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Sugar mills pay more cane, shares up

Ratnajyoti Dutta and Alka Pande / Reuters — Wed, 25 Nov 2009 09:37:00 GMT

New Delhi / Lucknow: Sugar mills in India’s top cane-producing region have offered higher prices to growers, raising hopes that protesting farmers would start selling cane and helping shares of sugar companies rise.

Stormy protests by farmers had disrupted Parliament last week and delayed cane crushing in the Uttar Pradesh, which can further squeeze supplies in the world’s biggest consumer of the sweetener.

Sugar scarcity in India, which imported 5 million tonnes in 2008/09 and is likely to buy a similar amount in the current year, has helped New York sugar futures rise the highest in nearly three decades.

Millers in Uttar Pradesh have agreed to pay Rs190-195 rupees per 100kg for cane, 5.6% above their previous offer and 15% more than what the government mandated.

“We have decided to pay Rs25 as incentive over and above the state-set price,” said Shyamlal Gupta, secretary general of the Uttar Pradesh Sugar Mills Association.

He said 47 sugar mills in the state, out of 91 private mills, have already started crushing. “Almost all mills will start crushing by end of this month,” he said.

Shares of sugar firms such as Bajaj Hindusthan, Oudh Sugar, Dhampur Sugars, Triveni Industries, Balrampur Chini and Simbhaoli Sugars were up 3-5% at 1pm, outperforming the benchmark index that was up 0.5%.

Gupta said millers hoped the offer would end protests by growers but Sudhir Kumar Panwar, the head of farmers’ group Kisan Jagriti Manch said farmers deserved more.

“This hike is short of reality and expectations,” Panwar said, who has demanded at least Rs215.

Union agriculture minister Sharad Pawar met rival political parties on Wednesday to discuss the demands of cane growers, and farmers and government officials said talks were likely to continue.

“We hope the government would accept our demands,” Ajit Singh, leader of Rashtriya Lok Dal who is leading protesting farmers, told reporters after the meeting.

Last week, thousands of farmers protested against low state-set sugarcane price and forced adjournment on the first day of Parliament.

Growers have threatened another protest in Lucknow from 26 November, if their demand for higher price was not resolved.

India, the world’s top sugar consumer, faces a big shortage of the sweetener as the cane crop contracts for a second year, after farmers switched to better-paying crops last year and then the weakest monsoon in 37 years hit the crop this year.

Erratic weather hits exports of tea, coffee

Ajayan — Tue, 24 Nov 2009 16:39:00 GMT

Kochi: Lower production levels on account of erratic weather patterns have driven down this year’s exports of plantation crops, primarily tea and coffee, while spice exports picked up in October due to lower production elsewhere in the world.

Graphics: Sandeep Bhatnagar / Mint

Coffee exports have fallen 14.5% in volume and 19.36% in value between April and October from the year earlier, while tea dropped 12.66% in quantity between January and September, rising 5% in value on account of higher prices. Tea is the only plantation crop whose exports are calculated according to the calendar year.

Spice exports started picking up from September and the deficit for the April-October period is just 2% by volume and 4.6% by value.

Roshni Sen, deputy chairperson of the Tea Board of India, the government trade promotion body, said the non-availability of sufficient crops has prevented India from boosting exports.

Still, Indian exporters have benefited as weather and production patterns have been similar across the world, with major tea-producing nations such as Kenya and Sri Lanka reporting lower crop output on account of drought conditions.

Between January and September, the period for which figures are available, tea production fell to 696.72 million kg from 706.74 million kg in the year earlier. India exported 131.23 million kg, against 150.25 million kg last year.

However, a hike in unit prices due to a supply crunch pushed up the cost of tea to Rs135.42 a kg from Rs111.93 a kg last year, with export earnings rising to Rs1,777.05 crore from Rs1,581.07 crore.

Meanwhile, an import order from Iraq for 15 million kg of Indian and Sri Lankan teas last week met with a lukewarm response from Indian exporters due to concerns over payments.

Deepak Shah, chairman of the South Indian Tea Exporters Association, said that though India had an advantage over Sri Lanka, where output has dropped and prices are higher, exporters were unwilling to take any risks.

“There have been issues of delayed payments. The condition in the order that payment (will be made) after the consignment reaches Iraqi ports and is inspected, added to the risk since exporters would not be able to take any letters of credit and get any bank support,” he said.

If the terms are changed, exporters will try and satisfy as much of the contract as they can, Shah said.

What has helped the tea trade is strong domestic consumption and better price realization—Indians drink almost 80% of the country’s average production of 850 million kg.

Heavy rains interspersed with long dry spells since October and September have hit coffee output and exports, said G.V. Krishna Rau, chairman of the Coffee Board of India. Production for last year has been estimated at 262,000 tonnes, while the post-blossom estimate for the current year has been pegged at 306,000 tonnes.

With plucking set to begin at the end of November and expectations of a better crop, Rau claims that the deficit will be wiped out before the end of fiscal 2010 and that exports should reach last year’s level of 197,000 tonnes.

Spice exports have seen volumes climb since October. Only 284,935 tonnes worth Rs3,056.24 crore had been exported through October compared with 290,875 tonnes worth Rs3,203.96 crore during the corresponding period of last fiscal.

According to data from the Spices Board India, October alone saw exports of 41,585 tonnes worth Rs505.74 crore, a 10% increase in volume and a 16% growth in value.

Exporters say poor cardamom and chilli crops in Guatemala and China, respectively, have pushed Indian exports higher. Similarly, the lower production of seed spices such as cumin in Syria and Turkey, and coriander in Romania and Bulgaria, have given India an edge.

T.T. Jose, managing director of Mas Enterprises Ltd, says that the demand from exporters at the weekly cardamom auction held at Vandanmedu in the hilly Idukki district has been good so far, especially since October, and is holding up.

Bulging stocks will limit Indian wheat imports

Naveen Thukral and Himangshu Watts / Reuters — Tue, 24 Nov 2009 09:05:00 GMT

Singapore / New Delhi: Indian importers have bought small volumes of Australian wheat in recent weeks, the first such purchases in two years, but bulk purchases are unlikely as stockpiles amount to nearly three times reserve targets.

The imports of wheat in containers this month, which took the market by surprise, were triggered by firming local prices, which have jumped 19% this year, and global supplies that are around 15% cheaper for mills in southern India.

But soon after the deals, New Delhi made clear that it saw no pressing need to import large quantities -- at least until a clearer picture about the new crop emerged.

“I am absolutely not gung-ho on India importing wheat,” said Atul Chaturvedi, head of the agricultural arm of Adani Enterprises Ltd, a leading Indian commodities trading firm. “The government is sitting on a massive stockpile of wheat.”

Three good harvests and export curbs have helped government agencies accumulate wheat stocks of 28.2 million tonnes by 1 October, against a target of 11 million tonnes.

