IITian a Farmer, Private Equity in Agri

1. Rediff has featured the story of R Madhavan, an alumnus of IITM, who has chosen to become farmer by means of a slideshow. He came to the notice at this year's Pan-IIT event. Couple of interesting points:

"They [Israel] treat each plant as an industry. A plant producing one kilo of capsicum is an industry that has 1 kilo output."

"Drip irrigation is not only for saving water but it enhances your plant productivity. We commonly practice flood irrigation where they just pump water. As per the 2005 statistics, instead of 1 litre, we use 750 litres of water."

And the most important of all:
"My target is a net income of Rs 100,000 per annum per acre. I have achieved up to Rs 50,000."

I think this is too ambitious goal and if it is possible, lot of farmers can get rich including my Father.

"f I have 200 acres of land, I can go for food processing, etc. My next project is to lease land from the small farmers for agriculture. The village will prosper with food processing industries coming there. My yield will also be more with more land."

2. Morgan Stanley Private Equity (MSPE) has invested Rs 182 crore for a “significant minority stake” in Biotor Industries, an integrated manufacturer of castor oil and castor derivatives in the world. This may be the first deal in the country in agriculture sector.

Flood tolerant rice and pomegranate

1. Scientists have identified a gene, called Sub1a, that confers a tolerance to submergence and precisely transferred that genetic information into popular rice varieties in South and Southeast Asia. The new rice varieties passed field tests last month in Bangladesh and India. They will be made available within two years to smallholder farmers in flood-prone areas where seasonal rains have destroyed crops, according to University of California-Davis news releases.

2. Farmers in Punjab are moving to grow fruits like pomegranate instead of crops like wheat and cotton.

Debt relief

The Maharashtra government is set to announce another farm loan waiver package to cover all those who were excluded by the central government's waiver package. The latest package is likely to cost between Rs 5,000 crore and Rs 7,000 crore, and "benefit" 2.7 million farmers.

I think this is more for taking out political mileage than really benefiting the farmer. Here is the proof that these things do not work out. The front page story in businessline points out that "Nearly 40 per cent of these banks’ eligible farmer-borrowers, who own over 5 acres of agricultural land, are believed to have not coughed up even the first instalment towards one time settlement in order to avail themselves of the 25 per cent rebate on their loan overdues."

Under the Debt relief scheme-2008, the government gives 25 per cent rebate on the overdue loan amount if farmers bring in the balance 75 per cent for one-time settlement.

Commodity Future, Prahalad and water infrastructure

1. Do farmers really benefit from commodity future market. They may not do so directly but indirectly they get affected as brought forward by this article. The author also gives example of Mondragon Cooperatives of Spain to put emphasis on his point.

2. C.K. Prahalad discusses on opportunities in agriculture - "Till now the focus has been on pre-harvest elements like fertilisers and pesticides. But India has serious post-harvest issues of wastage, poor preservation of perishable products and inadequate access to markets. Companies like ITC, Amul, Reliance and Bharti are investing to address these issues. And it is benefiting farmers. Amul does not waste anything. You can do something similar in products as varied as shrimp, arecanut, coconut. But you can't simply replicate the Amul model, you will need to build separate structures."

3. Something that we need to do in India as well - implementation of integrated water, agriculture and energy programmes to enhance sustainable development.

Fight over Minimum Support Price

Minimum support prices fixed by the government continue to be a matter of debate for some right reasons.

Sugarcane farmers are asking for increase in the SMP (statutory minimum price) for sugarcane. Their logic: MSP of wheat and other crops has been increased by about 37% which that of sugarcane remains the same. Very valid point as the cost of cultivating has not remain same and has grown in more or less the same proportion to that of wheat and other crops.

MSP of cotton has also been in lime lite ever since they were declared just before the economic slowdown began. Private players are no longer ready to pay the MSP, which is very high according to them. CCI (Cotton Corporation of India) had to come in fill the gap in the supply-demand equation to keep the MSP alive. This is the reason why CCI has been able to procure lots of cotton.

Several people have raised their voice about the ways in which MSP prices ought to be fixed. Here is the link to the article in Businessline by Sharad Joshi.

My take: Its best to leave the prices to be fixed by market forces.

Rubber, GM debate and Rice intensification

1. Rubber plantations are taking strong roots in Maharashtra's coastal Konkan region, thanks to a salubrious climate, improved yield and the state's own initiative to popularise the cash crop. And the fact that several farmers from Kerala, the traditional home for rubber plantations, have invested in the business in the coastal districts is only helping the trend catch on further.

2. Update on GM debate: Environment ministry is for the GM crops like Bt Brinjal but as we noted down some days back, health minister is against any such moves.

3. Rice Intensification technology known as System of Rice Intensification (SRI) for having bigger yields with less seeds, water and fertilizers is gaining popularity in India. SRI is a novel approach to increase the rice production by constructively reducing the capital fertilizer, labour and water and promoting more abundance, diversity and activity of soil biota in and around the plant’’s rhizosphere.

Gold Rush, Vertical Farming and Bt corn

1. Rich countries and companies are eying land in poorer countries as an investment in future for food security. Some poor countries are happy to trade it with other desirable options like dollar and oil. More details here.

2. This article discusses about rooftop farming and vertical farming. Rooftop farming is nothing but planting the crops on the rooftop. Though it sounds very simple, it is not so. Check out this company called SkyVegetables. Vertical farming was coined by Dickson Despommier, an environmental health sciences professor at Columbia University. His idea is to grow and harvest food in multistory structures specifically designed for this purpose. Though it is an interesting idea, but an expensive solution.

