Special focus on
Agriculture in Budget 2015-16
ISSUE: II
NEW DELHI, APRIL 2015
PRICE: ₹ 20
ISSN 2395 - 2954
Agriculture picture needs to be painted better
>> 5
’Preserve prime farm land for food security’ Acres of conflict
Dr Devendra Sharma & P. Chengal Reddy, Chief Advisor, CIFA debate on the row over land acquisition bill in the Big Fight. >> 8-9
Sea food industry India’s untapped potential >> 3
Budget neglects food processing sector >> 7
Dr M S Swaminathan, the name needs no introduction. A pioneer of the ‘Green Revolution’, the agriculture scientist is still most vocal about issues concerning farmers of the country. Here, in a candid conversation with Sharat Kumar Sharma, he shares his views on different issues.
In the last two decades, howimproved water use efficiency do you see the growth of through a More a Crop per Drop agriculture in India? approach. He has also been advoDuring the last two decades, cating an intensified lab to land our agriculture is progressing movement. I would suggest the steadily with a result that implementation of the Swamiwe are now in a position to nathan Committee. According to it, confer on a majority of our tthe government believes that population, the right to food raising minimum support price with home grown food. would increase the cost of food, the Earlier the world saw us as fact was that prosperity of the famished people with empty farmers will help nearly 60 per cent bowls. Farmers have given of the population that lives of India dignity. But we will agriculture. Moreover, small have to protect both farmers have limited market suragriculture and the farmer plus and the concept of inclusive if we are to feed 150 crore growth should also include farmers. people by 2030. If cost plus 50 per cent is not Did Union Budget 2015-16 feasible right now as MSP then we can probably start at 30 reflects changes in approach per cent and ramp it in handling of agriculture up gradually. But from previous UPA just as there are regime? regular pay The union budget has no commissions special reference to for the service agriculture except the issue class, the of the soil health crop on farmers also the occasion of the need better International Year of the remuneration Soil (2015). Prime for their Minister has produce. also been emphasising the need for
What should comprise in next generation of Green Revolution? The next green revolution should be an evergreen revolution leading to improvement of productivity in perpetuity without associated ecological harm. Now the country needs “evergreen revolution” through integration of ecological principles. This is the year of soil and next year is of pulses, so every panchayat should take to soil monitoring and amelioration to improve the yield.
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As there are regular pay commissions for the service class, the farmers also need better remuneration for their produce.
What is your take on current land bill. Is it anti-farmer? The Current Land Bill enlarges the scope for land acquisition. This has to be done with great care keeping in view that we will have to grow food for a population of nearly 150 crore by 2030. A clear distinction should be made between Turn to Page 2
April, 2015
Editor-in-Chief Shakti Sharan Singh Managing Editor Sharat K Bhardwaj Associate Editors Shipra Pandey Sumedha Editorial Board Dr Pawan Singh Dr Sudhir Sahi Raghu Raghvendra Rao Ajay Kr Singh Sidhartha Tiwari Amitabh Ash Kundan Kumar Amit Kr Singh Ravi Ranjan Gurariyar Shiivesh Garg Design By Vineet Singh Advertising Sales Jagdish Pandey Copyright@FlairBooks Edited, Owned & Published By Shakti Sharan Singh Flair Books A/14, First Floor, Sector-3, Noida, UP-201301 India Mob: +91 9899978110 +91 9818309210 Printed By Arkay Associates, E-03, Sector-3, Noida, UP-201310
Farmers’ plight: ’Perform’ or perish Prashant Singh Almost every “serious” discussion about agricultural issues and condition of farmers in India primarily revolves around (1) budgetary allocation of funds for agriculture and rural sector (2) issues related to fertilizers and some other “subsidies” to farmers and (3) Credit facilities by banks to farmers. However, the real problem is inadequate prices for their produces. For instance, From 1970 to 2014 the price of wheat and rice has been increased by just 18 times. Moreover the cost of production of agricultural produces in 1970 was approximately 15% of the output value but in 2014 it is approximately 55% to 60% of the output value. Now compare this increase in cost of other goods or with the increase in the salaries of the salaried class since 1970:-If one glance through the table below than one can very well assess the situation. 1 Average Increase in MSP of agricultural produces (before accounting for the increase in cost of production of agricultural produces) 18 times 2 Average Increase in MSP of agricultural produces (after accounting for the increase in cost of production of agricultural produces) 9.5 times 3 Average salary of central government employee increased by 110 to 120 times* 4 Average salary of state government employee increased by 130 to 140 times* 5 Average salary of primary/middle level school teachers 280 to 320 times* 6 Average salary of collage/university teachers 150 to 170 times* 7 Average mid to high level corporate sector salary 350 to 1000 times* 8 Average medical treatment cost (the lower figure) increased by 200 to 300 times# 9 Petrol and Diesel prices increased by 150 times 10 Average brick price increased by 240 times 11 Average cement price increased by 45 times
* This only includes the salary component and doesn’t include the “other benefits” like medical, TA, HRA, and other non-salary benefits. # This includes only the treatment of common diseases. Big and critical diseases are not included into this. Going by the above table it is clear that if in 1970 in order to purchase a certain basket of commodity (i.e. education, health, cloths, foot-wear, construction of house, entertainment etc.) if a farmer had to sell, say, 100 kg. of wheat or rice then in order to purchase the same basket of commodity in 2014, he had to sell at least 800 kg to 1200 kg. of wheat or rice. In the words since 1970 the relative purchasing power of the farmers has declined 8 to 12 times . That is shocking enough for anyone even without accounting for the increase in agricultural production cost and if one is to take even that into account the relative decline in purchasing power of a farmer from 1970 to 2014 becomes 18 to 27 times (at least—this must be emphasized upon once again)!!This is not merely shocking rather it’s simply maddening. Right since 1950, our farmers are being strangulated, slowly & steadily; little by little and now the situation has become so unbearable for them that they are committing suicide. Why our policy makers and “media-commentators never talk about this? On first thoughts it seems that their silence on this issue is the part of the conspiracy of the establishment against poor farmers. It is certainly the part of a very long conspiracy of the modern banking-industrial establishment against the farmers. but as far as the silence of our so-called intellectuals over the issue is not due to any conspiracy. turn to pg. 14
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Preserve prime farm land... government, public and private use. When there was a problem with Pakistan and I was in government, I had supported acquisition. But if you don’t preserve prime farm land the food security would suffer. Do you think that our crop production estimates are accurate and scientific? If not, than how it can be improved? The crop production estimates carried out by different agricultural universities and the economic and statistics directory, Ministry of Agriculture are as scientific and accurate as possible. For food security, what measures are required to be addressed immediately? For food security, we should immediately implement the National Food Security Act 2013. It is the need of the hour. Please comment on future and importance of GM crops in India? An Agricultural Biotechnology Committee which I chaired in 2003 and which submitted its report early in 2004 had recommended both a Parliament approved Regulatory Agency as well as the necessary infrastructure for conducting All India Coordinated Trials with GMOs. Such a special All India Coordinated Trial to be organised by the ICAR should have as its Coordinator an eminent Biosafety Expert. The necessary precautions, such as the needed isolation as well as demonstration of the importance of refuge, should be undertaken under this coordinated project. Ten years have passed since this recommendation was made and we should lose no further time in implementing it. We should place in position a trial and safety assessment system which answers the concerns of anti-GMO experts and environmental organisations.The present moratorium on field trials with recombinant DNA material is serving as a serious handicap as well as a disincentive in harnessing the benefits of the wide array of transgenic material currently available with various public and private sector research organisations and universities.