Still, the government, which sets the price of grains it pays to farmers, has further pushed up the cost of Indian wheat with an increase of nearly 2% in the support price, to Rs11,000 a tonne, for the crop to be gathered in April.

This encouraged millers in southern India to import wheat in containers from Australia at around $300 a tonne, including cost and freight, compared with the domestic price of about $350.

Mills in southern India find it cheaper to import from Australia, compared with moving the grain from northern growing regions, which would include a huge transportation cost.

Industry officials said the price difference, which will persist for some time, will prompt millers to keep importing smaller wheat parcels and the government was unlikely to block them, especially after the worst monsoon in 37 years decimated the rice crop and stirred doubts about winter-sown wheat.

But any signs of bulk purchases may prompt New Delhi to slap on an import tariff, which was dropped two years ago, to avert a problem of plenty.

“The government is allowing small-scale imports, which is fine,” said one Singapore trader with a multinational commodities firm. “But large imports will hurt the government’s own interest, as it is trying to raise prices for farmers to boost output.”

Recent rains in India’s wheat-growing northern states, mainly Uttar Pradesh, Punjab and Haryana, have boosted the outlook for the crop, even though high temperatures have shrunk the overall crop area, farm and weather officials said.

Vulnerable to rain, fog or heat

International wheat prices have slid 9% this year as the world grapples with a second straight year of oversupply, but recent imports by countries such as India have caught investor attention as money flows into commodity markets.

Analysts said any rise in Indian purchases would lend a bullish tone to the wheat market, particularly if output fell in India and other regions, such as north Africa.

“Earlier, it looked like a temporary situation, but now it seems wheat imports will continue for some time, because prices are attractive for Indian buyers,” said a trader based in Singapore who sells US and Australian wheat in Asia.

“I have done a few deals at around $290-$300 a tonne and there seems to be more interest.”

Another trader said five containers of wheat had been cleared by Indian customs authorities two weeks ago, signalling tacit government support for imports that will soothe fears of possible grain shortages in the country of over one billion people.

Alhough the government expects the wheat harvest to surpass last year’s record of 80.6 million tonnes, just a few spells of unseasonal rain, winter fog, or a temperature spike in February will be enough, analysts say, to reverse the equation for the crop, which is sensitive to weather anomalies.

This year, India’s driest June in 83 years delayed rice planting, the harvest of the grain, and the subsequent wheat sowing. Farm scientists say this could take a toll of the wheat crop, but it is still too early to assess its size.

Jag Shoran, principal scientist at a state-run wheat research agency, said wheat sowing was normally completed by mid-November in the northern states of Punjab and Haryana, the country’s bread basket, but had been delayed by eight to 10 days this year.

“Although there will not be any apparent damage to the crop due to the 8-10 days’ delay, any further delay may harm the crop.”

The wheat crop will also suffer fallout from a dispute between farmers and sugar mills over cane prices that delayed the cane harvest, and now threatens to affect wheat sowing on some 2 million hectares in eastern Bihar and northern Uttar Pradesh.

These two states are important as government agencies, which often buy more than 90 percent of the grain at higher prices from farmers in Punjab and Haryana, are less active there, allowing millers and private traders to secure wheat more cheaply.

A shortfall in these regions would force private traders to turn overseas for wheat.

K.L. Rahman, research head at Way2Wealth, a domestic brokerage, said farmers would eventually harvest cane and plant wheat, but the delay in planting may hit productivity.

“One thing is sure, Indian wheat prices will rise by 5 to 15% from the current level in the near future due to reports of delay in crushing,” Rahman said.

Parliament adjourned over sugar price protest

Reuters — Thu, 19 Nov 2009 08:17:00 GMT

New Delhi: Thousands of Indian farmers protesting low state-controlled sugarcane prices forced the postponement of the first day of the parliamentary winter session on Thursday, highlighting rural discontent over government policy.

Some 5,000 farmers from Uttar Pradesh, India’s biggest cane producing state, marched to the opening of the parliament to demand higher state-set prices for sugarcane.

Parts of the capital was disrupted by the protests, that were backed by opposition parties.

The Congress-led coalition won re-election with a stronger mandate in May, raising hopes of quick reforms, but it has moved slowly and is still answerable to a reform-shy rural base. It faces political opposition to rapid change and deregulation as protests on Thursday highlighted.

The federal government has given the states greater autonomy in fixing sugarcane prices, one of India’s biggest cash crops, in order to lift restrictions on a heavily-regulated sugar sector.

But many farmers are unhappy with those state-set prices, saying they benefit sugar firms.

India’s government has set a series of reforms ranging from the financial sector to law and order and gender equality as priorities for the winter parliament session.

Investors are following whether Prime Minister Manmohan Singh will follow up on his pledge to push ahead with difficult financial reforms, particularly in the insurance and pension sectors.

The state government has fixed the price the mills must pay to farmers at Rs165-170 rupees ($3.55-$3.66) per 100 kg, and farmers have been seeking a higher price that corresponds more to the rise in retail prices.

“We demand at least Rs215 as the cane price,” Anil Singh, national secretary of the National Alliance of Farmers’ Associations, told Reuters.

Sugar output in Uttar Pradesh is likely to fall below estimates as the weakest monsoon in more than three decades has hit sucrose content in cane.

Delhi govt to sell wheat flour at 132 outlets in city

PTI — Wed, 18 Nov 2009 13:04:00 GMT

New Delhi: Delhi government will sell wheat flour at subsidized rates at 132 outlets across the city from Saturday to provide relief to citizens from the spiralling price of the commodity.

Announcing the initiative, chief minister Sheila Dikshit said initially 10 kg packets of wheat flour will be made available for Rs139 as against the market rate of Rs180 to Rs200.

The subsidized wheat flour will be sold at 84 outlets of Kendriya Bhandar, eight outlets of National Consumer Cooperative Federation (NCCF) and 40 selected outlets at the circle offices of the food and supplies department of the city government.

The chief minister said considering the rising prices of wheat flour in the market, Delhi government had approched the Union agriculture ministry and it has provided 80,481 metric tonnes of wheat to Delhi government at Rs1,080 per quintal under the open market sale scheme.

“We are concerned about rising prices of wheat flour and that is why this initiative is being launched to mitigate effects of inflationary trends in food items,” the chief minister told a press conference.

“I think infusion of this huge quantity of wheat into the market will bring down the price of the commodity considerably,” she added.

India in first wheat import deal since ’07

Reuters — Fri, 13 Nov 2009 10:34:00 GMT

Singapore: India has struck its first wheat import deals since 2007, buying the grain from Australia in containers, trade sources said on Friday.

“Our company has sold some wheat in containers to India,” said a Singapore-based trader. “I have done some deals today.”

