What’s in Budget 2011 for Farm sector?

• FM hints at inclusive growth, indicates double-digit growth in the near future

• Food inflation declined in the last year but remains a concern

• Rural economic growth helped India avoid the quagmire of a global meltdown

• FM acknowledges that the implementation gaps in the PDS is a big challenge

• GDP estimates grew at 8.6% in 2010; 9.6 % in services, 5.2 % in agriculture sector

• Exports grew 29 percent, imports by 17.6 percent

• Wholesale-retail price imbalance unacceptable. Need to improve the distribution system of food and agriculture

• FDI policy liberalisation being looked into

• 36.4% of total budget outlay to be allocated for social sector development

• Cold storage to be recognised as an infrastructure sector

• 150 lakh mT of storage capacity for food items being created under Rural Godown scheme

• Proposals for 15 more food parks during 2011-12

• Vegetable initiative to set in motion a virtual cycle of production and distribution. Allocation of Rs 300 crore for implementation of vegetable initiative to provide quality vegetable at competitive prices.

• Oilseed production to go up in 2010-11 as against 2009-10; 100,000 hectares added to oilseed farming

• National Mission for Sustainable Agriculture

Government to promote organic farming methods, combining modern technology with traditional farming practices.

• Outlay of Rs 500 crore to increase agriculture productivity

• Green revolution in eastern region to be given a fillip with additional allocation of Rs 400 cr to bolster paddy growth

• FM announces Women's Self-help Group Development Fund of Rs 500 crore

• India Micro-finance Equity Fund of Rs 100 crore proposed

• FM proposes removal of bottlenecks in supply of essential food items

• Capital infusion into PSU banks; Rs 20,000 crore proposed

• Slew of bills to make the financial sector more open in 2011-12

• FM allocates Rs 600 crore for various environmental schemes in 2011-12

• Rs 2 lakh crore from National Clean Energy Fund allocated for Green India Mission
• Food Security Bill to be introduced this year

• Fertiliser companies to get investment-linked tax deductions

• Nutrient Based Subsidy (NBS) has improved the availability of fertiliser; Govt. actively considering extension of the NBS regime to cover urea

• Allocation under Rashtriya Krishi Vikas Yojana (RKVY) increased from Rs 6,755 crore to Rs 7,860 crore.

• Allocation of Rs 300 crore to promote 60,000 pulses villages in rainfed areas

• Allocation of Rs 300 crore to bring 60,000 hectares under oil palm plantations. Initiative to yield about 3 lakh Metric tonnes of palm oil annually in five years.

• Allocation of Rs 300 crore to promote higher production of Bajra, Jowar, Ragi and other millets, which are highly nutritious and have several medicinal properties.

• National Mission for Protein Supplement

Allocation of Rs 300 crore to promote animal based protein production through livestock development, dairy farming, piggery, goat rearing and fisheries.

• Accelerated Fodder Development Programme

Allocation of Rs 300 crore for Accelerated Fodder Development Programme to benefit farmers in 25,000 villages.

• National Mission for Sustainable Agriculture

Government to promote organic farming methods, combining modern technology with traditional farming practices.

• Agriculture credit

1) Farm loan @ 4%

2) Agricultural credit to farmers to grow from Rs 3,75,000 cr to Rs 4,75,000 cr

3) Interest subvention proposed to be enhanced from 2 per cent to 3 per cent for

4) providing short-term crop loans to farmers who repay their crop loan on time.

5) In view of enhanced target for flow of agriculture credit, capital base of NABARD

6) to be strengthened by Rs 3,000 crore in phased manner.

7) Rs 10,000 crore to be contributed to NABARD’s Short-term Rural Credit fund for 2011-12.

• In view of recent episode of inflation, need for State Governments to review and enforce a reformed Agriculture Produce Marketing Act.

• National Food Security Bill (NFSB) to be introduced in the Parliament during the course of this year.

• Indirect Taxes exemptions

1) Scope of exemptions from Excise Duty enlarged to include equipments needed for storage and warehouse facilities on agricultural produce.

2) Basic Custom Duty reduced for specified agricultural machinery from 5 per cent to 2.5 per cent.

3) Basic Custom Duty reduced on micro-irrigation equipment from 7.5 per cent to 5 per cent.

4) De-oiled rice bran cake to be fully exempted from basic Custom Duty. Export Duty of 10 per cent to be levied on its export.

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.

Circa 2001-2010:

The Lost Decade for Indian agriculture

If mere wishful thinking could have attained desired results, Indian agriculture would have been a different story altogether. The beginning of new millennium came with lots of promises and hopes for the agriculture sector. However, a decade down the line, hope has given way to despair; the only way a farmer can prosper is by selling off his land. For the Indian agriculture, the last decade has been a story of lost opportunities.

