machinery is also dependent on the availability of other infrastructural services in the rural areas. Mechanization of small and noncontiguous group of lands is found to be against ‘economies of scale’ especially for activities like land preparation and harvesting, thereby making individual ownership of agricultural machinery uneconomical. In order to make farm equipments and

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machines available to the farmers at affordable cost, Farm Machinery Banks can be established to custom hire the machines and equipments to the farmers. This will, besides increasing the power availability, help in removing the disparity in availability the farm power among various states and reduce the drudgery associated with various farm operations. 1.32 Recognizing the need to spread the benefits of agricultural mechanization among all strata of farmers, Department of Agriculture & Cooperation is integrating the components of gricultural mechanization under various schemes and programmes through promotion of ‘Custom Hiring Centre’ for agricultural machinery. 1.33 It has been estimated that about 18 to 25% losses occur in the entire food supply–chain from production to consumption. A three pronged strategy involving (i) compression of the supply– chain by linking producers and markets; (ii) promoting processing in production catchments to add value before the produce is marketed; and (iii) developing smallscale processing refrigerated chambers or cold storage using conventional and nonconventional sources is required to reduce postharvest losses. This would require greater attention to post-harvest engineering research and development. Labour and Agricultural Wages 1.34 Agriculture is a labour intensive activity. Cost of cultivation data shows that labour accountsfor more than 40 percent

of the total variable cost of production in most cases. Therefore, availability of labour to work in agriculture is crucial in sustaining agricultural production. Agricultural wages have traditionally been low, due to low productivity, large disguised unemployment in agriculture sector, and lack of sufficient employment opportunities elsewhere. However, in recent years there has been a perceptible change in this trend due to economic growth and adoption of employment generation policy like the MGNREGA and increase in minimum wages under the Minimum Wages Act. The average daily wages for agricultural field labour for ploughing and harvesting at all India level have increased at the rate of 8.7 per cent and 9.2 per cent per annum during 200102 to 2010-11 respectively as against the average wages paid for industries covered under Annual Survey of Industries (ASI) at 6.3 per cent per annum. However, agricultural wages, in general, are still much lower than the industrial wages. With skill development this gap will narrow down, putting further pressure on availability and cost of agricultural labour. This further strengthens the necessity for agricultural mechanization in a manner that is inclusive and suitable for Indian conditions.

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laid downagricultural commodity and country specificphytosanitary treatments for imports into thecountry. The regulatory responsibilities areprimarily discharged through Plant QuarantineStations established in all regions of the countrymanned by technical personnel and equippedwith laboratory facilities.

Agriculture Credit and Insurance 1.35 Agriculture Credit plays an importantrole in improving agricultural production,productivity and mitigating the distress offarmers. Government has

AGRI REPORT taken several measuresfor improving agricultural credit flow to farmers. As against the credit flow target of Rs.4,75,000crore for the year 201112, achievement has beenRs.511029 crore, 107% of the target. The target ofcredit flow for the year 2012-13 has been fixedat Rs.5,75,000crore and achievement as at endSeptember, 2012 is Rs. 2,39,629 crore. Crop loansup to a principal amount of Rs.3 lakh are beingprovided effectively at 4 per cent per annumwith an interest subvention of 4 per cent fortimely repayment of loans. Further, the benefit ofinterest subvention has been extended to smalland marginal farmers having Kisan Credit Cardfor a further period up to six month postharvestagainst negotiable warehouse receipt for keepingtheir produce in warehouses to avoid any distresssale. The limit of collateral free farm loan has beenincreased from Rs.50,000 to Rs.1,00,000. A RevivalPackage for Long Term Cooperative CreditStructure (LTCCS) is also under considerationof the Government in consultation with StateGovernments. 1.36 Over the years, there has been asignificant increase in the share of formalfinancial institutions (commercial banks, RRBsand cooperatives) in the total credit availed bycultivator households. The formal financialinstitutions accounted for about 66 per cent of thetotal credit to cultivator households

by the early1990s. However, the share of formal institutionalcredit to agriculture witnessed some reversalduring the period between 1991 and 2002 whichwas partly due to a contraction in rural branchnetwork in the 1990s, and partly due to thegeneral rigidities in procedures and systemsof institutional sources of credit. The regionaldistribution of agricultural credit by commercialbanks, both in terms of quantum of credit and thenumber of accounts, has been skewed. There isa significant concentration in the southern states(Andhra Pradesh, Karnataka, Kerala, TamilNadu) followed by the northern and westernstates. In contrast, the share of the eastern (Bihar,Jharkhand,Odisha and West Bengal) and thenorth-eastern states has been low. Further, nearlythree quarters of the farmer households still donot have access to the formal credit system andhave no means to insure themselves againstincome shocks. This leaves them vulnerable tothe informal money lenders. 1.37 With a view to encourage the farmersto adopt progressive farming practices, highvalue inputs and higher technology and tostabilize farm incomes, insurance coverage inthe event of failure of the notified crops as aresult of natural calamities, pests and diseases,the National Agricultural Insurance Scheme(NAIS) has been introduced in the country fromRabi 1999-2000 season. Under the scheme, atpresent, 10% subsidy in

premium is availableto small & marginal farmers which is shared bythe Central and respective State Government on50 : 50 basis along with claims for normal suminsured & indemnity level for food and oilseedcrops. To improve further and make the NAISeasier & more farmer friendly, Modified NationalAgricultural Insurance Scheme (MNAIS) hasbeen implemented on pilot basis in 50 districtsfrom Rabi 2010-11 Season. Besides the NAIS andMNAIS, Pilot Weather Based Crop InsuranceScheme (WBCIS) and Pilot Coconut PalmInsurance Scheme (CPIS) are being implementedby the government. Despite the various schemeslaunched by the government from time to time,agriculture insurance coverage in terms of area,number of farmers and value of agriculturaloutput insured is very small as compared tothe total number of holdings/ farmers (137.8million as per agriculture census 2010-11), thetotal cultivated area (159.2 million hectares) andthe value of agricultural output. A broader baseboth in terms of area covered and crops insuredis necessary for the viability of the schemes. Agricultural Extension Services 1.38 Over the years, extension system in thecountry has been exposed to multiple challenges.Farmersâ&#x20AC;&#x2122; needs in terms of information andtechnology support have become more complexdue to rapid pace of developments in the fieldof

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Agricultural Prices and Markets 1.39 Food and agricultural commodity pricesin India are primarily determined by domesticdemand and supply factors. Market microinfrastructure, the systems and procedures ofcommodities trading and players determine themarket efficiency. It has been observed that thereis wide spread imperfection in the agriculturalproduce markets. There is general opaquenessand poor price transmission mechanism. Consequently, there is a wide gap between theprices received by the farmers and the prices paidby the consumer. At times, the farmers are not ableto receive a price to cover his cost of productionwhile the

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agriculture. Climate-change, depleting naturalresources, scarcity of labour and volatile marketforces are some of the concerns that have puttremendous pressure both on the farmers as wellas extension system in the context of increasingthe productivity, profitability and sustainability of Agriculture. Rebuilding an agricultural extension system that is capable of adapting tothechanging agriculture scenario within thecountry and globally remains a big challenge.Efficacious extension services are being providedby organising farmers into groups (FIG, CIG,FACs, Producer Companies etc.); reaching outto the farmers directly by ensuring availabilityof dedicated functionaries under ATMA andestablishing convergence not only betweenresearch & extension but also among extensionfunctionaries under different schemes and puttingin place extensive and integrated 5-tiered use ofICT tools & mass media. Quality of services beingprovided through Kisan Call Centres (KCCs) hasbeen enhanced significantly with use of lateststate of the art tools, dissemination of informationabout new schemes &programmes and effectivesupervision & greater involvement of StateGovernments. The success story on production offoodgrain, pulses, vegetables, and fruits duringlast three years is an eloquent testimony of theway extension machinery worked in tandem withother programmatic interventions (e.g. RKVY,NHM, NFSM, MMA etc.) and has succeeded inpropagating technologies and providing timelyinformation to farmers.

