HEADLINES: ‘Attempts to address all facets of farming’ Agriculture growth target set at 4% Aim: A second green revolution Allocation for warehousing to boost farm output, tame inflation Cautious reforms to tame food inflation Cluster shot for biotech growth CM nod to standard apple carton FM reposes faith in agricultural market reforms It’s a Rs 5,000-crore positive surprise in store Jaitley gives farmers more cheap loans Manure of infra and credit for Indian fields National agri market, FCI reform Modi’s keys to revive farm sector Proposals on warehousing, marketing to improve supply Rural job scheme to be tweaked to aid farmers Wooing farmers with sops & promises Top Business Line ‘Attempts to address all facets of farming’ The Finance Minister has, laudably, called for a technology-driven second Green Revolution focused on nutrition security. Better seeds and agronomic technology, supported by effective extension services and backed up by a strong academic and effective supply chain framework can herald the much required transformation for India’s agricultural sector. The Government has attempted to address all these facets in a holistic manner. The focus on strengthening irrigation and warehousing is critical and has been given due importance. Access to credit at low rates will ensure that farmers can invest in the best inputs. The creation of soil health cards will enable farmers to make informed decisions about their crop. A price volatility fund as well as a fillip to farmer markets will enable farmers to get better remunerations and help address inflation. The increasing commitment being shown towards research and the creation of a national adaptation fund will help put in place the necessary building blocks for sustainable agriculture. The creation of biotechnology clusters will further spur research and development in cutting-edge technology. The Government has balanced out the immediate needs of farmers in terms of financial support and knowledge development, while focussing on the future by enhancing the agricultural supply chain. Top Mint Agriculture growth target set at 4% Setting itself the target of sustaining a 4% growth rate in agriculture against the odds posed by a deficit monsoon, the Union Budget announced a slew of measures to make farming competitive and better integrated with the market. “There is an urgent need to step up investment, both public and private, in agro-technology development and creation and modernization of existing agri-business infrastructure,” finance minister Arun Jaitley said while presenting his maiden budget. The new schemes that were announced are intended to change not only farming practices but also storage, distribution, and marketing. Taking the recommendations of the Economic Survey, the budget reiterated the need to link markets across the country by setting up a national market for farm produce. By increasing competition and integrating markets across the country, both farmer’s and consumer’s interests will be served, the finance minister said. “The Central Government will work closely with the State Governments to re-orient their respective APMC (agricultural produce market committee) Acts, to provide for establishment of private markets.” The budget peppered funds in newer schemes such as providing every farmer with a soil health card to check any imbalance in fertilizer use and setting up of mobile soil testing labs (Rs.156 crore) and introduced a new Rs.1,000 crore ‘Pradhan Mantri Krishi Sinchayee Yojana’ to improve access to irrigation in rain-fed areas. A major thrust was channelling agricultural credit in newer ways. The Union budget not only set a target of Rs.8 lakh crore during 2014-15 towards rural credit, it introduced a Rs.5,000 crore warehouse infrastructure fund. “By strengthening the value chain from production to distribution and marketing the budget addresses several core concerns. Creation of national markets, producer organizations and excise exemptions are welcome steps towards making farming more profitable and market-driven,” said Pramod Kumar Joshi, South Asia director of International Food Policy Research Institute. “Several initiatives like the Rs.100 crore climate adaptation fund or Rs.50 crore for each centre for excellence in agricultural research are steps in the right direction, but the allocations are too small to make a difference for a large country like India. Top The Hindu Aim: A second green revolution Committing itself to a sustained growth of four per cent in the farm sector, the government on Thursday announced in its Budget a technology-driven second green revolution with emphasis on higher productivity and a “protein revolution.” However, in a year when drought is looming large on the country, farmers are disappointed that no announcement has been made regarding an Income Insurance Scheme for them. Also, no additional funds have been set aside for farmers for relief from drought conditions when