Y2K started with a great promise for the agriculture sector. Everyone agreed that agriculture was poised for a quantum leap and will provide the much needed impetus to the Indian economy propelling it into the big league. It was only a matter of time before the Indian farmers were happy and prosperous lot. When the first ever National Agriculture Policy was announced on 28th July, 2000, it sought to actualise the vast untapped growth potential of Indian agriculture, strengthen rural infrastructure to support faster agricultural development, promote value addition, accelerate the growth of agro business, create employment in rural areas, secure a fair standard of living for the farmers and agricultural workers and their families, discourage migration to urban areas and face the challenges arising out of economic liberalization and globalisation. Most importantly, over the next two decades, it aimed to attain a growth rate in excess of 4 percent per annum in the agriculture sector.

In the decade that followed, India witnessed more than 1, 00,000 farmer suicides. The first state where suicides were reported was Maharashtra. Soon newspapers began to report similar occurrences from Andhra Pradesh. In the beginning, it was believed that most of the suicides were happening among the cotton growers, especially those from Vidarbha. A look at the figures given out by the State Crime Records Bureau, however, was sufficient to indicate that not just the cotton farmer, but farmers as a professional category were suffering, irrespective of their holding size. Moreover, farmers not only from Vidarbha, but also from the entire Maharashtra showed a significantly high suicide rate. The government appointed a number of inquiries to look into the causes of farmers’ suicide and farm related distress in general. Subsequently, Prime Minister Manmohan Singh visited Vidarbha and promised a package of Rs.110 billion (about $2.4 billion) to be spent by the government in Vidarbha. The families of farmers who had committed suicide were also offered an ex gratia grant to the tune of Rs.100,000 (about $2,000) by the government. The relief measures announced, obviously, had no desired effect as reports of suicides continue to pour in unabated from these belts even after the implementation of the debt relief package. This is largely because private moneylenders, who supplement the loans of even those farmers who are covered under the institutional credit system, have continued to harass them for the settlement of their dues. What farmers need for their survival is income, and not so much debt relief; in other words, the country needs agricultural renewal and productivity improvement.

It is not to suggest that, on its part, the government did nothing to change the situation in the agriculture sector. The center government has been proactive in taking many pro-farmer steps, especially in terms of increasing credit availability to the agriculture sector. The credit flow to agriculture sector has more than tripled in the previous decade. In 2008, the government waived off more than Rs. 72,000 crore worth of farm loans. The loan waiver was India’s largest-ever single-shot income transfer scheme, estimated to have helped some 36 million farmers nationwide. It included a full waiver of outstanding loans for small farmers—who cultivate up to 2 ha —while medium and large farmers got a quarter of their outstanding loans waived on an agreement to pay the rest. The scheme was seen as a contributing factor in the UPA’s re-election a year later.

Over the decade, successive governments have made incremental investments in agriculture, but the proportionate results have not translated in the same magnitude. Agriculture sector has been squarely blamed for the slow economic growth of the country by one and all involved in the policy making and planning process. More and more funds are flown to the agriculture sector through mega projects like RKVY, NHM, loan waiver scheme, etc. but the real spurt is still to be felt, out of the investment. Purely in terms of availability of money, the agriculture sector is prospering like never before.

However, despite this, the overall agriculture picture looks gloomy . The last decade has seen Indian economy being propelled into the big league, minus the vital element that had been the driving force all these years - the agriculture sector. In fact, the contribution of agriculture sector to Indian economy has gone down to less than 15 percent and if the current trend continues, it may nosedive to single digit in the next few years.

The most noticeable reason for the present status of the agriculture sector has been the failure of the public sector to offer anything substantial to the farming community. Apart from Pusa Basmati, the entire National Agriculture Research System is yet to come out with any substantial research breakthrough in any of the field crops. The most glaring failure has been in the field of pulses and oilseeds. We continue to remain the world’s largest importer of both. Similarly, we have also missed the opportunity for growth in coarse cereals.

The much sought after target of 4 per cent growth in agriculture can only be ensured by bringing the non conventional areas into the mainstream and making them perform on par with their predecessors, Punjab & Haryana, the areas of green revolution, which have gone almost stagnant. Like in other sectors, Gujarat has shown the way how this illusive growth rate can be attained in the agriculture sector as well. Agriculture sector in Gujarat performed at more than 10 per cent since the last few years, and even the compounded growth rate for the previous decade is more than 10 percent. This growth rate has been achieved by increasing the irrigation coverage through the utilization of Narmada waters. Apart from this, the state has had a specific plan of action for all crops and regions and saw to it that there was effective implementation of the same. Another important feature of the agriculture revolution in Gujarat has been the involvement of both public and private sector in the process. As we have often mentioned in the past, the next big fillip to Indian agriculture can come only by utilizing the untapped potential in the eastern Gangetic plains. The productivity levels in these regions are abysmally low despite abundance of ground water, fertile soil, and favorable climate. However, the socio-political conditions in the region have prevented the agricultural growth in this region. Thankfully, the new decade starts on a positive note with at least one state, i.e., Bihar seemingly poised for a spectacular growth.

