AGRITECH INDIA NEWSPAPER- August Issue

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August 2012

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2nd International Exhibition on Potato Production & Technologies

Vol. 3 Issue 4

11-12-13, January 2013 New Delhi, INDIA www.indiapotatoexpo.com

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25 million tonnes sugar output: ISMA forecast

Gautam Goel, President, ISMA, with Abinash Verma, Director-General (left) addressing a press conference in New Delhi

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ven as pressure builds up on the Centre to curb sugar exports to boost domestic supplies, the industry has maintained that production next year would be 25 million tonnes. This production forecast by the Indian Sugar Mills Association (ISMA) has come despite concerns over drought in parts of Maharashtra and Karnataka.

Uncertainty over next year’s crop has already sparked a rally in sugar prices that are hovering around Rs 40 a kg in retail outlets.

Unconfirmed sources said that the Government was contemplating a ban on sugar exports or may impose a 10 per cent levy to curb shipments.

ISMA officials clarified on Wednesday that there would be ample stocks at the start of next season in October and that India would remain a net exporter for a third year in a row.

They also said that domestic prices had turned attractive for the millers and no fresh export contracts were being signed.

“The sugar balance at the beginning of 2012-13 season will be 6.5 mt, about 1 mt more than the current year’s opening balance of 5.5 mt,” said Gautam Goel, President of ISMA. The closing balance of 6.5 mt as of end-September is not only adequate to meet festive demand, but

also to meet the requirement till January 2013, by which time sugar from the new season will be available.

“There are adequate sugar stocks.

Unnecessary speculation would harm the industry in the long run,” he said. Sugar prices, on ex-factory basis in North India, shot up by over 10 per cent from about Rs 3,200 a quintal to around Rs 3,600 in the past fortnight on concerns over drought impacting the crop in Maharashtra and Karnataka. This led to a spurt in retail sugar prices at over Rs 40 a kg.

Abinash Verma, Director-General of ISMA, said that the forecast for 2012-13 had factored in lower production in Maharashtra and Karnataka. The projected shortfall in output in these States will be largely made up by Uttar Pradesh, where good rain has boosted crop conditions.

Sugarcane acreage for 2012-13 has increased by 4 per cent to 52.88 lakh hectares (lh), as farmers in UP, lured by higher support prices, have planted an additional 2 lh.

Sugar output in UP for 2012-13 is pegged at 7.8 million tonnes from the current year’s 7 mt. Cane acreage in Maharashtra for 2012-13 is pegged at 9.45 lh, slightly less than the 10.28 lh in current season. As a result, the estimate in Maharashtra has been lowered by 15 per cent to 7.6 mt from 8.95 mt in the current season.

Similarly, in Karnataka, the acreage is estimated at 3.8 lh, down from 4.32 lh in the current season. Production is estimated to be lower by 21 per cent at 3 mt from 3.8 mt.

Production for 2011-12, as projected by ISMA, stands at 26 mt, while exports till endSeptember are expected to be 3.5 mt. The prevailing high prices have helped millers cover production costs and reduce cane arrears or payments to farmers. Cane arrears stood at Rs 4,250 crore as of July 1 against Rs 9,900 crore in March 2012-end.

Agriculture Ministry keeps a watchful eye on onion crop

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he Union Agriculture Ministry is keeping a watchful eye on the politically sensitive onion crop. ISRO’s Resourcesat-2 satellite is snapping high quality images of the onion fields, so that policy makers can get accurate data and decide on the approach to be taken on onion exports.

The satellite survey is being carried out in onion-growing districts of Gujarat, Maharashtra, Madhya Pradesh and Karnataka.

Over the last one year, the National Horticulture Mission has been funding a project for arriving at a right estimation of the crop in the country.

The project is being implemented by the Nasik-based National Horticultural Research and Development Foundation. Nasik is the largest onion growing district in the country.

R.P. Gupta, Director of the foundation said that the results have been very encouraging.

When the ground data was correlated with the satellite data, it was found to be 75 per cent accurate. Soon NHRDF could get data with 90

per cent accuracy, he said.

“A NHRDF field officer goes to the onion field with a global positioning system tracker.

At the same time, the satellite takes the picture of the field. The picture is then analysed depending on the colours and the hues of the field and the size of the crop is arrived at,” Gupta said.

Satellite image of the onion-growing area is gathered at an early growing stage, maturity and harvesting time. GPS tracker helps ground data to correlate with the satellite images.

A senior Maharashtra Government official said the crop survey based on satellite technology will help the Centre in forming its onion export policy. It will give better estimates of the crop size.