kharif sowing is yet to commence. Presenting the 2014-15 Budget, Union Finance Minister Arun Jaitley, however, announced the setting up of a Price Stabilisation Fund with a corpus of Rs. 500 crore to help farmers deal with volatility, lowering of interest rate by 3 per cent on short-term crop loans for timely payment, finance to five lakh Bhoomi Heen Kisan Joint Farming Groups, soil health cards for farmers, mobile soil-testing laboratories and an Agri-Tech Infrastructure Fund. The agri-tech fund will be used to make farming competitive and profitable, step up public and private investment, develop agro-technology and modernise existing agri-business infrastructure. Top Business Line Allocation for warehousing to boost farm output, tame inflation The proposed allocation of Rs 5,000 crore to increase agriculture warehousing capacity in the country will give a significant boost to this sector, but industry players feel a lot more could be done to narrow the yawning demand-supply gap in warehousing capacity. Indeed, creating warehousing capacities and concomitant supply chain infrastructure can be an effective weapon to combat food inflation. For, Government estimates indicate that about Rs 50,000 crore is lost annually due to post-harvest losses, a major scoop of it due to inadequate storage and transportation facilities. Apart from this, good quality warehouses can improve the quality of agri products, besides check hoarding, both of which could be used to tame inflationary pressures. Industry players say this allocation, coupled with the step to allow Nabard to finance warehousing projects directly from last year, instead of playing the role of a re-financer to banks, could spur fresh private investments in this sector. Currently, estimates by Nabard indicate that the supply gap for storage of all major agri-commodities and chemical fertilisers has bulged from 11.75 million tonnes (mt) in 2012-13 to 12.04 mt last fiscal. The available capacity was 8.48 mt against a demand of 20.52 mt, including 17.33 mt for major crops and 3.19 mt for chemical fertilisers. It is projected that the gap could increase to 12.30 mt in the current fiscal – while supply would nudge up to 9 mt, the demand would soar to 21.31 mt, including about 18 mt for crops. Out of this gap, a major portion of almost six mt would be in eight States, led by Uttar Pradesh with a shortfall of 1.78 mt, Rajasthan 76 lakh tonnes, Madhya Pradesh 68 lakh tonnes, Andhra Pradesh and Telangana combine 52 lakh tonnes and Punjab 50 lakh tonnes. Top Hindustan Times Cautious reforms to tame food inflation The general budget on Thursday proposed a set of reforms that will gingerly help to tame food inflation such as a price stabilisation fund, a revamp of the Food Corporation of India — the government’s main grain-stocking agency — and a national farm market. While these are aimed at better “food management” — to curb leakages, losses and shoring up supply infrastructure — food prices remain a critical challenge and, without deeper reforms, can remain sticky. Higher “support prices” to farmers and heavy procurement by the FCI both have been significant inflation drivers. The wholesale price index, the country’s main price gauge, rose more than expected in May to a five-month high on the back of high food and fuel prices. “(But) we are still not out of the woods,” the finance minister said on food inflation. To curb wild swings in prices of essential commodities, a ‘Price Stabilisation Fund’ worth ` 500 crore was announced. Jaitley also announced restructuring of the FCI, but did not give details. In another step, the government proposed to link markets across the country for more efficient trading of food items. A national market for farm produce would be set up, Jaitley said, adding that talks were in progress with state governments to modify local food marketing laws. Lack of cold storage and food processing facilities means the country wastes up to 30% of its perishable produce, according to one estimate. To spur investments on this front, the budget proposed to lower excise on food processing machinery from 10% to 6%. Top The Times of India Cluster shot for biotech growth Biotechnology is getting a booster dose with the western model of cluster-based development to ensure that academia, researchers and companies work closely to create strong synergies for growth. The Modi government has big plans for cluster-led biotech development in Faridabad and Bangalore and agribiotech clusters in Mohali, Pune and Kolkata. The nascent Mohali cluster will be revived through public-private collaboration. “The statement about ushering in a second green revolution will boost R&D and open up a host of opportunities,“ said Association of Biotech-Led Enterprises-Agriculture Group chairman Ram Kaundinya. Vijay Chandru, chairman and CEO of Strand Life Sciences, said cluster development was the right approach but called for more tax incentives if the industry