April, 2015
Sea food industry: India’s untapped potential Shubhav Raj The seafood industry is more of a global business than any other animal protein sector but trade flows are in constant flux, according to a new seafood trade map and report compiled by Rabobank International. With an estimated traded value of USD 140 billion (EUR 132 billion) in 2014, exports have nearly doubled in value in the last five years, said Rabobank. This growth comes from the rise of aquaculture, but can also be explained by processing in regions with lower labor costs and rising prices on a per unit level. In the coming years, China is expected to maintain its leading role as a seafood exporter, but other growing export-oriented aquaculture countries such as Norway, India, Vietnam, Indonesia and Ecuador are also positioned to further boost exports. “The industry is very diverse and offers a wide range of products, with each having its own export and import markets.
Mapping these trade flow patterns illustrates the international nature of the industry and the importance of trade,” stated the report. Globally, the EU remains the largest seafood buyer by value, importing seafood worth over USD 26 billion (EUR 24.5 billion) in 2013, which is almost USD 10 billion (EUR 9.4 billion) higher than in 2005. Rabobank said this value growth is based exclusively on the increasing value per unit of the imported seafood, as there has been virtually no growth in the EU’s import volumes for close to a decade. A similar development is seen in the United States – the second-largest seafood importer – where imports of USD 19 billion (EUR 17.9 billion) show strong value growth, but volume growth is marginal. Nevertheless, both of these markets have performed substantially better than Japan. In the early 2000s, Japan was the leading seafood
importer, but a declining population – combined with falling per capita seafood consumption and the depreciating yen, which has made imports more expensive – has resulted in a long-term contraction in imports. Changing China In volume terms, China has surpassed all import regions other than the EU, although its imports are in part made up of relatively low-value
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commodities destined for processing and re-export, said Rabobank. In terms of exports, China is the clear world leader, achieving a total value of USD 20 million (EUR 18.9 billion) in 2013, which was twice as much as Norway, the No. 2 global exporter. While Norwegian exports are primarily destined for the EU, the Chinese seafood industry exports a great variety of products to nearly every country in the world. Between 2000 and 2013, Chinese exports grew by a compound annual growth rate (CAGR) of 15 percent in value terms. In the same period, imports expanded slower than exports and consequently expanded China’s net trade position. “Aquaculture, a large reprocessing industry and increasingly affluent domestic consumers are the key reasons why China is by far the biggest player on the world seafood stage. China remains the leading exporter in the seafood industry and is also a key importer of several products, such as fishmeal to feed its large fish farming industry,” said the report. However, Rabobank expects that it is only a matter of time before the Chinese net export position begins to reverse. “The drivers are all in place: a growing middle class – demanding higher-value seafood from distant regions (e.g. salmon from Norway) – and rising labor and land costs that erode the competiveness of exports. In addition, Chinese producers are increasingly aware that the domestic market for products such as shrimp and tilapia offers better prices than the foreign market. “We expect China to increasingly import high-end seafood products in the future, while its seafood production industry will focus more on domestic demand, gradually stabilizing its enormous positive net trade position,” it said.
April, 2015
Agri Leadership Summit 2015, Gurgaon This time Shyokand has produced 5ft 3 inches long bottle gourd, which he claims to be the longest ever grown in India, and was displayed at the Agri Leadership Summit 2015 Known popularly as Calabash around the world, bottle gourd is the most commonly used vegetable in various Indian culinary dishes. It is also used as one of the herbs in Ayurveda. Shyokand claims that he has seeds of bottle gourd that have the capacity to grow as long as five feet. The Agri Leadership Summit 2015, which began on March 13 and ended on March 16, was organised organised by the Haryana Government with an aim to create a direct marketing chain of agri products from the farmer to the customer for the benefit of both.
After having his name entered fifteen times in the Limca Book of Records for his contribution to the agriculture sector, Shyokand now eyes registering his name in the Guinness Book of World Record. “I have a record enlisted on page no. 252 of Limca Book of Records 1998. I would be taking a visit to London this year for Guinness world record,’’ says Shyokand. He also holds records in producing other vegetables including garlic weighing 700 gm, 19-inch long bitter gourd, 19-inch long calocassia, turnip of 5 kg, 3 kg yam and16-inch long French bean. “Before sowing the seeds, I put the mixture of neem leaves, mango leaves and red chillies as compost and manure in the fields. After sowing the seeds, I irrigate at regular intervals,” explains Shyokand. He says that bottle gourd can also be grown at home.“You can grow it in a jute bag or pot in the house. Irrigate it at regular intervals for a month. In the late spring, transfer the plant to a prepared bed as the plant spread to long distances,’’ he adds. Shyokand has been honoured with the Dr Ramdhan Singh award by the Haryana Government and with the Krishi Rattan award by the PHD Chamber of Chaudhary Charan Singh Agricultural Haryana University. “In 2000, I was sent to Israel by then Haryana CM Chautala. There I worked with agricultural scientists specialised in organic farming. They were growing vegetables in 15 days. I did that in 12 days. One of the lady scientists was even ready to sponsor my citizenship,” asserts Shyokand. Shyokand says he had to drop out of school after sixth standard due to financial problem. He is glad that one of his sons has carried forward his dream to earn a doctorate degree in agriculture. Both his sons are now deployed as Grade A officers with central government.
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Events ARGUS FMB ASIA FERTILIZER 2015 Argus FMB Asia Fertilizer 2015 will be held on 15-17 April in Beijing, China. The conference will be held at a new venue called, The Westin Beijing Chaoyang. The event offers you the chance to network over 3 days with the industry’s most senior executives. It is your opportunity to meet the MARKET - from leading producers to major buyers and distributors, and all categories of essential service providers. Over 400 attendees from 235 companies and over 50 countries registered to attend the conference.