In the last couple of years, the Centre’s policy on onion has come under fire because an export ban had led to glut in the market.

Last year, onion farmers from Nasik and the surrounding region stopped bringing onion to the market due to falling prices. Their decision was reversed only after the export ban was lifted, the official said.

The Revenue Department usually gives inaccurate figures about the actual acreage under the crop, the officials pointed out.

They do not have a proper mechanism to get the figures. Village-level officials are usually saddled with huge amount of administrative work and therefore getting the right data is difficult.

Food Minister to take steps to stop speculation in futures trading

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News

AgriTech India August 2012

he food and consumer affairs ministry plans stern action to curb any speculative trading of grains in the futures market after an emergency meeting slated for later this week to review the price situation. Food and Consumer Affairs Minister KV Thomas is taking a daily stock of prices as the country grapples with a below- normal monsoon.

“After reviewing the situation in the futures market, we will send the necessary advisory to regulator Forward Markets Commission (FMC) for controlling speculation,” said a ministry official.

Rising commodity prices are a big worry for the government as food inflation has remained in double digits for the past four months and fears of a drought are further stoking the prices.

The ministry is most concerned over the rise in the grain and sugar prices. “We have bumper

stock of wheat and surplus production of sugar.

But prices are on boil. We need to curb if at all there is any speculation,” the official said.

Futures trading also has the potential of becoming a political sticking point with several parties blaming speculators for the recent price rise. Recently, Mamata Banerjee-led Trinamool Congress (TMC), a key ally of the UPA government, put a spanner in the approval of the Forward Contract Regulation Act, blaming futures trading for the abnormal rise in prices.

The bill has been deferred twice by the Cabinet under pressure from TMC. Currently futures trading is not allowed in rice, arhar, and urad. But the government is now willing to ban it in some other foodgrains.

There are five national and 16 regional exchanges in the country. FMC regulates these bourses.

Despite high output millers have no wheat

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illers, especially in the South, are finding it difficult to source wheat. This is even as wheat prices have firmed up in recent weeks amid a slowdown in arrivals while exports have gained momentum.

No trader is willing to commit since exporters, who are active in the market, seem to have deeper pockets. Further, farmers are also holding back produce anticipating better prices.

Wheat production has been estimated at a record at 94 million tonnes, and the Government’s procurement has also been at an all-time high. “So the Government has procured more than what was seen as extra production,” said M.V. Balasubramanian, Managing Director of Sarathy Enterprises (formerly Narasu’s Roller Flour Mills).

Also, there are no details on the exact quantity procured by exporters. The overall wheat exports since September last year are pegged at 1.8 million tonnes.

Adi Narayan Gupta, President, Roller Flour Millers Federation of India, said: “The availability of wheat is poor and we feel the Government should stop exports by private trade.”

Until the news of drought affecting the US and Black Sea wheat crop came, wheat was available in ample measure.

Balasubramaniam said: “Even if someone commits to supply wheat, it will take at least 25 days now.” “We are now seeing shortage throughout the country,” he said adding that there should be a ceiling for exports by private parties.

S. Pramod Kumar, Executive Director of the Bangalore-based Sunil Agro Foods, said, “The situation is pretty confusing. Despite a record harvest there’s a physical shortage of wheat.”

Uttar Pradesh and Rajasthan were reported to have surplus wheat but all that now has gone missing. Either exporters have bought the produce or farmers are holding on to stocks expecting better prices. Most of the available wheat is now moving towards ports such as Kandla and Visakhapatnam.

Grains analyst Tejinder Narang said: “The private trade is going ahead with exports as the market prices are supportive. As a result, farmers are also getting better prices.” The meeting of Russian Commission on Food Security, scheduled to be held on August 8 to discuss the grain market and exports, could set the price trend. If Russia decides to allow

exports, there will be pressure on prices or else they’ll firm up, he said.

Prices have firmed up by an average of Rs 200 a quintal in the past one month. Gupta of the Millers Federation said that this is being reflected in prices of products such as atta and maida, which are also seeing a rise. The wheat prices that were quoting around Rs 16,500 a tonne a month ago are now ruling at Rs 17,250 a tonne for delivery in Tamil Nadu.

The Centre came up with the open market sale scheme wherein it was to sell 30 lakh tonnes at Rs 1,170 a quintal. Of this, 13 lakh tonnes were to be sold during July, August and September. However, it has stopped the sale abruptly after prices began to increase in the global market.