Bt cotton- Single success story of Indian agriculture

Doubtlessly, Bt cotton has emerged to be the biggest success story of Indian agriculture in the previous decade. Despite the controversy surrounding it, the area under Bt cotton in India has jumped from a little over 40000 ha in 2002-03 to more than 8 million ha in 2009-10, constituting almost 90 percent of the area under cotton in India. In the process, the cotton production in India, which was hovering around 160 lakh bales, has more than doubled and has breached the 350 lakh bales mark. Incidentally, India has the world’s largest area under Bt cotton. Although, it has been unfairly blamed for farmers’ suicides, its success is evident from its large scale adoption by the farmers. What is most remarkable about this success story is the fact that it has come entirely on account of private sector initiative. The public sector has played no role at all, either in research or in extension. Besides negative publicity, it has had to battle court cases along its journey. Besides high yields arising on account of Bt’s resistance to the dreaded American Boll Worm, its growth has also been helped by high cotton prices in the international market. Although, Monsanto may not admit it, Bt cotton got a real fillip when the AP government forced Bt cotton to slash seed prices and make it more affordable.

However, despite the success of Bt cotton, we have nothing else to offer to the Indian farmers. The development of drought resistance crops, salinity tolerant crops, and crops high in desired nutrients still remain a paper dream, and we have been left debating the pros and cons of Bt brinjal.

Private participation, on a rise…

One of the important features of the National Agriculture Policy 2000 has been its emphasis on public private partnership. For reasons unknown, the ICAR and SAU’s have been shying away from involving private sector in the development process. In fact, a deliberate impression is created that the public sector is the only benefactor of Indian farmers and the private sector is out to loot the farmers. Despite all these hindrances, the private sector has beaten the public sector in almost all vegetable crops and coarse cereals. It is only rice and wheat where the public sector still enjoys an edge.

Global Warming

Since the last few years, we are repetitively witnessing instances of flood and drought in one or other parts of the country. The phenomenon of climate change has affected the hydrological cycle to a larger extent and, thus, the crop season is almost getting shifted in the view of non uniform temporal and spatial distribution of monsoon rains. Unseasonal rains in the rainfed areas and deficient rains in the once water sufficient areas are causing a lot of damages to the crop production and shifting the cropping pattern in the regions. Recent rains in the month of November- December, 2010, in the western, southern, and central parts caused havoc and losses reported in many of the crops, which resulted in the added food inflation and rise of the prices of onions and grapes in the market.

It is estimated by many of the agencies that India would face considerable yield losses in rice and wheat alongwith a fall in the growth rate of GDP owing to climate change. Increased occurrence of extreme events, such as cyclones, tsunamis, recurrent droughts and unseasonal rains, etc., due to climate change, will mostly affect the farming community of the nation.

The Centre has allocated Rs.350 crore for implementation of a new planned scheme ‘National Initiative on Climate Resilient Agriculture’ to address the impact of climate change on agriculture and allied sectors. Of this, Rs.200 crore will be spent during 2010-11 and Rs.150 crore in 2011-12 in research infrastructure, capacity building, and on-farm demonstration of technologies. Much has been talked and discussed at different fora about the climate resilience and global warming, but the ultimate output is far from satisfactory.

Mounting labour crisis

One of the inbuilt strengths of Indian agriculture was the cheap and abundant availability of farm labor. However, in the last decade, labour crisis has become acute with the operation of NREGS. With this scheme ensuring that the rural unemployed youth and adults get a satisfactory minimum wage, nobody would like to get involved in farm activities, which has gone more risky, with the wrath of climate change and unaffordable in the view of rising input costs.

Mechanization is the way out, talked much by the authorities to overcome the scarcity of labours in farming activities and economizing the agronomic practices. But with the initial cost and its further maintenance playing spoilsport , the solution is custom hiring of the machineries and equipments and promoting the co-operatives for the areas of woes. The need for developing farm machinery suited to small holdings and making them affordable to farmers is being talked about for the last three decades without any real solutions.

One of the important reasons for the failure of the agriculture sector to perform to its potential in the last decade has been the decline in the quality of human resource with the public sector. It is open secret that all the important posts in the ICAR and SAU’s are filled through political and other lobbying and the factors other than professional merit have a greater role in selecting or rejecting a particular candidate for the particular post. There have been allegations of corruption against many a Vice-Chancellors and more often than not, the matters have reached courts. Thus, the focus on the work that these people are supposed to perform is often lost. The trend had started when Dr. R S Paroda was forced to resign as Director-General of ICAR by leveling false accusations. A decade later, the situation has gone from bad to worse. Apart from politicians, even the corporate world is said to be influencing the selection process.