consumers are paying an abnormallyhigh price for the same commodity. This is a majorconcern for the policy makers. High food inflationwith an inadequate supply response, aggravatedby logistic and market-related constraints areother areas requiring attention. Imperfect marketconditions, restrictions on the movement ofagricultural commodities due to infrastructuralconstraints, transport bottlenecks and local taxesinfluence the retail prices trends across the majormarkets and consumption centres. 1.40 The principal factors behind the higher levelsof inflation in the recent period are onstraints inproduction and distribution especially in highvalue items such as pulses, fruits and vegetables,milk and dairy products, egg, meat and fish. Increase in prices can be attributed to both supplyand demand factors. The per capita availabilityof some of the items such as cereals and pulseshas been declining resulting in some pressure ontheir prices. In the case of fruits and vegetables,milk, egg, meat and fish, prices have gone updespite an increase in per capita availability. Thisis due to a changing pattern in the demand of thehouseholds for high value items with increasingincome levels. Market imperfections also add tothese trends by restricting the price transmission. These include lack of infrastructure facilities likeefficient transport facilities, storage, processing,marketing and credit facilities. When growthpicks up at low income levels the demand forfood items

would increase as income elasticityof demand for food is higher at lower levelsof income. Thus, lower per capita availability of food grains and structural shortage of keyagricultural commodities like oilseeds and pulsescombined with the rising demand have kept foodprice inflation high. This process has got furtheraccentuated by spikes in global food prices throughinternational transmission. Rising internationalprices of oil also impacted the cost of productionof agriculture through increase in input costs offertilizers, transportation and a general rise in thecost of all other inputs and services. Increase incost of production results in increasing the MSPof agricultural commodities which also influencesmarket sentiments. The enduring solution toprice inflation lies in increasing productivity,keeping the cost of production under control andremoving market imperfections through reformsand infrastructure improvements. The widevariations in market fees, commission charges,lack of grading, standardization and packagingfacilities are resulting in higher marketingtransaction costs and low price realization by thefarmers in regulated markets. This has resultedinto fragmented supply chains with largeintermediations. Establishment of an effectivesystem of grading and marking of agricultureproduce is necessary for an electronic agriculturalmarketing exchange. 1.41 Contract farming has considerablepotential in terms farmersâ&#x20AC;&#x2122;

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access to moderntechnology, quality inputs and marketingsupport through contractual agreement between processing and/or marketing firms forproduction support at predetermined prices. Itis necessary that direct marketing and contractfarming is promoted to facilitate enhancedshare of producers in consumerâ&#x20AC;&#x2122;s rupee.Development of agricultural marketinginfrastructure is the foremost requirement forthe growth of comprehensive and integratedagricultural marketing system in the country. The development of alternative and competitivemarketing channels is necessary to inducecompetition in the existing marketing systemsand to facilitate farmers to sell their produce atremunerative prices. Creation of scientific storagenearer to farm is necessary to avoid wastage anddeterioration of the produce. 1.42 Many of the States are yet to adoptthe model Agricultural Produce MarketingCommittee (APMC) Act suggested by theCentral government in 2003. The APMC Acts ofnon-reformed States do not allow the processorto directly buy the agricultural produce fromagriculturists outside the market yard. This leadsto long intermediation and high marketing cost,which result into lower share of farmers of therupee paid by consumers and consumers also donot get fresh produce at reasonable prices. Manyof the States that have amended

their APMCActs have not done so strictly on the lines ofthe Model law circulated by the Centre. Muchneeded provision for permitting the out-ofmanditransactions and the matter of exemptionof market fee on horticultural perishables beingpursued by the Department with States, do notfind place in the amended statutes in severalStates. The Department is working towards anintegrated nationwide market for agriculturalproduce. 1.43 Multiple intermediaries, high markettaxes ranging from 13% to 15.5% ad-valorembesides other market charges, poor marketinginfrastructure and access are some of thereasons for high retail prices and these need tobe rationalized. States should waive off marketfee on fruit and vegetables under the APMC Actto ensure unhindered trade in the perishablecommodities. There is a need for a Centrallegislation to ensure barrier free movement ofagriculture commodities across the country todevelop an integrated national market. 1.44 In the context of foodgrains policy,concern has been raised about simultaneousoccurrence of high food inflation and largefoodgrains stocks in our granaries. The variouscommodity wise stocks limit notified alsodiscourages investment in storage facilities. The stock limits and movement of agriculturalcommodities across the country need to be freedso as to facilitate an integrated national

marketfor agricultural produce across the country.Besides improving storage facilities, there is aneed to redesign the mechanics of procurementand release of foodgrains to the market to ensurethat the impact on prices is substantial in thedesired direction. In a large number of markets inseveral states, such as Bihar, eastern UP, Orissa,Assam, M.P. and Chhattisgarh where surplusesare emerging, there is a need to extend the pricesupport mechanism for effective procurementoperations and to strengthen the marketinfrastructure. 1.45 The Prime Ministerâ&#x20AC;&#x2122;s Economic AdvisoryCouncil (PMEAC) has also stressed in its recent Economic Outlook report the need foragricultural reforms. The areas that have beenidentified for urgent attention include thereduction and rationalization of input subsidies,ensuring glitch-free marketing of farm produceand liberalizing tenancy arrangements. Thetime schedule for rationalizing fertilizer subsidythrough the nutrient-based subsidy regimecalls for decontrolling the prices of urea, themost consumed fertilizer. Inefficiency in powergeneration and huge transmission losses arenot letting to remove subsidies on power foragricultural purposes. The Council has alsorecommended for removing subsidies on canalwater to improve water use efficiency and calledfor encouraging involvement of consumers inwater and power distribution. The Way Forward 1.46 While there has been a significant increase inproduction of foodgrains and other agri-producein the recent past, there are formidable challenges,e.g. a decline in the average size of land holding,dwindling water resources and inefficient wateruse, the adverse impact of climate change,shortage of farmlabour, poor and inefficientmarketing infrastructure, and increasing costsand uncertainties associated with volatility ininternational markets. The main eterminantsof agriculture growth would be: (a) viabilityof farm enterprise and returns to investmentthat depend on productive infrastructure, suchas soil and water conservation and expansionand improvement of irrigation systems, marketaccess, prices and risk;

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(b) availability anddissemination of appropriate technologies thatdepend on quality of research and extent of skilldevelopment (c) plan expenditure on agricultureand in infrastructure which together with policymust aim to improve functioning of markets andmore efficient use of natural resources; and (d) governance in terms of institutions that makepossible better delivery of services like credit,quality inputs like seeds, fertilizers, pesticidesand farm machinery. In addition, certain regionalimbalances must be clearly addressed. As thedomestic supply of pulses, oilseeds and fruitsand vegetables fall short of the demand, there is aneed for crop diversification towards these highvalue crops. From the point of both food securityand sustainability, extension of green revolutionto low productivity areas in the Eastern Regionwhere there is ample ground water and surpluslabour needs much higher emphasis. Equallyimportant would be the development of suitabletechnologies and crop varieties particularly forrain-fed area, as 55 per cent of cropped area israinfed. 1.47 Most of the smallholders sell their produceimmediately after harvest, invariably realizinglower prices and later buy the commoditiesduring the lean season at much higher prices.This is partly due to smallholders need for cashand partly due to lack of adequate technologies and facilities for postharvest handling, storageand processing. This coupled with poor marketinformation and weak market integration,adds to supply distortion and price volatility. To increase and stabilize supplies and therebymitigate price volatility, improved infrastructuralservices, particularly for transportation, storageand processing, pro-smallholder innovations incredit flow, organization of producers and otherstakeholders in the agriculture value chain withclear roles and responsibilities in cooperativeswhich can provide an array of services fromprovision of inputs to enhancing market access,financial services, technologies and information. 1.48 KCC is an innovative tool of credit deliveryto meet the production credit requirement of thefarmers in a timely and convenient manner. Alleligible farmers should be brought within theumbrella of