3. Monsanto sees India adopting bt corn in five years.

Organic Farming and GM debate (again)

1. Some interesting things happening in organic space. "Lalbhai Group’s flagship Arvind and State Bank of India are set to cement a relationship later this month by signing a memorandum of understanding that will link over a thousand farmers in Vidarbha region’s Akola district to a demand-driven supply chain and an assured cash flow. The company buys back cotton at a 30% premium to conventional cotton varieties such as Bt and hybrid, and uses it to produce organic denim for export to Frankfurt." Details here.

As posted earlier on this blog, there has been lot of interests by corporates like Pepsi, RCF to get into contract farming. This is a kind of win-win situation for both the farmers and the corporates. The former get to sell their produce at higher prices without paying a "rip" to the middleman and the later get the supply of raw material without much hassles.

2. Union Minister for Health Anbumani Ramadoss has again touched the controversial topic of GM food. He said he will oppose introduction of such a variety without conducting proper tests.

Crop insurance, Debt waiver

1. Have you ever heard about Agriculture insurance company (AIC). It was set up to dispense insurance protection over agriculture and allied activities. Despite having such an organization in our country, crop insurance is rarely heard. There is hardly any effort to spread the awareness about various crop insurance schemes despite having so many rural banks, agriculture institutions and rural-based economy. This article list down some recommendations to increase the awareness and strengthen the agri-insurance.

2. Our ex-finance minister had given a generous 72,000 crore farm loan waiver in the union budget. This brought lot of happiness among the farmers and will probably fetch him some extra votes in the next election. However, he forgot, or pretended to ignore a fundamental problem. After giving this waiver, what will be the incentive for the profit-motivated banks to give fresh loans to farmers. And this is what farmers are facing today - non-availability of fresh loans. This story discusses this problem in detail.

Farm profitability and Olives

1. ET carries an article about profitability in farm sector.

2. Businessline carries an interesting story on Olives from Italy.

Slowdown, Targeting farmer

Slowdown has becoming a buzzword for lunch discussions nowadays. Its difficult to find any newspaper front page without a mention or hint towards this global economic turmoil. However, for rural India, whose dependence is on agriculture, global downturn hardly matters. Although it may have some impact with a lag (eg. textile industry suffering, cotton prices falling and so on), but the relative difference is not much. And so companies are targeting rural India - as this article in livemint says. "due to its primary dependence on domestic consumption rather than exports, rural India would be even more insulated, given that almost 60% of its households are dependent on agriculture, where fortunes fluctuate more on the basis of vagaries of the monsoon than those of the Sensex or Lehman Brothers and AIG! Even the increasing spiral of inflation, with its direct impact on prices of vegetables, would indeed benefit the farmer, fetching him a better price for his produce."

Not quite true as I mentioned earlier. The prices are falling and the effect goes to source i.e. agricultural commodities. Government is already finding it difficult to maintain the MSPs. There is another interesting article about how government meddling is creating the slowdown in the agricultural sector. The first few lines have got some sense of humour, but sadly it is true partially - " How will Indian agribusiness fare over the next six months? The answer lies not in demand-supply, volatility in international markets, credit supply or weather. It all depends of sarkari mood".

Half Century

Mera Khet completes a half century today with fifty posts and many more stories.

Cotton blues and Soil degradation

1. As reported on this blog earlier, farmers are finding it difficult to sell cotton at MSP fixed by the government. Farmers who are in desperate need of money are selling for whatever they are getting as it is impossible for the CCI to go in every nook and corner of the country. Government, however, is doing its part of bailout announcements. This time it is mulling a bailout package for the cotton industry.

2. Some news from Karnataka agriculture: Sugarcane growers are cribbing on getting lesser prices than fixed by government. One of the ministers says that 40 percent of Karnataka's soil is degraded. The noted soil scientist J. C. Katyal, who is also the Vice-Chancellor of the Choudhary Charan Singh Agricultural University (Haryana), said the root of the problem has been traced to degradation of soil quality. If the soil lacks any nutrients, the agricultural produce grown on it will also suffer from nutrient deficiency and ditto with people who eat these produce, he said.

Blah Blah Blah

Union agriculture and food minister Sharad Pawar is all for stimulating private investment in the horticulture sector to boost the economic condition of farmers in the midst of a global financial gloom. He says "Government can play a supporting role. But government and farmers’ cooperatives cannot provide modern technology. For that, you need private players"

How can you expect private investments when you keep meddling with everything related to agriculture. People do private investmnets to earn profit.

You fix the prices to reduce inflation but your MSP finds it difficult to hold. You can do great justice to you post if you dont do anything!! I hope cricket keep you busy.

Update

1. CCI will suffer a loss of about Rs2,065 crore if it has to buy one-third of the entire crop of 33 million bales this year. The government steeply hiked the MSP for cotton by 46% in September prior to the onset of the harvest season; domestic prices now rule higher than the international cotton prices that have slipped due to slowing consumption.

2. India will host the fourth world congress on `conservation agriculture’ in New Delhi from Feb 4 to 7. The congress would showcase innovations in agriculture for improved efficiency, equity and environment. The congress would review the progress in conserving soil, water and other resources in agriculture It will also facilitate partnerships between countries, organisations, institutions and agencies.