ASIA CHOCO COCOA CONGRESS 2015 Date: 21-Apr-15 to 23-Apr-15 Location: HILTON SINGAPORE / Singapore / Singapore Category: Agriculture, Farming & Forestry Conferences & Trade Fairs Asia Choco Cocoa Congress 2015 (abbreviated as AC3) will bring together international and Asia’s cocoa growers, traders, millers processors, chocolate manufacturers, investors, technology bests and other crucial stakeholders to explore burgeoning business opportunities in the fastest growing confectionary region in the world and address global supply chain challenges, procurement strategies and INVESTMENT OPPORTUNITIES at a time of price volatility and consumption growth. Be part of the BEST partnering and business development opportunity with Asia’s cocoa and chocolate industries in the center of Southeast Asia in 21 – 23 April 2015
The 7th Guangzhou Int'l Garden Machinery Fair (GMF 2015) In GMF 2014, about 100 established companies were gathered to exhibit and showcase their latest products at the show, such as Stihl, Husqvarna AB, Greenman, Bronte, O-JENAS, Global Tools, Jiling Dongyuan Machinery Manufacture Co., Ltd., Ma’anshan Green Friend Machine Manufacturing Co., Ltd., Lu shyong Machinery (Zhejiang) Co., Ltd., and so forth. They were all appreciated the fair and would like to book larger space in next edition.In GMF 2015, the Organizing Committee also will do our best to invites professionals worldwide to build a platform for communication, cooperation, brand publicity and product promotion.
April, 2015
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AGRI PICTURE NEEDS TO BE PAINTED BETTER Nirmesh Singh Unless agriculture is on right track, India cannot feed her people. India’s emphasis on agriculture over past decade has been low despite the fact it contributes to 17% to GDP and provides employment to 52% of population. India has four critical fundamental resources in abundance that are needed for agriculture – light, land, water and labour. Higher agricultural growth will also be needed in future to take care of food needs of a growing urban population. Importing food for our 1.2 billion people may not be great idea as it will undermine the significance of being self sufficient. Before it is late, it is the time to rethink and revamp our strategy on agricultural sector. For how long, we can ignore that there is an urgent need to work upon an effective policy to bolster agriculture which in turn will help reviving manufacturing sector. Perception about Indian farmer needs to be changed. Contrary to the common belief that farmers lack knowledge about the market and new farming techniques, it is found that they are highly multi - skilled people who perform different roles. A farmer is also a mechanic, weatherman, veterinarian, businessman, marketer, scientist and much more. Over the last four decades, with the growth of India’s population, the number of farm land holdings has also increased from 71 mn to 138 mn. Consequently, the average size of land holdings has been also reduced to half from 2.28 ha in 1971 to 1.15 ha in 2011. Nevertheless, India’s agricultural production has been able to match increased food needs of growing population and this would have been impossible without farmers’ gaining knowledge about modern farming techniques, fertilizers, pesticides and other inputs. But farmer needs to be strengthened to make India achieve self sufficiency in food. India needs another green revolution and this time it should also encapsulate areas which are still dependent on rains for irrigation,where farmers cannot afford modern techniques and implements for farming and wherever there is paucity of fertilizers.During the last Green Revolution, though India reached self-sufficiency in food production but impact remained restricted due to its focus on regions that were well irrigated and grew two crops, rice and wheat. Secondly, farmers who benefitted from it were those who could afford the cost of adopting new technology. Agriculture has to grow at 4 % to ensure sufficient income growth to farmers. There was an average growth at 3.5% in the years 1981-97 but it fell to 2% during 1997-2005. Consequently, India witnessed increase in farmers' suicides. Nearly, 14 million farmers have committed suicide in the last 17 years. This is not only due to decline in agricultural growth but also because of decline in per capita land availability, reduction in employment in agriculture. All this has led to alarming decline in productivity of labour. The net sown area currently is around 140 million hectares. The area under forests and non-agricultural uses has increased. Good quality agricultural land in the urban periphery is no more under cultivation and comparatively inferior quality land in the form of waste land has come under cultivation. Therefore, quality of agricultural land we have today has deteriorated. Hence, there is a twin problem of low quality land and low labour productivity that is becoming a reason of widening gap between agriculture and non-agricultural occupations. Marginal farmers have increased to 85 % from 70% in the last decade. India is witnessing slow diversification of crops and soil erosion. Other factors like slowdown in public investment and private
investment in agriculture are also impeding the use of new technology and use of fertilizers. Since the size of the land holdings has become small and majority of farmers are cash strapped, it is difficult for them to go for innovations to improve productivity. This has resulted in increase in the number of subsistence farmers who have hardly any surplus to sell.
Agriculture has to grow at 4 % to ensure sufficient income growth to farmers. There was an average growth at 3.5% in the years 1981-97, but it fell to 2% during 1997-2005. Consequently, India witnessed increase in farmers' suicides. Nearly, 14 million farmers have committed suicide in the last 17 years. This is not only due to decline in agricultural growth but also because of decline in per capita land availability, reduction in employment in agriculture. All this has led to alarming decline in productivity of labour. Around 41% of land under cultivation is not irrigated. This can be addressed by introducing small irrigation facilities and by water conservation. Villages will have to revive traditional water harvesting systems. The Government’s programme of ‘Pradhan Mantri Krishi Sinchayee Yojana’ for harnessing of rain water at micro level is likely to bring more arable area under irrigation. The programme’s objective of 'Har Khet ko Paani' for micro irrigation to ensure ‘Per drop- More crop’ can change the face of irrigation in India.
