Managing the plentiful

Government procured 25.4 million tones of wheat last year and this year it has been targeted at 26 mt, two thirds of this will be from Punjab and Haryana. But what makes no sense is that government is going ahead with procurement without proper storage facilities, as there exists a significant gap between procurement and storage capacity. Such huge stocks seem difficult to manage as well. FCI does not have adequate storage capacity to safely hold even half of the present inventories and is, therefore, forced to keep grains in the open, exposing them to the risk of rotting and other forms of losses.

What’s the meaning of increased area or production, when there is no provision/ infrastructure to store the buffer stocks? It is the utter waste of resources and adding to the burgeoning global problem of Hunger and malnutrition. But the real sufferers are the poor and hungry, who are not even able/ manage to have a square meal a day.

Food Corporation of India (FCI) is the major public sector authority to undertake purchase, storage, movement, transportation, distribution and sale of foodgrains on behalf of the Central Government. A lot of wastage can be seen in FCI storage facilities due to lack of improper and inefficient storage, transportation and upkeep. 72 lakh tonnes of wheat are lying in open warehouses of the Food Corporation of India in Haryana, Uttar Pradesh and Punjab, a huge quantity of which has got rotten. The grain has been lying outside, uncared for, for more than a year. As a result of this criminal negligence, the huge quantity of wheat and rice meant for PDS is lying outside, uncared for, for a substantial period and even for one or two years more till it rots and become unfit for consumption even by the cattle. This combined with the menace of hoarding and food inflation, makes it hard for even a middle class family to meet their food requirements leaving the market-dependent common man food insecure due to unaffordable prices. Recently it came to light that in Rajasthan FCI, godown and premises are used for storing liquor, and grains meant for PDS are dumped outside in the open, which is highly deplorable and a heinous act of condemnation.

Never before have we produced as much food as in the last few years and yet we never before have so many people gone hungry. It is not just happening in India, but worldwide. And it is not just production of food but the manner in which it gets distributed that is increasingly the subject of debate. Recently planning commission has categorized 372 million Indians as poor in the proposed National Food Security Act. It means that additional 97 million people would get subsidised food grains, once the proposed law is implemented, increasing the government's food subsidy bill from Rs 20,000 crore, to Rs 75,000 crore. So the grain requirement would sure go up and the procurement agencies need to strengthen the existing facilities accordingly. Every now and then govt reiterates that we have enough foodstocks, but still the millions of food needing hungry bellies goes to sleep even without a single meal. But for all the inadequacies, the central govt and ministry used to put the blamegame on the states.

Clearly, the govt and FCI has to go for storage capacity addition for ensuring the safe storage of the purchased grains. A review of food management policies is overdue. Minimum Support Price (MSP) has become the procurement price. The MSP should be true to its name a minimum price for all food growers and not just for a section of them in a few states. Even today, almost four decades after the so called green revolution,l Punjab and Haryana prides themselves as the food/ grain basket of the nation. But it should not be forgotten that all major schemes and incentives too reached them - either it was the inputs of green revolution or the MSP or, launch of any ambitious program. The FCI or any other government grain procuring agency has limited its activity to North India due to the reasons they can only answer. The grain procurement needs to be extended beyond the green belts of Punjab, Haryana and Western UP without going through the politics of subsidy and MSP. And with these existing inequalities in policy making and implementation, how can we talk of food security. The government’s food procurement policy should be need-based and at market-driven prices.

Professional management needs to be taken up for the buffer stock storage and its further movement with the involvement of Private players and corporate houses on PPP basis, in line with the ventures by the Adani Groups in Moga, Punjab and Kaithal, Haryana.

When everyone right from the Hon’ble President to PM and Mrs Gandhi speaks of hunger elimination, then why are not they serious enough about the issue, or it seems they are doing just the lip- service. What is more deplorable is that when people are dying of hunger and the prices of cereals have skyrocketed, utter neglect on the part of agencies and the authoritative govt, which is more interested in passing resolution on food security rather than securing the available food to the hunger and starving masses.

Cautious use of GM crops needed

The recently released report by US based National Research Council, which is affiliated with the National Academy of Sciences, came out with the findings that Genetically engineered crops have provided substantial environmental and economic benefits to American farmers, but overuse of the technology is threatening to erode the gains. The study seems to be the first comprehensive Impact assessment on the Genetically modified crops on American farmers, which was rapidly accepted and adopted since their introduction as early as 1996. The report found that the crops allowed farmers to either reduce chemical spraying or to use less harmful chemicals. GM crops also had lower production costs, higher output or extra convenience, benefits that generally outweighed the higher costs of the engineered seeds.