GM debate again, UDP technology

1. Controversies surrounding the GM crops have again come up, with Mahyco ready to commercialize GM brinjal seeds. Various NGOs and farmers are out on the ground to protest. Point to be noted from the article. "Nowhere in the world GM brinjals are permitted for agricultural cultivation or human consumption. We are no guinea pigs. So, we should not be treated like one”. Gujrat Agriculture minister has no clue.


2. The US-based International Centre for Soil Fertility and Agriculture Development (IFDC) is pitching to promote the technology developed by them dubbed as Urea deep placement (UDP) technology for increasing the fertilizer use efficiency. UDP increases yields by 25% while using 40% less urea.

Food Security, Lending to Food Processing

1. This article in Taipei Times is puzzling - it points out that countries like Ukraine and Argentina have great potential for farming but are not reaping the benefits because of government meddling in exports and price-fixing. What beats me is that it blames that "Governments such as China, India and Vietnam fail to realize that restricting exports leads farmers to invest and produce less".

2. From BusineessLine: In a bid to bail out the food processing industry from the current financial crisis, the Government has allocated Rs 1,000 crore to the National Bank for Agriculture and Rural Development (Nabard). It will utilise the fund to refinance banks that lend to the food processing sector.

3. According to United Nations’ Food and Agriculture Organization, the current financial crisis will adversely affect agricultural sectors in many countries, including India and other developing countries. Lower international commodity prices have not yet translated into lower domestic food prices in most low-income countries, it added. The FAO report further noted that world agriculture was facing serious long-term issues and challenges that need to be urgently addressed. These include land and water constraints, low investments in rural infrastructure and agricultural research, expensive agricultural inputs relative to farm-gate prices and little adaptation to climate change.

Some cheerful stuff in gloomy environment

One can hardly escape from bad news if he/she regularly browses on web or reads any of the business news paper. In the previous post, we discussed how farmers are largely unaware about the current financial crisis. But knowing the following things will surely cheer them up.

According to this article, which looks more like a well crafted advertisement for Monsanto, Bollgard technology has greatly helped farmers to increase the cotton yield. "Bollgard cotton provides in-built protection for cotton against destructive American Bollworm Heliothis Armigera (locally called American gundi) infestations, and contains an insecticidal protein from a naturally occurring soil micro organism, Bacillus thuringiensis (Bt)."

Heres another piece, which is again kind of an advertisement, although not as good as the previous one. A fair kicked off in Ranchi to to provide latest technical support to the farmers and also to apprise them about new technologies. It was emphasized that the agriculture department of the state has been providing the farmers with high yielding seeds instead of traditional seeds, which had enough potential for sustainable growth of agriculture.

Another agriculture fair was held in Bangalore where about 100000 farmers assembled for a glimpse of the new crop varieties, developed by the University of Agricultural Sciences (UAS). The annual fair is held to showcase latest farm technologies developed by the varsity and create awareness in the farming community on modern methods of harvesting.

This article brings to our notice the boom in flower industry. “Commercial floriculture could be a viable and profitable option along with regular crops for farmers in our country. The area of cultivation required is less and the output in terms of number is more. Labour costs and water management costs are also less. A farmer can get a profit equivalent to what he gets on a one-acre farm of regular crops by growing flowers on a 1,000 square meter area. The initial investment required could be, around Rs 5 to 6 lakh but now the NHM provides half the amount as subsidy. The rest of the loan, taken from banks, can be easily covered within two years.”

Yeh financial crisis kya hai??

ibnlive.in has got this interesting article about how farmers are unaware about the financial crisis that has stuck the world. I had a similar though recently when I visisted my home-village. "For almost 70 per cent of India, that lives in villages like Sonarpur, the Sensex going 20k up or 10k down isn't the debate. The debate is where the minimum support price is going, Rs 50 up to 900/quintal is what the villagers have heard. So the big worry is not the money they will get, but the current availability of fertilizers."

Credit squeeze for Agriculture

The businessline story brings out an interesting point - Bank credit has been just Rs 95064 crore for the half year ending Sept,08. The target for the year is Rs 2,80,000 crore. So it is less than half the target till now. However our ever-optimistic stock-market-spokesperson cum finance minister is very optimistic - "We are well on the way to achieving the target (of Rs 280,000 crore). The banks have assured me that the target will be achieved”.

Respected Sir, there is a simple theory called incentive caused bias. If banks have to bear the brunt of your generous debt waiver, what would motivate them to lent money to farmers when it already so scare!!

Nokia Life Tools

Nokia has launched a service, dubbed "Life Tools" to provide the latest agricultural information, such as weather updates and grain prices; educational tools, such as English-language training and general knowledge; and appealing entertainment--namely horoscopes and downloadable ringtones.

Monthly subscription prices have been pegged at between Rs 30 and Rs 60 (62 cents to $1.23) for the agriculture and education modules. Entertainment services are paid for as downloads. Nokia hopes the platform will fill a big gap in 3G-starved markets like India where consumers are unlikely to have the flat-fee data bundles or fast download speeds that developed-market phone users have become used to.

Cotton Prices

Farmers are finding it hard to sell cotton at good prices. Although MSP prices are pretty decent this year, farmers are finding very few takers. Government is stepping up the procurement process to support the prices but unfortunately it if not working out. Some farmers are selling cheaper either to pay off the debt or because they dont have infrastructure to store. It is ironical that a higher yield of cotton is adding woes to the farmers instead of helping them.

One important thing to note is that when demand soars and prices are high, government alters it policies (like capping the price, increasing the imports etc) to keep check the prices. Most of the times it is successful in doing so but it fails miserable to keep up the prices in the times like this. So for a farmer, its always like loosing on any side of the coin.

