Change in guard

In a recent development, aftermath of the exposure of series of scams and bad name to the incumbent UPA, government has announced major changes in the ministerial portfolios of many of the ministries. Looking into the series, some makeshift / course correction has also been seen in the agriculture and allied sector.

Sharad Pawar has been able to retain the Agriculture portfolio, but parted with the additional responsibility of Public Distribution and Food Supply, which was the cause of major headache to him, mainly in the view of unprecedented case of food inflation and cases of food mismanagement reported across the country. Additionally, he has been given the charge of Food Processing Ministry, which was earlier held by Subodh Kant Sahai. Food processing sector had achieved remarkable feats under Sh. Sahai, attracting a huge investment to the least known and talked about sector, so now the onus is on Mr. Pawar to continue the show and take it forward to a newer height to the untapped area of immense potentialities.

KV Thomas has been allotted the Ministry of Public Distribution, Food supply and Consumer affairs as Minister of State (Independent charges). The bygone year witnessed many incidences of food rotting and food storage inadequacy. There are many challenges on the front, i.e., to tame the unstoppable price rise, food management, ensuring proper distribution, revamping the outdated functioning of procurement agencies, comprising the causes of two contradictory sides- farmers and consumers, and other issues. , So, there lies a lot of scope for the improvement on the distribution side to take up major reigns and place the house in order to ensure food security for the nation and deliver the food to the needy, solely on merit.

Arun Subhashchandra Yadav has been inducted as Minister of State (MOS) for Agriculture. Earlier, he was Minister of State in the Ministry of Heavy Industries and Public Enterprises. So, by taking over the new assignment, it is expected from Shri Yadav that he would rightly address farmers’ issues in the Agriculture Ministry. Born in1974 at Borawan Khargone in Madhya Pradesh, Shri Yadav is a commerce graduate and agriculturist by profession. He represents Khandwa Lok Sabha Constitutency in Parliament. For the first time he was elected to 14th Lok Sabha in by-election in 2007.

Harish Rawat took over the charge of MOS - Food processing Industry. He was born in 1949 in Almora. After qualifying for the LL.B. examination from the Lucknow University,he started his legal practice as an advocate. Later, Sh. Rawat joined the Indian Youth Congress and became its youngest chief in 1973. In 1980, he contested parliamentary election from Almora-Pithoragarh constituency on a Congress ticket and won the seat. Harish Rawat has held prominent positions in the Congress party and the government. Before joining the FPI ministry, he was acting as Minister of State for Labor and Employment.

We wish all the new office bearers a glorious time ahead. We hope that the dynamic team takes immediate and effective measures to tackle many of the long pending farmers’ issues, which would go a long way in bringing spectacular agricultural development, food security, and farmers’ welfare in India.

Surinder Jakhar; remembering a cooperator par excellence

Surinder Kumar Jakhar, the son of Balram Jakhar, former Lok Sabha speaker and IFFCO chairman for over two decades, died in an accidental bullet shot fired from his own gun at his farmhouse at Abohar district of Punjab.

Born on April 5, 1953, in a prominent family of Congressmen, Surinder Jakhar remained apolitical throughout his life, though he started his career as a sarpanch of Panchkosi village in 1980. Jakhar chose not to follow in the footsteps of his father, Balram Jakhar, and younger brother Sunil, who is an MLA from Abohar. Jhakar was a graduate from DAV College, Punjab University, Abohar. He was actively involved in cooperatives for about three decades. In 1987, he was elected as the MD of Fazilka Cooperative Society and was enjoying his fifth term before his demise.

A staunch follower of Gandhian views and administrator par excellence, he has shown many extraordinary capabilities during his long tenure as chairman of the largest cooperative institution. He first became the Director of IFFCO in 1988 and then became the youngest chairman in 1997. He was serving his fourth term as chairman, IFFCO. He was the founder chairman of IFFCO Tokyo general insurance company and also served as Director, Kribhco and Markfed.

Under Jakhar's leadership, IFFCO set a new record of selling 112 lakh MT of fertilizers in 2008-09 and achieved an all-time record turnover of Rs 32,933 crore in 2008-09. IFFCO had earned a net profit of Rs 360 crore in 2008-09.

During his tenure, IFFCO successfully forayed into the rural telecom sector by forming IFFCO Kisan Sanchar Limited, IFFCO Chattisgarh Power Limited in Power sector, and became the first company in India to make a SEZ for farmers as IFFCO Kisan SEZ. He was awarded best co-operator of the year in 2001 in a state-level function. He also became the director of International Co-operative Association (ICA) twice.

He made significant contribution towards accelerating agricultural and rural development during his long and illustrious career. A widely travelled person, he carried with him rich and varied experience in the field of agriculture and cooperatives. His zeal in solving and improving the financial position of rural people, particularly the farmers, and augmenting their income through cooperatives was the inspiration behind his joining the cooperative movement. Jakhar's dream comprised networking cooperatives all over the world to meet the various requirements of people at large for their economic betterment. He was a cooperator of eminence and widely acceptable, and will always be remembered and acknowledged as a great cooperative leader in the Indian Cooperative Movement.

