The flawed policy on Sugarcane pricing

Sugarcane, the political crop of country is again back in news for all the wrong reasons, with sugarcane farmers in UP on the warpath against the state advised price (SAP) and centre’s Fair and Remunerative Price (FRP) for their produce.

The Centre’s insistence that the FRP, which it announced recently replacing the statutory minimum price (SMP), is almost 15% more than the earlier price and is just a floor price, and that millers are free to pay more than the FRP has failed to assuage the farmers. The Centre has already conveyed that sugar mills in the state will have to pay more than the announced rate of Rs 160-170 a quintal to the farmers. The Central Government has made a steep reduction in the price of sugarcane for the coming season. The State Governments used to announce a SAP of sugarcane which was higher than the Minimum Statutory Price (MSP) declared by the Centre. Last year the MSP was Rs 108 per quintal while the SAP was Rs 160-180 per quintal. Now the Centre has banned the practice of declaring Advisory Price. It has provided that the State Government will have to itself pay the difference between the lower Statutory Price and the higher Advisory price. This will put an end to the practice of state governments announcing a higher Advisory price since they do not have such financial muscle. The centre has announced a price of Rs 130 per quintal for this season against Rs 108 for the previous year. But this increase is deceptive. The Centre has fixed an FRP of Rs 129.84 a quintal for sugarcane for the 2009-10 season (October September), while UP has announced an SAP of Rs 160-170 a quintal. However, the prices indicated by the mills were above the FRP and SAP, this was much below the farmers’ demand of Rs 280 per quintal. Sugar mills have not started crushing this season for lack of supply as farmers are demanding much higher.

The persisting tussle between millers and growers has kept sugar supply tighter than even anticipated and jacked up consumers prices to Rs 35/kg. By January, unless big imports are made, sugar prices are projected to hit Rs 40/kg. UP sugar mills that produce almost 40 per cent of the country's total sugar are yet to start crushing operations that have already begun in states like Maharashra, Gujarat, Tamil Nadu and Karnataka. And, on top of it, the state government is disallowing them to process imported raw sugar. Sugarcane output in UP is expected drop marginally to 40 lakh tonnes in the 2009-10 sugar year on the back of a 17% acreage drop. Sugarcane farmers, especially in UP, will suffer huge losses by the Ordinance brought by the Centre.

The government should withdraw the Ordinance and consider it only after holding consultations with everyone. The pricing issue of cane should be brought to a earliest timely solution, since the delay in crushing of mature cane will result in loss of sucrose content and thereby, loss of recovery at a time when the country requires higher output. Hence, an all party acceptable price should soon to be decided. Early harvesting of matured cane will allow farmers to prepare field for wheat sowing which is likely to start by the end of December. Farmers have been reeling under the cut in sugarcane prices on the pretext of ‘fair and remunerative pricing’ and feeling threatened by the proposal to ban Khandsari/ Gur/ Jaggery production. There is some doubt concerning Pawar’s intentions while the sugar mills don’t want such low prices for the sugarcane, as it will result in farmers leaving the crop. A Cabinet note to amend rule 7 of the Sugarcane Control Order (SCO) is being revived to ensure total regulation of the gur industry’s use of sugarcane. This would mean that the Centre will once again (after 2007) acquire the power to predetermine the use of sugarcane by different industries.

Interestingly, no specific slab has been fixed for this mutually agreeable price, which will not be constant but would vary from place to place depending on the recovery of the crop. It would be up to the millers to work out what price they are capable of giving along with the farmers who have to agree to providing cane at that price.

The biggest loser in this imbroglio has been the common man, who, after reeling under the impact of an unprecedented rise in sugar prices, was hoping for some respite once the new crop was crushed. Sugar prices, which have already moved up by a whopping 87% since January, have again started rising because of the delay in crushing and low inventories with mills.

UN Food Summit; No where to Go

With more than 1 billion people going hungry, the Food and Agriculture Organisation had called the Food summit on November 16-18 in Rome, hoping to win firm pledges by world leaders to spend $44 billion a year to help poor nations feed themselves. The World Summit on Food Security comes a year after major rises in food prices caused chaos in many developing countries. Food shortages and malnutrition rose to the top of the political agenda since a spike in food prices since last years parked riots in around 60 countries, mainly blamed to speculation and hoarding. Alongside the whole world is getting the heat of global warming in the form of wide variability in weather condition, drought, flood, cyclones etc., affecting food production and lastly adding to the woes of food and nutritional security. There has been a 12-13 per cent decline in crop output this kharif season due to long dry spells in some parts of the country and floods in some other areas. This year, the output of all major crops has gone down, including principal crops such as foodgrain, fibres and oilseeds and to some extent sugarcane, except cotton in India.