is to reach $100 billion by 2025. But not everyone is impressed. “Biotech has got good verbal support but the devil is in the detail,“ said Kiran Mazumdar-Shaw, CMD, Biocon. Mapmygenome CEO Anu Acharya felt that though the budget made the `right noises', the `specifics' were missing. The Tribune Top CM nod to standard apple carton Chief Minister Virbhadra Singh today intervened and passed the proposal for the standardisation of 23.5-kg apple carton which was approved by five other ministers. Governor Urmila Singh is likely to give her assent tomorrow. The proposal will be passed through an ordinance. Taking the suo motu cognizance of a report published today in the columns of The Tribune, Virbhadra Singh gave his assent for the proposal as desired by Horticulture Minister Vidya Stokes and other government agencies, revealed sources. The General Administration Department (GAD) took the initiative after the Chief Minister’s intervention and circulated the proposal for other four departments. Apart from Chief Minister and Horticulture Minister, Agriculture Minister Sujan Singh Pathania, Forest Minister TS Bharmouri and Industries Minister Mukesh Agnihotri gave their assent to the proposal moved by GAD, sources revealed. The assent of five ministers was needed for the prosposal before it was made an ordinance after the assent of the Governor, said officials. It is learnt that the Horticulture Minister will take up the proposal with the Governor tomorrow and she is expected to give her assent, considering that the apple season is only a week away and farmers are uncertain about the standard packing material. The government had made punitive provisions for apple farmers, commission agents, truck operators and others to adhere to the standard apple cartons. They would attract penalty for overweighing, overloading and overgrading, revealed the officials. Top The Financial Express FM reposes faith in agricultural market reforms A free, fair and efficient primary agricultural market, with adequate infrastructure, will boost profitability of Indian farming and become an impetus for faster growth of India’s agricultural derivatives market. The finance minister has given a welcome policy impetus to this strategic transformation by stressing on the need for a national agricultural market, and the use of warehousing for scientific storage and post-harvest credit. Creating a national market for agriculture across India’s 7,000-odd APMC market yards will help remove market distortions, improve price discovery, create a level field for stakeholders and promote efficiency. It will widen the supply pipeline, reduce artificial shortages, and allow processors and consumers to procure from across the country, thus helping farmers realise increased returns. For two years, NCDEX has been working towards a “one state one market” framework with the Karnataka government, using NSPoT’s unified market platform. It uses international best practices to offer risk management and trade fulfillment processes to farmers and traders coming to spot markets in the state. We are delighted this concept is now gaining traction at the highest levels of the central government and hope it will encourage more states to undertake similar policy reforms. Warehousing is a vital component for the efficient functioning of modern commodity markets. In a competitive supply chain, warehouses become a hub for convergence of scientific storage solutions, post-harvest credit through negotiable warehouse receipts, pledge finance for processors, food quality testing and assaying. The proposal to set aside Rs 5,000 crore in FY15 for development of scientific warehousing is a welcome step. The WDRA has a long-pending demand for integration of warehouse receipts with post-harvest lending. The announcement to implement this plan with vigor should go a long way in collateralised lending and expansion of finance to farmers. This will enable farmers to also use warehouse receipts from exchange-accredited warehouses to meet working capital requirements. Top Deccan Herald Amla (gooseberry) trees in parts of Karnataka have been facing anomalies in their flowering and fruit-bearing patterns lately.Seema S Hegde and Raghunandan S Hegde explore the reasons for the change. The Indian gooseberry, popularly known as amla (Phyllanthus emblica) is a very versatile fruit. Not only is it rich in Vitamin C, it is also well-known for its medicinal properties and wide usage in Ayurveda. In addition to this, it is used in many home remedies and hair care products. It is also an essential culinary ingredient, especially in pickles. Apart from having cultural and religious significance in Indian traditions, it is an important source of livelihood as a non-timber forest product, particularly to many tribal people. The leaves of the tree are used as much in agricultural fields. And not to forget, a small packet of salted amla is a faithful companion during travel. However, over