At least 60 per cent of the allotted wheat has been sold and millers see two reasons for the abrupt end to the open market sale. Either the Centre does not have the required wheat or the demand is far higher, they say. Though there were rumours that the price will be raised to Rs 1,285, there has been no announcement in this regard. Some of the wheat earmarked to states such as Karnataka and Delhi is being diverted to other States, millers claimed.

Australian wheat which was offered at $310 a tonne in containers is now quoted at $460. Balasubramanian said: “Prices are likely to firm up further since the drought effect in the Black Sea region is feared to be worse than anticipated.”

“The way things are going, we may not get wheat for conversion into maida for Diwali,” he said.

India may slip to 4th slot in cotton exports

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ndia may lose .its position as the secondlargest cotton exporter in the coming season starting October on weak global demand and deficient monsoon affecting production.

According to the US Department of Agriculture, India could slip to the fourth position in cotton exports with Brazil and Australia gaining. Both these nations have harvested a record crop.

The Cotton Advisory Board has estimated exports this season at a record 13.5 million bales (of 170 kg each) against 8 million bales last season. The record exports will leave about 4 million bales carryover stock.

Output, demand With a likely drop in acreage owing to delayed monsoon, the USDA has cut Indian production in its latest estimate. India, the world’s second-biggest grower, produced a record 34.25 million bales in the 2011-12 cotton year.

“Cotton production is forecast to decrease by two million bales to 32.3 million bales, as the area is expected to drop by 10 per cent, while domestic consumption is expected to rise to 26 million bales in 2012-13, from 25.3 million bales,” the USDA said on projections for the coming season.

Dim prospects The USDA expects global cotton trade to be slack in the coming crop year, with exports expected to decrease by 14.9 per cent to 37.4 million bales. “India is likely to suffer the largest decrease, with shipments forecast to fall from their 2011-12 level of 10 million 480 lb bales to nearly a million bales lower than our May estimate. Similarly, export prospects for the months of August and September, the remainder of the local October/September marketing year, appear dim in light of anticipated weak foreign demand and the current export registration procedure,” USDA noted.

Global scenario Meanwhile, the Washington-based International Cotton Advisory Committee (ICAC) has said that there will be a further cut in production and consumption globally from its last month’s estimation. Demand in the year starting August 1 will be 23.17 million tonnes (mt), down from last month’s projection of 23.53 mt, while output has been trimmed to 24.74 mt (24.87 mt). This reduction resulted from lower harvest expectations and a nearly unchanged consumption estimate.

“Consumption will be lower as the rate of global economic growth is expected to remain slow and the high domestic cotton-support price in China (the largest consumer) is encouraging mills there to shift towards alternative fibres,” the group said.

Stockpiles World cotton stocks are expected to be more plentiful than they have ever been. Stockpiles in the season will climb to 15.19 mt, up 0.4 per cent from last month’s forecast of 15.13 mt and 11 per cent higher than a year earlier, ICAC said.

With the slowdown in global trade, ending stocks are expected to increase in exporting countries, most notably in India and the US. In 2011-12, the global increase in stocks was concentrated in China where stockpiles almost tripled to 6 mt, boosting global inventories to 13.628 mt. This season, stocks could accumulate at a faster rate outside of China, the group said, especialy in India and the US. This expected pile-up of inventory could weigh on global cotton prices, ICAC said.

Company Profile & News

AgriTech India August 2012

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JCB India Limited

The leading co in the Indian earthmoving and construction equipment industry

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CB India Limited, India’s largest manufacturer of Earthmoving and Construction equipment, is a fully owned subsidiary of JC Bamford Excavators Limited (U.K).

J.C. Bamford Excavators Limited UK, one of the leading manufacturers of earthmoving and construction equipment, is considered one of Britain’s a most impressive success stories. It produces over 300 different models, which are sold in over 150 countries. JCB is also the world number one producer for backhoe loaders.