Two other traders in Singapore and India confirmed the deals. One trader said that up to 10,000 tonnes of wheat had been sold for arrival at southern Indian ports in January.

The deals had been sealed between $270 and $300 a tonne, including cost and freight, mostly for Australian Prime Wheat (APW).

India is sitting on ample supplies of wheat, but this year’s worst monsoon since 1972, has raised doubts about the prospects of the winter-sown wheat crop. India had 28.2 million tonnes of wheat in government stocks by 30 September, government data show.

Traders said they were waiting for the first cargo to clear Indian customs, with more shipments to follow, as prices were attractive for mills in southern India to import wheat.

“Some business has taken place in containers, but there is a huge pipeline of trade which is waiting for the results of the first few containers and if it gets cleared, possibly you will see a large pick-up in shipments,” said one Singapore-based trader with an international trading house.

Indian wheat is quoted around $329 to $350 in southern India, making Australian wheat attractive.

India’s food dilemma: high prices or shortages

Himangshu Watts / Reuters — Thu, 12 Nov 2009 06:04:00 GMT

New Delhi: For a man who will inherit vast tracts of fertile farmland in Punjab, India’s grain bowl, Jaswinder Singh made what seemed to him a logical career move — he took a job with a telecoms company in New Delhi.

“I can’t go back to the village after an MBA. Delhi has more money, better quality of life. The job is more satisfying, and you don’t depend on the weather or prices set by the government,” said Singh, who earns rent from his farm, while a tenant tills the land.

Singh’s choice reflects a growing and worrisome trend in the nation’s agriculture sector: Indian farms are failing to attract capital or talent, either from rich landlords like Singh, or the 21,000 students who graduate from India’s 50 agricultural and veterinary universities.

“At present, most of the farm graduates are either taking jobs in the government, or financial institutions, or in private sector industry. They are seldom taking to farming as a profession,” a report by the M.S. Swaminathan Research Foundation said.

The views of the foundation — set up by M.S. Swaminathan, who led India’s Green Revolution in the 1960s that helped make this vast nation self-sufficient in food — were echoed in a poll by the National Sample Survey Organisation, a government body. The survey showed 40% of Indian farmers would quit farming, if they had a choice — an alarming revelation for a country where two-thirds of the billion-plus people live in villages.

Slow Growth

India’s farm sector has changed remarkably little since the advent of the Green Revolution, while other industries have been transformed over the past two decades. As a result, agriculture’s share of the Indian economy shrank to 17.5% last year, from nearly 30% in the early 1990s.

“We are not realising that farming is becoming an increasingly less profitable profession. There was a time when farmers had very little choice. Things have changed. Farmers would like to make a shift,” said T.K. Bhaumik, a leading economist.

This has raised concerns that India’s farm output could lag demand and the country — which ranks among the world’s top three consumers of rice, wheat, sugar, tea, coarse grains and cotton — will become a large food importer unless yields jump.

“The increase in yields in the past decades have been insignificant. India sorely needs another Green Revolution,” says Kushagra Nayan Bajaj, joint managing director of Bajaj Hinduthan, India’s top sugar producer, which is importing raw sugar after a drought ravaged the domestic cane crop.

But the next revolution faces a tougher challenge — in part because of the environmental damage done by the previous one. Back then, abundant groundwater was available and the soil was not degraded by pesticides and fertilisers, which initially helped boost productivity.

P.C. Kesavan, distinguished fellow at the M.S. Swaminathan Research Foundation, said chemicals used in agriculture had destroyed the sustainability of productivity in the long run.

“Yes, a second Green Revolution is indeed very essential — the very need of the hour. But, it should not be the same kind of Green Revolution that the first was,” he said.

In Punjab, the flagship of India’s Green Revolution, groundwater is declining rapidly.

“The water table of Punjab is falling at an alarming rate, especially in the central districts, due to excess drawing of groundwater,” said Karam Singh, an agricultural economist at the Punjab State Farmers Commission.

Sardara Singh Johl, an economist and former chairman of India’s Commission for Agricultural Costs and Prices, said there would be very little water available for farming in the state. “This could severely compromise the food security of India. Government should realise the gravity of the situation and allocate funds for research to conserve groundwater,” he said.

To prevent food shortages, economists and scientists are calling for a range of policy initiatives, such as allowing genetically modified crops, greater investment in irrigation, better economics in farming and greater government attention to agriculture.

Weather Risk

With 60% of Indian farms depending on erratic rains, it took just one failed monsoon to force India to import 5 million tonnes of sugar in 2008-09, after exporting a similar quantity a year earlier.

The drought, after the worst monsoon rains in 37 years, is also expected to slash rice output by 17%, encouraging India to begin importing rice, after being a leading exporter of the commodity for decades.

Last year, when rice stocks dwindled in many countries, India’s panic move to ban exports helped push global rice prices to a record, and the country can potentially rattle the world market again.

L.S. Rathore, head of the agricultural meteorology unit of the government’s weather office, said, if the monsoon fails again next year, the country would face a shortage.

“Higher imports will be the only answer to the food management issue then,” he said, adding that it was unlikely that monsoon rains would fail in two consecutive years.

Still, changes in weather patterns are a major cause of worry. This year, drought-prone, arid regions of Gujarat and Rajasthan received good rainfall, while traditionally flood-prone areas in eastern India endured a drought.

“Climate change could exert devastating impact on growth and productivity of several crops, particularly the food grain crops,” said Kesavan of the M.S. Swaminathan Research Foundation. He said agriculture in India had always been a “gamble with monsoon” and millions of poor farmers did not have the resources to cope with the uncertainty of monsoons.

Tough Choices

Analysts say agricultural economics need to improve significantly to retain farmers like Jaswinder Singh, who handed over his farm to a tenant and works in New Delhi. But this is not easy in a country where inflation is always an election issue and a state government was voted out because onion prices soared.

“This is a million-dollar issue,” said Bhaumik, the economist. “If you want to make farming more profitable, the price for farm products needs to be more remunerative. Will the middle class accept this?”

He said the government may have to allow genetically modified crops in order to improve farm revenue. “I think they will have to allow it. There are limitations on the supply side. Productivity improvement is the crux of the issue. That is why we need to have an understanding of GM foods. You have a crisis at hand,” he said.

India so far has allowed genetically modified seeds only for cotton, which has boosted productivity, but use of such seeds for edible crops has always evoked strong protests.

Last month, a government panel recommended commercial cultivation of genetically modified brinjal (a type of eggplant), evoking sharp protests and a quick clarification from the government.

“Strong views have already been expressed on the Bt-Brinjal issue, both for and against. My objective is to arrive at a careful, considered decision in the public and national interest,” environment minister Jairam Ramesh said in a statement last month.