After break of two weeks

Update to this blog will start again after the break of two weeks.

Government policies, PDS and B2B meeting

1. A call for change in Government policy in agriculture in Indian Express. There should be more emphasis on investments in marketing and processing infrastructure, on expanding and modernizing the trading centers and on increasing the rural connectivity.

2. According to this article, "to give entry to various giant grain corporations, the Indian government slowly and systematically weakened its Public Distribution System (PDS) by slowing down grain procurement, especially wheat". This is leading to food crisis, specially for the people below poverty line.

3. B2B meetings for Agriculture and Food processing in India - The Bangalore Chamber of Industry and Commerce (BCIC), in partnership with BCI - global leader of B2B meetings and professional events - will be setting up a first international trade show dedicated to agriculture machinery and food processing on March 4-6, 2009 and fully contribute to this process.

The show will combine a 3 day exhibition for Indian and international companies to showcase their products and capabilities and a matchmaking service to facilitate contacts. They will feature their technologies for agriculture and food processing.

Contract farming, Private investments and low MSPs

1. RCF (Rashtriya Chemicals and Fertilizers) is planning to get into contract farming and green house businesses by leveraging its customer network and land holding. The company plans to build a network of at least 1,000 farmers to grow flowers, fruits and vegetables. Recently similar announcement was made by Bayer CropScience.

2. Contract farming verses cooperative farming - what is the difference. My guess is that in former, some corporate guy takes over farm land from small farmers or bound them by the contract, while in the later one, farmers unite and make a society like Amul and sow and sell the produce together.

3. Farmers are unhappy with the low MSP fixed by government. The input costs have risen much faster that the final output. Some comparative numbers with 1966 are given. According to Mahendra Singh Tikait, farmers' leader, fair price for wheat should be rs 3000/quintal and for sugarcane it should be Rs 250 a quintal.

God's own crop, CCI to buy cotton and Agri-sector alliance

1. Millets are getting the charm back again after finding the way in Indian supermarkets and increasingly becoming part of urban diet. Decant herald carries an interesting article on Millets like jowar, bajra, ragi etc, which are also called "God's own crop"

2. Cotton Corporation of India (CCI) has assured Punjab government that it would purchase maximum quantity of cotton from the mandis in the state so that the farmers could get remunerative price of their produce.

3. Indian commerce minister Kamal Nath calls for alliance among developing nations in Agriculture sector to fight against the subsidies provided by rich nations.

Wireless sensors, Equitool for organics

1. A scientist of Indian origin, along with his team, is developing wireless transceivers and sensors that would collect and send data about soil moisture within a field. The sensors could help researchers understand precisely how water moves through a field, develop better models to predict crop growth and yield and understand the carbon and nitrogen cycles within soils, as well as help farmers manage their nutrient and water resources, which could maximize yields and profits, and minimize environmental impacts.

2. Equitool is a tool to help decision-makers assess whether an organic production and processing standard applicable in one region of the world is equivalent, ie not identical but equally valid, to another organic standard. It will help streamline acceptance of products that are traded internationally according to Food and Agriculture Organisation (FAO).

$2 billion for secondary agriculture

A panel formed by the government in 2006 has proposed the creation of a $2 billion fund to boost so-called secondary agriculture. It covers things like the extraction of oil from rice bran, milk from soya bean and industrial chemicals and biofuel from sugar cane, extracting vitamins from food grains, medicines from herbs, fibre boards from rice straw and so on. Details on the story here.

Agriculture growth, useless MSP and Australian wheat

1. The Hindu Businessline writes about slow growth in agriculture. Agricultural policies are to be blamed.

2. Farmers are not benefiting in spite of high MSP prices as open market prices fall much lower. Manipulative actions by traders also hit the profitability.

3. Indian mills can have custom grown wheat from Australia and enter into contract farming and long term agreements. South India flour mills, in particular, prefer Australian wheat not only for its quality but also due to logistical advantage.

Conservation agriculture, FDI in agriculture and Agri-entrpreneurs

1. Business standard covers this interesting story on new farming techniques to improve land productivity as well as to reverse the climate change. Suggestions include rice-wheat cropping sequence, zero tillage agriculture, raised bed planting, laser land-lavelling and drip irrigation.

2. It is surprising to hear the suggestion coming from a minister to get foreign investment in agriculture. The food processing minister says that it is the "next sunrise sector".

3. Interesting story covered by ET on Agri-entrepreneurs. It covers various ventures like Satnam Agri Products by Mandip Singh producing premium potato chips, Minchy brand on wines by Girish Minocha and Pawas Canning by Hemant Desai exporting mango pulp to Japan. It also covers Nisarg Nirman Agro Products growing and selling exotic fruits to five start hotels, Jalbindu Agri Tech by Rahul Gala growing and selling dates using high echnology and "Best Roses" by Kumar Patel.

GM debate, Stuck farm insurance claims

1. Central chronicle says that greater measures are required to test GM crops for safety.

2. Farmers insurance claims are stuck because of non-availability of funds from state.

Jai Reform, Jai Kisan

1. Indian Express has got this interesting column about the denial of renewal of license to Metro Cash and Carry. "Those who shout loudest that farmers need a good deal are frequently the same people who protest loudest about big retail chains"

2. Farmers have started moving towards cash-generating crops and vegetables. Vegetable production has increased by 141 per cent in the past five years leading to an increase in local consumption and exports.