JCB India Limited started operations in 1979 as a joint venture company. In 2003 JCB UK acquired 100% shares in the joint venture and today JCB is the fastest growing company in the Indian earthmoving and construction equipment industry. The company is a pioneer in the industry and has been recording excellent growth rates. The company has developed and expanded through launching revolutionary products and adherence to world class JCB corporate identity norms. Today in India, JCB has sold over 1,50,000 machines and out of every two Construction equipment sold in India, one is a JCB. JCB India has the World’s largest Backhoe Loader manufacturing facility at Ballabgarh in Haryana which was expanded and in April 2009 inaugurated by Sir Anthony Bamford. It also manufactures the BSIII compliant JCB Engine ecoMAX out of the Ballabgarh facility, which is big on fuel savings and high on performance with 16 valve effort. It has two manufacturing facilities at Pune comprising of: l Fabrications – India Business Unit is a component manufacturing plant and is export-oriented. It caters to the needs of JCB factories both in India and abroad l Heavyline – India Business Unit is a Heavy Line manufacturing plant that produces Tracked Excavators, Wheel Loading Shovels and Vibratory Compactors l It has India’s largest Parts & Technical Training Centre for construction equipment in India l One of India’s largest design centre for construction equipment JCB India therefore offers a diverse range of unmatched Backhoe Loaders, Wheeled Loaders, Excavators, Skid Steer loaders, Telehandler, Compactors and Pick and Carry Cranes: Backhoes n Our choice of superlative Backhoe Loaders includes 2DX, 3DX (76 HP).

3DX Xtra, 3DX Super (96 HP) and 4DX (96 HP) depending on the customers requirements and applications

Tractor sales may come down due to inflation, high interest rate

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ith sales already flat over the last few months on rising prices, high interest rates and lower farm incomes, tractor sales could face the most pressure from deficient rainfall. Incidentally, the tractor market has enjoyed a strong growth of up to 30 per cent in the last few years. If farm revenues drop on lower produce, farmers may cut down fresh expenditure.

Rohtash Mal, ex-President of the Tractor Manufacturers’ Association and till recently the head of Escorts’ AgriMachinery division, said that sowing has been lower this season as soil moisture has been affected. So, an approximate estimate of the harvest can be made in the next 10-15 days.

“There could be trouble in the tractor market. But, there is also a counter, farm labour is not available, plus the soil is hard, so farmers may need tractors more now. Middle to upper level farmers may be able to afford them,” he said.

Wheel Loaders n The options in the exceptional wheeled loaders are 430ZX with two engine options (JCB Ashok Leyland (127 HP. 1.7 cu.m), 432ZX (150 HP, 2.3 cu.m) and 456ZX (216 HP, 3.3 cu.m) Excavators n Our best and India’s finest Excavator range includes JS 81 (8 ton), JS 140 (14 ton), JS 200 (20 ton). JS 210 LC (21 ton), JS 330 (33 ton) and recently launched JS200HD (Quarry machine) suited to diverse weight requirements Skid Steers n We also have 3 different Robotic Skid Steer Loaders, viz. 160/170/190 all of which come with a wide range of attachments to suit specific customer needs Telehandlers n We have two models in telehandlers namely 506C and 528S which are widely used in construction of multi-storyed buildings,

material handling at ports, industrial purpose, etc.

Compactors n We have two models of compactor called Vibromax VM115 and VMT 850, which are widely used in construction of roads and highways Mobile Crane n Liftall is among JCB India’s latest launches.

Currently there are three models Liftall 1253 and Liftall 1202 in the 12T category and Liftall 1553 in the 15T category. Cranes are extensively used as Material Handling as well as construction equipment.

JCB India designs and develops the products on the basis of needs and requirements of the customers as well as on the growing infrastructure needs of the country.

All machines are high quality products, at par with the world’s best and built to withstand extreme vagaries of climate, while delivering

their optimum performance.

JCB India believes in extraordinary customer satisfaction, as they are the principal force guiding all JCB initiatives and endeavors.

We implement this mission through our comprehensive Network of 57 dealers and over 430 outlets, which provide expert servicing for our world-class machines. Our Product Support makes a diligent and persistent effort to ensure that every JCB machine is in best operational conditions at all times. We have a dedicated parts center in Faridabad and parts depots in Chennai, Pune and Kolkata.

Engineering excellence and innovation are the hallmarks of JCB and we are streamlining our facilities in India as per world standards.

With the valued inputs from our customers, JCB India will continue to innovate and produce equipment and services to best suit the needs of our markets. This indomitable spirit and our unwavering commitment to serve while keeping pace with the changing tastes of our customers, has helped in winning over our customers over, time and again.

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News

AgriTech India August 2012

Weak monsoon affects world agriculture market

– G Chandrashekhar

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t a time when global commodity markets, especially energy and metals markets have come under pressure due to weak macroeconomic sentiment and demand concerns and as a result, prices of some commodities have recently declined to levels last seen in 2009-2010, agricultural markets have been booming in the wake of serious weather aberrations affecting some of the major origins in the northern hemisphere.

The worst drought in several decades currently threatening the US crops (mainly corn and soyabean), weather concerns in the Black Sea region (Russia, Ukraine and Kazakhstan) impacting grains as also neardrought conditions faced in the Indian subcontinent have catapulted grains and oilseeds prices to record highs.