Horticulture & Food Processing- scaling newer heights

The only positive story of the previous decade has come from the horticulture sector. India has seen spurts in Horticulture sector, from doubling of fruits and vegetables production to increasing the area under floriculture, which was backed on private participation, technology interventions, and supportive policies of the government, and less risky and sure returns. The sector has witnessed an upsurge in the production scenario, particularly of the fruits and vegetables. During 1991, India was stranded at the production figure of 56,000 MT, which made a significant jump to 126,000 MT in 2008 for the vegetables, which even aims to touch the levels of 150,000 MT by 2015. The same kind of trend have been witnessed in the fruits production, with an output of 28,600 MT during 1991 that has reached 63,500 MT. The projected production of horticultural crops during 2009-10 has gone up to 226.87 million tonnes. It includes 73.53 million tonnes of fruits and 136.19 million tonnes of vegetables from an area of about 21 million hectares. The growth rate in horticulture production between 2004-05 and 2008-09 has been to the tune of 7.2 per cent.

Even after the amendments in the APMC act and the adoption of the Model act by many of the states, the problem of middlemen and hoarding still exists. However, amidst the problems, many initiatives like ‘Safal market’ at Bangalore, TNAU precision farming project, and some of the private sector and local small entrepreneurs venturing the scene prove to be a silver lining. Three terminal markets have been approved by the government, among them, the one at Patna would start functioning from this year itself and the other two at Maharasthra and Orissa would be operationised soon. But these efforts need to be replicated on a larger scale at pan India diasporas.

Plantation sector remains almost stagnant over the decade because of ageing and senile plantations, weather fluctuations, and not so remunerative prices, which are highly dependent on the market forces and ruled by International ups and downs/ scenario. Although the government has announced and implemented many policies and relief packages, the breakthrough is still to revolutionize the segment, unlike other sub-sectors of horticulture.

India is a large, low-cost producer of fruits and vegetables, and horticulture is a sector with huge export potential. But, high transportation costs, inadequate storage facilities, a fragmented supply chain, and weak quality standards at home are eroding its competitiveness.

Today, Horticulture has become one of the most profitable ventures among the farm activities. I It has transformed itself from conventional horticulture to a Hi-tech horticultural business, backed with public support, ensured economic returns, hi-tech interventions like polyhouse and micro irrigation technology.

Food security to be this decade's biggest worry

A few days ago, Amul raised the price of milk - for the third time in a year. Anyone who is betting that the gains in food prices will fade with time needs to get ready to put the loser's share of money on the table. Runaway food prices are here to stay and taming that will need far greater structural changes than temporary clampdowns on hoarding and exports. If the last decade was about India's [ Images ] economic growth, food security is what we should worry about this decade.

As the economy expands, India's hungry mouths are going to open wider and want more variety and quantity of food. The growth in population and incomes will mean that as we munch our agricultural production, we will also be forced, increasingly, to use our stock of greenbacks to buy food in the international marketplace. Our enormous consumption will do to food prices what China's lightning-paced build-up has done to commodity prices - push them on a one-way street, up north.

Anyone can see this coming, but India's complacency is somewhat comical. In many ways, the government may have aided the food predicament without realising how great a role it has played in shaping it. Its zeal in implementing the rural employment guarantee plan and other social sector schemes has put money into the hands of thousands who previously had frugal access to food, if at all.

Getting food to all is most certainly a good thing especially when you consider how an economy growing at almost 9 per cent annually still needs to have a plan in place for such a fundamental right. So while we've earned big brownie points on that score, we lose heavily on how poorly we have anticipated our food needs.

Agriculture accounts for only about 15 per cent of our gross domestic product, and our crop yields are still low. The World Bank estimates that rice yields in India are a third of China, and half of Vietnam. Given that all countries have a finite amount of natural resources available to them, the only option is to vastly step up investment in improving agricultural productivity per hectare. The government, however, over the years seems to have focussed quite heavily on providing subsidies to the sector.

Subsidies, while politically popular and sometimes necessary, eventually rob us of greater efficiency, because they makes us lazy towards cost effective innovation. Agriculture has lagged when it comes to better seeds, technology and improved farming practices. Weather patterns world over are getting harder to predict and our own hapless dependence on Mr Monsoon has already taught us that we will have to be in a constant state of preparedness for bailouts and imports, as we haven't developed a dependable irrigation system as a substitute. Our troubles don't quite end there. We already know of wheat rotting for lack of storage and onions getting soaked in unseasonal rain.

Much as we may claim buffer stocks, rotting food reserves are as much use to us as baby clothes to a teenager. It's time we took storage and distribution out of government hands and gave it to the private sector to do it effectively, with pay-outs and penalties for targets met and slipped, so it remains efficient and without leakages.

As urbanisation and industrial projects compete for land, some agricultural land will no doubt be swallowed up.

Farmers have been arguing that the increase in basic minimum wage as a result of the employment guarantee program has made labour scarce and expensive, making farming less lucrative.

Add all of this up, and ensuring food security looks like the biggest challenge India's likely to battle. To depend increasingly on external markets to rescue us, while dragging our feet on improvements at home, will likely end in tears, not just over onions but in wasted greenbacks as well.

Anjana Menon is executive editor, NDTV Profit. Views expressed here are personal.

AgriUpdate 2010, the year that was....