April, 2015
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FOOD & BEVERAGE COLORANTS MARKET IN ASIA-PACIFIC TO GROW Asia-Pacific Food & Beverage Colorants Market is expected to grow from $405.9 million in 2013 to $539.9 million by 2019, at a CAGR of 4.8% from 2014 to 2019. In Asia-Pacific, the food & beverages colorants market in India is expected to grow at the fastest CAGR during the forecast period of 2014 to 2019. The market demand for food products is mainly driven by the increasing population and the rising disposable incomes, resulting from economic development in the region. Due to the harmful effects of synthetic food colorants, their consumption is gradually coming down in India. However, due to the relatively higher costs of natural colorants, the shift from synthetic colorants is projected to occur over a long period of time. Presently, there is a rampant use of unpermitted colorants and the misuse of permitted colors taking place in the Indian food processing industry. In 2014, the Asia-Pacific market was dominated by a large number of small producers and distributors of F&B colorants. Chr. Hansen (Denmark) is one of the fastest-emerging players in the Asia-Pacific food & beverages colorants market. The FMC Corporation (U.S.) is leading the Asia-Pacific market with share of 16.7%, as of 2014. FMC Corporation operates through three business segments, namely agricultural products, specialty chemicals, and industrial chemicals; and their natural colorants are used in food applications such as bakery products, beverages, canned fruits, cereals & snacks, confectionery, dairy, dry mixes, fats & oils, ice creams, frozen desserts, meat products, pasta, sauces, pet foods, along with dressings and sea foods. Among the application segments, the frozen meat products segment is projected to be largest market shareholder of the Asia-Pacific colorants market in the coming years. The Asia-Pacific market is driven by the rising disposable incomes of the population, especially in India and China. The rising demand from Australia and New Zealand is also projected to drive the growth of the Asia-Pacific colorants market during the forecast period of 2014 to 2019. EIN Newswire
April, 2015
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Budget neglects food processing sector Amit Kumar
India has only 6-7 per cent share in global food processing industry despite being second in the global production of fruits and vegetables, way behind USA which has 65 per cent and China with 23 per cent
When new NDA regime took charge, food processing industry too was expecting some sops from the Union Budget-2015-16. Unfortunately, Centre remained silent and the most ambitious national mission on food processing got delinked from central schemes. The responsibility has been given to states for preparing their own mission, vision and budgetary allocation, based on their priorities. The risk of this step could be that few states will lag behind. The mission earlier had created environment of competition among states, which has resulted in a uniform growth in number of new food processing units. The sector which accounts for 10% of the total food industry, and has a potential to generate employment in big chunks, was in need of a significant push from the government. But the Budget 2015-16, did not allocate any funds for state and UT plan outlay by ministries/departments for food processing. It was Rs 125 crore previous year, this year it is nil. It will now depe nd on the states to decide as how much they want to spend on food processing. The share of the states in Union taxes was increased to 42% from 32%, as recommended by the Finance Commission. However, Rs 480 crore have been allocated to MoFPI (ministry of food processing industries) for major programmes under Central plan. The objective of food processing mission in 12th plan (2012-2017) was to contain food inflation, reduce wastage and create 1 million jobs. Keeping the objective in mind, 12th plan lays greater emphasis on following• Setting up of National Mission on Food Processing to improve coordination and implementation of schemes and to enable greater involvement of state governments. • Expanding and modifying existing infrastructure development schemes – Mega Food Parks Scheme, Integrated Cold Chain Scheme • Setting up and Modernisation of Abattoirs—Establishment of new abattoirs and modernisation of existing abattoirs • Develop and strengthening of existing and new institutions • Taking up a nation-wide skill development programme along the lines of special projects for skill development of rural youths under SGSY of MoRD. • Putting in place a network of food testing labs (Government/Private) through providing incentives. • Encouragement for larger participation in Codex deliberations and setting up/strengthening of Codex Cell in FSSAI to promote, coordinate and monitor related initiatives at the level of stakeholders • Setting up of an Innovation Fund and Venture Capital Fund for Food Processing to promote innovations and technology development A well-developed food processing industry is expected to increase farm-gate prices, reduce wastage, ensure value addition, promote crop diversification, generate huge employment opportunities and boost exports. The private sector needs to invest much more in creation of warehousing capacity, cold storages, processing lines and supply chains. The Budget has only few long term policy decisions with a view to promote Agri and food processing sector1. Setting up of national agricultural market this will ensure better price to the famers 2. Special fund for funding of micro entrepreneurs The fate of many proposed food processing units in country hangs fire as the Centre has decided to delink the National Mission for Food Processing (NMFP) from its support. The decision to withdraw eight schemes, including NMFP, from Central support and put the onus of their continuation entirely on the states. The state may decide to continue or not with the schemes out of their increased resources resulting from the recommendations of the 14th Finance Commission. The decision will prove to be a huge setback for states still awaiting grant of funds. Withdrawal of NMFP will have a serious bearing on the overall food processing sector in the States which has been identified as priority area for driving entrepreneurship and generating employment. (The writer is founder-partner of Green N Fresh, A post harvest Management Firm)
April, 2015
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Land Acquisition Bill: Acres of conflict Dr Devendra Sharma
In the days to come the battle over land takeover is only going to be intensified, both in Parliament as well as on the streets. As various farmer organizations get ready to storm the capital, and Anna Hazare planning a padyatra from March 30, the government will have a tough time in future. It will be more difficult as the entire opposition has been united to oppose the bill’s smooth passage in Rajya Sabha. While the Lok Sabha passed the Land Acquisition Bill with 11 minor amendments, most of these already existing in the 2013 law, the painstaking defence by Rural Development Minister Birender Singh has failed to cut much ice. In the shrieking debates and the deafening noise that preceded and still continues, the real issues behind the need for a law that allows forceful takeover of land have disappeared from public scrutiny. In this article I am trying to analyse some of the main arguments that have been floated to justify land acquisition without the consent of the farmer. I hear again and again that the availability of land is coming in the way of development. Projects worth Rs 4-lakh crore are held up because of non-availability of land. While the government has failed to provide a list of projects that have been held up, Economic Survey 2015 does not list land as a limiting factor for infrastructure projects to take off. It states that the projects are held up because of unfavourable market conditions, and lack of investor interest. Secondly, if land availability was a factor I don’t see any reason why over 576 Special Economic Zones should have failed to perform. A CAG report says that out of the 45,635.63 hectares of land notified for the development of SEZs, actual operations took place in only 28,488.49 hectares or 62 per cent of the land acquired. Neither did the SEZs create employment nor did it lead to manufacturing or industrial growth. And remember there was no environment clearance hurdle nor was there any social impact assessment required. Moreover, with all kinds of tax holidays, estimated to be in tune of Rs 1.75 lakh crore, the SEZs failed to perform. In a scathing comment, CAG says “Acquisition of land from the public by the government is proving to be a major transfer of wealth from the rural populace to the corporate world.” I don’t think the government even knows how much of land already acquired is lying vacant. An investigation by a TV channel found that nearly 45 per cent land acquired in just five States is lying unused. In Orissa, for example, 3799 acres acquired for TISCO steel plant in Gopalpur in 1995 has still not been used. In any case, the government is eyeing 17 lakh acres of surplus land lying with public sector undertakings. With so much of land already available, I don’t see any reason why the available surplus land is not first put to proper use. Further, the argument that the 2013 law needed to be changed since the Chief Ministers wrote against it is simply amusing. Let us not forget that the Chief Ministers of the coal mining states also opposed open auction of the coal blocks. But after a Supreme Court order cancelled 204 coal blocks, the auctions that are underway are likely to bring in revenue of Rs 15-lakh- crore. I wonder why in a market economy, where free enterprise is being promoted, the private sector can’t be asked to bid for land in open auctions taking the prevailing market price as the base price. A study by IIT Roorkee estimates that in past 50 years some 50 million people have been displaced by ‘development projects’. With the oustees of Bhakra dam and Pong dam still not rehabilitated, land conflicts have erupted primarily because the government forcibly takes over land for the private entities in the name of ‘public purpose’. As several CAG reports have found out that the land acquired has finally gone into the hands of real estate firms who have made fortunes. In 2013-14, a study by Washington-based Rights and Resources initiative found 252 conflicts over land acquisition. A Newsweek article sometimes back had pointed to 75,000 land conflicts, most of them bloody, in China every year. A recent report states that 28 lakh villagers have committed suicide in China in past 10 years. About 80 per cent of them did so because of forcible land takeover. Lawmakers in India, therefore, need to be doubly concerned about the resulting socio-economic unrest. Actually, the commodification of land is part of a global design. Globally, an area equivalent to the cultivable area of China and India has already been acquired by private capital. For India, it was in 1996 that the World Bank had asked to move 40-crore people – twice the combined population of UK, France and Germany – from the rural to the urban areas in next 20 years, by 2015. In 2008, the World Development Report of the World Bank had asked India to hasten the demographic shift by going in for land rentals. It is primarily for this reason that agriculture is deliberately being starved of resources, and farmers’ income is being kept low to force them to abandon farming and migrate. Pitting agriculture against industrial development is a faulty debate. At a time when jobless growth is the norm anywhere and everywhere, industry cannot absorb even a fraction of the growing workforce. In past 10 years, between 2004 and 2014, only 1.5 crore jobs were created despite a high growth rate. Encouraging entrepreneurship in the rural areas and providing land to the landless is therefore the only sensible way to revitalize the economy. If the drought-prone village of Hibre Bazaar in Maharashtra can now boast of 60 lakhpatis, I see no reason why it can’t be the norm in the rest of the country.