Yet, prices are not on a one-way street.

Ahead of the USDA WASDE report on August 10, in the bourses, financial participants are paring back their speculative positions in agriculture. Profit-taking has pressured prices of late. Improved rainfall in the US Midwest is seen helping stabilise soyabean yields.

According to experts, given the rapid growth in unhedged long positions in futures markets and the long list of potential catalysts that could halt the upward trend in the month ahead, overweight agricultural positions are now being pared back.

Meanwhile, India too continues to be the

focus of attention with the forecast that the southwest monsoon will be less than 90 per cent of the long-period average which signifies drought. Forecast of El Nino is likely to reduce rains in the second half of the June-September season impacting a range of crops including rice, coarse cereals, pulses, oilseeds, cotton and sugarcane.

Of course, for the world market and particularly for investors, the US drought remains the key factor setting sentiment and prices. Soyabean and corn seem to be the most favoured in terms of price performance.

Expanded Acreages Despite expanded acreages, yields are set to take a hit due to acute moisture stress. In case of wheat, on current reckoning, 2012-13 output is forecast down by 30 million tonne due to geographically widespread downgrades, but comfortable carry-over stocks are expected to cap the upside risks to prices.

While crop prospects and harvest size continue to come under close scrutiny in this weather-market, market participants are also concerned about precipitate policy intervention by governments. For instance, the anticipated decline in the US corn output may prompt the government to discourage diversion of the crop for bioethanol production.

Wheat too may come under this ambit.

Elsewhere, countries in the Back Sea region may resort to imposing restrictions on grains export as happened in 2009.

At home, it should come as no surprise if the Union government unleashes a series of measures – fiscal, monetary, trade, tariff and administrative — to fight food inflation. Ban

or sharp curtailment of export of essential commodities would be the most logical step to expect, followed by imposition of stringent storage restrictions.

On the futures platform there may be stricter regulatory oversight. Even re-imposition of selective credit control on essential goods may be considered.

Simply put, the policy context has now become complex. Countries will be forced to undertake extraordinary measures to respond to the extant extraordinary situation. The most unfortunate part for India is that our own drought has coincided with similar conditions in the US, the world’s largest agriculture producer and exporter.

The focus must now turn to the southern hemisphere. Whether expansion in crop production in the second half of the year will at least partially compensate for the decline in the first half and bring about some price relief is a conjecture at this point of time. But if current high prices are any guide, there will be supply response soon, subject again, of course, to normal weather.

Weak monsoon brings down growth of hybrid seed industry

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canty rains in cotton-growing regions of Gujarat, Maharashtra and Tamil Nadu have washed away hopes of hybrid seeds growth in the country. TheNational Seed Association of India (NSAI) is expecting only a single digit growth between 5-7% against its previous estimate of 20% early this year.

India’s hybrid seed industry, which is pegged at Rs 11,000 crore, grew nearly 15% last year. And cottonseed contributes up to 30% to the total industry. Cotton farmers have decided to grow sesame, sorghum and other crops that require relatively less water.

“The growth of hybrid seed industry may not match up with the last year’s growth. In fact, the growth could come down by half in such a difficult condition,” said Raju Kapoor, executive director, NSAI. The cotton seed usage has been witnessing a decline this season, signaling a significant fall ahead.

As per the government data, Gujarat’s 8 districts, out of 18 districts, are still experiencing scanty rainfall and the rest got deficit rainfall.

Saurashtra and Kutch regions, which produce more than 35% of cotton, are the worst droughthit places.

Farmers are advised to sow cluster bean, sesame and castor as soon as rainfall revives.

However, the farmers who have already sown cotton are being advised to carry out harrowing and earthing up.

States like Haryana and Karnataka, which are still awaiting rains for its standing crop, are directed for furrow irrigation followed by straw mulching. Despite widespread rainfall for a few days, Maharashtra’s rain deficit is still 26%.

“Farmers are expecting low output for cotton this year as deficient rainfall is all set to hamper their standing crops. Some of them have shifted their interest to other crops,” said NP Hirani, chairman of Maharashtra State Co-operative Cotton Growers Marketing Federation, the largest supplier of cotton, supporting 2.5 million cotton farmers.

J&K to set aside Rs. 112 cr for farm sector

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he Jammu and Kashmir Government has approved an Rs 112-crore action plan for 2012-13 under the ‘Rashtriya Krishi Vikas Yojana’. The plan was approved at State Level Sanctioning Committee (SLSC) chaired by the Chief Secretary, Madhav Lal, here last evening, an official spokesman said.