But many critics have already warned that the over- obsession with GM crops may cost dearly, in the form of erosion of biodiversity and possible harms/ hazards to the human health, environmental/ food chain imbalance etc. Already many western nations are facing the problem of super weeds and other resistant flora and fauna due to excessive herbicidal application combined with the planting/ sowing of GM crop varieties. In India also the revelation of Monsanto about the resistance breakdown of Bollgard II in many parts of Gujarat points to this fact. So a middle route can be suggested, with the optimum/ need-based planting of GM crops along with the traditionally existing varieties and crops.

The findings of the study is critical but it seems still the report is not likely to win over critics of the crops. Biotechnology and other modification techniques have to be assorted only for the pest management, nutritional benefits and to cope over the adverse effects of global warming. The report also mentioned that use of GM crops resulted in other environmental benefits like controlling soil erosion and contamination of water and other ecological bodies.

The report said that use of chemical insecticides had declined as BT crops have spread. In areas with heavy insect pressure, it said, the use of the crops has increased farmers’ income because of higher yields and reduced spending on insecticide. Though there is no doubt that there are sure gains on the ecological fronts, similar gains on the economic sides has still to be established in India in case of the only released GM crop, Bt Cotton. And on the food front, a long detailed investigation has to be carried out before blindly going with any new technology. Safety has to be given the first thought and the long term effects have to be taken care without jeopardizing the living creatures and environment. The report said that when genetically engineered crops were introduced, some had lower yields than conventional varieties, a finding often cited by critics. But the report said newer studies showed either a modest increase in yield or no effect.

The appraisal and approval of release must be well scrutinized by the concerned regulatory authority, and should not be given any chance of faultiness from either of the side, which may result in considerable repercussions in the future. In Indian case of Bt Brinjal also the immediate release has only been withheld due to the lack of transparency in testing / appraisal stage. But there is no doubt that Genetically engineered crops are here to stay and looks prospective for the total production increase with minimal cost.

As the land, water and other production resources are shrinking, global community is going to face the heat of food and nutritional security. So all the possible technological interventions should be adopted and applied for tackling the problems facing India and world at large. So a holistic approach must be adhered to while discussing any scientific technology in the interest of food production and humanity. A well debated fact based thought should be given to the GM technology or other Biotechnological tools of crop improvement involving the stakeholders and keeping intact the interest of the affected persons. Any technology is not completely bad or good, instead it might have some flaws. So the flaws can be worked upon and rectified for its better percolation in the target people.

Food processing – Modernisation, scalability key for take-off

Food processing is of utmost importance to the growth of India's rural economy. This is due to its innate potential to increase value proposition to the farmer, reduce post-harvest wastage and generate greater non-farm realisation. It is estimated that a one per cent growth in food processing has the potential to generate an additional direct employment for five lakh people, and indirect employment for 15 lakh individuals. It is this multi-dimensional incremental propensity of the food processing industry to positively affect the socio-economic fabric of rural India that has kept policy makers strongly focused on driving the development of this industry.

The Indian processed food industry is in a demanding stage of growth and development. Contributing to more than 35 per cent of the total food market, the processed food industry has been growing at a healthy 14 per cent in the recent past. This growth is expected to continue in the near future due to three extremely strong drivers namely – high domestic demand, excellent supply strengths, and focused Government support.

Growth drivers

On the demand side, factors such as steadily increasing population, rapidly changing demographics and lifestyles, and increasing disposable income especially among the young middle class population are driving an unprecedented growth in consumption of high value food items.

On the supply side, remarkable natural advantages such as diverse agro-climatic zones, varying soil types and a vast irrigated area have contributed towards making India one of the largest producers of food commodities in the world thus providing a strong raw material base for the processed food industry.

In addition, to the demand and supply advantages, the food processing industry enjoys intense focus and support from policy makers. The Government of India has accorded priority status to the food processing industry and has taken numerous initiatives to boost the growth of this sector. The Ministry of Food Processing Industry (MFPI) set up to boost food processing has introduced a multitude of support schemes and interventions to increase the levels of processing in the country. These schemes have brought about the much needed focus on key success factor functions such as infrastructure development, technology up-gradation, quality assurance, research and development, and human resource development.

Extremely positive demand trends combined with strong supply strengths and a favourable policy environment has resulted in remarkable acceleration of investor interest to tap the potential that the food processing industry offers. The growing interest for private investment in this sector can be gauged by the fact that the inflow of foreign direct investment (FDI) has increased at a CAGR of 27.7 per cent from Rs 17,400 crore in 2004-05 to Rs 46,200 crore in 2008-09. Though the industry is on a rapid growth path, it is still in the early stages of its life cycle.

This is reflected in the fact that the processing levels and value addition across key perishable segments are extremely low. For instance, in the case of fruits and vegetables just about 2.2 per cent of the production is processed compared to 30 per cent in Thailand and close to 80 per cent in Philippines and Malaysia. Likewise, the levels of processing in the dairy sector are about 37 per cent compared to above 60-70 per cent in developed countries.