Bhagirath Choudhary, a New Delhi-based representative of the International Service for the Acquisition of Agribiotech Application, said the case for using genetically modified seeds was compelling.

“You cannot do without this technology in agriculture — even today, and more so in the future. We are unable to increase the production because productivity is not being increased,” he said.

Others are not convinced.

“My personal view is that it has so far been more glorified for what it has delivered. It is commerce-driven, more than science-based,” said Kesavan of the M.S. Swaminathan Research Foundation. “Time is ripe now to have a large-scale brainstorming on the social, environmental and economic impact of GM crops on resource-poor, small and marginal farmers.”

Rains impede cotton harvesting; pulses to gain

Reuters — Wed, 11 Nov 2009 07:54:00 GMT

Mumbai: Unseasonal rains in western and southern parts of India have impeded harvesting of cotton in two biggest producing states and sustained heavy showers could damage the crop, industry and government officials said on Wednesday.

Northern Maharashtra and southern Gujarat are likely to receive heavy to very heavy rains due to a cyclonic storm, weather department said early on Wednesday.

Gujarat is India’s biggest producer of cotton followed by Maharashtra.

“Farmers are not harvesting due to rains. They will start once rains stop,” said NP Hirani, chairman of the Maharashtra State Cotton Growers Marketing Federation Ltd.

Cotton crop may, however, benefit from the rains as the sowing in June was delayed by almost a month because of the patchy rains, but consistent heavy rains for more than two days may cause damage, an official at Maharashtra government’s agriculture department said.

Sugar cane crushing is likely to stay subdued for a week due to rains, industry officials said on Tuesday.

Pulses to gain

Rains may improve yield of tur or pigeon peas and hasten sowing of chana, traders said.

“Rainfall is conducive for tur crop. It will certainly improve yields,” said Damodhar Gilda, a trader based in Gulbarga, in southern Karnataka state.

Rains have been improving soil moisture level and that will help sowing of the winter pulse, Gilda added.

Spot chana prices have corrected by more than Rs130 per 100 kg in past two days due to rains, while chana futures opened lower on Wednesday.

IFFCO plans to set up overseas cooperatives for pulses cultivation

Utpal Bhaskar — Thu, 05 Nov 2009 18:19:00 GMT

New Delhi: The Indian Farmers’ Fertiliser Cooperative Ltd (IFFCO), which has business interests in fertilisers, insurance, power and telecom, now plans to form overseas groups of farmers that would cultivate pulses to meet domestic demand.

“We are looking at long term tie-up for the import of pulses,” managing director U.S. Awasthi said. “I want to encourage some countries to take up pulse plantation and we can import it.”

India faces a shortage of lentils. The country consumed 18 million tonnes (mt) of pulses in the year ended 31 March, but grew only 14.66mt. It accounts for 25% of the global production and 30% of its consumption, meeting the shortfall through imports, mainly from Canada and Myanmar.

IFFCO is considering the US, Australia and Africa to form farmer cooperatives for long-term pulses imports.

“We will form cooperatives in the overseas countries, where we will provide support in the form of technology and inputs and then we will buy off their products,” Awasthi said.

An analyst said that pulses have been the weakest link in India’s farming system and its production has stagnated as farmers moved to cash crops such as cotton and oilseeds.

Yields are also low in India at 622kg per hectare, lower than neighbours Sri Lanka at 965kg and Bangladesh at 807kg.

“This opportunity for IFFCO could be a little long-drawn,” said S. Raghuraman, head of trade research at Agriwatch, an independent research firm. “Though there is a lot of potential there, it will also involve a lead and gestation time.”

Also, overseas opportunities are likely to demand a premium due to the rising prices for lentils, Raghuraman siad.

To tap into the opportunity that a shortfall in a staple food item presents, private sector firms such as the Tata group are also considering entering the pulses market.

“We think some supplemental effort from the private sector is needed” to fill the shortfall, R. Gopalakrishnan, senior board member of Tata Sons Ltd, the group holding company, had told Mint in an earlier interview.

This is not the first time that IFFCO is looking at overseas opportunities to meet domestic demand. It has already established joint ventures in Senegal, Oman and Australia to source raw material and fertilisers for its plants.

IFFCO posted a profit of Rs360.01 crore on a revenue of Rs32,993 crore for the financial year ended March. It has 40,000 member societies with a domestic urea production capacity of 4.2mt and complex fertilizer making capacity of 4.3mt.

Govt mulls package for tea industry

Niladri Bhattacharya / Reuters — Wed, 04 Nov 2009 12:32:00 GMT

Kolkata: The Central government is considering a package for the tea industry, the junior trade minister said on Wednesday. “Social cost is a major issue with the tea industry. The government is taking this matter very seriously and shortly we are going to come out with a package for this industry,” Jyotiraditya Scindia told reporters.

Social cost includes all the basic amenities which are provided to labours by the plantation owners, he said.

“Social amenities adds around Rs7 per kg in the production cost, and we have proposed that half of this cost should be borne by the Centre and the state government,” said Indian Tea Association, chairman, Aditya Khaitan.

This would be in addition to the Rs6 billion alloted this year through the Tea Board under Special Purpose Tea Fund (SPTF) for re-plantations and rejuvenation in tea gardens, he added.

The SPTF was announced in 2005, under which federal government would give Rs42 billion grant to the tea industry over a period of 15 years.

An industry expert said the proposed package would be helpful in reducing the production cost, boosting global competitiveness of Indian tea.

“A package for this would unable us to reduce the fixed (production) cost and be more competitive, as in countries like Sri Lanka and Kenya, the producers do not bear such cost,” he added.

The minister said the industry should look to improve the quality of the tea produced and focus more on exporting the orthodox variety of tea rather than crushed tear and curl (CTC) variety leafs.

“The real market for export in the tea sector lies in the orthodox variety, whereas we only export CTC leafs. So we should look to reorganise our tea export basket,” Scindia told an industry chamber.

“There is also a need to focus on more value-added products like the tea-bags,” he added.

Debt relief package

The federal government is also planing to come out with a separate and comprehensive debt-relief package for the plantation sector, Scindia said.

“Government is very serious about addressing the problems of indebtedness of the plantation sector. A note has been sent to the Cabinet Committee on Economic Affairs (CCEA), so we should come out with a package shortly,” he added.

The package would particularly address small and medium plantation growers, he said.

Production of Kharif foodgrain may fall 16%

PTI — Sun, 25 Oct 2009 14:45:00 GMT

Mumbai: The country’s kharif foodgrain production is expected to decline to 98 million tonnes this year from 117.7 million tonnes produced in kharif 2008, Centre for Monitoring Indian Economy (CMIE) said here.

“Decline in acreage and expected fall in yield will lead to a 16% drop in kharif foodgrain production. It is expected to fall to 98 million tonnes from 117.7 million tonnes produced in kharif 2008,” CMIE said.