KCC in time bound manner and itshould be made single product catering the allcredit needs of farmers. The National AgriculturalInsurance Scheme (NAIS) and modified NAIS(MNAIS) provide risk coverage of the crops onthe basis of their yield. While the unit area forMNAIS is village/village panchayat, NAIS alsoallows notification of village as the unit area.However, many States notify a larger unit areasuch as Block, Taluk and Tehsil. The largerunit area does not cover the risk of individualfarmers effectively because of larger variationsin the yield in the unit area. The States arereluctant to notify a smaller unit area (such as avillage) because of increased requirements of theminimum number of crop cutting experimentsthat has to be undertaken which is both costlyand time consuming affair. The States needto deploy additional manpower and provideadequate training to the personnel engaged inthe crop cutting experiments to ensure accurateand timely availability of yield data for effectiveimplementation of the insurance schemes. Useof modern technology such as remote sensingthrough satellite imagery may be deployed toreduce the cost and improve the accuracy of cropcutting experiments. 1.49 To sum up, the thrust areas for theagriculture sector include enhancing publicsector investment particularly in research andtechnology transfer along with institutionalreforms to make it

more accountable towardsdelivery, conservation of land, water andbiological resources, development of rain fedagriculture, development of minor irrigationand water use efficiency, timely and adequateavailability of inputs -seeds, fertilizers, pesticides,developing efficient marketing infrastructure,increasing flow of credit particularly to the smalland marginal farmers.1.50 Improved performance at farm level willresult in improved foodsecurity and improvedfarm livelihoods only if other components in thevalue-chain such as infrastructure supportingagricultural upstream and downstream activities,including transport, storage, processing andmarketing facilities for agricultural productsare also developed simultaneously. Continuousinnovation to improve productivity andcompetitiveness of the agriculture sector arenecessary to create jobs, generate income andalleviate rural poverty. From the governmentâ&#x20AC;&#x2122;sside, enabling policies and institutions in a varietyof domains - from R&D to trade and markets, fromnatural resource governance to collective actionby agricultural producers, agricultural extensionand rural advisory services are necessary to bringknowledge, technologies, and services to farmersand entrepreneurs. Investment in relevant publicgoods which works both as a catalyst of, andcomplements to, private investment in agricultureis necessary.

NEWS

Govt to spend Rs 3,507 cr in 12th Plan to boost oilseeds, oil

he Government proposes to spend Rs 3,507 crore during the 12th Five Year Plan to boost oilseeds output and bring additional area of 1.25 lakh hectares under oil palm. “The Cabinet Committee on Economic Affairs approved the implementation of National Mission on Oilseeds and Oil Palm with an allocation of Rs 3,507 crore,” a statement said. Besides enhancing the oilseeds output by 6.58 million tonnes, the Mission would also bring additional area of 1.25 lakh hectares under oil palm cultivation with increase in productivity of fresh fruit bunches from 4,927 kg per hectare to 15,000 kg per hectare and increase in collection of tree borne oilseeds to 14 lakh tonne. “The implementation of the proposed Mission would enhance production of

vegetable oil sources by 2.48 million tonnes from oilseeds (1.70 million tonnes), oil palm (0.60 million tonnes) and tree borne oilseeds (0.18 million tonnes) by the end of the 12th Plan Period,” the statement said. The Mission would emphasise on increasing the Seed Replacement Ratio with focus on varietal replacement; increasing irrigation coverage under oilseeds from 26 per cent to 38 per cent and diversification of area from low yielding cereals crops to oilseeds crops. Besides, it would also focus on intercropping of oilseeds and use of fallow land, expand area under oil palm and tree borne oilseeds. The mission would also focus on increasing the availability of quality planting materials of oil palm and tree borne oilseeds and also enhance the procurement of oilseeds and collection

Stock holding limit for pulses, edible oil, oilseeds extended by one year

he Cabinet has decided to extend the stock holding limit for pulses, edible oil and edible oilseeds to September 30, 2014. This will help the States to take strict action against hoarders. PTI adds: The Union Cabinet approved the proposal for extending the stock

holding limit on pulses, edible oils and oilseeds for one more year to ensure their availability and check prices. The validity of the current stock holding limits order with respect to these items expires on September 30. “The validity of the Central order dated 27.09.2012 issued in respective of pulses, edible oils and oilseeds has been extended for one year till September 30, 2014,” Information and Broadcasting Minister Manish Tiwari told presspersons here after the Cabinet meeting. This decision would enable State Governments to continue to take effective de-hoarding operations under the Essential Commodities Act, 1955, by fixing stock limits and licensing requirements, among others, in respect of pulses, edible oils and edible oilseeds, he said. This will also help in the efforts being

and processing of tree borne oilseeds. Under the mission, the recommended varieties and proven technologies would be demonstrated in a cluster approach to ensure participation of all categories of farmers, irrespective of the size of their holdings, social status. The oil palm mission is built upon the achievements of the existing schemes of Integrated Scheme of Oilseeds Oil Palm and Maize, Tree Borne Oilseeds Scheme and Oil Palm Area Expansion programme during the 11th Plan period. The implementation of these schemes have shown increase in production and productivity of oilseeds, area expansion with increased production of FFBs under oil palm and augmented availability of quality planting materials, pre-processing technologies and awareness about tree borne oilseeds. taken by the Centre to tackle the problem of rising prices and also improve the availability of these commodities to the general public, especially the vulnerable sections, he said. The stock holding limit has helped in controlling prices of pulses and edible oils in various parts of the country. For instance in Delhi, the retail price of gram, tur and urad have come down by up to Rs 15 per kg in the last one year. At present, the retail prices of various pulses in Delhi are ruling in the range of Rs 54-79 per kg, while prices stood in the range of Rs 62-78 per kg in the year-ago period. Groundnut oil is available at Rs 167 a kg and mustard oil at Rs 100 a kg. The country is dependent on import of pulses and edibles oils to meet domestic shortages. The production of these two commodities is expected to be higher in the kharif season of the current year due to a strong monsoon. The stock holding limits are extended from time to time. Wheat and sugar have been withdrawn from the ambit of this order effective from April 2009 and December 2011, respectively.