Issues and Challenges

While the low levels of processing clearly reflects the untapped potential that is yet to be leveraged, it also indicates that the industry faces certain critical challenges which need to be overcome to sustain continual growth in the future.

Some of the key challenges faced by this industry include: High inefficiency in procurement: Due to factors such as low productivity, fragmented supply base, extremely high intermediation, and poor flow of information between farmer and processor. Non-availability of suitable varieties and raw materials that are amenable for processing: Lack of critical mass in domestic demand

Fragmented industry resulting in poor economy of scale. Lack of sufficient cold chain and post-harvest facility. Low quality standards of raw material and poor adoption of traceability and certification restricting exports. Inadequate availability of trained manpower.

Recommendations and the way forward:

While the efforts taken by policy makers for increasing the processing levels are highly commendable, there are certain policy initiatives that need to focus on facilitating modernisation and up-gradation, increasing scale of operations, and increasing business viability so as to further enhance the growth of this sector.

These include: Supporting backward integration of processors with farmers by building organisational capital and market intelligence capital at the farm level through supporting the formation of farmer groups. Promoting specific commodity clusters and intensive livestock rearing - to support increase in scale of aggregation and uniform application of quality standards.

Facilitation of contract farming

Rationalisation of marketing laws - to facilitate better private participation in aggregation, grading, quality certification, and post-harvest handling of agricultural produce. Developing India-centric food brands with strong geographic appellations (e.g. Assam Tea, Ratnagiri Mangoes) with traceability and trust marks. Review of policies with specific reference to infrastructure development such as Land Laws and Zoning Laws: Such that all agriculture-related post harvest activities are permitted to be carried out without having to change the definition of the land use. Power tariff for post-harvest handling projects: Such that special tariff rates be applied for all post harvest projects to make them more viable. Restrictions on multiple subsidy provision for agri-infrastructure projects such that the subsidy provision is not capped in terms of value and number of applications for a firm. Enable better access to credit: for instance by increasing the upper cap of investment in plant and machinery to qualify as priority sector credit. The current limit of Rs 5 crore is very low and needs to be increased substantially given the high cost of modern technology and the need for scale.

While policy makers have rightly focused on protecting the small and medium enterprises, the need for scale has largely been neglected. It is imminent for policy makers to focus on attracting large business houses into the food processing sector and in the process push for introduction of higher scale of operations and modernization of technology.

Conclusion

In conclusion, it may be stated that while extremely positive demand, supply and policy environment are driving the growth of the food processing industry, the sector is facing teething problems especially in the areas of technology up-gradation, modernization and increased scale of operations. Strategic handling of these issues by means of specific policy reforms from the government and through focus on new ideas and innovations by private players holds the promise of taking the food processing industry into a take-off growth path in the near future.

(Rana Kapoor, The writer is Founder/Managing Director & CEO, YES Bank)

A Sardar Sarovar Riddle

Whatever the project's detractors may claim, it has given Gujarat increased yields and diversified crops

In one of Harry Belafonte’s songs, he sings ‘all together now’. The entire audience then yodels ‘Matilda’, which is the theme of his concert. This happens at the Sardar Sarovar Project (SSP) too. About a year ago, my young friend Tushar Shah said that the Sardar Sarovar canals were not delivering any water while khet talavdis, which we all love, were responsible for Gujarat’s agricultural growth performance. I taught him econometrics a long time ago and as a teacher, it gives me satisfaction that he is better than me. But he doesn’t like government canals and when he was giving one of his first cost comparisons, I had to tell him that he was ignoring the social and energy costs of pumping out water from ground reserves. We, then, decided to have a seminar on SSP canals, which never took place. Then, IFPRI and Ashok Gulati got into the act and Gujarat’s agriculture department had huge hoardings advertising their certificates on farm ponds and agricultural markets. Thereafter, everybody got into the act and it was Matilda all over again.

I found this a little puzzling. For one thing, I travel a lot in Gujarat and always go to villages to talk with the Patels and other farmers. I am the first one to admit that we need to be faster in building SSP canals and distributaries. But I have seen Narmada waters in farmers’ fields. In fact, in my father-in-law Navin bhai’s village, adivasis received these waters and were making more than Rs 1 lakh per hectare.