3. Press Digest - from Reuters

Sygneta's tropical sugar, Contingency plan for Bihar, Pepsico

1. Sygneta's Tropical Sugar Beet receives world business and development award. The award is for the development and successful introduction of a new sugar beet that can be grown under tropical climate conditions and brings significant advantages to farmers, the environment, the sugar and ethanol industries and the economy.

2. The Indian Council of Agricultural Research (ICAR) has evolved a plan for farmers to deal with the flood risis.

3. Pepsico CEO Indra Nooyi says her company will extend its partnership with Indian agriculture by covering 10,000 acres and 50,000 farmers by 2011.

Stuck in the moment

A post dedicated to things which see no light at the end of tunnel.

1. Talks at WTO never seem to end. Agriculture negotiations resumed at the World Trade Organisation (WTO) on Thursday, but comments from diplomats showed it would be difficult to bridge gaps.

2. Tussle between farmers and SEZs continue. If SEZs go tlhrough farmers loose their land and livelihood, if they dont industrialization suffers.

3. A government official says that 4% growth in agriculture is needed to sustain economic growth of 8%. What is government doing to make it possible?

Increasing food production, Wastewater to fertilizer, Retail boom

1. Interesting article here on increasing food production.

2. Canada-based Ostara Nutrient Recovery Systems secured $10.5M for wastewater-to-fertilizer technology. The technology helps by removing nutrients, like phosophorus, from wastewater and recycling them into fertilizer.

3. An elaborate article on how retail boom is going to affect the farmers. It covers various aspects like corporate entry into agriculture, cooperative movement, government regulations, SAZ's , public-private partnership , storage , transportation etc.


4. Interesting analysis on rising agricultural input costs, the main contributers to the cost and the way governments are handling fertilizer policies to ensure food-sufficiency.

Dupont opens research centre in Hyd

DuPont opens research centre in Hyderabad.

It is the first integrated agriculture and industrial biotechnology research centre for DuPont outside the U.S.

To collaborate with ICRISAT to develop seed products

Initial focus will be on hybrid rice and maize

The biotech research centre would focus on bringing new crop genetics to the market faster and on application of industrial biotechnology to produce bio-fuels and biomaterials for global markets.

Water scarcity, Onion storage and Integrated Farming

1. The Economist carries an interesting story about shortage of water. We consumer more that 3000 litres of water per day. That is because today's agricultural practices wastes lot of water in irrigation.

2. The Maharashtra State Agriculture Marketing Board (MSAMB) has proposed an onion storage scheme. "This will prevent the usual trend between June and September, when the price per quintal goes up to Rs 1,000 from Rs 200-Rs 300", said project manager DM Sable of MSAMB.

3. Integrated farming is needed to achieve a sustainable high growth rate, said noted agriculture scientist M.S. Swaminathan at an agriculture leadership summit.

Integrated farming refers to agricultural systems that integrate livestock and crop production.
It also denotes sustainable development by balancing food production, profitability, safety, animal welfare, social responsibility and environmental care.

VAS for farmers, Agriculture rivival and farmer training

1. Something what I have been thinking about quite some time has become true - Bharti Airtel, in association with IFFCO (Indian Farmers Fertilizer Cooperative) has announced the launch of VAS (value added services) for farmers. IFFCO Kisan Sanchar (IKSL), the joint venture company of Bharti Airtel and IFFCO, will offer agriculture related information like best farming practices, soil testing, soil improvement, optimum crop cycles, required fertilizers and pesticides as well as livelihood information like mandi crop prices and utility (power/ irrigation).

2. Prime Minister says revival of Indian agriculture is must for self-sufficiency in food grains and inclusive growth.

3. Training camp help for farmers under the Agricultural Technology Management Agency (ATMA),Govt. of India.

Indian International Agri Expo 2008

India International Agri Expo to be held in Cochin from Oct 31st to Nov 2nd. Technical seminars will be held with topics like organic farming, value-added products, agri-tourism etc.

Quiet revolution, Cashing on floods, Corn export ban and Rice output

1. P.K. Joshi, director of the New Delhi-based National Centre for Agricultural Economics and Policy Research, in an interview with NEWSWEEK's Jason Overdorf about the challenges India faces.

2. MS Swaminathan, one of India's best-known agricultural scientists and a Rajya Sabha member suggests that "Bihar now needs to change its short-term farm strategy and switch to short-haul cash crops that do rather well after floods. The idea is to grow crops that mature quickly — in about two months — and have a good market."

3. ET reports that Government can lift ban on corn exports.

4. The Union Food and Agriculture Minister, Mr Sharad Pawar,says that the country’s rice production during the current kharif season “will exceed 84 million tonnes (mt)”.

Farm Insurance, hike in MSPs

1. Business-line writes about the status of farm-insurance in our country in its editorial. According to a survey by Max New York Life and National Council for Applied Economic Research, only 19% of rural household have life insurance while only 10-15% of all farmers have crop insurance.


2. Some happy news for farmers. Government has announced higher MSP (Minimum support price) for various Kharif crops for year 2008. However as "harvest of crops is only weeks away; and there is no way farmers will draw any benefit from the announcement at this point of time in the crop growth cycle." MSP of cotton has also been increased by 38.9-47.8

Cotton export, bumper potato harvest

1. According to the International Cotton Advisory Committee (ICAC), the world cotton production is likely to fall. China has reduced its acreage for cotton cultivation and US and Pakistan are also set to report lower output. India, set to produce higher output will benefit from exports. Higher MSP (Rs 3000/quintal - 2,500/quintal) will also benefit farmers.