Under the plan, Rs 12 crore has been earmarked for implementation of vegetable initiative for the urban areas of the state, Rs 50 crore for saffron and Rs 14.91 crore for development of dairy, fisheries, sheep and poultry.

Lal called for synergy between various departments, the agriculture universities in the state and other Government institutions for over all benefit of people associated with agricultural activities, its production and marketing.

Lal stressed on establishment of market tie-ups by identifying and involving private players in the field as well. He said initiatives should be designed in such a way that visible difference is observed in the served area.

The Chief Secretary also called for full utilisation of funds made available to the state under the scheme so that the benefits reach the target population engaged in agriculture and allied sectors.

The committee also reviewed the approved ‘Rashtriya Krishi Vikas Yojana’ action plan 2011-12 and held detailed deliberations on department-wise expenditure and implementation of the schemes in the State.

News

AgriTech India August 2012

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...Continue from page 1

Rs. 1,900-cr Special Package for Farmers, States Want More

Kharif Crops Hit As a weak monsoon crossed the half-way mark, the shortfall in kharif acreage of rice, pulses, oilseeds and cotton continued to widen.

Rice acreage registered the sharpest fall at 25 lakh hectares from 18 lakh hectares in the past week. This was because of a slowdown in paddy transplanting in West Bengal, Bihar and Uttar Pradesh.

This trend may persist with the India Meteorological Department (IMD) predicting deficient rain for the remaining period of the monsoon. The IMD pegged the overall rain deficit for the June-September period at 15 per cent, the worst since 2009 – a drought year when the shortfall stood at 22 per cent.

The deficit has already a sparked a rally in prices of agricultural commodities and could possibly shrink the country’s economic

Poor Monsoon will slow down growth rate: Montek

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ven as prevailing negatives in economic fundamentals have led to significant lowering in GDP growth projections for the current fiscal by various think tanks, Planning Commission Deputy Chairman Montek Singh Ahluwalia scaled down the growth estimate further to about 6 per cent on account of a deficient monsoon.

While maintaining that deficiency in monsoon rainfall during the first two months was a known factor, Ahluwalia said: “If we factor in that agriculture which would not be strong, economic growth would be closer to six per cent.

I don’t think we have sufficiently strong industrial turnaround yet.”

Ahluwalia, however, does not feel that there is a need for special schemes to tackle the drought-like situation as the rural employment guarantee programme MGNREGA will be enough to deal with the problem of joblessness in rural areas.

Indicating that the current situation does not call for an incentive as these are issues for State governments to tackle and “they are usually very keen to take corrective measures,” Ahluwalia said: “The growth rate in agriculture will be lower and that means that certain amount of income and employment stress in rural areas will have to be countered.

In that perspective, the existence of the MGNREGA scheme provides a kind of automatic stabiliser. If people need work because of the drought, they will get work through the MGNREGA.” Ahluwalia pointed out that while this was not the first time the country was facing a monsoon failure, it was possible that the situation might improve in the coming months. “They [Meteorological Department] have actually said that the overall monsoon position in the next two months will be better than the previous two months but overall it will be deficient.

There is nothing new in this. We have known that it will be deficient in the first two months… this is not the first drought we have had. Droughts do create a problem, and we know what to do when they happen,” he said.

Inflation a concern As to whether the drought would impact the price situation further at a time when inflation is persisting on the higher side, Ahluwalia said it was “a matter of concern” if inflation is above 5-6 per cent.

“It is true that inflation has been a problem.

It has come down from the double-digit but virtually all the government forecasts say it will remain around 7 per cent for sometime and that is not good enough,” he said.

growth. The Reserve Bank of India has scaled down growth projections to 6.5 per cent from the earlier 7.3 per cent.

The gap in acreage for tur (arhar) and urad has largely been covered, while it has widened for moong due to poor sowing in Rajasthan.

Lower sowing of groundnut in Saurashtra has hit the oilseeds acreage, though higher soyabean planting in Maharashtra has helped bridge the deficit to an extent. Poor rains in Gujarat have shrunk the cotton acreage by 7 lakh hectares, though area under the fibre crop has picked up in Andhra Pradesh.

15 % Rainfall Deficit “The total rainfall for the June-September period is likely to be below normal, at 85 per cent of the long period average (LPA),” said L.S Rathore, Director General, IMD. LPA is the 50year average, pegged at 89 cm.