Ayyappan got the reign of ICAR (1 January, 2010)

Dr S. Ayyappan, the most coveted authority on Fisheries sector and the former Deputy Director General (Fisheries) for a long duration has been crowned with Director General of ICAR & Secretary, DARE. He has followed the designated post after Mangala Rai retires on December last year.

Bt Brinjal halted by Jairam

Year 2010 witnessed, strong comeback story of Bt, with Environment Minister Sh. Jairam Ramesh putting an indefinite moratorium on the release of Bt Brinjal, in view of lack of consensus among the farm fraternity and non-readiness of general public for the acceptance of Bt Brinjal and their apprehensions about multitude of issues involving health risks and environmental threats. The not much sought decision came after conducting public consultation and debate among the stakeholders in 5 cities of country (9 February, 2010). Whole episode and month long hearing seen large amount of hues&cries and confrontations among supporters and the anti-groups, and even the ministries, particularly the Environment&Forest, Agri and Science&Tech drawing flaks on one-another, which surely become a good reason for TRPs to the electronic media and meaty material for the print media, which the farm sector was derided since a long.

PK Basu takes charge as Agriculture Secretary to the GOI

Prabeer Kumar Basu, has taken charge as Secretary, Agriculture & Cooperation on 2nd March, 2010. He replaces Shri T. Nanda Kumar who retired from service on February 28, 2010 on superannuation. Mr. Basu is 1976 batch IAS officer of Bihar cadre. He served in various capacities in the Government of Bihar during his tenure, particularly in Finance, Industries, Agriculture & Cooperation and Energy. He was appointed Additional Secretary in the Department of Agriculture & Cooperation from March, 2007 to November, 2009 before being elevated as Special Secretary in the Ministry from November, 2009.

Agriculture loans exceed target by 13% in FY10

Agricultural credit flow by cooperative and public sector banks exceeded the target by 13 per cent in 2009-10. The flow of credit to the agriculture sector increased significantly and banks have surpassed the target by extending Rs 3,67,000 crore worth of loan to farmers. The farm credit was extended to as many as 4.82 crore farmers last year and banks gave crop loan to 91 lakh new farmers. According to official data, public sector banks lent Rs 2,75,000 crore of farm credit, while co-operative and RRBs loaned Rs 58,000 crore and Rs 34,000 crore respectively.

Land acquisition in a trouble

Land acquisition has never been in such controversy in the country, as in the recent years, which even forced the giant corporate houses like, TATA, Vedanta and POSCO to rollback their projects. It has also witnessed the adamant approach of Environment&Forest ministry joining the anti-groups of NGOs.

Rohtas Mal appointed as President – TMA

Mr. Rohtash Mal, ED&CEO, Agri Machinery Group, Escorts Ltd., has been appointed President of the Tractor Manufacturer Association (TMA) for 2010-2011. Mr. Mal succeeds Mr. Anjanikumar Choudhari, President-Mahindra. Mr. Mal graduated from the IIT, Delhi, and is an alumnus of IIM-Calcutta. Before joining Escorts Agri Machinery Group in 2007, he worked with the Bharti Group for over six years and for two years as the CEO of their agri-business.

Photosynthesis is now possible in petri dish too

In a major breakthrough, team of scientists at University of Cincinnati, Ohio has produced sugar from solar energy, using plant, bacterial, frog and fungal enzymes. They have focused on making an artificial photosynthetic material, which uses plant, frog, fungal enzymes and bacteria, trapped within a foam housing, to make sugar from sunlight and carbon dioxide. This technology establishes an economical way of harnessing the physiology of living systems by creating a new generation of functional materials that intrinsically incorporates life processes into its structure. These revolutionary findings about this latest photosynthetic technique have been published in the Nano Letters Journal.

Pawar’s power play

Sharad Pawar, the not so pleased minister with his current portfolio issues such unwarranted statements that ire the senses of common man and in cases, judiciary’s too. Either in the times of drought, flood, food inflation, Bt Brinjal moratorium, grains rotting or, farmers’ suicide, he looked much helpless. In a bizarre move he has been elected as the ICC chief, please do not confuse it with any agriculture or, farmers’ organization; it is World cricket governing body, International Cricket Council. But, here the million dollar question is, what an acting agri minister doing in the cricket pitch, when reform on many of the fronts in the farm sector is still in wait of its field day, taking a huge toll on the food production and the farmers’ very livelihood.

Nutrient based Fertilizer Subsidy implemented

After a great lull and long time demand from the Fertiliser Industry, Government has implemented the Nutrient Based Subsidy (NBS) regime. The move is well considered to be in the direction of promoting the need based fertilizer application, streamlining the availability, regulating the prices and dumping of chemicals as witnessed across many of the irrigated rice bowls of India. The NBS regime was implemented with effect from 1st April, 2010.

Normal monsoon recorded in 2010

A good well spread monsoon across India, except Eastern parts has excited farmers, policy makers and other stakeholders for a buoyant economy.