The kharif sowing season ended with a 5.3% decline in acreage. By end-September 2009, area sown was 91.9 million hectares compared to 97.1 million hecares by end September 2008.

Crop cultivation was hit the hardest by rainfall deficit of 23 per cent during the 2009 southwest monsoon season. The decline in acreage was in addition to the 2.4 per cent fall in the 2008 kharif season, CMIE said.

The fall in acreage by end-September 2009 was on account of less area sown under rice, groundnut and sugarcane. Acreage under all other crops increased in spite of drought conditions in almost half of the districts in the country and poor rains in the remaining districts.

The worst hit was area sown under rice. Kharif rice production is likely to fall by 16% to 68 million tonnes. It accounts for 40% of kharif acreage and is cultivated throughout the country.

By end-September 2009, rice was sown on 32 million hectares compared to 38 million hectares sown by end-September 2008. This leaves a huge shortfall of six million hectares, CMIE said.

Major oilseeds grown in the kharif season are soyabean and groundnut. Sesamum, sunflower and castor are also cultivated in this season.

By end-September, acreage under oilseeds declined by 5.3%, mainly due to less area under groundnut.

Acreage under groundnut declined by 15.5% to 4.4 million hectares. Poor rains in Andhra Pradesh led to a 34% drop in acreage in the state.

Gujarat, the largest state growing groundnut, witnessed a 7.4% fall in area sown. Acreage under soyabean remained unchanged at 9.6 million hectares.

Sugarcane cultivation was completed by end-June 2009 and was down by 3%. Cotton acreage witnessed a sharp increase of 13% to 96.2 lakh hectares.

The production of coarse cereals is also expected to decline mainly due to a fall in bajra and maize production.

As kharif crop production is expected to fall sharply, the focus has shifted to rabi production. Delayed withdrawal of rainfall towards end-September is expected to benefit rabi crops and likely to compensate for the loss of production in kharif season to some extent.

The rabi foodgrain production is likely to grow by 1.3% during 2009-10, CMIE said.

Commercial cultivation of Bt brinjal may take a year

Jacob P. Koshy and Padmaparna Ghosh — Thu, 15 Oct 2009 19:24:00 GMT

New Delhi: Bt brinjal, or the country’s first genetically modified food crop, is unlikely to be available for commercial cultivation before late next year, and still requires mandatory clearances from three government ministries, say key officials involved with the regulatory process.

On Wednesday, the genetic engineering approval committee (GEAC), a biotechnology regulatory authority ruled that genetically modified, or GM, brinjal was safe for commercial cultivation. This was after a GEAC subcommittee, constituted on the Supreme Court’s directive, reviewed the scientific data from two-year-long field trials in farmers’ fields.

However, apart from environment minister Jairam Ramesh’s nod, commercial cultivation of the genetically modified vegetable will require approvals from the ministries of agriculture and health and family welfare.

Even if a GM crop is not an environmental threat, it had to prove itself better than its naturally produced counterpart to be allowed for commercial cultivation. “A genetically modified fish may be safe, but you have to prove it’s beneficial too. You can’t have a genetically modified crop just for the sake of it,” said M.K. Bhan, secretary, department of biotechnology. “So stakeholders such as the ministry of agriculture and health, etc., have to clear it before it reaches the field.”

Bhan is involved with the GEAC’s decision-making process.

Minister of state for agriculture K.V. Thomas emphasized that though the agriculture ministry would take a “scientific” view on the need for GM crops, Bt brinjal was unlikely to make an appearance on dining tables anytime soon. “We are not going to have a negative approach. Neither are we blindly objecting or supporting it. Our decision will be on the basis of advice from scientists,” he said over the phone, adding that commercial cultivation of the vegetable is not “likely before another year”.

Jairam Ramesh, minister of state in the ministry of environment and forests (MoEF), said since there were “strong” views both for and against genetically modified food crops, more consultation was required.

“I have studied the recommendations and have decided that a series of consultations with scientists, agricultural experts, farmers’ organizations, consumer groups and NGOs will be held in January and February 2010,” he said.

Activists and farmers’ organizations have protested against approvals to genetically modified crops, largely on grounds of its allegedly toxic health effects. Several European countries have banned GM crops.

“Clearance of such a crop requires the authorities to practice extreme caution. Currently in India there is no labelling regime for genetically modified foods which will give consumers a choice to make a decision whether they want to consume genetically modified food or not. Till the time this is done regulators should not clear edible GM crops,” said Sunita Narain, director, Centre for Science and Environment, a Delhi-based environmental activist group.

Currently, Bt cotton is the only genetically modified crop allowed for commercial cultivation. Its use was prompted by pests becoming increasingly resistant to traditional insecticides—in some cases, a pest that could have once been killed with a single dose of insecticide needed 21,000 doses.

The use of Bt cotton in India has increased cotton yield from 308kg per hectare in 2001 to 508kg per hectare in 2006, according to Cotton Corp. of India Ltd, a state-owned company that helps in the marketing of cotton.

Like Bt cotton, the transgenic brinjal contains a gene, artificially introduced into its genome, mainly from a soil bacterium called bacillus thuringienesis.

Research into Bt brinjal is part of a USAID programme called Agri-Biotechnology Support Programme (ABSP) under a private-public partnership where three Indian institutions—the Indian Institute of Vegetable Research (Varanasi), the University of Agricultural Sciences (Dharwad) and the Tamil Nadu Agricultural University (Coimbatore)—are working with Monsanto and Mahyco.

Bt Brinjal has been under trial for the past nine years and was first sent to the GEAC for approval in 2004. It was cleared by a panel led by Delhi University vice-chancellor Deepak Pental, but a GEAC review committee was constituted in 2007 when civil society groups and NGOs raised doubts over health safety and environmental concerns.

jacob.k@livemint.com

Liz Mathew and Seema Singh in Bangalore contributed to this story.

Study points to rise in sea levels, lower farm yields, thinner forests

Padmaparna Ghosh — Wed, 14 Oct 2009 17:05:00 GMT

New Delhi: India’s biggest set of climate studies so far predicts a further rise in sea levels, reduced farm yields and thinner forest covers.

Findings from the studies, released on Wednesday by the environment ministry, will be India’s official submission to the United Nations Framework Convention on Climate Change. All countries submit periodic studies on the impact of climate change on their regions.

India’s previous submission in 1994 was on a smaller scale. At least 150 institutions took part in the studies this time, against 50 earlier.

Sensitive issue: Farmers packing potatoes in West Bengal. It is estimated that a 1 degree Celsius increase in average global temperature will reduce yields of potato, wheat, soyabean, mustard and groundnut by 3-7%. Indranil Bhoumik / Mint

According to the latest studies, agriculture is among the crucial sectors that would be affected by climate change in the next 50 years.