Oil & Food Journal Vol. 08, Issue 12, October 2013

o you know that when we eat a dosa or idli from anywhere in Maharashtra, there is 90 per cent chance that the urad dal in them came from mutation breeding, a promising technology developed by the Bhabha Atomic Research Centre (BARC), Trombay. Since we import 40 per cent oilseeds and 20 per cent pulses, BARC focused its attention primarily on these crops. Heritable mutations of genes occur spontaneously in all living beings; but their rates are extremely low — of the order of one in a million. Isolating living organisms with beneficial characteristics from nature and multiplying them by selective breeding is a very slow process. Scientists speed up the mutation rate a thousand fold by exposing seeds or in some instances parts of the plant to ionising radiation. Breeders produce plants from these irradiated seeds. They combine plants with different desirable characteristics to develop high yielding, early maturing and disease resistant plants. Pigeon pea and mung bean suffer viral attacks; soya beans are hit by bacteria; drought and salinity affect pulses and oil seeds; some plants are sensitive to temperature. Pre-harvest sprouting and in situ germination are other worrying conditions. Scientists have overcome most of these adversities by genetic

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manipulation. IMPROVED QUALITY They can improve the quality and nutritional content of oil seeds and the bread making quality of wheat. Wheat plant can be made heat tolerant and resistant to stem rust. They have developed many varieties of rice. Some are early harvestable ; others salt tolerant; a few are disease resistant. Reduced height Basmati is another notable contribution. The development of better crop plants takes time. Scientists test the improved crops at least for three years in BARC fields before they are entered for evaluation trials conducted by the agricultural universities etc. Promising new varieties are further evaluated in adaptive, district and mini-kit trials on the farmers’ fields. BARC scientists set up linkages with farmers to produce quality breeder seeds and participate actively in Kisan Melas held in farmers’ fields to popularize the technology. They developed 41 new crop varieties (Trombay varieties) by radiation induced mutation and cross-breeding; these have been released and officially notified by the Ministry of Agriculture, Government of India for commercial cultivation. Farmers in virtually every State benefited from the technology. It started in 1973 with Trombay Groundnut (TG1) cultivated mainly in Gujarat and Maharashtra. Maturing in about 130-135 days, with large seeds, the crop gave a modest increase in yield of 15 to 20 per cent. Besides high yield, early maturity and early water use efficiency, some of the Trombay groundnut varieties have fresh seed dormancy of 20-30 days thus preventing in-situ germination, a nightmare for farmers due to end of season rains when the crop is ready for harvest. Scientists from the University of Agricultural Science and BARC produced a large seed variety of groundnut. Hundreds of farmers are producing even

up to 7 tonnes/ha of some varieties of groundnuts in some States. A drought tolerant early maturing variety and an early maturing large seed variety of groundnuts are being cultivated in large desert areas in Rajasthan.

NEWS

Mutation breeding of oil seeds, pulses and cereals

EXPORT-WORTHY BARC has also developed early maturing, confectionary grade, large seed groundnut seed varieties (100 seeds more than 60 grams) suitable for export. As early as 2002-2003, the breeder seed indent for Trombay Groundnut varieties by the Department of Agriculture & Cooperation, Ministry of Agriculture, stood at 932 out of 3,137 quintal (29.7 per cent) of national indent. In an address at the Indian Nuclear Society Technical Seminar, Dr S.F. D’Souza, Associate Director listed the mutant varieties of crop plants developed at Trombay and lucidly described their socio-economic impact The breeder seed indent for Trombay Urad bean (black gram) then stood at 93.4 quintal out of 222.05 quintal (42.06 per cent) of national indent. Farmers grew them on 5.10 lakh hectares out of 5.49 lakh hectares (about 93 per cent) in Maharashtra. Maharashtra State Seed Corporation, Akola has distributed 21,000 metric tonnes of a certified variety of black gram seeds to the farmers. BARC developed many varieties of high yielding, disease resistant moong beans. One of them a disease-resistant, early maturing ( 55-59 days) variety for summer season made available an additional area for moong bean cultivation under crop diversity programme. Jawaharlal Nehru Krishi Vishwavidyalaya, N G Ranga Agricultural University and Indira Gandhi Krishividyalaya collaborated with BARC in some of the programmes. Currently farmers cultivate Trombay moong bean varieties over 300,000 hectares in India. INDIA LEADS In developing and applying mutation breeding using ionising radiation, India has a leading role among all nations. Many varieties of mutant crops cultivated on tens of thousands of hectares enhance income in rural areas, contribute to environmentally sustainable food security and improve human nutrition in India.

NEWS

Oilseeds output seen at record high:

Farm Minister Sharad Pawar

ummer sown oilseeds output is seen hitting a record high at 23.93 million tonnes in the 2013/14 crop year aided by all-time high soybean output, Farm MinisterSharad Pawar said, helped by ample monsoon rainfall. Soybean output has been estimated at 15.68 million tonnes, up 6.8 per cent from a year earlier, according to the farm ministry’s first estimates for the year that

Global Oilseed Crush Seen at Record by Oil World as Crops Rise

lobal oilseed crushing probably will climb to a record in the next season as harvests accelerate in the Northern Hemisphere and production is set to rise in South America, Oil World said. About 401.08 million metric tons of 10 major oilseeds will be processed in the 2013-14 season that begins Oct. 1, up from 387.07 million tons a year earlier,

the Hamburg-based researcher said in an e-mailed report. Oilseeds including soybeans and rapeseed are crushed by processors to make vegetable oils and meal used to feed livestock. World production of seed oils probably will rise by 3.7 million tons from the previous year, while meal output will climb by 10.1 million tons, according to the report. “With harvesting of large oilseed crops

began in July. The minister put the output estimate for cotton at 35.3 million bales of 170 kg each, up 3.8 per cent from a year ago, and also a record high. Earlier, Farm Commissioner JS Sandhu said the total summer grains output was likely to increase slightly from last year to 129.32 million tonnes in 2013/14. India’s crop year runs from July to June. gaining momentum in the Northern Hemisphere in coming weeks, the global oilseed industry is gearing up for a record crush volume,” Oil World said. “This estimate is also based on the large oilseed crops shaping up in the Southern Hemisphere, which are still subject to many uncertainties.” Soybean futures fell 7 percent this year on the Chicago Board of Trade as the U.S. Department of Agriculture predicts world harvests will climb to a record 281.7 million tons as production expands in South America and U.S. crops recover from last year’s drought. Rapeseed futures on NYSE Liffe in Paris slid 21 percent amid rising production in Europe, Canada and Ukraine. Oilseed processing in China, the world’s biggest soybean consumer, will rise 1.6 percent from a year earlier to 90.72 million tons, “still significantly trailing the country’s huge crush capacity,” Oil World said. Crushing in Brazil may climb 10 percent from the previous year to 41.08 million tons, while processing in Argentina rises 9.8 percent to 40.2 million tons, Oil World said. Brazil is the world’s top soybean exporter and Argentina ranks third, after the U.S. While South American farmers usually start planting soybeans in the next few weeks, major growing areas of both countries have experienced dry weather recently, Oil World said.

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Corporate India

ooking oil refiners in India are seeking higher tariffs to curb cheaper imports that have eroded margins of companies in the world’s second-largest consumer of the commodity. India must increase the levy to 12.5 percent from 7.5 percent, Atul Chaturvedi, chief executive officer at Adani Wilmar Ltd., said in an interview. Overseas purchases of refined, bleached and deodorized palm olein surged 36 percent to a record in the 10 months to August as a drop in palm prices in Malaysia made it lucrative to import processed products. Refiners including Adani and Ruchi Soya Industries Ltd. (RSI), India’s largest cooking oil processor, say they are operating at 30 percent of capacity as imports flood the market. Rising overseas purchases are hurting Prime Minister Manmohan Singh’s efforts to rein in an unprecedented current account deficit that sent the rupee to a record low last month. At the rate now for capacity utilization “you are as good as closed,” said Chaturvedi. “If the refineries are shut, you are going to have lot of job losses.” Demands for higher levies may increase as international prices slump further. Palm, the world’s most-used cooking oil, may drop to the lowest level since 2009 by January as global supplies of edible oils expand and crude oil weakens, Dorab Mistry, director at Godrej International Ltd., said. Prices Retreat Futures will probably retreat to 2,000 ringgit ($629) a metric ton in Kuala Lumpur if Brazil and Argentina, the largest soybean growers after the U.S., harvest bigger crops and Brent crude drops below $100 a barrel, Mistry told an industry conference in Mumbai. The contract for delivery in December lost 0.7 percent to 2,300 ringgit on the Bursa Malaysia Derivatives on Sept. 20, the lowest price at close for the most-active