But a final draft declaration includes only a general commitment to pump more money into agricultural development, and makes no mention of a proposal to eliminate hunger by 2025. Even in the very first opening day of the summit many critics, mainly from the African nations described the Food Summit as wasteful and ineffective. The meeting was branded a failure within a couple of hours of its start after the 192 participating countries unanimously rebuffed the United Nations' appeal for commitments of billions of dollars in yearly aid to develop agriculture in poor nations. None of the leaders of the Group of Eight leading industrialized nations attended except for Italian Premier Silvio Berlusconi.

FAO in its publication observed that the financial crisis has its origin far from the agricultural sector and far from the developing countries, where its most devastating effects on the poorest segments of the population are being felt.

According to FAO, the number of hungry people rose to 1.02 billion people, more than at any other time in history and up 100 million from last year. A child dies of malnutrition every six seconds despite the fact that the world produces more than enough food for everybody; cereals crops in 2009 are expected to be the second largest ever, after a record 2008.

As per the Indian stand the climate change and its adverse impact on foodgrains production, and food security in particular, would be aggressively taken up at the summit. Our agriculture minister would raise the issue of limitations of technology on increasing foodgrain production given the availability of land and water.

FAO had hoped to keep the momentum going and that leaders would commit to raising the percentage of official aid spent on agriculture to 17% back to the 1980 level from 5% now. That would amount to roughly $44 billion annually, instead of the $7.9 billion that is being spent now.

A comprehensive spectrum of measures to combat a scourge gravely exacerbated by climate change and population growth is needed. This includes food aid, safety nets, social protection, increased investments in agricultural development, better market access, and fairer trade for smallholder farmers, especially women.

Previous food summits and meetings have been long on rhetoric and short on concrete action, and whatever promises were made have gone largely unfulfilled. In 2000, world leaders subscribed to the UN Millennium Development Goal of halving the number of hungry people by 2015, and this Food Summit will reaffirm commitment to that target. Even UN officials acknowledge that aim will not be met anytime soon, with some pointing to mid-2040 at the earliest.

The argument is that there is enough availability of foodgrain and food in the world. However, it is skewed. Promoting investments and infrastructure development in agriculture sector should also be taken to the forefront. There is a need to step up investments in agriculture with the dual purpose of stimulating sustainable productivity increases to expand supply and of exploiting the potential of agriculture for contributing to economic development and poverty alleviation in the least developed countries.

Bt Brinjal- The Indian Chapter

India’s biotechnology regulator Genetic Engineering Approval Committee (GEAC), on October 14^th gave its green signal to the environmental release of Bt brinjal, the first genetically modified food crop to be allowed in the country. With this, a debate has gripped the entire nation of whether or not to allow GM food crops as this could be a precedent for many other such crops.

Though GEAC has put its stamp on the crop, the final decision rests with the Union Environment Minister, Mr. Jairam Ramesh who has explicitly averred that the matter will be treated with no urgency and only after public deliberations will a final decision arise. However, apart from environment minister Jairam Ramesh’s nod, commercial cultivation of the genetically modified vegetable will require approvals from the ministries of agriculture and health and family welfare.

Currently, Bt cotton is the only genetically modified crop allowed for commercial cultivation and its introduction was prompted by its pests becoming increasingly resistant to pesticides. The commercial cultivation of Bt cotton has reportedly increased cotton yield from 308kg per hectare in 2001 to 508kg per hectare in 2006. The success of Bt cotton in India has in fact raised hopes for Bt brinjal as well. Although brinjal may not transform India’s fortune as was the case with Bt cotton, it might as well clear the deck for many such similar interventions.

The most prominent thing that irks the supporters as well as its critics is the absence of a labeling mechanism for foods in India. This will deprive the consumers to make an informed choice about the foods they consume. More over the labs in the country are not at present capable of identifying GM products, and there is also a big question hovering of who will regulate these products. Whether it will be the Ministry of Food, or will it be Health; Environment or Science and Technology or is there any other separate ministry to be formed in the future to look into the GM matters. Without a clear agreement on these issues, a decision cannot be arrived on this matter. But the time granted should be used constructively to assess the impact of the Bt Brinjal on the Socio – Economic tapestry of Indian Agriculture.

The ethical angle is going to be another major issue which is going to consume lot of newsprint in the coming months. Though scientific definitions may not delineate GM Brinjal as a vegetable with animal traits, to strict vegetarians willful mixing of bacterial genes may raise serious religious and sensitive issues. Cotton per se never faced this problem as cotton is not a food crop. Though sixty percent of the Cotton plant biomass is indirectly or directly linked to our food system, e.g. Cotton seed oil in our vanspati ghee or cotton leaves as fodder to goats and sheep, we have not yet been exposed to direct GM food crop like GM soybean or GM maize. Approval of GM Brinjal will open floodgates to most of them.