The deficit rain forecast confirms the possibility of drought in parts of the country, which now includes even the North-Western States of Punjab, Haryana, Rajasthan and Gujarat that face a 50 per cent deficiency. States such as Karnataka, Maharashtra and Rajasthan have already declared the drought-hit areas.

Since the onset of monsoon in June, the deficit has been 20 per cent. Twenty-two of the 36 meteorological subdivisions accounting for 63 per cent of the country’s total area are facing a deficit or scanty rainfall. For August and September, the shortfall is forecast at 10 per cent on the likely emergence of El Nino – a warm weather condition in the Pacific that creates drought in countries, including India.

Rathore maintained that paddy cultivation would not be affected, but said that conditions were worrisome for production of coarse cereals.

Seed Subsidy Seed subsidy to take up replanting and an assistance of Rs 50 crore to upscale production of fodder with a buyback arrangement was also approved, Pawar said.

Gujarat seeks Rs 14,683-cr The Narendra Modi Government in Gujarat has sought Central assistance to the tune of Rs 14,683 crore in view of a drought-like situation in the State. The State Government urged a visiting Central team, led by Union Agriculture Minister, Sharad Pawar, and Rural Development Minister, Jairam Ramesh, to release assistance to the tune of Rs 14,683 crore.

“We have asked the State Government to make this demand in two parts – one, immediate assistance for meeting the drought, which we at the EGoM can sanction, and the long-term plans for Narmada pipelines and other things, for which the State Government can approach the Planning Commission,” Pawar told reporters.

Out of the Rs 480 crore demand for immediate solution to drinking water and fodder problems, the Centre has already released Rs 320 crore and the balance Rs 160 crore would be released in the next 45 days, he added.

Ramesh said the Centre would consider increasing the number of employment days from 100 days to 150 days a year under MGNREGA schemes for the rural and poor masses. Officials said the State Government may wait a few weeks before formally announcing a ‘drought-like situation’.

Punjab wants Rs 2,380-cr Dubbing this year’s monsoon “as one of the worst” in recent history, the Punjab government today sought a special package of Rs 2,380 crore from the Centre to bail out the farming community from the “weather-driven” crisis.

Punjab Chief Minister Parkash Singh Badal demanded Prime Minister Manmohan Singh’s “immediate” and “effective” intervention for providing relief to the state, an official statement said.

The demand for central package includes Rs 850 crore for extra expenditure incurred by farmers and Rs 1,530 crore for power purchasing at a higher price as well as for diverting energy to farmers, it said.

Stating there has been 65 per cent deficit in monsoon up to July 25 this year, Badal said that “the country at large and Punjab and the North West region of the country are in the throes of one of the worst droughts since the 1960s.”

“Worse, the forecast for the remaining stretch of the monsoon period holds out no hope for the Kharif season. The timing of the rainfall deficit has dealt a crushing blow to the peasantry in Punjab as it hit them at the sowing season.” he added. Badal also raised concern over Punjab getting no special package from the Empowered Group of Ministers on July 31.

Drought effect on US crops

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mall amounts of rain this week and early next week in about 70 to 75 percent of the U.S. Midwest crop belt will provide some relief to deteriorating corn or soybean crops from the relentless and spreading drought, meteorologists said on Monday.

“There’s no huge change in the forecast today, maybe a little more favorable for crops but we couldn’t have gotten much worse,” John Dee, a meteorologist for Global Weather Monitoring, said.

Dee said a weather front would move into about 75 percent to 80 percent of the Midwest Tuesday through Thursday, leaving 0.20 inch to 0.60 inch of rain and a similar front was expected next Monday and Tuesday with about 70 percent coverage.

Temperatures will rise into the upper 90s (degrees Fahrenheit) to low 100s F early this week, cool to the 80s F by midweek then rise into the 90s F again by the weekend, Dee said.

“There are no sustainable soaking rains in sight. There is some slight relief but no huge reversal in the drought,” Dee added.

Commodity Weather Group (CWG) on Monday said more than one-half of the Midwest would still be too dry and warm for at least the next two weeks and the most persistent heat was expected for the western Midwest.

“This will leave over one-half of the latepollinating and filling corn and pod-setting soybeans subject to additional stress,” CWG meteorologist Joel Widenor said.

CWG’s Monday report said the drought was more focused on southern Wisconsin, western Illinois, southern and western Iowa, far northern and far western Missouri, southwest Minnesota, South Dakota,

“We have been seeking a comprehensive economic package to save the nation’s saviour.

Unfortunately, even the financial packages announced for farmers in the country have by-passed the country’s leading agricultural state,” he said.