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contract since Aug. 14. Futures dropped 2 percent last week. “If you don’t change levies now, you are not going to have any margins,” Paul Bloemendal, commercial director at Ruchi Soya, said in an interview yesterday. “With no margins you are not going to get investments.” India will decide on the import tariff in 10 days, Food Minister K.V. Thomas said on Sept. 20. The government in April 2008 cut the tax to 7.5 percent. India will also have to take into account the effect of higher taxes on inflation, which accelerated to the fastest pace in six months in August. Singh has moved to attract foreign investment and increased gold-import taxes to try and pare a record currentaccount gap to about $70 billion in 20132014. The government has raised the bullion levy three times this year and linked imports to re-exports to moderate consumption. ‘Dire’ Situation The rupee has dropped 12 percent this year. That hasn’t deterred imports of the vegetable oil as at the current rate of duties processed cooking oil in India costs $810 a ton, while crude palm oil can be purchased at $805 a ton increasing the demand for refined products. “The current situation is very dire for the industry,” said Isha Trivedi, a Mumbaibased analyst at PhillipCapital India Pvt. “It doesn’t make sense to import crude oil if the price difference between crude and refined oil is not much. Even

if India raises the refined tax marginally, imports will continue to take place but at a slower pace.” Cooking oils represented 61 percent of Ruchi Soya’s revenue in the year ended March 31. The company’s earnings margin before interest, taxes, depreciation and amortization narrowed to 3.4 percent in the period from 4.04 percent a year earlier.

NEWS

Cooking Oil Refiners Seek Levies as Plants Idle:

Palm Stockpiles Ruchi Soya’s shares have dropped 41 percent this year making it the worst performing stock in the Bloomberg Industries GL Sugar & Grain, Oilseed Competitive Index. The stock rose 1.1 percent to 38.2 rupees at 9:59 a.m. in Mumbai. World palm stockpiles will surge 17 percent to a record 9.2 million tons by the end of 2013-2014 as demand expands 4.5 percent, the least in 12 years, the U.S. Department of Agriculture estimates. India’s imports of vegetable oils may increase 3.8 percent to 11 million tons in the season starting Nov. 1, from 10.6 million tons estimated for this season, said Mistry. Consumption will gain 4.9 percent to 18.1 million tons, he said. “Some of my refiner friends tell me they make money on refining sunflower oil in 12 out of 12 months,” said Godrej’s Mistry. “They make money in refining soybean oil 10 out of 12 months. They make money refining palm oil in 3 out of 12 months.”

NEWS

‘Better post-harvest handling can help save 25 mt food grains’

n estimated 25 million tonnes of foodgrains, accounting for about a tenth of country’s output, could be saved from wastage if farmers are trained to adopt proper post-harvest management practices, a study has revealed. The study “Value Addition in Agricultural Products in India,” carried out by industry body Assocham said if farmers are educated on how to handle post-harvest cleaning and grading, it would help avoid significant spillage and wastage at various points from farm-to-market yard. Farmers sell their produce in market yards without cleaning and grading, which is done by traders. As a result, farmers get a low price, it pointed out.

“There is a need to educate farmer community about traders’ needs in terms of quality, grades and application of permissible preservatives for a longer shelf life,” said Assocham Secretary General D.S. Rawat. Also, the present system of bulk procurement of wheat and rice by the Government in various States is disincentivising the farmers to invest their time in cleaning and grading, as any premium on better quality and grade is not commensurate with the returns they fetch, the study said. Farmers must be informed that higher grades would fetch them better price and they should thus go for better varieties right from the time of sowing. Further, it

pointed out that the Government should also encourage system of farmer graded grain in procurement in synchrony with the trade and export needs. “The government should encourage private sector participation in grain trade with a pro-active export policy given the severe storage and maintenance problems together with mounting subsidy on wheat and rice procurement,” Rawat said. The study said post-harvest infrastructure development is a pre-requisite for value addition in agri-exports. “India can also tap the great potential for exporting 20 mt rice, wheat, maize and other cereals without disturbing the domestic equilibrium,” the study said.

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India’s pulses harvest for the Kharif 2013 season has touched 7 million tonne (as compared to 5.9 million tonne in 2012 and, as per the latest report of Weather Watch Group in Agriculture Ministry, the acreage planted to pulses has touched 10.2 million hectares (as compared to 8.8. million hectares in 2012. Mr. Pravin Dongre, Chairman - India Pulses and Grains Association (IPGA) speaking about the kharif harvest said, “The overall agricultural production scenario is extremely positive. In addition to the excellent monsoon, the Government’s decision to hike the MSP has helped assure remunerative farm-gate prices. The 7 million tons harvest also makes a case for opening up pulses export even if on a limited scale.” The MSP (per quintal) for Tur / Arhar has increased from Rs. 3200 in 2011 to Rs. 4300 in 2013, Urad from Rs. 3300 in 2011 to Rs. 4300 in 2013 and Moong from Rs. 3500 in 2011 to Rs. 4500. Similarly, pulse wise planted area has seen growth from last year as Tur/ Arhar increased from 26.7 lakh hectares (LT) in 2012 to 32.7 lakh hectares, Urad from 16.6 LT to 18.6 LT and Moong from 12.2 LT to 18.2 LT. The southwest monsoon has performed well with 8% excess rainfall as on Sept. 4th. Out of 36 meteorological subdivisions, as many as 30 have received excess to normal rainfall. In particular, agriculturally important States of UP, MP, PN, Haryana, Maharashtra, Gujarat, Andhra Pradesh and Karnataka have enjoyed more than normal rainfall. According to India Meteorological Department, rainfall is expected to be normal for the rest of the season ending September. India Pulses and Grains Association (IPGA), the country’s apex body of pulses and grains industry & trade, is hosting THE PULSES CONCLAVE 2014, the second edition of their conclave for the global pulses industry and trade from February 19th to 21st, 2014 at the Grand Hyatt in Goa. The Pulses Conclave 2014, supported by the Government of India, Ministry of Consumer Affairs, Food and Public Distribution ( Department of Consumer Affairs).

NEWS

Kharif 2013 pulses harvest touches 7 million tonne

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10 ways til or sesame seeds add more to your life than just flavour! Sesame or til has more health benefits than most other seeds. It is one of the most common ingredients used in kitchens all around the world including India. While we do relish a tasty til ka ladoo, did you know that our ancestors were right on the money when they made sure to include til and its derivatives in almost all aspects of life? Sesame has been found to have a number of benefits apart from just adding colour, flavour and texture to your food.