A CAG report says that out of the 45,635.63 hectares of land notified for the development of SEZs, actual operations took place in only 28,488.49 hectares or 62 per cent of the land acquired. Neither did the SEZs create employment nor did it lead to manufacturing or industrial growth. And remember there was no environment clearance hurdle nor was there any social impact assessment required. Moreover, with all kinds of tax holidays, estimated to be in tune of Rs 1.75 lakh crore, the SEZs failed to perform. In a scathing comment, CAG says “Acquisition of land from the public by the government is proving to be a major transfer of wealth from the rural populace to the corporate world.”
April, 2015
‘Politicisation of land acquisition policy is wrong’ P. Chengal Reddy, Chief Advisor, CIFA. National farmer's representative body, Consortium of Indian Farmers Association (CFA), welcomes the new land acquisition policies. However they have to be more practical, simplified and time bound so that it will not caused distress to the farmers and at the same time help national development. There is a misapprehension about the land acquisition and its benefits. Here in everybody have forgotten the biggest land acquisition needs are by the farmers for whom the ongoing 400 irrigation projects and canals require over 40% of the land. Somehow the present controversy is more focused on so called exploitation by the vested interest. It may be a fact to some extent but in reality acquisition policy has stalled implementation of large number of irrigation projects, roads, schools, hospitals, poor people houses and other public welfare activities, ranging from 20 to 30 years. Farming cannot sustain without agro processing industries of sugar factories, milk chilling units, textile & oil processing industry. In the 2013 Act the 80% consent clause is ambiguous. There is no clarity whether 80% land ownership is the criteria or 80% of the cultivators? If 20% cultivators can oppose 80% land owner, consent cannot be obtained. This issue in my view will hamper acquisition in almost 90% of the villages.
The clause of social auditing is equally confusing. We have experienced Ms. Medha Patkar, Social Auditing has delayed Narmada Project by over 30 years. Her auditing is to stop nuclear plants and perhaps even launching Mars mission from Sri Harikota. Who are the persons to do social auditing? What should be their back ground? Who should authorize them to do the social auditing? Should they be from Delhi funded by Greenpeace or should they be from leftists opposing for ideology or rightist opposing for their religious beliefs? The politicization of acquisition policy is wrong. It is stated by Political parties, political party connected farmers Associations and NGO's that the proposed ordinance by the NDA will take away the right of land owner farmer to file cases and also deprive him of compensation. The Parliament of India cannot pass any acts depriving the citizens the right to protect is property. If any acquisition is required the purpose procedure has to be followed in acquiring the land. Adequate, development and potential linked compensation must be paid to the land owner. The Supreme Court of India has passed many Judgments protecting the rights of the land owner farmers in regard to the above as given below ---. 1. Right to property is a Fundamental Right and also a Human Right. SC case No. 9038 /2010 dated: 3-09.2011 State of Haryana vs Mukesh Kumar. 2. Compensation to be considered on Potentiality for Development SC No. 3148- 3157/2000 dated: 07-12-2007 Atma Singh vs State of Haryana. 3. Comparison between mere compensation and compensation for damage, detriment or inconvenience Electricity Appellate Tribunal Case No. 135/2012 Vidyasagar Garg vs
Haryana State Electricity Regulatory Commission. 4. The history of the liberty is History of observance of proce dural safe guards (1992) 318 United States Judgment.c 5. The World Bank and others have specified that the land acquisition procedure has to take land owners consent and pay compensation. SUGGESTED MODIFICATIONS 1. Fixing the compensation, timely compensation and rehabilitation should be done by a District Level Committee headed by a District Judge with revenue and agriculture expert as members. The Committee should visit the proposed acquisition lands and seek farmer's views in addition to studying the land utility as on the dates. The committee will be able to observe and take decision whether the acquisition will hamper productivity or whether there is ambiguity or mischief about the land acquisition. 2. The District Committee must decide in a time bound manner preferably within 45 days the amount of compensation to be paid for the land, based on the local registration charges, scope for future development and also the claim for increased compensation submitted by the land owner. Based on the above the District Committee must pass the order and inform the land owner. The Supreme Court of India has passed judgments that the compensation must be based on futuristic value. 3. After finalizing the compensation amount for the entire project, the District Committee should inform the institution including Government Departments, Ministries or Private Sector to deposit the entire compensation amount with the District Committee within 30 days. 4. The District Committee must also be empowered to
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finalize a rehabilitation package for the local people. The MOU so enter into and in the presence of the District Committee, District Magistrate, Institution Management and the Local Sarpanch/MLA/MP. The MOU must have panel provisions of imposing penalty or if necessary criminal action against the management if they failed to implement it. 5. District Committee must have power to monitor the MOU Implementation. They must be empowered to receive complaint from the local people if the MOU is not properly implemented and act upon. 6. Within 45days/ of initiating land acquisition proceedings or handing over the land to the institution the District Committee must disburse the compensation amount to each of the land owners. 7. The appeal against on order passed the District Committee be made to a State Level Committee headed by a sitting High Court judge. The appeal will be only after the above formalities are completed. Land acquisitions cause displacement which is truly painful to the farmers. But it does not mean that the farmers amongst whom 80% are cultivators & 20% absentee farmers are totally against land acquisition. They are not naive to obstruct implementation of any of the above activities in their village which are beneficial to them. What is highly suspicious is that the past experience of insufficient compensation and inordinate delay in payment compensation and failure for timely rehabilitation is the reason for opposing land acquisition by farmers across the country. It is necessary that the NDA proposed changes must be time bound and practical.