On attending their wedding ceremonies, I saw that they spend a lot of money and are happy. Not following Brahmanical Hinduism, they pray to their own deities for whom they were building lovely temples. They were also building serais for pilgrims to which I contributed, being a son-in-law of the village. I also saw this in North Gujarat. A few weeks ago, I was coming down from Udaipur where Har Nath Jagawat, whose advisory committee I chair, had his annual meeting. There has to be something intoxicating about Sadguru’s adivasi cooperatives that build dams and harvest water, for tribal leaders to come down from Sahelian Africa to train with him. At Shamlaji on the Rajasthan-Gujarat border, I decided to motor down to Panch Mahals, instead of continuing on NH-8. One still sees real poverty on the road, a heartbreaking sight in a very fast growing area. It seems so senseless. As one’s car climbs up the hill and since canals don’t go up the hill, skinny women and children appear, which is not the case in canal serviced areas. I remember a Norwegian researcher making fun of me in her piece on SSP planners who quoted me as saying that I wanted to plan for more equity but was limited by the fact that canals follow ridge lines.

By now, I was convinced there was a counterfactual to the Matilda crowd. How big, I do not know. And I have no compulsions about producing non-existent facts. But the macro story, if you look at it with a trained eye, strikes a wrong note in Matilda. The story you remember is that agricultural markets appeared in Gujarat, there were farm ponds and diversification and yields went up—presto agriculture was growing at 6%. To begin with, irrigated yields did not go up. The state government does not publish irrigated yield statistics cropwise any more but for wheat we know that irrigated yield was 27.1 qtls/hec in 1999-00, a year of average weather and it was 28.35 qtls/hec in the triennium 2006-07 to 2008-09. Informally, we know the same story is true of other crops, if you take both good and bad years into account. Actually, there was a setback to diversification and Gujarat went back to paddy in a big way. In the last few years, the paddy growing area has gone up in Gujarat and the state has contributed 27% of the additional area under paddy cultivation in India. Now, this makes you ponder. The SSP planners did not want more paddy. But traditional canals get you paddy. Are markets not important? Oh yes, they are and have always been, as is the case in Gujarat. Read Dantwala’s classic on cotton marketing in Saurashtra. Before the upsurge of paddy in the 80s and 90s, grain areas were going down.

So yield and diversification are not going up in irrigated areas.

Gujarat remains a market savvy agriculturist, as it has always been. But the source of its growth is coming from irrigation. With more irrigation, total yield goes up. As ISRO satellites show us (CMD of SSNL would happily send ISRO remote sensing data to anybody), on January 31, 2009, area irrigated by SSP canals was 3,74,606 hectares. On September 28, 2008, it was 2,46,995 hectares. SSP is delivering to farmers, with good and bad canals, 6.21 lakh hectares of irrigation. Of course, we want thrice as much and we want it controlled, so that more people benefit, our land is not spoiled and our crops are diversified. But, Planning for Prosperity said in 1985 Gujarat’s agriculture will grow by 6% after it delivers. That’s the way it is today.

Yoginder K Alagh, Former Union minister

Scientists found animals that can live without oxygen

For the first time, scientists have claimed to have discovered animals that live without oxygen deep under the Mediterranean Sea. These creatures called 'loriciferans', which measure less than one millimetre in length and somewhat resemble jellyfish sprouting from a conical shell, were found by team of Italian researchers from 10,000-feet deep hyper-salty basins in the Mediterranean Sea. Though scientist in the past have found a wide variety of single-celled organisms that live anaerobically, or without oxygen, they never had an encounter with live multi-cellular or metazoan animal living without oxygen in deep seas. According to researchers at the Polytechnic University of Marche in Ancona, Italy, the new findings could shed light on what life might have looked like before the rise of oxygen levels in the deep ocean and the appearance of the first large animals in the fossil record roughly 550 million to 600 million years ago, LiveScience reported.

The deep Mediterranean basins are completely anoxic, or oxygen-free, and loaded with toxic levels of sulfides. In these extremes, the researchers were only expecting to see viruses, bacteria and other microbes. Roberto Danovaro, who led the team that conducted three expeditions off the south coast of Greece looking for signs of life in samples of mud from deep hyper-salty basins, said they have earlier found bodies of multi-cellular animals in these sediments. But they "were thought to have sunk there from upper, oxygenated, waters", said Danovaro. Instead, "our results indicate that the animals we recovered were alive," the scientist said, adding that "some, in fact, also contained eggs". The scientist explained that electron microscopy revealed the three new species of loriciferans found from the basins lack mitochondria -- the energy-making organelles or components in our cells that allow us to generate energy from oxygen among other functions. "Instead, they possess large numbers of organelles resembling hydrogenosomes -- anaerobic forms of mitochondria -- that were previously seen in single-celled organisms inhabiting no-oxygen environments."

According to biological oceanographer Lisa Levin of the Scripps Institution of Oceanography in San Diego, the implications of this discovery might also reach far beyond the Mediterranean Sea. The new finding "offers the tantalising promise of metazoan life in other anoxic settings -- for example, in the subsurface ocean beneath hydrothermal vents, or subduction zones, or in other anoxic basins," Levin said. Danovaro and his team reported their findings online in journal BMC Biology.

Dilemma of Development.