P.K. Aggarwal, head of environmental sciences, Indian Agricultural Research Institute, which participated in the studies, estimates that an increase of 1 degree Celsius in average global temperature will reduce yields of wheat, soyabean, mustard, groundnut and potato by 3-7%.

Though the adverse effects on agriculture are expected to be marginal till 2020, yields are estimated to drop by 10-40% by 2100.

There may be some good news though for chick pea, maize, sorghum, millets and coconut along the west coast, as yields for these might improve. Potato, mustard and vegetable yields in north-western India might incur less loss due to reduced frost damage.

“But the costs of inaction in terms of climate change will be much higher and we need to act now,” Aggarwal said.

The monsoon rains, closely tied to agricultural produce in India, would also suffer from adverse changes in climate. Studies by K. Krishna Kumar, programme manager, climate change, Indian Institute of Tropical Meteorology, Pune, forecast fewer rainy days, though of higher intensity.

Both rainfall and temperature will be extreme, the studies predict.

Kumar said that though there would be no significant change in the frequency of cyclonic storms or monsoon depressions, the intensity of future storms would be higher by 10%. “But more simulations are needed to gain confidence in the projected future changes in the finer characteristics of monsoon,” he added.

Environment minister Jairam Ramesh, commenting on the importance of such scientific knowledge on climate, said, “We have to create institutions, give them long-term funding. Most critical are studies on Himalayan glaciers and India has to play a key role in that.”

Other critical projected changes from the studies include the likely disappearance of some endangered species, reduction in forest cover by 15%, and increased flood risks associated with storm surges along India’s south-eastern coast

Anger grows as drought, broken promises blight farmers’ hopes

Liz Mathew — Sun, 11 Oct 2009 15:25:00 GMT

Yavatmal: Recent rains have given Vidarbha a fresh look, but they have done little to ease the misery of thousands of farmers in these districts at the eastern edge of Maharashtra as they live with the reality of parched fields and mounting debt.

As election fever grips the state, farmers in Yavatmal and nearby districts swear politicians have turned their backs to them, just as nature has.

Fraught livelihood: Bhavsingh Harji Rathore’s crops wilted due to a long period of deficient rainfall. And an inadequate farm loan waiver scheme meant the 60-year-old was unable to pay off his Rs1.5 lakh loan. Ashesh Shah/Mint

The delayed and deficient rains—the region received only 60-70% of the average rainfall this year too—have demolished any lingering hope. The standing crop of cotton, soya bean and jowar has already wilted. Although it started raining in June-end, giving farmers a slender thread of hope to cling to, the subsequent prolonged dry spell has left Yavatmal district, the epicentre of farmer suicides, in crisis yet again. According to the National Crime Records Bureau (NCRB), there have been at least 182,936 farmer suicides between 1997 and 2007.

Meanwhile, anger against politicians is boiling over.

“How thick-skinned these politicians are to visit us seeking our votes. They come only at election time, forget us for the next four years and come again to renew the promises,” says Kashinath Rathore, a farmer in Bothbodan village, 15km from the district centre in Yavatmal. Apart from the major political combinations—the Congress and the Nationalist Congress Party (NCP), the Bharatiya Janata Party (BJP) and the Shiv Sena, and the Republican Left Democratic Front (RLDF), or the Third Front, and the Bahujan Samaj Party (BSP)—eight independents are also contesting from the Yavatmal assembly constituency for the 13 October state elections.

“We are like animals. The politicians do not care for people like me in the villages. They do take care of those who live in cities. No one wants us because we are powerless,” says Suresh Nanakchand Chaitani, a labourer who has not been getting any work for the last three weeks, struggling to bring a smile to his wrinkled face.

Unlike Kalavati, the distressed farmer widow whose story was brought to the world’s attention by Congress general secretary Rahul Gandhi, Chaitani’s destiny has not changed even after the Congress’ star campaigner visited his home. “Last year on 18 July, Rahul Gandhi came to my house, sat there for almost an hour, promised that my life would be different. But nothing happened,” Chaitani says, showing the National Rural Employment Guarantee Scheme card, (obtained under the Congress-led United Progressive Alliance, or UPA, government’s most popular flagship programme) with no entries on it. “I have not got a single bit of work, nor have I received a single paisa as wage under this scheme since I got this card in 2006,” Chaitani says.

Villagers in Bothbodan, where 18 farmers committed suicide in a month in 2007, say only around 12 farmers among the 2,000 people living in 300 houses, most of them dilapidated, benefited from the UPA government’s Rs71,000 crore loan waiver scheme.

Ramesh Madhav Jadav, whose debts total Rs75,000, explains the politics of the loan waiver. “Nothing came to us. All the money went to farmers in Baramati because the agriculture minister comes from there. While we got Rs6,000 as loan per acre, farmers there managed Rs1 lakh,” he says, referring to NCP chief Sharad Pawar’s constituency. Pawar shifted to the Madha Lok Sabha constituency in the April-May general election, leaving his traditional Baramati seat to his daughter Supriya Sule.

However, Avinash Paranjpe, an economist who has done field work in Yavatmal, says the farmers in Baramati and other western Maharashtra areas could get more loans because their main crop—sugar—was of high value and the loan amount would be higher for sugar farmers. “Actually, the crop decides the loan amount, not Sharad Pawar,” he says.

However, he agrees with the farmers’ allegation that the benefits of the loan waiver scheme and other relief packages have not reached the ground level.

According to Jadhav, a Rs6,000 loan for 1 acre cotton farming is ridiculous. “You need three bags of cotton seeds (each costs Rs750), 15 bags of urea (Rs500 each) and pesticides worth Rs6,400 for each crop in an acre. The labour charges for de-weeding and other costs are separate. That is why we go to private parties for borrowing money. Neither the officials nor the politicians understand this,” he says.

The situation on the ground is quite disheartening. With no rains and irrigation, Jadhav’s cotton plants on 3 hectares behind the village houses started wilting and the soya bean crop has already dried up. “Twenty years ago, I used to get 10 quintals per acre and now, it is not even one quintal. How do I look after my family (of nine members)?” he asks.

Another farmer, Bhavsingh Harji Rathore, who lives alone in his mud hut, has a similar story to tell about his farm. The 60-year-old got a Rs20,000 relief from the bank, but his Rs1.5 lakh loan is still unpaid.

In the neighbouring hut, 80-year-old Chandrabal Chauhan and his wife Domy are almost bedridden. With no children to look after them, the elderly couple stopped farming as it gave them no benefit.

“The Congress leaders make loud speeches about the schemes they launched for senior citizens. Despite several requests to the leaders, none of them bothered to provide some help to this elderly couple. Our village was visited by many dignitaries including Rahul Gandhi, Mani Shankar Aiyer and even spiritual leader Sri Sri Ravi Shankar. But nothing has changed, only promises remain,” says Kashinath Rathore.