the last few years, not all is well with amla trees. These trees generally bear flowers during the earlier part of spring. Fruits are borne during winter and they ripen by the time of Deepavali. But lately, the cycle seems to have been disrupted. Until recently, fluctuations in the growth of the species were not noticed. It was only during last spring, did we start observing changes in the flowering and fruit-bearing pattern of amla trees in our village (in Sirsi taluk, Uttar Kannada district) and surrounding villages. Our observations began when we noticed the death of many trees in our village, for no apparent reason. Amla trees are known for their property of coppicing (regrowing after cutting) even when the branches are cut completely. Hence, it was alarming to see the entire tree go dry and stand dead within a year’s time, without being subjected to any external damage. It is clearly evident that the life-cycle of the trees has been disturbed. We took note of five distinct changes in the pattern. Top The Financial Express It’s a Rs 5,000-crore positive surprise in store The budget was expected to address issues such as persistent food inflation, aggravated by prospects of poor monsoon, frequent price shocks for various commodities, restrictive market regulations leading to inefficiencies, the raw deal that producers get and labour shortage due to the MGNREGA. The main reasons for high food inflation are the increasing cost of production, rising price spread between producers and end-users, changes in dietary preferences and increase in money supply. The short-term answer to reducing the cost of production is by harnessing the potential of low productivity states whereas the long-term solution is technology. Unfortunately, the budget has not paid attention to the first aspect of relying more on low-productivity states for growth. However, announcements such as setting up of new R&D institutions are welcome steps. India has a track record of facing severe droughts without any significant disruption to the economy. This has been possible due to public stockholding of foodgrain. Over time, the country’s production base and requirements have risen sharply, but we have not augmented our stockholding capacity to match demand. Even the recent Economic Survey quotes outdated buffer stock norms, which are much lower than what the country requires for price stabilisation and PDS. The budget proposes Rs 5,000 crore for developing scientific warehousing. Hopefully, it will be for all kinds of commodities. This is the budget’s biggest step for agriculture. Steep prices increases have become common in India and consumers want stable supply throughout the year whereas production is concentrated in some seasons. Matching demand and supply requires reasonable capacity, in most cases cold storage. The available cold storage capacity is not adequate even for potato. The vital link between harvest and consumption is weak, the major reason for price shocks in case of perishables and semi-perishables. The budget proposes R500 crore as price stabilisation fund for agricultural commodities. This, along with the allocation for scientific storage, will be helpful in addressing price volatility and its effect. Top Hindustan Times Jaitley gives farmers more cheap loans Farmers can continue to get cheap farm loans, with finance minister Arun Jaitley raising the target for loan disbursal to the farmers to Rs 8,00,000 crore. Farmers will continue to get loans at a concessional interest rate of 7% and those making timely payments will get a further rebate of 3%, so that they pay an effective rate of 4%. In fact, the target for farm loan disbursal has been raised consistently. For example, in 2010-11, the loan target was raised by more than 15% at Rs 3.75 lakh core, as against ` 3.25 lakh crore in 2009-10. India’s aggressive farm credit policy — ranging from soft loans to higher support prices — has put soft cash into stressed farmhands and cushions the impact of weather shocks and crippling droughts. Lauding the measures for the sector, agriculture minister Radha Mohan Singh said: “Till now, agriculture used to be on the sidelines in union budgets but this is the first time that agriculture has been given a place of pride in the budget.” Top The Financial Express Manure of infra and credit for Indian fields Creating agri infrastructure, improving credit inflows and curbing inflation were FM Arun Jaitley’s key focus areas as he announced in his Budget speech the inception of Warehouse Infrastructure Fund (WIF), Price Stabilisation Fund (PSF) and Long Term Rural Credit Fund (LTRCF), besides the launch of Pradhan Mantri Krishi Sinchayee Yojana (PMKSY). Jaitley earmarked R5,000 crore for WIF, which aims at increasing the shelf life of agricultural produce through scientific warehousing, which, in turn, is expected to boost farmers' income. He set aside Rs 1,000 crore for PMKSY, which equips rain-fed farmers to mitigate