Here are the top ten benefits of the tiny seed: Lowers bad cholesterol Sesame seeds are rich in oleic acid, a potent mono-unsaturated fatty acid which lowers the ‘bad cholesterol’ or LDL cholesterol in the blood and increases the level of ‘good cholesterol’ or HDL in the body. Thereby helping you maintain a healthy lipid profile. All this in turn protects you from heart disease, stroke and atherosclerosis. (Read: Herbal remedies for high cholestrol) Protects you from cancer Research has found that sesame has very potent anti-cancer properties. It has been found to be effective against a number of cancers like lung cancer, colon cancer, leukaemia, prostate cancer, breast cancer and pancreatic cancer. There have been a number of papers published on its efficacy in stopping the proliferation of blood vessels supplying the tumour, in changing the way white blood cells (or your immune system cells) are attracted to chemo attractants (substances that are attracted to cancer causing agents), in reducing the rate of infiltration of the cancer etc. All these benefits are brought about by a potent antioxidant known as sesamin. Sesamin stops and slows down the regeneration of cancer cells and stops the production of chemicals that are linked to their survival. [1]

Helps reduce anxiety Rich in niacin, an essential vitamin, and sesame seeds are known to reduce anxiety. With almost 28% of the total necessary daily intake of niacin present in 100 grams of the seeds, it helps in improving the GABA (gamma-Aminobutyric acid) activity inside the brain, thereby reducing anxiety and neurosis. Keeps your heart muscles healthy Sesame seeds are extremely rich in essential minerals like calcium, iron, magnesium, zinc and selenium. These minerals help to regulate cardiac muscle activity making them stronger and beat at regular intervals.(Read: Drink green tea for weight loss and to keep heart disease at bay!) Helps maintain healthy bones in children Sesame seeds are rich in dietary proteins and very good quality of amino acids that are essential for the growth of bones in children. Just 100 g of the seed gives approximately eighteen grams of proteins. This combination is great for the uptake and use of proteins and amino acids by the child’s body, helping them grow stronger and better. Helps keep pregnant mothers and growing foetuses healthy Packed with folic acid, sesame seeds are great for pregnant mothers. Since

folic acid is essential in the proper DNA synthesis in growing foetuses and improves the all round health of a pregnant mother, sesame seeds and their derivatives like sesame oil lends greatly to the health of an expectant mother. (Why pregnant mothers need folic acid in their diet) Makes a great massage oil for babies While the benefits of massaging a baby after birth is still debatable, a number of Indian cultures still practice it. According to a study, sesame oil or til oil massage showed to improve the bone strength and their growth in babies. It also showed that the child was able to sleep better after a massage with the oil. According to Ayurveda, sesame oil is said to have a relaxing effect on a child and is cooling in nature. Its innate components also add to the healthy growth of the baby. Read more about massaging your baby. Beats osteoporosis Due to the zinc and calcium present in sesame seeds, they are great in preventing osteoporosis. The combination of essential minerals and vitamins help in the proper assimilation of calcium by the body, and zinc helps in preventing excessive leeching of calcium into the body. Improves the efficacy of certain diabetes drugs A study published by the Department of Biothechnology at the Vinayaka Missions University, Tamil Nadu, found that sesame helps to reduce blood pressure and has an anti glycaemic effect with up to 36% of reduction of the glucose levels in the blood when combined with the widely used antidiabetic drug glibenclamide. [2] So for a type 2 diabetic, including sesame seeds is a great idea to fight the disease naturally. Helps recovery after a stroke Studies on animal models found that sesame seeds are great in restoring the blood flow to parts of the brain that have lost circulation due to a stroke. This study is based on the fact that the high amounts of magnesium and zinc present in the seed help in strengthening one’s blood circulation and neural impulses.

Oil & Food Journal Vol. 08, Issue 12, October 2013

NEWS

India may set record wheat output this year on good rain: Government

The economics of hybrid rice in India

he government said the country’s wheat production this year may surpass the previous record of 94.88 million tonnes after good rains took water reservoir levels to a 10-year high. India, the world’s second-biggest wheat grower, had produced a record 94.88 million tonnes of wheat in the 2011-12 crop year (July-June), buoyed by a good monsoon. Poor rains in 2012-13 lowered the output to 92.46 million tonnes. “We are quite confident that we will easily achieve the wheat production target of 92.5 million tonnes this year as the water level in reservoirs is the highest in the last 10 years. If the temperature remains good at various stages of crop growth, we could even cross the previous record,” Agriculture Commissioner J S Sandhu told PTI in an interview. Sandhu said water in the country’s reservoirs has risen to 130 billion cubic meters now, as against 155 billion cubic meters of usable storage capacity. While the reservoir position is very good in the north, south and west, there hasn’t been much improvement in central India due to less rainfall, he added. As soil moisture is good, sowing of rainfed wheat will begin next month, while planting in irrigated areas will start in the first week of November, he added. Sowing of wheat, the main rabi (winter) crop, normally starts in October and harvesting takes place in March-April. Sandhu said farmers will be encouraged to use two seed varieties (HB2967 and HH1105) that are resistant to yellow rust fungal disease. Availability of the two seed varieties is sufficient, he added. On other winter crops, Sandhu said, “We aim to achieve a total foodgrain production of 128.5 million tonnes in the rabi season of this year. It is an easily achievable target.” The government has set a rabi production target of 12 million tonnes for pulses, 14 million tonnes for rice, 4.4 million tonnes for maize and 1.5 million tonnes for barley, he added.

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With the Lok Sabha recently passing the National Food Security Bill (NFSB) that promises subsidised foodgrains to 75% of the rural population and 50% of the urban population, India is under huge pressure to significantly increase its cereal grains production. One such method of doing so is through the accelerated adoption of hybrid technologies, including hybrid rice. Hybrid rice has the potential to significantly increase rice yields, often to the order of 15-30% relative to local or even modern high yielding varieties. These higher yields allow for more intensive rice production, thus allowing farmers to either produce more output on a particular plot of land or to diversify into higher-value crops like vegetables and other horticulture crops. Both strategies potentially result in higher farm incomes and more abundant food supplies that can stabilise prices for both urban and rural food-insecure households. The government of India has set an ambitious target to increase the area under hybrids to 25% of total rice area by 2015. Despite these promising results, the pace of hybrid rice adoption in India has been slow, particularly in comparison with experiences in China. At present, over half of all rice area in China is under hybrid rice, resulting in improved food security for an estimated 60 million people per year. The adoption of hybrids has been much slower in India, with only about 7% of rice area under hybrids. The low rate of adoption is largely due to poor grain quality and the resulting low market price, difficulties in achieving high rates of heterosis in tropical hybrids, high hybrid seed cost, limited availability of quality seeds, and hybrids not suited to ultimate consumers’ tastes and preferences. These are just a few of the main challenges facing the expansion of hybrid rice in India. Most of the India’s hybrid rice is currently grown in the eastern and northern parts of the country, where yields have historically been low and where the yield gains attributable to hybrids are most apparent; currently 80% of India’s hybrid rice is limited to areas such as Jharkhand, Bihar, Uttar Pradesh and Uttarakhand.

NEWS

Amethi to have first mega food park of UP

ongress vice president Rahul Gandhi’s constituency - Amethi - will have the first mega food park of Uttar Pradesh. The park, whose foundation stone was laid at Jagdishpur, will have 35 industrial units having capacity to give direct and indirect employment to about 30,000 persons.

Besides creating a market for raw material, the park is expected to act as a model for the entire region, leading to fast growth of food processing in the state. It will have modern infrastructure and world-class facilities for food processing industries. After laying the foundation stone of the Mega Food Park, the Union minister of state for agriculture and food processing Charan Das Mahant said that the move will help small and medium sized entrepreneurs, self-help groups and farmer-groups to set up food processing industries. “This will create a market for raw material and in turn provide better prices to farmers for their produce”, he said while re-affirming Centre’s support to the

food processing sector in UP. Mahant said, “Though the state produces a variety of food-grains, fruits and vegetables, the lack of infrastructural facilities deterred entrepreneurs from establishing food processing industries. The Park will fill up this void and act as a model for the entire region”. Known as ‘Shaktiman Mega Food Park’, it will be set up under the ‘Scheme of Mega Food Parks’ which aims at facilitating the establishment of a strong food processing infrastructure backed by an efficient supply chain. This includes establishment of collection centers, primary processing centers, a central processing unit and cold chain infrastructure. The processing centers will have infrastructure required for processing, packaging, environmental protection systems, quality control labs and trade facilitation. These facilities will be shared by all industrial units in the food park. The park, spread over 72 acres, will offer essential services like dry warehousing, cold storage, a farmer friendly bank and fully equipped education and business centers.