IARI fee hike episode

In an uncalled for dramatic event, India’s premier Agricultural School, IARI & other Deemed Institutes under ICAR proposed almost 900% (more than 12 times) fee hike (from Rs 6,000 to 67,000 per semester) in their tuition fee, which came as surprise to all. But, at last ICAR pacified and latter rolled back the unprecedented hike after students gone for strikes and no work motion for continuous 3 days.

Rasi started exclusive Hybrid Vegetables Division ‘HyVeg’

Rasi Seed, one of the biggest cotton seed producers has made a foray into hybrid vegetables, with the Seminis man and well known authority in Indian Vegetable Seeds sector, Dr Arvind Kapur joining his team as CEO of the Hybrid Division and its corporate office is based at Gurgaon.

Amarjit Singh Nanda joins as Animal Husbandry Commissioner to GOI

Dr Amarjit Singh Nanda, director of research, GADVASU, Ludhiana, has joined as animal husbandry commissioner of India, the highest post in the field of animal production and health in India. Dr Amarjit Singh Nanda, director of research, GADVASU, Ludhiana, has joined as animal husbandry commissioner of India, the highest post in the field of animal production and health in India.

Anjani Kumar Chaudhary quits M&M

After a tenure spanning a decade at the Mahindra Group, the last five of which were spent leading the Farm Equipment Sector as President, Mr. Anjanikumar Choudhari retired from his role on March 31, 2010. Dr. Pawan Goenka, President - Automotive Sector, assumed the additional responsibility of the Farm Equipment Sector, and re-designated as the President - Automotive and Farm Equipment Sectors with effect from April 1, 2010.

NMMI launched

The Cabinet Committee on Economic Affairs approved the implementation of the existing Micro Irrigation Scheme (MIS) as the National Mission on Micro Irrigation (NMMI) during the 11th Plan period with an outlay of Rs.8032.90 crore, of which Rs.3409.26 crore will be contributed by the Central government, comprising 40% subsidy for general farmers and 50% subsidy for small and marginal farmers. This Mission will result in 2.85 million hectare to be brought under micro irrigation; savings in use of irrigation water, fertilizer and electricity; increase in production and productivity of crops.

IVRI awarded best SAU award

Among the State Agricultural Universities and Deemed Universities, the Best Institution Award for 2010 has gone to the Indian Veterinary Research Institute, Izatnagar. The major accomplishments of the IVRI include recognition of High Security Animal Disease Laboratory (HSADL), Bhopal, as OIE approved reference laboratory, seventh in the world, for highly pathogenic avian influenza diagnosis. The awards were given on the ICAR Foundation day celebrated every year on 16th July.

Drought haunts eastern India

Severe monsoon failure in the Eastern parts of the country hit the agricultural production in the states of Bihar, Jharkhand, Orissa, West Bengal, Assam and Eastern Uttar Pradesh. This caused a state of dilemma for the region’s farmers, as till recently these parts is known to receive more than sufficient rainfall and promises to be the seat of the 2nd Green revolution, which is blessed with highly fertile alluvium soil of Gangetic belt and enough surface irrigation resources.

Escorts win Indian Tractor Industry’s largest order

India’s leading tractor manufacturer, Escorts Ltd., set a new benchmark by winning Indian tractor Industry’s largest ever deal for tractors, valued at Rs 185 cr. by the Government of the United Republic of Tanzania. Escorts has been chosen to supply 1430 units of its premium range of powerful ‘Farmtrac’ tractors to Tanzania which is implementing a national ‘Food Sufficiency Programme’ aimed at making it a food surplus country.

Moderate hike for Wheat MSP, as Pulses get more

GOI, on the recommendation of CACP revised the MSP for wheat, rice and pulses. There was a marginal hike of Rs 20 a quintal in the support price of wheat to Rs 1,120, but the prices of masoor and gram dals have been raised sharply by up to Rs 380 a quintal to encourage farmers to grow more. There is also an increase in mustard MSP by Rs 20 to Rs 1,850 per quintal. Safflower MSP has gone up to Rs 1,800 from Rs 1680 a quintal. Barley MSP has been increased to Rs 780 from Rs 750 per quintal.

Food rotting reported all over

Thousands of tonnes of foodgrain found rotting in the FCI godowns across the country due to apathetic

attitude of the concerned authorities and lack of storage space. Even the SC has lambasted the Food &

Civil Supply ministry over the issue and asked the Ministry to freely distribute the foodgrains lying outside the godowns but Agri ministry, Govt and PM refuted for the same.

M&M institutes Agriculture Awards

Mahindra & Mahindra, the largest tractor manufacturer and supplier has started the Samriddhi Awards for honouring the Indian farmers. The awards would be given under six categories to farmers, agro-entrepreneurs an agro based industries for delivering farm prosperity through their involvement in various links of agri value chain which help the farmers to maximize the value they create.

Borloug Institute to be established in Bihar

After ICRISAT another International Institute got a place over the Indian map, with the proposal of establishment of Norman Borloug Institute at PUSA, Bihar. The state is now in a mood of jubilation on announcement of establishment of the new internationally acclaimed institute known as the Borlaug International Institute which is famous for its study of Green Revolution and its after-effects. This Institute will function under a determined quality staff from Mexico.