2. Bumper potato crop has become a curse for farmers instead of helping them. The prices have dropped down to Rs 350-400/quintal

SMP for cane, Global Industry Analysis Report

1. Farmers are urging the government to raise the Statutory Minimum Price (SMP) of sugarcane. The current price is Rs811.80 /ton.

2. Global Industry Analysis (GIA) has come out with a research report on Agriculture (priced $1950). "The report titled "Agriculture: A Global Outlook", published by Global Industry Analysts, provides a collection of statistical anecdotes, market briefs, and concise summaries of research findings. Discussions in the report take note of burning issues consuming the world agriculture industry, such as, food security for nations, food integrity, environmental degradation, and the growing notoriety of GMOs (Genetically Modified Organisms). Also covered are evolving trends i.e. the green revolution brought about by organic farming, e-commerce penetration in agrochemical trading, and the impact of biotechnology on agriculture, among others. Punctuated with 64 data rich, information laden tables and easy to understand charts and graphs, the discussion on the global market offers exclusive coverage on Agricultural Biotechnology, Agriculture and Environmental Diagnostics, and Agrochemicals, among others. Annotated with tables that enumerate key research findings, the regional markets briefly abstracted, and summarized include the US, Canada, and Japan, among others. The report provides an indexed, easy-to-refer, fact-finder directory listing the addresses, and contact details of 415 companies worldwide."

Investment in food

The profile of food investment is changing in middle east because of constraints in agricultural capacity and rising food prises. This analysis discusses the changes.

Updates: Netafim, Bihar floods, Trade pacts and Pusa1121

1. Netafim, the world’s largest provider of smart water solutions for agriculture, inaugurates its second plant in Chennai, India. "Netafim™, an Israel based Agri-Business pioneer and the world’s largest provider of smart water solutions for agriculture, has been delivering innovative solutions that increase crop yields and preserve water resources. Netafim™ is active in over 110 countries across 5 continents, employing over 2600 employees, has more than 35 subsidiaries and 13 manufacturing facilities in 11 countries."

2. Bihar floods have led to losses worth more that 150 crores. Business-standard carried this story. Worst affected are the crops like paddy and maize and also pulses, vegetables and banana.

3. India is pushing on talks involving free trade of goods, services and investments with Japan and South Korea. Parallel talks are also going on with Thailand in similar lines.

4. Conflicts surrounding Pusa rise continues. Limited exports of Pusa rice has been allowed. Although it has not been provided the new definition of basmati rice in spite of meeting the necessary requirements.

MFIs selling farm loans to banks

Business-standard reports that private banks are buying loan portfolios from MFIs. Its a win-win kind of situation where MFI's benefit by reducing their asset size and hence increasing CAR, while banks try to meet the priority sector lending targets.

So banks are using these kind of tricks to extend 13.5 per cent of their advances as direct agricultural loans. This does not increase the credit availability for farmers so though this scheme may be good for MFIs and banks but may not be so for farmers.

Organic farming, Basmati rice

1. Organic farming is gaining some interest across farmers and consumers. We can see special sections in grocery retail chains dedicated for organic farming products. One of the companies working in this domain is Sresta, founded by an IIM alumnus. ET covers a story here.

2. Businessline carried the story about late inclusion of Pusa 1121 into new definition of basmati rice. The story also explains the economy of paddy cultivation on a per acre basis.
“As it is, Pusa 1121 prices have been going down in the global market and the delay in notifying the evolved variety would be a final nail in the coffin of the growers of this variety of rice.”

Capital expenditure in agriculture

Consider this from the highlights of Union budget 08-09:

- Debt waiver of Rs 60,000 cr (later increased to a larger amount)

- Credit target of Rs 280,000 cr

- Investments of Rs 20,000 cr for irrigation

- Crop insurance scheme to be introduced

- Rural infrastructure spending of Rs 14,000 cr

- Planned spending of Rs 240,000 Cr. Unplanned spending of Rs 5o7, 000 Cr

Farm subsidies and debt waiver serve no purpose in long term and hence does not count.

We can assume that improvement in rural infrastructure will help farmers in some way and so it is actually agricultural capex. The proportion of capex in agriculture to total spending comes to around ((20,000 + 14,000)/(240000+507000)) = ~4.55%

So that is 4.55 percent for more that 50% of people sustaining on agriculture. And god knows knows how much of it will actually go down till implementation.

This amount may be smaller than capex of some of our large companies.

India's GDP, Rice output, Sugar export subsidy

1. India's Q1 GDP growth is 7.9%, lowest since 2004. There have been different estimates of the GDP growth for year 08-09. Some have been very optimistic forecasting more that 9%. With inflation taking time and ease and tighter credit policy, only time will tell how much we grow this year. Till then, lets leave the job of forecasting the growth to economists and stock market analysts. By simple law of probability half of them will be correct :p

2. Quite contrary to a news today, this one says that India may produce record rice this year. "India's rice production in this agriculture year may breach the record output of 96.43 million tons in the last year on the back of increased acreage even as floods in some producing areas have hit the kharif crop, a top government official said today."

3. Chidambaram says India must stop sugar export subsidy.

Rice output, new hybrid mustard and ASEAN FTA

1. Rice output to be low because of floods, but premium category output go up -
Floods to cap India summer rice output at '07 level
Reuters India - Mumbai,India
... some floods in Punjab and Haryana states," Agriculture Commissioner NB Singh told Reuters. The two states produce nearly half of India's rice and wheat. ...
India's premium rice production up, farmers eye exports
Reuters India - Mumbai,India
This year it is more than 10 per cent," Gurdial Singh, joint director of agriculture, told Reuters. Officials say India is set to buy record quantities of ...