April, 2015
Helping farmers by removing middlemen Origo Commodities Sindhu Kashyap Origo Commodities was started in 2010 by Sunoor Kaul and Mayank Dhanuka. Both Sunoor and Mayank have known each other since school, and even graduated from the Indian Institute of Technology (IIT) Delhi together. Talking a little bit about their backgrounds, Mayank Dhanuka says, “It was after IIT did we go into different fields. I got into the fields of finance and investment banking. I was a banker for about eight years. I started my career in India, and spent over a year here., after which I moved to Hong Kong and went to business school in Columbia. I worked in New York for a couple of years, and came back to India in 2009. Sunoor’s career path is slightly different. After IIT he joined General Electric (GE), after which he did his MBA from Michigan and became an investment banker as well.” While both Mayank and Sunoor have lucrative careers in New York, they’d discuss coming back to India, and starting something of their own. “We wanted to do something that was close to our hearts and something that was impactful,butwe weren’t sure of what that was. We weren’t looking at any particular community or a particular set of people. We wanted to be in a business that was impactful,yet be a profitable business, which could be scalable and become really large one day,” says Mayank. Unlike most entrepreneurs, Mayank and Sunoor began brainstorming on the idea after they came back to India in 2009. The plan was to come to India, do adequate research and digging around and find an idea that matches their criteria of an impactful, yet profitable venture. “We wanted to get a feel of the market conditions and a feel of the area. I had been out of the country for over 10 years, whereas Sunoor had been out of the country for over five-to-six years. So we wanted to understand better what industries are interesting and what would be lucrative for us. We got a lot of ideas in education, healthcare and other such areas. However, it did not excite us, as there were a lot of people who were in these fields,” says Mayank.Elaborating further, Mayank says, “We were looking for a differential factor and something that can be really large. During those days,we’d meet everyone we could to get a sense of what the country is like. We got the idea of Warehouse Receipt Finance, which is financing of commodities in agricultural warehouses, particularly for farmers. This idea intrigued us, so we dug deeper and found out that not only did it meet our criteria,but also was a space that was non-existent. It was scalable, profitable, a high growth industry and was impactful.
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.” Beginning with several clients in the warehousing side, the business expanded to collateral management. The most recent expansion has been procurement on behalf of people who buy agricultural commodities to create order process.”One initiative that has become successful is where we recently tied up with National Bank for Agriculture and Rural Development (NABARD) to support and educate farmers in different parts of the country to realise better pricing for their harvest by pledging their produce under Negotiable Warehouse Receipt financing,” adds Mayank. So far they’ve educated farmers in Andhra Pradesh, Telengana and Rajasthan. “We would now like to call ourselves a post-harvest management solutions company. Our ultimate aim is to connect the processor to the producer, completely removing the equation of the middleman. Right now, in India, from the producer to the processor, there are close to six or seven middlemen, which creates a lot of inefficiency in the system. While we will be fighting several huge vested interests and it is a challenge, but if you can cut those middlemen out everybody benefits,” adds Mayank. While Origo Commodities today operates over 350 warehouses and has its presence in over 16 states with different clients, it has its own set of challenges. “It’s a fairly challenging business, which is an agricultural logistics business. Like any logistics business, it needs to be tackled with a strong operations process in place. We are always fighting vested interests;you’re trying to do the job of four other people and make the system efficient. Fighting against these interests is always challenging. If you try to make a change in the system it is a long and tough journey,” says Mayank. Talking about their future plans, Mayank says, “We’re looking to create the perfect conduit, the perfect supply chain from the processor to the farmer. It can be done by creating the right infrastructure where farmers can avail the services that they need, be it storage or finance or any value added service. Once this system is in place,it automatically removes the middlemen. However, there still is a long way to go! Courtsey:social.yourstory.com
April, 2015
Agriculture happens to be the engine of India's economic growth and in the next 10 years the total food production in India is likely to double, say experts. Hopes of pro-growth reforms from the newly-elected Modi government have already fuelled a rally in most of the agriculture-related stocks so far in the year 2014. But fears of below-normal monsoon have capped gains at least in the short term.
Bayer Cropscience Ltd: Target price set at Rs 2240 Bayer Cropscience is a zero debt company for the last three years with huge cash in hand and in the current high interest rate system this conservative capital structure is advantage for the com pany, thus, helping in improving the bottom line.
BASF India Ltd: Target price set at Rs 1058
The company may participate in this growth
by increasing its manufacturing and working capital efficiency, adding capacity & introducing new innovative product & formulations. Above 25% of total revenue comes from this segment of business.
the partnership companies all over the world, named Gazprom, Statoil, Monsanto, Petronas, Shell, Sinopec Total. Atul Ltd: Target price set at Rs 1098 The brokerage firm rates Atul Ltd a 'BUY' based on factors like the company's strong
management, healthy business model which is adequate diversified and a vast product range. Atul Ltd has 14 products and 44 formulations in this segment of business & above 35% of total revenue comes from this segment of business.
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April, 2015
Why farmers have less faith this time? Vijay Sardana
SEZs were created closer to cities where real estate prices are likely to go up, large portions of fertile agriculture land allocated to the big industrial houses, close to the ruling political parties in the states with no sensible commitment and restrictions on usage pattern. Farmers are extremely apprehensive about these moves and charged the governments for acting as “middleman” or “brokers” of corporate houses. The Economic Survey, the Budget and now “PM’s Maan ki baat” current crisis has not only exposed the inefficiency of planning, but also lack of ideas and vision to solve the problems of farmers and also the ineffective implementation methods adopted by the people involved in the planning process since liberalization. PM should address farmers' Mann ki Baat
Modi was hope for farmers but now that hope is also fading. ‘Maan ki baat. has also exposed that there is no answer to problems of farmers except sympathy, this also raised serious doubts about the effectiveness of the policy plans and their intention in coming days. It reinforces that agriculture is not an economic activity but a political activity in India. The fact remains that India is adding about 20 million people every year to its human population, 20 million to animal population, and land under cultivation has been stagnant during the last 40 years since 1970 i.e. approximately 141 million hectares. Who will feed theme. Water availability and water tables are going down. No new technological breakthrough is taking place that can bridge the demand supply gap in food grains.