risk. To deal with price volatility of agricultural produce, as seen recently in case of potato and onions, Jaitley has allocated Rs 500 crore under PSF. To arrest the decline in share of long-term credit, which is affecting asset creation, LTRCF will be created in Nabard for refinance support to cooperative banks and regional rural banks with an initial corpus of Rs 5,000 crore. The FM has earmarked Rs 50,000 crore towards Short Term Cooperative Rural Credit to ensure uninterrupted credit flow to farmers and avoid high cost market orrowings by Nabard. Jaitley also announced the continuation of interest subvention for short-term crop loans, where farmers get credit at a low 7% and a 3% incentive for timely repayments. The minister announced a hike in agricultural credit target of state-owned banks by Rs 1 lakh to Rs 8 lakh crore. “We are committed to sustaining 4% growth in agriculture,” Jaitley said in his maiden budget speech. The FM also promised restructuring of the Food Corporation of India (FCI) to reduce transportation and distribution losses, and plugging loopholes in the Public Distribution System (PDS). Top Business Line Agriculture is of paramount importance to India, given the need to feed the country’s growing population of over 1.2 billion. Not just that, nearly half of Top The Indian Express National agri market, FCI reform Modi’s keys to revive farm sector Union finance minister Arun Jaitley on Thursday gave a fresh push for creating a national market for agricultural produce and planned reforms in food grain management through “restructuring” the FCI. In his Budget speech, he announced setting up of two centres of excellence in agricultural research (Assam and Jharkhand), two agricultural universities (Andhra Pradesh, Rajasthan), two horticulture universities (Telangana and Haryana) and a dedicated “Kisan TV” for farmers. “To accelerate setting up of a national market, the Central government will work closely with the State governments to re-orient their respective APMC Acts to provide for establishment of private market yards/private markets,” Jaitley declared, stating his government’s commitment to restructure the Food Corporation of India (FCI). However, no time-frame was outlined for these two reforms in agricultural markets and foodgrain management. But, the announcement sought to address the challenge of small landholding and landless farmers before the farming sector of the country through “joint farming groups” and farmers’ “producers organisation” innovations. For this purpose, Jaitley announced to “provide finance to 5 lakh joint farming groups of ‘Bhoomi Heen Kisan’ through NABARD in the current financial year” to meet the institutional finance requirement of landless farmers. Additionally, the Finance Minister announced to provide Rs 200 crore to NABARD for “building 2,000 producers organisations” in two years. Expressing the government’s commitment for achieving four per cent agricultural growth target, the Minister pressed for “blue revolution” in fisheries and “protein revolution” in protein-rich farm items. The Budget also proposed dedicated funds for meeting various demands of the sector with an outlay of Rs 100 crore for an “Agri-Tech Infrastructure Fund”, Rs 100 crore towards “National Adaptation Fund” for climate change, and Rs 500 crore towards “Price Stabilisation Fund” for shielding farmers against volatility in commodity prices. Top The Tribune The Union Budget neglecting the organic farmers in Punjab and allocating Rs 100 crore for its development in the North Eastern states has left many organic farmers in the state despondent. To save fast-depleting table of ground water and avoid excessive use of pesticides and chemicals in agriculture in Punjab, the organic farmers in the state were expecting subsidy on the pattern of chemical based agriculture to give a boost to organic farming in Punjab. But the Budget has no such provision, said Umindera Dutt, executive director, Kheti Virasat Mission (KVM), an organisation dedicated to organic and chemical-free agriculture network in the state. The worst impact of intensive chemical-based agriculture was visible in north India on environment, health and ecology and there was an urgent need to promote sustainable agriculture. But like the previous Congress-led UPA government, the BJP had also failed to deliver even if the party promised it in its manifesto, said Umendra Dutt. “We expect the BJP government to announce subsidy for organic farming. Every year the Central Government spends crores of rupees on chemical fertilizer subsidies but there is not even single penny of subsidy, incentive or bonus to the farmers who have shifted to ecologically sustainable natural farming,” said OP Rupela, an agriculture scientist and a former member of UN Food and Agriculture Organisation. Top Business Standard Proposals on warehousing, marketing to improve supply To ease supply-side constraints on food articles, Finance