2. Folks at NRC develop new hybrid seed for mustard -
India develops hybrid mustard seed, better yield expected
Thaindian.com - Bangkok,Bangkok,Thailand
NRC is an affiliate of India’s premier farm research body, the Indian Council of Agriculture Research (ICAR). The Delhi-headquartered ICAR under the ...

3. ASEAN concludes free trade deal with India: ministers
AFP -
SINGAPORE (AFP) — Southeast Asian nations have concluded a deal for free trade in goods with India, ministers said Thursday, in a development hailed as a ...

Cotton output, Corn futures and organic farming

1. Cotton output seen good this year because if good rains and better seeds. But will the farmers benefit?
India Cotton Output May Top Estimate as Rains Improve (Update3)
Bloomberg - USA
India starts cotton planting in June and the harvest begins in October. China is forecast by the US Department of Agriculture to produce 35.5 million bales ...

2. Corn futures rise
India corn futures rise on lower acreage, exports
Reuters India - Mumbai,India
"We think despite lower acreage, yield will be higher this year," said a senior official with state department of agriculture of Andhra Pradesh, ...

3. South Asian Farmers Discuss Organic Farming
Indian Catholic - New Delhi,India
South Asian farmers visited a Garo tribal woman to learn how she practices organic farming and conserves 64 varieties of indigenous rice.

Today's Links

1. The revival in agricultural growth
Hindu Business Line - Chennai,India
At a time when there are signs of a slowdown in industry, much is being made of an agricultural revival that is helping to stabilise India’s high growth rate. But C. P. Chandrasekhar and Jayati Ghosh argue that, despite somewhat high growth rates of agriculture in recent years, a longer term perspective suggests that all is still not well in a sector that has been damaged in India’s post-reform growth trajectory.

2. Biofuel: Algae takes lead over jatropha
Chandigarh Tribune - India
As algae do not need agriculture land, it can be grown using non-potable or sea water. “Algae farming for oil can be great opportunity for India, ...

3. Surinder Sud: Reaping what you sow
Business Standard - Mumbai,Maharashtra,India
India's productivity in agriculture is directly related to the low sums it invests in R&D. For agricultural growth to be knowledge-based and ...

4. INDIA’S RURAL SALVATION COULD BE SUSTAINABLE AGRICULTURE
By erleargonza
Millions of farmers in remote rural areas of India struggle to feed themselves and their families, while the resources on which they depend are deteriorating daily. This book shows how sustainable agriculture can help India’s farmers ...

Today's Links

1. Global pulses prices climb on Indian imports
Reuters India - Mumbai,India
By Rajendra Jadhav MUMBAI, Aug 25 (Reuters) - Large tenders for pulses imports floated by India to augment supply in the festival season have pushed up ...

2. India firm over sectoral tariffs
Business Standard - Mumbai,Maharashtra,India
The strategy of developing countries, including India, is to first get their concerns on protection of their agriculture sectors addressed, after which they ...

3. Left behind: Debt relief brings little respite for India’s farmer
Financial Times - London,England,UK
The mathematics behind the crisis in India’s agricultural sector are simple. Agriculture’s contribution to GDP fell from 42 per cent in 1970 to half that by ...

4. Organic Farming
By rajkumar
Arresting the decline of soil organic matter is the most potent weapon in fighting against unabated soil degradation and imperilled sustainability of agriculture in tropical regions of India, particularly those under the influence of ...

Today's Links

Nothing much over the weekend. Here's one link:

India's edible oil import estimate to go up by 8 pc
Hindu - Chennai,India
The report by the United States Department of Agriculture (USDA) has revised upwards its estimates of edible oil imports by India to 5.4 million tons in ...

Today's Links

1. SANASA Development Bank conducts Micro Finance Study Tour and ...
Daily Mirror - Colombo,Western,Sri Lanka
By Gayani Perera The National Bank for Agriculture and Rural Development (NABARD) in India is mandated to provide need based quality training for capacity ...

2. How agriculture is blooming in Singapore
Commodity Online - Kochi,Kerala,India
And companies in Asia based in Singapore are looking to countries like China and India and launching agri-funds to tap the Asian potential,” says the ...

Today's Links

1. Vertical Farms for Food & Restoration
SustainableBusiness.com - Huntington Station,NY,USA
Over the past three years, he's focused on the effects of agriculture on the environment. He gave the class a project: pretend you're a community of 50000 ...

2. Sure, everyone has to eat, but 'dot-corns' may be peaking
Globe and Mail - Canada
The "dot-corn" bubble may be about to burst as farmland prices spike and agriculture stocks rise even faster than Internet shares did in the late 1990s, ...