Extension system is defunct and shrinking every day. Farmers are still at the mercy of government-sponsored monopolies like FCI thru out dated policy like APMC Act. This year even FCI may also run away from farmers. We are eager to sign Free Trade Agreements with other countries but free trade is not permitted within India due to various state laws like APMC Act. Agriculture related infrastructure is non-existent but we are willing to waste Rs. 50,000 crore every year in food wastage. New agriculture policies are now more often designed to please international trading partners at WTO instead of domestic farmers and consumers. With all these problems on hand and without any strategy in place to overcome them, our policy planners and negotiators are still hopeful that Free Trade
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Agreements with ASEAN countries and agriculture negotiations at WTO will benefit Indian agriculture. I don’t know, how one can win a wrestling game with giants with our hands cut or tied?
The Economic Survey, the Budget and now “PM’s Maan ki baat” current crisis has not only exposed the inefficiency of planning, but also lack of ideas and vision to solve the problems of farmers and also the ineffective implementation methods adopted by the people involved in the planning process since liberalization. With all the facts available on ground, it seems we were designing a suicide plan for Indian agriculture and farmers of India. When our farmers are committing suicide, our agriculture planners and managers of agriculture policy must be satisfied with their policy outcomes. Because they have achieved what they wanted by controlling and regulating agriculture with outdated laws and policies. I wonder when we will realize that agriculture is an economic activity and not political one. Sooner we do that the better it will be for our country and for all of us.
April, 2015
Integrated value chain of agriculture is the flow of agricultural commodities from the initial producer to final consumer. The key stages of the agri-value chain are: Crop input, crop production, primary processing, aggregation and procurement, testing and certification, warehousing and temperature controlled storage, collateral management, financial against agricultural commodities and consumer. As of today, the value chain for agricultural commodities in India is quite fragmented with a large number of small players at each stage. Procurement and Food Security Government of India (GoI) undertakes procurement of food grains for maintaining the buffer stocks, which are required to (i) Feed Public Distribution System (PDS) and other welfare schemes, (ii) Ensure food security during the periods when production is short of normal demand during bad agricultural years and (iii) Stabilize prices during period of production shortfall through open market sales. With effect from the 20 April 2005, FCI is required to maintain buffer stocks. GoI has introduced National Food Security Bill (NFSB) in the Parliament. Besides reforming the existing PDS, NFSB proposes to give legal entitlement to subsidized food grains (rice, wheat, millets) to at least 75% of the country’s population (90% in Rural areas and 50% in urban areas). FCI will be required to procure additional food grains and maintain stocks to the tune of almost 75 million MT. The fact remains that public and cooperative sector by themselves cannot create suitable and adequate storage infrastructure in the country. Hence there is a need to encourage and incentivize private sector for making investments in agricultural storage and marketing infrastructure. For ensuring private sector’s participation in the creation of storage and agricultural marketing infrastructure in a meaningful way, government will have to play its role effectively, especially in addressing some of the critical issues faced by this sector.
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Agriculture needs modern storage infrastructure in place Aditya G. Bafna, Executive Director, Shree Shubham Logistics ISSUES AND CHALLENGES Initiatives taken by GoI in regard to the development of storage infrastructure and other related activities in the recent past, would be of great help to the farmers of this country. However, the changing scenario demands a much different role for government, both in the Centre and in States, in the future. Food security is much more than food grains availability. For ensuring private sector’s participation in the creation of storage and agricultural marketing infrastructure in a meaningful way, government will have to play its role effectively, especially in addressing some of the critical issues faced by this sector. An attempt has been made in the following paragraphs to identify a few critical issues that require urgent attention and intervention by the authorities concerned.
Primary Processing: Most of the agricultural produce, which comes to the market for sale in our country, is neither cleaned, sorted nor graded due to the absence/lack of cleaning, sorting and grading facilities in the producing areas. Thereby, realization of prices of average grade of the commodity for the farmers despite of a quality grade produce. Although, Scheme for Development/Strengthening of Agricultural Marketing Infrastructure, Grading & Standardisation (AMIGS) also aims at creating cleaning, sorting and grading facilities but has resulted into a small fraction of the creation of such facilities. Even the basic facilities for proper weighing are sometimes absent. Storage &Handling: A large quantity of agricultural produce is wasted/damaged in our country due poor handling facilities, both at farm and market level.
Post-harvest losses range from 10%-15% in respect of food grains to as high as 40% in the case of fruits and vegetables. Similarly, inadequate transport and cartage facilities (especially in case of cereal crops and oilseeds) aggravate the losses at various points in the value chain. There can also be no two opinions about the fact our country does not have adequate storage infrastructure, leave aside the modern or scientific warehouses. As mentioned earlier, we must appreciate the fact that storage infrastructure is also required beyond the realm of procurement by state agencies. In fact, any effort to improve price realization at the farmer’s level has to precede by the availability of a warehouse which can offer scientific storage and preservation facilities, besides other amenities (like cleaning, sorting and grading). In fact, a good ware house is a sine qua non for agri-commodity trading and financing. This is one area where private sector can play a very important role and supplement the efforts of government. However, there are certain critical issues which can be addressed with active and a sympathetic intervention from the governments at Centre and states. •Availability of Land – Central and State governments must considers making available suitable land parcels under government control either on a long lease or through outright sale at concessional rates. •Land Usage Limits - As large land parcels are required in the conventional warehousing infrastructure, land usage limits should be increased to 60%. With our rich experience in this field, we can emphatically say that even an open space of 40% is sufficient for ensuring free movement of large vehicles and providing other amenities. •Scientific Warehouse Management - There has been a spurt in the creation of warehouses in the country after the introduction of Gramin Bhandaran Yojana (GBY) in the year 2000/2001 and subsequently the AMIGS.
April, 2015 However, this capacity has been created without any reference to the demand or potential. In fact, warehouses of all kinds/types (small, medium & large) owned by people of all hues cropped up across the country without having expertise of Scientific Warehouse Management. Accreditation of Warehouses by WDRA - The number of warehouses, which can issue Negotiable Warehouse Receipts (NWR), is very less as compared to the total number of warehouses functioning in the country. As a result, Small/Marginal Farmers are not able to avail the benefits of concessional finance by the banks against Negotiable Warehouse Receipts (NWR). Agricultural Marketing: Agricultural marketing, both buying and selling, is a very complex phenomenon in our country. There is a need for the government to play a proactive role for putting in place a simple, efficient and user friendly agricultural marketing mechanism. Restrictive and Multiple Regulations: Agricultural marketing in India is characterised by the presence of a large number of statutes and regulations, which affects this sector adversely. Notwithstanding the fact that every segment of business/economy requires regulation for its smooth functioning and growth, government must work towards simplification of laws and regulations governing this sector.
Farmers’ plight...
