Sugarcane SMP, Bill Gates letter, Value Chain Financing and Conservation Farming

1. The sugar industry in the private and the cooperative sectors have united to pressure the government to announce high support prices for the commodity. Is it not surprising? In this cruel capitalist world, people are fighting to increase the price of commodity that they have to buy!

2. Bill Gates writes about his vision about agriculture in Africa in his annual letter. Very valid points brought forward.

3. This interesting article in ET talks about Value chain financing for agriculture sector. In value chain financing, a bank enters into an arrangement with some or all the players in a particular value chain to extend finance to them. A value chain basically constitute of three levels - farmers producing the primary commodity, an SME or an agent acting as intermediately or adding value to the produce and the large firms using this as raw materials.

4. From business standard: Over a thousand agricultural experts from around the world, who had gathered in Delhi last week for the fourth congress on conservation agriculture, deliberated an issue that is vital for sustaining high-growth agriculture without clashing with the environment.

PrimeAg, Farmers-turn-Managers, Food Outsourcing and Sugar Prices

1. An article on Australian food company PrimeAg which borne out with a vision to meet the world's food security. An example of corporate farming we may soon see in india.

2. IIMA is launching a course on Food supply chain management to upgrade the knowledge of the farmers. "The course will cover all challenges and bottle-necks of the supply chain from the times the seed is sowed, till it reaches the consumer. Also, exports and reaching the food to poor will be discussed."

3. Mr Piruz Khambatta, Chairman & Managing Director, Rasna Pvt Ltd says that the food outsourcing business from India has an opportunity of $5 billion as of today. “Only six per cent of the total amount of food produced in the country is processed. This has led to an annual loss of Rs 33,000 crore in the agricultural sector through perishable commodities.”

“Agri business for rural India can do what Information Technology has done for urban India. India should be promoted as the food factory of the world in terms of both production and marketing,” he said.

3. This article in business-standard suggests that raising the retail price for sugar is the only and surest shot to resolve all the problems of the sugar industry.

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.

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.

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."

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.

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