He said farmers of Punjab had sacrificed two of his most precious assets at the altar of the national interest which was land fertility and water. The Chief Minster said the timing of the rain deficit has further pushed the peasantry and food security into a deep crisis.

“This (poor rain) has (come) at a time when farming and the farmers were already in the grip of one of the worst economic crises in history. Across the country in general and in Punjab in particular, farmers faces a grave crisis, leading to back-breaking indebtedness and even suicides,” Badal said.

“The 65 per cent rainfall deficit means that the farmers will have to incur an additional expenditure for sustaining the paddy crop transplanted in about 27.80 lakh hectares and other kharif crops like cotton and maize etc., by using diesel run pumps.

Badal said the expenditure to be incurred on saving paddy, cotton and maize crops by using diesel run pumps would be approximately Rs 550 crore. Further, an additional expenditure of Rs 300 crore is likely to be incurred by the farmers for replacement of mono-block pump set operated tube-wells to submersible pump set operated deep tube-wells, he said.

A cumulative extra burden of Rs 850 crore is to be borne by the state farmers to save their crops, Badal said. Apart from this, the Punjab State Power Corporation Ltd (PSPCL) will incur an additional expenditure of Rs 1,530 crore by diverting power from other sectors as well as purchasing power at a higher price.

Thus, additional cost on all these accounts will be Rs 2,380 crore.

He said an objective study shows that the beleaguered farmers have to incur an additional expenditure of about Rs 3,000 per hectare in nurturing their paddy crop. “There is an urgent need to come to the aid of the farmer in one is worst hours of crisis through a comprehensive economic package, taking into account the stress that the state government and the PSPCL

Nebraska and Kansas.

The devastating drought has been decimating corn and soybean crops in the southern Midwest and eastern Midwest in states such as Arkansas, Kentucky, Indiana, Ohio and southern Illinois.

Drought and heat in the United States led the U.S. Department of Agriculture last Wednesday to slash its corn production forecast to 12.970 billion bushels, down from its previous outlook for 14.790 billion and below the record crop of 13.1 billion bushels produced in 2009.

USDA last Monday dropped its estimate for U.S. corn good-to-excellent condition rating to 40 percent from the previous 48 percent. Traders expect USDA to show a similar decline in updated weekly crop progress data later on Monday, including a decline in soybean conditions.

A report from climate experts on Thursday said the Midwest was in the grips of the worst drought in a quarter of a century.

Nearly two-thirds of the nine-state Midwest region was in some stage of drought in the reporting week that ended July 10, up from just over 50 percent a week earlier, according to the Drought Monitor, a weekly report on drought throughout the country compiled by U.S. climate experts.

One-third of the region was in severe to exceptional drought, up from about a quarter of the region a week earlier, it said.

The worsening drought caused Chicago Board of Trade spot corn futures prices to soar nearly 45 percent in only six weeks with the price on Friday coming within a few cents of the record high of $7.99-3/4 per bushel hit 13 months ago.

also have to take in the process, he said.

Banks’ Role The Government has also asked the public sector banks to gear up their branches to support farmers in the rain-deficit areas. The Department of Financial Services in the Finance Ministry has sent a missive to this effect to the top management of public sector banks, banking industry sources said.

The local machinery — branches — will be asked to implement ‘in full measure’, if necessary, restructuring of loans in line with the RBI guidelines. With the monsoon playing truant this year, bankers are already facing the heat on advances to the farm sector. They fear the situation will worsen if the deficit in rains continues in the remaining monsoon period.

Although, the situation is not that alarming, bankers fear the shortfall in rains, which has already hit sowing of key kharif crops in these States, will hurt the farmers’ repayment capability.

“We are already facing the heat (on farm loans) but proactive steps are being taken to protect the bank balance-sheet,” said S. L. Bansal, Chairman and Managing Director, Oriental Bank of Commerce (OBC). In the April-June quarter, as much as Rs 231 crore of agri-advances have slipped into the nonperforming asset category for OBC. V. Kannan, Executive Director, OBC, pointed out that for drought-prone areas specified by the Government, there are already standard RBI guidelines for restructuring farm loans. All farm advances to such areas have to be restructured and fresh advances have to be extended. They will have to be taken out of the NPA category and treated separately.

“As of now, we have not come to such a situation where large areas have been declared drought-affected and restructuring has to be done”, Kannan said. The situation is not alarming but the fear is that it may worsen in the second quarter if the shortfall in rains persists, said an official at Syndicate Bank.

Karnataka has already declared some interior parts of the State drought-affected. It has also announced a debt waiver for loans taken from cooperative societies. n

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