Controversies hover over Seed Bill

Seed Bill caught into controversy over issues of mandatory registration of varieties which was previously voluntary, GM crops regulation, compensation mechanism and more stakes for private sector at the cost of farmers. Many states are demanding for the inclusion of price control mechanism in the proposed bill.

Food Security Act; still a farsighted dream

Food Security Bill caught into hold due to various reasons of faulty enumeration in BPL families and planning commission’s reluctance to budge over giving it a green card. It is speculated by most of the people and policy makers that UPA-2 is knowingly delaying it, to use its credit for incumbent govt. on election time to reap over the benefits of the same, alike MNREGA and loan waiver, which become the lifeline for the UPA-2.

NBRAI all set to get a nod from Govt

The much-awaited National Biotechnology Regulatory Authority of India Bill (NBRA Bill) could not make it to the parliament for its final nod this time too, as the parliament ended its winter session without passing a Bill. NBRAI was much talked mainly due to the Bt Brinjal episode involving infighting between different ministries with their differing views and agendas over the same.

ASRB goes pre and mains

Year 2010 seen much awaited reforms in the recruitment process of Agricultural scientists, as the pattern of selection from a single exam has moved to 2 stages, with ASRB conducting first pre and only the qualified candidates sitting for mains. Ultimately, the interview assures the final candidature of the aspiring farm scientists, which in turn of results gets recommended to be inducted into the prestigious services.

NDRI cloned male buffalo calf “Shresth”

National Dairy Research Institute, NDRI, Karnal has achieved yet another feat by successfully cloning a male buffalo calf named ‘Shresth’. Scientists of N.D.R.I Karnal made this achievement during early hours today through the new and advanced ‘Hand-guided Cloning Technique’. The hand-guided cloning technique developed at NDRI, is an advanced modification of the “Conventional Cloning Technique”. Earlier the NDRI has produced the world’s first cloned buffalo calf on 6th February, 2009 followed by second on June 6, 2009 and third on August 22, 2010.

RBI divested its 50 % share in NABARD

The Reserve Bank of India (RBI) on October 30, 2010 divested its 71.5% stake in National Bank for Agriculture and Rural Development (Nabard), to the government, bringing down its holding in the bank to 1%. The stake transfer has been valued at Rs 1,430 crore. Following this, the government stake in the development financial institution has gone up to 99%. The move is in line with the Indian central bank’s strategy to bring down its holding in the development finance institutions and pass on the majority control to the government.

India explores Chinese way of storing grains

In the view of growing resentment among the masses and the apex court from the reports of spoilage and wastage of lakhs of tonnes of food grains in FCI godowns across the country, Ministry of Food Distribution and Civil supplies gone into the serious action mode and decided to expand the existing capacity of available storage spaces with the procurement agencies. Regarding the same, Minister of State for Agriculture, Food distribution and Civil Supplies, Prof. Thomas and other concerned authorities made a quick trip to China to learn the expertise on modern grain storage techniques from the neighbouring country.

Kapil Mehan joins Coromandal Int’l

Coromandel International has appointed Mr Kapil Mehan, Tata Chemicals former executive director, as the managing director of the firm on 19th October, 2010. Mr Mehan would replace Mr V Ravichandran, who resigned. Mr. Mehan joined Coromandel as Chief Executive Officer on September 20, 2010. Earlier in 2003, he has worked as Chief Operating Officer of Coromandel's fertiliser business. He is a graduate in Veterinary Science from PAU, Ludhiana and also holds postgraduate diploma in management from IIMA.

Natural Rubber prices to remain tight in 2011

Increasing demand from rubber manufacturers coupled with stagnant production could lead to a shortage of upto 5 lakh tonnes in the country in the next 5 years time. Country’s rubber supplies peak October-January, but this year unseasonal rains have been hindering tapping. India, world 4th largest producer is likely to produce around 8, 50,000 tonnes of natural rubber in 2010-11, down 4.8% from the earlier estimate of 8, 93,000 tonnes, after heavy unseasonal rains affected tapping. So, in the view of increasing demand and unfavoured production conditions, the global prices are bound to fly the sky.

4^th Indian Horticulture Congress concluded

Under the leadership of Dr KL Chadha, Horticultural Society of India (HIS) in association with Skill Foundation of India (SFI) organised 4 day long International Horticultural Congress at New Delhi. The event also witnessed a Horticulture Expo with the presence from many of the stakeholders from both the public and private sectors.

Harder days ahead for MFIs

After much hype and hoopla, Micro Finance sector reached to its low with much of the revelations about the operations and fraudulent dealings with naïve small and marginal famers, particularly the women. To regulate the same, first time in the country, Andhra Pradesh has come up with a bill to monitor the Microfinance Institutions (MFIs) which are under scanner for allegedly imposing exorbitant interest rates and coercive loan recovery methods. The legislation, if passed without any amendments, would spell doom for the microfinance industry.