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ndia’s share in Saudi rice import is 63 percent with the basmati rice much in-demand, said the Indian delegation from the Ministry of Commerce and Industry, which is in Riyadh to participate in the ongoing international agriculture and agro-industry trade show, in which India is the largest participating country with 40 companies. “Sixty three percent of rice import to Saudi Arabia comes from India with the Indian basmati much in demand,” said the Indian official. The government is keen to increase export of basmati rice by providing assistance to Indian exporters with mounting trade delegations abroad and participation in international fairs, the official stated. India, the largest supplier of rice to the Kingdom, is also getting more orders as Indian companies have renewed their efforts to fulfill the ever increasing demand from the Gulf country, which is one of the world’s largest rice importers. Rice is a major staple food of the people in the Kingdom with an average annual per capita consumption of about 43 kg. The country is dependent on rice imports to meet its growing requirements. According to statistics provided by the commerce and Industry ministry of India, the country’s basmati rice export to the Kingdom till April-May this year was 138,704 million tons valued at $171.15 million, whereas the export of non-basmati rice during the same period was 22629.83 tons with its value to the tune of $13.58 million. Rehan Zaheer, a top official from the Indian ministry of food processing industry urged Saudi businessman and agriculture companies to invest in India’s food processing sector, especially in rice and meat processing. He, however, clarified that India does not allow direct investment in farmlands. India recently relaxed foreign direct

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investment (FDI) norms in a number of key sectors, including food processing and agro-based industries as the hike in caps with liberalizing routes will stimulate FDI inflows into the country. Ajit Kumar, a high official from the Indian ministry of commerce and industry said that Saudi Arabia was an important market for Indian rice, especially basmati, and one of the largest market in GCC countries in terms of productivity. “We look forward to the Saudi market for our services in value added products,” he said. “There is a huge opportunity to look at food processing industry and we

are looking forward to the growing demand of the industry,” he added. He also disclosed that a Saudi delegation including some senior officials of the Saudi Food and Drug Authority will visit India this year to check the conditions of abattoir in order to grant licenses for meat processing in the Kingdom’s interest. Apart from rice, major Indian products being exported to Saudi Arabia include buffalo, sheep and goat meat, as well as fresh and preserved fruits and vegetables, confectionery and other processed foods that will be showcased at the Indian pavilion in the agro-industry trade show. The four-day agro-food exhibition, which endedat Riyadh International Convention Center, features a dedicated Indian pavilion comprising 40 companies. The pavilion will showcase export products from India’s major companies,

which include APEDA represented by its General Manager S.S. Nair, Nutrilite agro products Pvt Ltd., Indian food tech Ltd. and Kabir foods apart from the ministries of food processing and commerce and industry. India Trade Promotion Organization (ITPO), the premier trade promotion agency of the government of India, has organized India’s participation in the India pavilion. The visitors to the exhibition can visit the India pavilion to savor biryani, the Indian cuisine, made of basmati rice, and other processed foods from India. They will also be benefited from the personal presence of selected and leading exporters of agro-products including rice, chutneys and pickles, ready-to-eat snacks, processed foods and other Indian delicacies. Senior officials from ITPO, Agricultural and Processed Food Products Export Development Authority, Ministry of Food Processing Industry, Ministry of Commerce and Industry, and the exhibitors are also available to explain the characteristics of Indian food in detail and hold extended discussions on matters related to the subject, including investment in Agro-food sector in India. According to the Indian embassy, Saudi Arabia is the fourth largest trading partner of India and their bilateral trade crossed $43 billion in 2012-2013. India’s huge agro resource base and host of natural advantages make it a chosen destination for sourcing a variety of agricultural products. The embassy figures suggest that the total Indian agricultural exports were $221 billion during 2012-2013, of which Saudi Arabia accounted for $120 billion during this period. The 32nd edition of this bi-annual event is the Kingdom’s leading food industry event providing an opportunity to introduce new products, equipment, and technologies. Attended by the region’s food trade and business professionals, it is considered a unique platform to expand existing exports or establish new ones, at the center of the region’s fastest growing market.

NEWS

India’s Saudi rice import share reaches 63 percent

NEWS

Japan Mrs. Bector’s Food to looking for sell its biscuit business rice bran oil from India, joint ventures

apanese rice bran oil manufacturers have shown keen interest in the import of rice bran oil from India. Some of the Japanese manufacturers are also looking for joint venture with Indian producers of rice bran oil for manufacturing value added products. Indian rice bran oil is known as ‘health oil’ in India and ‘heart oil’ in Japan. This was the outcome of the meeting between a Seven-Member official Japanese delegation from Wakayama Prefectural Government and The Solvent Extractors’ Association of India (SEA). The Indian team at the meeting consisted of B.V. Mehta, executive director of SEA and some of the leading rice bran oil manufacturers/ marketers. While the Japanese delegation included Daisuke Tsutsumi, director for Overseas Promotion, Wakayama Perfectural Government and Toshimichi Tsuno leading rice bran oil and value added products manufacturer in Japan.

rs. Bector’s Food, a leading North Indian company engaged in the biscuits, bakery and condiments business, is looking to sell a controlling stake in the biscuit business and in talks with PE investors. According to people in the know, Motilal Oswal Private Equity, which holds about 23 per cent stake, will sell the business along with the stake owned by other promoters in Mrs. Bector’s Food. The firm has appointed Avendus Capital for advising the stake sale. According to people in the know, the talks with PEs are at preliminary stages as the de-merger of business was completed recently. The financial details of the deal are not known. Mrs. Bector’s Food, which sells products under brand of Cremica, is the supplier of buns, liquid condiments, batter and breading to McDonald’s, Hindustan Unilever, Big Bazaar, Spencer’s, Taj Group, ITC, Jet Airways, Air India, Barista, Café Coffee Day, Pizza Hut, Domino’s and Papa John’s. The biscuit business contributes Rs 450500 crore to the annual revenue of Rs 600 crore of the company. Cremica has products such as breads, sauces, bread spreads, ready-to-eat curries and syrups. Recently, the business was divided equally among Mrs. Bector’s Food’s founder Rajni Bector’s three sons – Ajay, Anoop and Akshay Bector. While 25 per cent stake of the condiments business was kept with Akshay, the biscuit business was divided among Anoop and Ajay Bector along with Motilal Oswal PE.

In 2010, Motilal Oswal PE bought the stake in Mrs. Bector’s Food from Goldman Sachs for about Rs 70 crore. Goldman Sachs had invested in Cremica in 2006. When contacted, Akshay refused to talk about the sale process. Avendus Capital did not respond to Business Standard’s queries. With projects in power and infrastructure stuck and no investment opportunities seen across sectors, PE investors are keen to ride the consumption story in India, mostly in areas such as food and beverages, restaurants and retail. According to a recent report by Technopak and National Restaurant Association of India, the $48-billion food services market in India is projected to grow to $78 billion by 2018. Saloni Nangia, president at retail consultancy Technopak, said: “There are many factors driving the growth of the market. Eating out and socialising is increasingly becoming a part of the Indian consumer’s lifestyle.” He also pointed to the rise in the number of women work force as well as their increasing earning and spending power. The sector offers opportunities both at the front end – at the restaurant and at the back end – including food processing, commissaries and logistics, giving PE firms attractive investment options in multiple areas of the business, she added. Recently, Manpasand Beverages, the Vadodara-based juice manufacturing and marketing firm, was engaged in discussion with PE firms to raise Rs 100-150 crore.