If the advisories of the companies are to be trusted, the transgenic vegetables are as safe as any vegetable available in the market, while Anti GM protesters paint a picture of a very gory world of Seed Corporations ruling the world. So where is the truth, may be somewhere in between. What can the Government do to inform the public, can we ask for every GM food be labeled like our green and red dotted foodstuffs? If after a period of 20 years, GM food is found to be dangerous, something like the discovery of toxicity of DDT after almost fifty years of indiscriminate use, will the mega corps pay for the clean up of whatever extent possible?

One obvious and unwanted fall out of this controversies are the misconceptions created in an uninitiated mind about the amazing science of biotechnology. This branch of genetic sciences has the capacity to change the world. We would definitely not have looked at a biotech Brinjal with suspicion, which produces insulin, or Vitamins, for example, instead of Bt Toxin. Valuable time and resources are being frittered out in search of finding a soybean which resists an herbicide rather than a soybean with double protein content. Maybe a corporation will not find it profitable but it could have gained a little more goodwill. Maybe government can take these initiatives and put forward legislatures to this effect.

- Anjana Nair-

Talks beyond Copenhagen

The threat of climate change that led to the Framework Convention on Climate Change (FCCC) at Rio, is perceived differently by different countries. Unsustainable consumption patterns of the rich industrialised nations are responsible for the threat of climate change. Only 25% of the global population lives in these countries, but they emit more than 70% of the total global CO₂ emissions and consume 75 to 80% of many of the other resources of the world. The richer world accounts for over 50% of carbon emissions and China brings the proportion to over 70%. In contrast, India accounts for less than 5% of global emissions. In per capita terms, the disparities are also large: an Indian citizen emits less than 0.25 tonnes of Carbon per year whereas a citizen of the USA, for example, emits more than 5.5 tonnes.

Another theme of Indian analysts has been the lack of reliability of GHG emission estimates, particularly of methane. According to initial estimates, large emissions of methane from paddy fields were ascribed to developing countries. However, the empirical basis of these estimates was questioned; subsequently experimental measurements by Indian researchers showed these doubts to be well-founded. Many Scientists and policymakers belonging to developing Nations argue that emissions by poor who live on the margin of subsistence should be considered a basic human right and should not be counted when ascribing responsibilities for emission reduction.

These facts have delayed any sort of effective international agreement on how to deal with the problem. In the case of the Montreal Protocol covering ozone-depleting substances, there was a wide consensus and effective action was mobilised quickly. Thus, an understanding of perceptions and positions of different countries makes it easier to explore possibilities of effective action.

Even in recently released IFPRI report, it’s clearly elucidated that agriculture is extremely vulnerable to climate change, because farming is so weather-dependent and small-scale farmers in developing countries will suffer the most. During the same phase, we are witnessing unsounding price rise, with substantial reduction on production fronts and weather aberration in the form of late or, almost failed rains/ monsoon, flood and deluge in rainfed and dry areas. Lastly, the study has called for an additional annual investment of $7 billion in agricultural productivity to help farmers adapt to climate change.

India’s perceptions on the problem of climate change and sustainable development; the kind of negotiating positions that follow from these perceptions; the policies India has undertaken so far and finally India’s possibilities for action that can help contain the threat of climate change.

Minister of state for environment and forests, Jairam Ramesh scotched speculation that India was softening its stand by allowing international verification of its steps for climate change mitigation or by agreeing to international commitment for quantified cuts in greenhouse gas (GHG) emissions. India has always opposed the “full stop” word from its climate change talks.

India has insisted that the measures it undertakes, as part of its domestic measures to counter climate change, will not be subject to international verification and reporting, unless it is funded internationally or uses technology received from abroad, like the world’s industrialized counterparts claiming to have taken all efforts to reduce the emission caps and mitigation measures, but denies any the right to be questioned or scrutinized.

There should also be consideration towards the common but differentiated responsibilities of different countries. As such, mitigation by India in two or three decades is neither necessary nor sufficient to arrest global warming and its consequence according to many experts in the field.

The argument that mitigation is not feasible without India's participation is thus political. As a bargaining tactic, the United States Congress refuses to undertake internationally-mandated mitigation obligations unless India accepts them.

There is a need for an equitable and efficient solution to climate change, so that efficiency can be obtained through a system of tradeable emission quotas and equity through equal allocation of global environmental space to all human beings. Therefore, in so far as the impact of human activity on global warming, rains, floods, sea levels and hurricanes in two to three decades is concerned, the die is already cast. So, it is time to act and further the talk on equity and sustainable basis, which should be acceptable to all partners across the globe and economic classes. Negotiations leading up to the climate change conference in Copenhagen in December are deadlocked on the question of similar demands on developing nations.