“We have so much barren land lying here. Why can’t the government bring in some industry here, so that our people get some jobs? It’s not that we are asking for money only. We want to earn our livelihood,” he says.

But the anger is not directed against any particular party. “No party is different. BJP and Shiv Sena leaders say they do not have power to do anything for us. But we know no one is better,” says Rathore.

The villagers are now planning to block all politicians from visiting them.

Developing countries need $83 bn a year for farms: FAO

Svetlana Kovalyova / Reuters — Thu, 08 Oct 2009 11:29:00 GMT

Milan: The world needs to invest $83 billion a year in agriculture in developing countries to feed 9.1 billion people in 2050, the United Nations’ Food and Agriculture Organisation said on Thursday.

World agriculture needs massive investments to raise overall output 70% over the next 41 years, including almost doubled output in the developing countries to feed a projected extra 2.3 billion people by 2050, the FAO said.

Primary agriculture investment needs include some $20 billion a year earmarked for crop production and $13 billion for livestock, the FAO said in a paper ahead of a forum on how to feed the world in 2050 it is due to hold on 12 Oct-13 Oct in Rome.

A further $50 billion a year would be needed for downstream services, such as storage and processing facilities, it said.

Most of this investment would have to come from private investors: farmers buying seeds, fertilisers and machinery and businesses investing in processing facilities, the agency said.

On top of this, public investments are needed in agriculture research and development, in big infrastructure projects such as building roads, ports, storage and irrigation systems as well as into education and healthcare, the FAO said.

Up to $29 billion of the $83 billion projected annual net investments in agriculture would need to be spent in the two countries with the largest populations -- India and China.

Sub-Saharan Africa would need about $11 billion, Latin America and the Caribbean region would require some $20 billion, the West Asia and North Africa $10 billion, South Asia $20 billion and East Asia $24 billion, it said.

With scarce funds in many developing countries, foreign direct investment in agriculture there could make a significant contribution to bridging the investment gap, the paper said.

But so-called “land grab” investments by rich nations in countries that are poor or lacking in food security have raised political and economic concerns, because they are often meant to export output to the investing countries.

Such deals should be designed in such a way as to boost benefits to host populations, increase their food security and reduce poverty, the FAO said.

Sugar mills farm out work to smaller rivals

Reuters — Wed, 07 Oct 2009 06:25:00 GMT

Mumbai: Big sugar refiners in North India are now farming out work to smaller mills in the south and west of the country after robust imports in the world’s largest consumer touched off an international price rise. India had contracted imports of about 5 million tonnes of raw sugar in 2008/09, of which 2.4 million tonnes have already landed, but only about a million tonnes have been refined and the remainder will be processed in 2009/10 season that started on 1 October.

Large trading houses and mills were importing raws despite higher prices to feed the roaring demand at home, stretching capacities. Smaller players, who cannot afford expensive imports, are cashing in this paucity.

“A few mills in the state are negotiating deals with private traders for refining. This will benefit both the sides,” said a senior official at Maharashtra State Cooperative Sugar Factories Federation Ltd. Maharashtra is India’s No. 1 sugar producer.

In northern Uttar Pradesh state, India’s biggest cane producer, output is likely to contract on patchy rains and lower area but southern and western states like Maharashtra, Karnataka and Tamil Nadu, are set to harvest higher crops.

Officials at India’s major refiners based in Uttar Pradesh and Karnataka said smaller mills were picking refining contracts but refused to discuss their own plans.

Indian sugar mills power plants using bagasse, a fibrous waste generated in plenty during crushing season, and prefer to let plants idle rest of the year to save on expensive power.

“Energy is a big component,” said Ashwini Bansod, a senior analyst at MF Global Commodities India Ltd. “It may force companies to approach mills in cane rich areas for processing.”

India, the world’s second largest producer after Brazil, consumes about 23 million tonnes of sugar a year, but it produced only about 15 million tonnes in the year ending September and output is seen at 16 million tonnes this year.

Arranged marriage

Karnataka-based GMR Industries plans to refine close to 50,000 tonnes raws for “another party” in November-April, Managing Director R Ramakrishnan said, while Oudh Sugar is still negotiating refining contracts.

Bihar-based Riga Sugars has signed an agreement to refine 5,000 tonnes raws, Managing Director OP Dhanuka, said.

“We will try and take more such orders. Current prices are not feasible to import,” GMR’s Ramakrishnan said.

New York raw futures jumped to 28-1/2-year high last month and were hovering near highs due to Indian demand.

Domestic sugar prices have soared by more than half in 2009 to touch an unprecedented Rs3,177.25 per 100 kg on 5 September.

High logistics cost is another import deterrent for small millers from the hinterland, analysts and officials said.

While refining costs differ from mill to mill based on capacity and location, analysts estimate a mill far from ports will have to spend about three times more than India’s largest refiner Shree Renuka Sugars.

Refining costs of Shree Renuka, which has operations in coastal states of Karnataka, Maharashtra and West Bengal, is a little over $30 per tonne, a company official had said.

Though small mills refuse to divulge details of their refining contracts, analysts say their earnings will rise.

“It is a novel concept and though it is difficult to ascertain in numbers of how much these companies will make, I can say for sure it will help their margin,” a sector analyst with a foreign brokerage said.

“It’s a win-win situation.”

Swamped by debt, fishermen flee moneylenders in Sunderbans

Romita Datta — Sun, 04 Oct 2009 15:55:00 GMT

Kultali, West Bengal: For the past 30 years, Atal Naskar has been making enough money from his three-acre fishing lake to feed a family of 10. But three months ago, this 50-year old fisherman fled his home in Kultali in West Bengal’s Sunderbans delta, hounded by moneylenders because he couldn’t repay a loan he had taken for fish farming.

Fishing lakes across the Sunderbans were destroyed by cyclone Aila, which hit West Bengal on 25 May. Embankments collapsed, allowing seawater to flood substantial parts of the delta.

Battling for survival: A fishing lake at Dakshin Goranghati in the Sunderbans which was destroyed by Aila. Indranil Bhoumik / Mint

The saline seawater increased the alkaline level of the water in the lakes and killed the fish, forcing thousands of indebted fishermen such as Naskar to flee their homes.

Naskar now works as a daily labourer “hundreds of kilometres away”, according to a member of his extended family, who wouldn’t disclose her name or Naskar’s whereabouts. “They (moneylenders) would kill him if they found him,” she said. “He isn’t keeping well these days…We are very worried.”

At least 60 families in Dakshin Goranghati area of Kultali have fled their homes, say locals. “At least half of the fishing lakes in this area have been abandoned and many have dried up,” says Uttam Naskar, a fisherman struggling to repay from his savings a Rs50,000 loan. “In many villages, the entire male population has run away…Even weddings have been cancelled,” he added.