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lowdown is piling on the pressure on biscuits and they are crumbling. The largest category in the branded food segment, biscuits are believed to be a market worth up to `17,000 crore. But growth rate has slowed to one-third in the past one year due to a variety of reasons. Amnish Aggarwal and Gaurav Jogani of Prabhudas Lilladher wrote in a report that taking “the growth index for the biscuit category as a whole as 100 for the first quarter last year, it has slipped down to 35 in the first quarter of this financial year”. Volume growth had slowed to single digits since the second quarter of last fiscal; but, that is believed to have slipped to sub-5% in the past couple of quarters. That growth is down is undisputed. Pravin Kulkarni, general manager-marketing, Parle, the market leader, says the industry has not been growing at a robust pace. “The growth rate has drastically come down from, say, 12-15% to about 5% in the last one year.” Kulkarni adds that the segment of popular glucose biscuits has been the worst hit. “If its contribution was 60% about two years back, it has now slipped to only 30%.” So much so that even diversified conglomerate ITC, which makes the Sunfeast brand of glucose biscuits, had accepted after its first-quarter results that it had been witnessing slowdown in this segment.

Oil & Food Journal Vol. 08, Issue 12, October 2013

Abneesh Roy of Edelweiss Securities says biscuits are taking a huge hit not just because of the across-the-board slowdown but also because it is one of the well-penetrated segments. Meaning, further growth in challenging times like these is tougher. “After soaps and detergents, biscuits are one of the most well-distributed and well-penetrated segments. Acquiring new customers during a slowdown becomes more difficult for categories that are well-entrenched and this slows down the growth rate,” said Roy. There are more reasons. To a certain section of consumers, biscuits qualify as discretionary expenditure. This is further dragging down their sales growth, in tune with the general slowdown in all forms of discretionary expenditure, from chocolates, skincare, consumer durables to autos (read the auto sales slowdown story below). Sluggish growth has also slowed the rate of premiumisation in biscuits. Then, there are the new standard packaging norms introduced last November that have hit the volume growth, says an analyst with a foreign brokerage. “For instance, earlier, biscuitmakers were selling pack sizes of 60 gm or 65 gm, but as per the new rule, they can sell it only in pack sizes of 25, 50, 75, 100 gm and so on. So, the pack sizes had to be reduced significantly in several cases, and it was not feasible to pass on the price hikes,” she said. Going ahead, the premium biscuits segment is expected to do better, but recovery in the overall segment is expected to take time.

Baking fresh business pan India

NEWS

For biscuit makers, growth drops to a third in just a year as slowdown bites

he cake segment occupies nearly 20% market following the bread category, which is approximately 78% of the baked products market. Bakesmiths & Company one of the most sought after premium confectionery and bakery retail brands in Kolkata is poised to further its presence across the country. To make the brand a household name, an MOU with Franchise India has been signed. Bakesmiths & Company has two (2) upscale outlets in Kolkata, coupled with strategic tie-ups with world renowned MNC’s to provide delectable bakes. Through franchising, 8-10 outlets are planned to be established within a year. Mr. Yasir Ahmed Hamraz, FounderDirector, Bakesmiths & Company said “Bakesmiths & Company is poised to regenerate the confectionery and bakery landscape of India. With the franchise model, we seek huge success in coming years.” Ms .Sonya Chowdhary, Director, Franchise India Brands stated “We are delighted to be associated with a brand that has reached a dominant position, in a short span, in the confectionery and bakery industry. Their pan India expansion strategy will certainly be immensely successful.” Bakery products are consumed by the masses due to their low price and high nutrient value. The bakery products have gained popularity with the masses on account of rapid economic growth and a change in eating habits.

NEWS

McDonald’s to roll out McCafés in India

merican burger chain McDonald’s is bringing its cafe brand to India at a time when the Seattle-based java king Starbucks has been expanding fiercely in a booming Indian cafe market. The first few McCafe counters will be rolled out in Mumbai followed by other metros such as Bangalore, Pune and Chennai over the next couple of years, said a McDonald’s India official. Internationally, McCafes are housed within McDonald’s outlets but have a separate look and feel, the same format will be followed here in India, said Amit Jatia, vice-chairman, Westlife Development, whose subsidiary Hardcastle Restaurants holds the development licence for McDonald’s Corp in south and west of the country. The organized Indian cafe market is pegged at around $300 million currently and is expected to double over the next five years, as estimated by retail consultancy firm Technopack. Globally, McCafes contribute approximately 15% of the burger chain’s revenues. However, these numbers could not be independently confirmed as the company does not give out category-wise sales numbers. McDonald’s has been pushing McCafes globally as beverages offer better margins without additional real estate costs. McCafes will occupy around 500 sq feet space within a typical 4,000 sq ft McDonald’s store here in India, Jatia said. Over the next three-five years as

many as 100150 McDonald’s stores will have the McCafe brand inside its premises, he said. The strategy of having McCafes within existing McDonald’s outlets gives a leg up to the burger chain over other rival coffee chains such as Starbucks and domestic players like Cafe Coffee Day. The starting price for a cup of coffee at McCafe would be Rs 90, Jatia said, adding that a whole host of other beverages, including juices, iced tea and even chai (tea), will be on offer going forward. McDonald’s in the south and west now boasts of almost all of the burger chain’s global offerings including breakfast, delivery, dessert, takeaway and now McCafes. Recently, Arisaig Partners, which bets on consumer facing businesses across emerging markets, picked up a 3.5% stake in Westlife Development for Rs 180 crore, valuing the company at a tad over Rs 5,000 crore. McDonald’s existing partnership with Coca-Cola’s Georgia may cease to exist, Jatia said as the company aims to push its own cafe brand. Hardcastle operates as many as 174 McDonald’s outlets and is looking to double the count over the next three years. In 2011, Hardcastle acquired the 50% stake held by the American parent, giving it full financial control to speed up expansion. While Hardcastle has been growing 25% annually, McDonald’s partner in north and east, Connaught Plaza Restaurants led by Vikram Bakshi has been dragged to the Company Law Board. McDonald’s Corp has said that it decided not to extend Bakshi’s term as the managing director because he had not been devoting enough time to the business.

India becomes leading rice supplier to Singapore

ndia has overtaken Thailand as Singapore’s biggest rice supplier for the first time, exporting 92,865 tonnes or 32.9% of the total rice supply to the island nation in the first eight months of 2013. Thailand shipped 85,816 tonnes or 30.4 per cent during the JanuaryAugust period of this year to Singapore. Vietnam supplied 77,459 tonnes or 27.4 per cent of rice supply during the period. Indian rice exports to Singapore had risen to 29.5% last year from 15.3% in 2009. Thailand has been the leading rice supplier to Singapore since 1998, accounting for over half of the total rice consumption of the city state between 1998 and 2011. But its market share fell to 35.3% last year while supplies from India and other countries have increased. “Importers (are) taking advantage of the lower prices of Indian rice compared to Thai rice,” the daily quoted a trade and industry ministry spokesman. The Singapore General Rice Importers Association said the shift in sourcing rice started when global rice prices began surging in 2008. Other rice producing countries have also curbed exports to ensure sufficient domestic supplies while Thai crops have been hit by massive floods in the past. Other rice suppliers to Singapore include Myanmar (2.5%), Pakistan (2.4%), the United States (2.2%), Cambodia (0.9%) and Australia (0.6%) as well as others (0.7%).

Oil & Food Journal Vol. 08, Issue 12, October 2013