3. India - Promises to keep
By sri(sri)
"the strategy for revitalising agriculture has yet to show visible outcomes. The record food production this year needs to be balanced with a modest projected 2 per cent growth in agriculture by the Prime Minister’s Economic Advisory Council. Agricultural productivity needs to substantially rise since the average yield of rice in India between 2003 and 2005 according to the Food and Agricultural Organisation (FAO) was 3,034 kg a hectare compared to 6,233 kg a hectare in China, while for wheat the figures were 2,688 kg a hectare for India compared to 4,155 kg a hectare for China, while for rapeseed and mustard India averaged 909 kg/hectare compared to China’s 1,778 kg/hectare. Similarly the divergence between India and China in horticulture has also increased sharply in recent years with China producing 450 million tonnes of fruits and vegetables compared to our 135 million tonnes. The EAC report also believes “that old tired excuses of substandard agricultural performance are not valid because Indian agriculture is placed favourably when compared to China in terms of quantity of arable land (161 million hectares vs. 130 million hectares), irrigated land (55.8 million hectares vs. 54.5 million hectares), average farm size (1.4 hectares vs. 0.4 hectares).”
Improving productivity involves a quantum change in application of improved technology with water economical cropping pattern, innovating drought-resistant seed strains, improving marketing outlets, reducing wastage arising from absence of cold chains, deeper penetration of formal credit to farmers and improved coordination between the Centre and the States particularly in harnessing the comparative strengths of various regional and climatic zones. No action has been taken on the recommendations of the Swaminathan Committee on revamping of agricultural research. The rural roads programme is running behind target. Cold Storage and Cold Chains remain inadmissible for priority sector lending. Our approach remains excessively anchored to multiple subsidies instead of altering the context enabling infrastructure. "

Today's Links

1. India was ready to soften on industry for agri deal in WTO
Business Standard - Mumbai,Maharashtra,India
... IST India was willing to accept the proposals on tariff reduction for industrial goods as a trade-off for protection of its interests in agriculture at ...

2. Global Food Crisis May Be Ending as Plantings Gain, India Says
Bloomberg - USA
Monkombu Sambasivan Swaminathan, the 83-year-old agriculture scientist who spearheaded India's first ``green revolution'' in the 1960s that made the country ...

3. Farmers protest scarcity of fertilisers
The Statesman - Kolkata,India
But government of India has so far supplied only 6. 91 lakh MT and that too not in time, agriculture office sources said. At the same time corrupt dealers ...

Today's Links

1. Organic food not healthier, study finds
CNN International - USA
... Agriculture Organization estimates that organic farming now accounts for around 4.1 million hectares in Asian countries like India, China and Russia. ...

2. India - More bad news for cotton
YarnsandFibers (subscription) - Mumbai,India
The US Department of Agriculture, in a recent report, said planted acreage has declined from 10.8 million acres in 2007 to 9.2 million this year. ...

3. How research in agriculture has helped India to develop
IPPmedia - Dar es Salaam,United Republic of Tanzania
The growth of agriculture on scientific lines in real terms, started in India only after independence. The first Prime Minister, Pandit Jawaharlal Nehru ...

4. India's Kharif crop acreage falls except rice, soya
Commodity Online - Kochi,Kerala,India
According to Ministry of Agriculture total area covered under coarse cereals so far this year at 171.1 lakh hectares (lh), which is below last year’s ...

5. World Bank suggests limits on disputed WTO farm safeguard
AFP -
"President Lula of Brazil has called on the parties not to let the WTO negotiations fail because of differences over a special safeguard for agriculture. ...

Today's Links

India may outpace Brazil in sugar production
Commodity Online - Kochi,Kerala,India
The Union Agriculture Ministry sources said, the sugar production has been fairly good. Even in 2007, the country produced 275 lakh tonnes of sugar while ...

Wastewater often used in urban agriculture: study
AFP -
The practice was being used on 20 million hectares (almost 50 million acres) of land, especially in Asian countries like China, India and Vietnam, ...

Leaving WTO would leave India without support: Pawar
MorungExpress - Dimapur,Assam,India
New Delhi, August 15 (Agencies): Agriculture Minister Sharad Pawar has rejected a suggestion that India should step out of the World Trade Organisation ...

Indian Agriculture business or service????
By mkalyan6484
India is 2nd largest agriculture producer but still we don't have sufficient amount to feed our people. Why??? Because everything is exported, without giving a thought for people of our country. Is profit is only important goal for all ...

India oilseeds rise tracking weak rupee, CBOT
Reuters India - Mumbai,India
India is import-dependent for edible oils and imports palm oil and soyoil derived from soybean. A weak rupee makes imports expensive. ...


`Farmers worse off than lowest-paid babus`
Reuters India - Mumbai,India

Old article on rediff

5 steps to boost Indian agriculture

The industry body has also scripted a five-point agri-reforms agenda to boost Indian agriculture and attract private investment in to the sector. ...

Links

1. India may lose up to 17% of its farming income due to climate change
Economic Times - Gurgaon,Haryana,India
... added that the difference between the countries is most likely due to India's agriculture being less sensitive to climate-dependent changes in rainfall. ...

2. Food, fuel subsidies will continue: PM
Business Standard - Mumbai,Maharashtra,India
This had led, after almost a decade of stagnation in agriculture, to a revival, causing record production of foodgrains, cotton and sugar in 2007-08. ...

Links

1. A New Brand of Agriculture? Farmer-Owned Brands Reward Innovation ...
A New Brand of Agriculture? Farmer-Owned Brands Reward Innovation*. Dermot Hayes By Dermot J. Hayes, Professor of Economics

2. India's sugar export soars
Hindu - Chennai,India
New Delhi (PTI): India's sugar exports have reached about 43 lakh tons till first week of August in the current 2007-08 season, which is more than double ...

3. Bt cotton pushes India’s farm biotech revenue up by 30%
Export revenue from agriculture biotechnology has grown by 12% to $13 mn during 2007-08 fiscal from $11.6 mn in a year-ago period, the USDA said.