Reviving the abandoned lakes is not going to be easy. “Fishing won’t be possible unless the pH value of the water is reduced to 8,” says Siddhartha Datta, environmentalist and pro-vice-chancellor of Kolkata’s Jadavpur University. “For that, you have to drain the water from these lakes and also dredge out the top soil.”

The alkaline or acid content of a solution is measured in pH.

Most fishermen cannot afford on their own to revive their fishing lakes, and moneylenders aren’t willing to lend. As most of these fishermen do not have clear ownership of the lakes or necessary clearances from authorities for fishing, they are unable to borrow from banks.

Fishermen typically borrowed Rs20,000-50,000 from local moneylenders to breed fish, and even after paying 7% of the catch as interest, they made Rs1-2 lakh a year depending on the size of the lake.

“The economy of this area has collapsed,” says local legislator Joy Krishna Haldar, who belongs to the Socialist Unity Centre of India party. “Fishing in at least 100 gram panchayats has been affected by the cyclone.”

At least 60,000 of Kultali’s 160,000 lakh people were dependent on fishing. Of them, around 50,000 are unemployed, says Haldar. In Sunderbans, almost 100,000 people have lost their livelihood because the cyclone destroyed fishing lakes, says Haldar.

The state’s irrigation department, which is responsible for the upkeep of the embankments, says it has so far spent Rs115 crore to repair the damaged embankments, and will not spend more.

“We had made it clear to the people that they would have to strengthen the embankments around their fishing lakes on their own,” says Subhas Naskar, the state’s irrigation minister. “Fishermen would have to recoup their losses on their own.”

Dispute over ownership and control of lakes is the key problem facing most fishermen in this area, according to the minister. So they are averse to spending heavily on building embankments around their lakes. But locals say it is impossible to protect the fishing lakes in Kultali unless the state government repairs the embankments to tame the nearby Matla river.

As indebted fishermen flee their homes, businessmen from Kolkata are trying to snap up abandoned fishing lakes in the South 24 Parganas district with the support of local political leaders.

“You need political clout to control fishing lakes. If you could get local political leaders to back you, you could make a killing,” said a businessman in Kolkata, who did not want to be identified because he is closing in on at least two large fishing lakes.

Farm yield may fall in South Asia

Padmaparna Ghosh — Thu, 01 Oct 2009 19:45:00 GMT

New Delhi: South Asia will be badly hit by declining crop yields stemming from climate change, a report by the International Food Policy Research Institute (Ifpri) has found ahead of a food security summit next month.

Graphics: Sandeep Bhatnagar / Mint.

Another study, released by the Food and Agricultural Organization on Thursday, also said that farm yields will be adversely affected by global warming.

The Ifpri report—made public on Wednesday—analysed 32 crops and livestock commodities in 281 regions across the globe and said that as much as $7 billion (Rs33,530 crore) will be required every year in developing nations as additional funding to finance research, rural infrastructure and irrigation investments. Asia will require the biggest chunk of investment in irrigation efficiency.

“Calorie availability in 2050 will not only be lower than in the no-climate-change scenario, it will actually decline relative to 2000 levels throughout the developing world,” the report said. “By 2050, the decline in calorie availability will increase child malnutrition by 20% relative to a world with no climate change.”

A world summit on food security is scheduled to be held in Rome between 16 and 18 November.

The study, titled Climate Change: Impact on Agriculture and Costs of Adaptation, projected better yields for developed nations, which, it said, were better prepared to deal with the effects of global warming.

India in 2007 initiated a mission on agriculture under the prime minister’s council on climate change, which is yet to make any headway.

Environment minister Jairam Ramesh announced recently that a proposed legislation on climate change will include a percentage target for organic agriculture. “This is one of the most important steps to combat climate change,” Ramesh told Mint on Monday. “Andhra Pradesh already has more than 5% of its agricultural land under organic (cultivation). We need to extend that to all other states.”

The Ifpri report used two models—built by the National Center for Atmospheric Research of the US and the Commonwealth Scientific and Industrial Research Organization in Australia—to validate its study.

Both the models projected increased rainfall but suggested that irrigated yields for all crops in South Asia would see dramatic declines.

An important fallout of declining yields would be on food prices, which would rise significantly. Even with no climate change, prices for the most critical commodities such as rice, wheat, maize and soyabean would increase between 2000 and 2050, the report found. Climate change will worsen the situation.

The report predicted that additional price increases would be as much as 32-37% for rice, 52-55% for maize, 94-111% for wheat, and 11-14% for soyabean.

India’s cotton exports decline by 55% in 2008-09 season

PTI — Wed, 30 Sep 2009 10:16:00 GMT

New Delhi: India’s cotton exports in 2008-09 season, which ends today, are estimated to have plummeted by a whopping 55% to about 38 lakh bales due to higher prices in the domestic market.

“According to provisional data, cotton exports stand at about 38 lakh bales for 2008-09,” a senior government official said. The country had exported 85 lakh bales in 2007-08 season, which runs from October to September.

The Cotton Advisory Board, headed by the textile commissioner, in October 2008 had estimated cotton export to be at 75 lakh bales during 2008-09. However, the estimate was later downsized to 50 lakh bales considering poor demand in the overseas market.

Trade experts blamed high domestic prices following a sharp increase in Minimum Support Price (MSP) the main reason for poor export.

Last year, the government had raised the MSP of long staple cotton to Rs3,000 per quintal from Rs2,030 and the medium staple to Rs2,500 from Rs1,800 a quintal. The MSP has not been hiked for the 2009-10 season.

Now that the exports have dipped sharply, the country is left with over 71 lakh bales of carry-over stock for 2009-10 season. The total cotton production in 2008-09 was about 290 lakh bales.

Govt to come out with relief package for coffee growers

PTI — Thu, 24 Sep 2009 14:07:00 GMT

New Delhi: Distressed coffee growers will get a “strong” relief package from the government to tide over the crisis of a fall in bean prices in the global market.

“We will come up with an appropriate and strong relief package,” commerce and industry minister Anand Sharma told reporters here today.

Sharma said the government has given a lot of support to the plantation sector.

“We are looking very closely what we can do for the coffee plantations,” he said.

Coffee prices have fallen sharply in the international market ahead of the harvest season from October in a number of countries, including India.

“Although average monthly prices in August were higher than in July, the prices of all four groups (of coffee) seem to be on a downward trend as the new crop year approaches in a number of countries,” the International Coffee Organisation (ICO) said in its latest report.

The bean prices fell by 10.44% in August in the international market.

Besides the weather uncertainties, the coffee growers are also facing a debt burden.

Moreover, coffee exports dipped by 19% during January-August this year to about 1.33 lakh tonnes due to high prices of the Indian bean.