Unseasonal rains caused havoc

The untimely rains in November-December months have affected crops and livelihood in the entire central, southern and western parts of the country. Though, no estimated data has been released by the state governments, losses worth many crores have incurred due to the unseasonal deluge. These rains have just shot up the prices of many of the commodities in the market. The worst affected crops are paddy, onion and grapes.

US bullying India

US pressing India hard on the wide ranging issues of FDI investment and opening the Indian market for the MNCs and US based companies, Monsanto and Wallmart. Since the Diwali time visit of the US Head Barack Obama, States officials have issued many of the contradictory statements, including hitting of the Indo-US relations and Knowledge Initiative in Agriculture (KIA), which has fruited least to the benefit of both the nations even after its much talked launch and aspirations out of that.

Dow Agro Chemicals facing ban

Dow Agro Sciences India Ltd. faces ban on purchasing of chemicals in India, following its persistent refusal to respond to show-cause notices over charges of bribery. CBI had recommended for blacklisting the firm as it was found guilty of bribing government official for pushing three substandard pesticides.

International Parthenium Congress 2010

3rd International Parthenium Congress held on December 8 – 10, 2010 at New Delhi under the patronship of Dr RS Paroda and Dr. M. Mahadevappa. This year’s conference theme was “Integrated Management of Parthenium linked hazards to plant, human and animal health for sustainable Biodiversity”, as the weed has attained a national status in several countries including India.

Jairam’s Climate change(d) stand

Today, as everyone is facing the brunt of the climate change and India is one among the victim of the naturally happening man-made catastrophe. But as per the earlier policy of GOI and Environment ministry, the view of India was to go for emission cuts purely on voluntary basis, rather than the changed view of Mr Ramesh, on the basis of growth equity and in accordance with common but differentiated responsibilities in their respective capabilities. The stand is clear deviation from earlier ones and no binding clause, so, astonishing everyone for the same and ask for Environ Minister come clear on the same from the Cancun. Developed nations have already caused much harm to the fragile environment but always blaming the underdeveloped economies for all the global woes. But due to widespread pressure from the league of developed economies, the policy seems to have change its course.

UP mega Food Scam

In the season of scams, another mega scam joins the league with the amount exceeding Rs 25,000 crores in many of the districts of Uttar Pradesh. CBI, the investigating agency in the case is expected to register more than 5,000 FIRs across the state, wherein lakhs of tonnes of food grains means to be distributed for BPL and economically weaker section of the society siphoned to other states and even to the neighbouring countries of Bangladesh and Myanmar.

Sanjaya Rajaram awarded with 5th Dr. MS Swaminathan award

Dr Sanjay Rajaram, the renowned Wheat Breeder and World Food Prize laureate has been bestowed with 5th Dr MS Swaminathan Award. He is currently heading the wheat improvement programme of CIMMYT, Mexico after the demise of Dr Borloug. He is involved in the development of more than 450 wheat varieties at CIMMYT during his three decade old association with the premier institute. Earlier the award has been given to likes of Norman E. Borloug, GS Khush, SK Vasal and Rattan Lall for their unmatched service to the farmers and agriculture at global level.

Onion does it again

The powerful Onion is again back in news, with its skyrocketing retail prices, in the view of heavy losses incurred mainly due to the untimed rains in western and southern parts of India (including in regions of Nashik, Pune and Gujarat, the main onion producing and exporting centres). But the noxious role of arthiyas and other middlemen are also to be blamed for the same. Government forced to ban the exports and import Onions from Pakistan to check the prices and it was under control within two weeks but still it is unaffordable for many, as it is touching Rs 50 per kg.

Cotton; export check in the times of bumper harvest

Even as country is heading towards record cotton production this year over a good monsoon. The govt., agri and commerce ministry is still to solve the riddle of surplus production and its utilization/ trade. Most of the farm commodities are stored in open, they are found to get rot, in view of any rains/ or, natural and man-made disaster. Gujarat has only estimated some lakh crores of loss due to this inaction, leaving aside the unreported losses spread across cotton growing states.

Satisfactory agriculture growth in 2010

Riding on a strong performance by the agriculture and services sectors, the Indian economy posted a better than expected growth rate of 8.9 per cent for the second quarter of 2010-11. The farm sector grew 4.4 percent from a year earlier due to a good monsoon and a low base effect, up from 0.9 percent in the corresponding quarter a year ago. The recovery in agriculture is likely to have a positive impact on rural demand in the coming quarters and maintain the positive momentum in the economy.

India opposes to global call for the ban on the usage of Endosulfan

India, the largest producer and consumer of Endosulfan has opposed the global ban of the ill-fated chemical, after much dramatised events of anti-pesticide lobby groups documented and presented many cooked data and stories of health and environmental impacts of the same, mainly in the cashew plantations of Kasargod district of Kerala in the view of its rampant use. Indian side has clarified its stand of not favouring the move to ban the pesticide in lack of any strong evidence and review done by several committees, declaring Endosulfan as safe for both human beings and ecology.