It is because at least 85% to 90% of “intellectuals” don’t even know about this! They think that it has something to do with so-called “market forces” and “open market oriented economic structure”. One of the most celebrated media commentators on economics related issue Dr. Bharat Jhunjhunwala, in one of his articles, opined that prices of agricultural commodities have not risen much because “consumers cannot eat more than twice/thrice a day whereas they can buy other consumer goods (cloths, shoes, entertainment etc.) in quite unlimited quantities! Therefore, these people think that by declaring a minimum support price for agricultural produces government actually helps the farmers by giving them a price that is somewhat more than the “market-forces determined prices” of agricultural produces!! These people think that if government withdraws itself from determining the MSP of agricultural commodities the farmers will get even lower price for their produces than they are getting now! This type of reasoning is laughable. In reality, if the government completely withdraws itself from determining and declaring any type of MSP for agricultural produces and let it get determined as per the so-called “open market forces” then do you (or anybody else) have any idea as to how the prices of essential agricultural commodities(i.e. wheat, rice and pulses) will get determined.? Therefore, if the prices of agricultural produces were to be determined “purely by market forces” then from 1970 to 2014 the prices of agricultural produces should have increased by 621 times instead of just 18 times as it is now!! It means that farmers are getting approx 1/34thtimes of price than they should have been getting under “perfect market conditions”.
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A study predicts normal monsoon in 2015 India might get normal monsoon rainfall at 102 per cent of long-period average during June-September this year, noted a just concluded joint study by indistry body Assocham and Skymet Weather joint. "However some pockets that might be deficient (by a narrow margin) include Himachal Pradesh, Punjab, Haryana, Uttarakhand, Marathwada, Rayalseema, South Interior Karnataka, North Tamil Nadu and parts of the North East," noted a study titled 'Monsoon 2015: Agri-business Risk or Opportunity,' conducted by the Assocham and weather forecasting company Skymet. "A devolving El Nino in Monsoon 2015 will most probably not impact it negatively as droughts seem to happen where there is an evolving El Nino episode," said D.S. Rawat, secretary general of Assocham in a press release, while releasing the findings of the study. "Chance of a back to back drought is three per cent (2014 was a mild meteorological drought), besides there is still no clear signal about the emergence of an Indian Ocean Dipole (IOD) this year during Monsoon," said Jatin Singh, CEO, Skymet.
April, 2015
Pooling of Gas in Fertilizer (Urea) Sector
The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has approved a major policy intervention, to supply gas at uniform delivered price to all fertilizer plants on the gas grid for production of urea through a pooling mechanism. It is expected that the cost of production of urea at pooled price would be less than the price of imported urea, which will encourage the existing urea units to produce beyond their reassessed capacity. The increase in urea manufacturing capacity will also contribute to the Make in India initiative. This reform measure is also expected to augment indigenous manufacturing capacities. It is expected to help in reviving the Gorakhpur, Barauni and Sindri urea plants. These three urea plants will serve as the anchor load customers for Jagdishpur Haldia pipeline. As a result, work on this pipeline which was approved in 2007 is expected to start in this financial year. The Department of Fertilizer (DOF) has estimated that today's decision will lead to additional production of around 37.13 Lakh MT of urea in existing fertilizers units over the next four years (i.e., 2015-16 to 2018-19). This will reduce import dependence to this extent and result in saving of Rs. 1550 crore of subsidy. At present, there are 30 urea producing units in the country, out of which 27 units are gas based and three units viz Mangalore Chemicals & Fertilizers Limited (MCFL), Madras Fertilizers Limited (MFL) and Southern Petrochemicals Industries Limited (SPIC) are Naphtha based. Out of the total consumption of about 30 Million Metric Tonne Per Annum (MMTPA) of urea, about 23 MMTPA of Urea is currently produced in the country. In addition to domestic production of Urea, around 2 MMTPA is imported from Oman under the Urea Off-Take Agreement (UOTA) which will continue upto 2020. The shortfall of about 5 MMTPA Urea is being met through imports. Urea demand during 2017-18 is projected to be about 34 MMTPA and by 2024-25, it is expected to be 38 MMTPA. Hence, in absence of new capacity addition in the country, urea imports would have increased. Further, DOF has estimated the saving in subsidy outgo due to revised energy norms of urea units of Rs. 6979 crore during the next four years.( i.e. 2015-16 to 2018-19). The need for this intervention arose because, at present, the price of gas supplied to fertilizer units varies from plant to plant depending upon the combination of domestic gas and Regasified Liquefied Natural Gas (RLNG). Hence, there is no uniformity in input price. Further, there is wide variation in the conversion efficiency of plants measured in Gcal/MT. As the variation in final urea production cost is a result of variation in two factors (gas price and conversion efficiency), it is necessary to separate the two effects. A uniform gas price at the input stage will achieve this objective and will help focus on improving plant efficiency.
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India imports Australian wheat as rains damage crop India has bought up to 80,000 tonnes of Australian wheat in recent deals, three trade sources said on Tuesday, the biggest such imports by the country in five years as unseasonal rains damage the crop at home. Purchases by the world's No.2 wheat consumer and producer could buoy benchmark Chicago prices, which rallied more than 6 percent in the past two sessions and are currently near a one-week top amid concerns over dry weather and rising temperatures hurting the US winter crop. Indian flour millers have bought between 70,000 and 80,000 tonnes of Australian prime wheat for April-May shipment at $260-$265 a tonne, including cost and freight. "They have bought three cargoes as some mills are taking coverage because of reports of rain damage," said one Singapore-based trading manager with an international trading company. "We don't expect India to buy large volumes as they have substantially large stocks but there could be some demand for higher grade wheat." India imported around 200,000 tonnes of wheat in 2010, US Department of Agriculture data shows, and purchases since then have been low because of bumper domestic production. But wheat output and overall crop quality is seen taking a hit this year following heavy, untimely rain in northern and central grain-growing parts of India just before the harvest. Traders said the top high-protein wheat producing states of Madhya Pradesh and Rajasthan have seen worst damage. While it is too early to estimate the extent of damage to the wheat crop, winter crops in more than 10 million hectares could be hit, government officials said. India could be in the market for more shipments although large stockpiles in government silos may cap purchases. Stocks lying with the state-run Food Corporation of India totalled 19.52 million tonnes on March 1, substantially higher than a target of 4 million tonnes. Still, some of the stocks, which are more than two-year old, may be of average to lower quality. In addition to the rain-damage, Indian millers are importing also because of global freight rates that plunged to a record low last month. "At times some port-based flour millers in southern India import high-protein wheat from Australia to take advantage of freight rates and lower global prices," said Prem Gupta, a senior member of the Roller Flour Millers Association of India. Reuters
April, 2015
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