Minister Arun Jaitley has proposed several measures to help improve marketing and storage of produce. Taking cues from the Bhartiya Janata Party's election manifesto, he has proposed integrating markets across the country, with the Centre to work closely with states to reorient the latter's respective Agricultural Produce Marketing Committee (APMC) Acts, to provide for establishment of private market yards and markets. States will also be encouraged to develop farmers' markets in town areas. There are around 7,500 wholesale markets, with differing prices, all governed by APMCs, with geographical boundaries; trade is not allowed outside these mandis. If a corporate buyer wishes to offer a higher price for a commodity to farmers, the trade has to be routed through the APMC. Intermediaries make a killing by keeping high margins, resulting in high prices for ultimate consumers. By opening the markets for farmers, this should change. In another important move, the minister proposed allocation of Rs 5,000 crore in 2014-15 for increasing of warehousing capacity, for increasing the shelf life of perishable produce. Another Rs 5,000 crore has been added to the corpus of the Rural Infrastructure Development Fund. Top Deccan Herald Rural job scheme to be tweaked to aid farmers The government, however, sought to lay special emphasis on the Pradhan Mantri Gram Sadak Yojana (PMGSY), which was launched during the tenure of the first NDA government headed by Atal Bihari Vajpayee. The government proposed to earmark Rs 14,389 crore for a “better and more energetic” version of the programme. Finance Minister Arun Jaitley, who presented the Union Budget in Parliament on Thursday, emphasised on Ajeevika or National Rural Livelihood Mission, which was also launched during the first NDA regime as Swarnajayanti Gram Swarozgar Yojana. At present, women’s self-help groups (SHGs) are provided bank loans under the mission at an interest rate of 4 per cent on prompt repayment in 150 districts and at 7 per cent rate in all other districts. Jaitley proposed to extend the provision of bank loan at 4 per cent interest rate to women SHGs in 100 additional districts. He also earmarked an initial sum of Rs 100 crore to set up a Start-up Village Entrepreneurship Programme for encouraging rural youth to take up local entrepreneurship schemes. Even as clamours from within the BJP to dilute the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) triggered protests from social activists, Jaitley said that the government was committed to providing wage and self-employment opportunities in rural areas. “However, wage employment would be provided under MGNREGA through works that are more productive, asset creating and substantially lined to agriculture and allied activities,” he said. The minister also proposed to earmark Rs 33,364 crore for implementation of the MGNREG scheme in 2014-15, thus maintaining the budgetary allocation for the demand-driven programme at the level of the previous years. Top Financial Chronicle Wooing farmers with sops & promises In a bid to raise 4 per cent growth in the agriculture sector in FY15 amidst the fear of El Nino triggering weak monsoon and resulting in decreased farm output, Arun Jaitley announced a slew of measures to boost farm output. He announced a price stabilisation fund, steps to set up a national market for farm produce, irrigation schemes, new agricultural universities and initiatives to increase warehousing and rural web connectivity, among other things. He said food price volatility was a big concern, and announced a Rs 500 crore fund for farm price stabilisation. The government allocated Rs 100 crore to set up agriculture infrastructure fund, Rs 200 crore to promote agriculture and horticulture universities in TN, Haryana, and AP. Also, another Rs 100 crore was proposed to set up agro technology institute in Assam and Jharkhand. “With a focus to push the infrastructure sector in agriculture the government will allocate Rs 5,000 crore for warehouse infrastructure fund to hike warehousing capacity,” Jaitley said. The government has set a target of Rs 800,000 crore for agriculture credit during 2014-15. It has decided to continue the interest subvention scheme and raise corpus of rural infrastructure development fund to Rs 25,000 crore. Among other decisions, he also said a Rs 100 crore dedicated Kisan TV for farmers will be operational by this year. “The government initiatives are targeted to give a boost to production and marketing but we will have to wait and watch how they are implemented,” PK Joshi of International Food Policy Research Institute, told FC. Agri News Service is an online service of Agriculture Today. For subscribing Agriculture Today www.agriculturetoday.in, download forms at http://www.agriculturetoday.in/SubscriptionForm.pdf
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[mukto-mona] Agrinews 11-7-2014
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