We pay a revered tribute to the great co-operative leader, who has championed the cause of the masses, and prays for the departed soul to rest in peace in the heavenly adobe.

New Menin Charge Mr N P Patel and Mr Balvinder Singh Nakai were elected unopposed as new chairman and vice chairman of IFFCO, respectively. Mr Patel hails from Gujarat and is currently the chairman of Gujarat State Cooperative Marketing Federation Ltd. (GUJCOMASOL). He is associated with the cooperative movement for about four decades, including being a member of the IFFCO family since 30 years. He holds several state and national positions in reputed cooperative societies as currently on board the IFFCO Kisan Sewa Trust, National Agricultural Coop Marketing Fed., Ltd., Gujarat State Cooperative Bank Ltd., Gujarat State Cooperative Union, Centre Bank Ltd, and was working vice chairman of IFFCO. He is remembered for promoting co operative societies in his native state Gujarat. Shri Balvinder Singh Nakai is an eminent farmer and cooperator. He is deeply involved in providing strength to Indian Cooperative Movement for the last three decades. He is currently working as the Chairman of Malwa Fruit and Vegetable Cooperative Marketing-cum-Procurement Society Limited. He had earlier served as Vice Chairman of IFFCO for two terms. Being a farmer himself, Mr Nakai has been instrumental in formulating farmer oriented policies of IFFCO.

Do To Agriculture What Was Done To Infrastructure

Jahangir Aziz

Not too many months ago we were congratulating ourselves for having navigated the global crisis largely unscathed. Foreign investment was pouring in. A 9% growth was virtually guaranteed and some were talking about India overtaking China. Today we are seething under the threat of a runaway inflation, wondering how low industrial production can go, watching FII funds leave every day, and questioning whether investment will turn around anytime soon. How did this all happen?

For one, in all the euphoria we somehow overlooked that in the first half of this fiscal year (for which we have data) a third of the growth on sequential basis was due to government spending. Barring infrastructure, there wasn’t any significant contribution from private investment. And this has been the real problem. In contrast to popular belief, the rise in funding cost has not been the critical factor holding back investment. It was the loss in investor confidence. At first, what held back investment was the fear of aglobal double dip. Then, India specific concerns about regulatory uncertainties and corruption surfaced. And now questions about the ability of policies to maintain stability have emerged.

To restore confidence all these concerns need to be addressed, but what is urgently wanted is a show of strength by the government that it remains in control of the macroeconomy. A first step is for the government to see the driver of current inflation for what it really is: an unsurprising consequence of loose monetary and fiscal policies stretching the economy to grow beyond its capacity rather than a consequence of unfortunate supply shocks. If the government comes to this realization then it will also do the right thing on February 28 and pull back the massive fiscal stimulus in play. The slow policy tightening isn’t helping investment. Rather investors are being deterred on of a hard landing in the near term. To minimize this risk, inflationary expectations need to be brought under control and this means sacrificing nearterm growth. If a little growth is not sacrificed now, a lot will have to be sacrificed later.

And this will make the FY12 budget important even if it contains only minimal policy changes. On the surface, the FY11 deficit outturn will likely come around 5.3% of GDP much better than the budgeted 5.5% because of the large spectrum sale revenue and strong tax collection. But the spectrum sale was one-off. Excluding this, so as to compare apples with apples, the deficit will barely move from 6.8% of GDP in FY10 to 6.7% of GDP. If the government fully compensates oil companies this year itself, the adjusted FY11 deficit will be even higher.

The FY12 budget will likely target a deficit of 4.8% of GDP. But achieving this will be a challenge, as it will mean cutting the deficit an unprecedented 1.5% of GDP. The government will likely spread the adjustment: expand the tax base (education, health, and new properties), increase the disinvestment target to include this year’s unfinished IPOs, and even partially rollback the excise tax cuts of FY09. With a significant portion of the spending under the two supplementary budgets likely to remain unspent, overall expenditure will only increase modestly. The government will once again budget a minimal amount for oil subsidies and exclude the cost of the Right to Food Security until it is passed by Parliament. It won’t be an exciting budget but it will help calm nerves and provide the government space to implement the needed reforms and address the regulatory

uncertainty and corruption. Will the government use this space? Much will depend on how the upcoming state elections turn out and its political fallout. But separately and much more importantly the government needs to address the structural shortage in food. There isn’t a dearth of potential solutions, but the lack of a coordinated strategy.

To galvanize support for reforms what is needed is to do for agriculture what was done for infrastructure. And here the Planning Commission needs to step in. Trying to increase agricultural productivity through 4-5% annual growth hasn’t worked. The Planning Commission needs to adopt the same strategy it did for infrastructure. Put out a big target such as doubling agricultural production in a decade and then work backwards to ascertain what is needed to achieve it. Perhaps FDI in multi-brand retail is critical to raising productivity, but perhaps it isn’t? Perhaps we need new laws for land holding and land markets. Right now we don’t have any such strategy. If the Planning Commission can capture the nation’s imagination and raise agriculture to the same level of importance it did for infrastructure we just might be able to solve the recurring problem of food inflation.

The author is India Chief Economist, JP Morgan.