Regoverningmarkets.org South Asia Newsletter (Vol. 25, No. 40 September 15 – September 21, 2007)

Govt urged to fix sugarcane price Sunday, September 16,2007 DAWN

HYDERABAD: Growers have urged the Sindh government to fix sugarcane price at Rs70 per 40 kilogramme before the crushing season begins in the province this October and waive off sugar cess levied at a rate of 0.25 paisa per 40 kg sugarcane. A delegation of growers from various districts of the province met with Chief Minister Dr. Arbab Ghulam Rahim in Karachi on Friday to persuade the government to fix sugarcane price at Rs70 per 40 kg, said a participant of the meeting on Saturday.

He said that the government wanted to fix prices somewhere between Rs67 and Rs70 but the growers were adamant that the millers should pay them Rs70. The crushing season is to begin in the province between Oct 15 and 20.

The chief minister had assured the delegation that he would try his best to solve the issue in an amicable manner, he said and added that the meeting discussed expected sugarcane production this year and possibility of sugar import by the federal government.

Besides discussing sugarcane, the growers also urged the chief minister to waive off recovery of 0.25 paisa on sugar cess 40kg cane from both the millers and the growers and believed its utilisation had always been questionable.

The sugar cess was meant to be utilised in the construction of roads in the cane producing districts. Sindh government released the funds collected under sugar cess to the district governments for construction of roads to put in place infrastructure for smooth transportation of the cane produce, he said.

The growers also raised the issue of collection of land revenue and taxes last year despite the fact that the chief minister had declared certain districts as calamity-hit.

The chief minister promised to look into the issues and directed the officials concerned to submit a report to this effect. He also assured them that the issue of dues outstanding against millers would be taken up with millers in a separate meeting to be held shortly, he said.

ACQUITTED: The additional district judge-II on Saturday acquitted local leaders of Pakistan People's Party (Shahhed Bhutto) Ali Ahmed Palepoto of charges of being involved in the murder 14 years ago of then superintendent of central jail, giving him the benefit of doubt.

The judge Mr Amjad Ali Bohyo Palepoto examined half a dozen prosecution witnesses including Dr Akbar Adil, Major (Rtd) Ghulam Hussain Khoso, inspectors Ghulam Mustafa Sheikh and Arshad, Makhmoor, Salim Rind, orderly of jail chief Major Khoso, and a doctor.

A case was lodged at Baldia police station after Major Khoso's car was ambushed a few yards away from his residence in front of the outer wall of central prison on April 14, 1993.

Palepoto was not identified by eye-witnesses including Dr Akbar Adil, who had earlier told police that he knew three people who had collided with his vehicle but Palepoto was not one of them.

Tea exports take a hit Monday, September 17,2007 The Telegraph

KOLKATA: Tea exports this year are expected to be lower than last year's figure of 203 million kg. However, the export target of 210 million kg has not been revised.

"As far as trends go, we are down by 20 million kg in the first seven months. It looks like we will not be able to match last year's figures," said Tea Board chairman Basudeb Banerjee.

The appreciation in the rupee has hit domestic exporters hard. Kenya, which had a bumper crop this year, reported a 48 per cent jump in exports. Last year, the drought in Kenya had helped Indian exporters grab a greater slice of the world market.

Local payment problems affected India's trade with Iraq, a major export market. "Efforts are on to solve it at the earliest," Banerjee added.

In 2006, India exported 42.13 million kg tea to Iraq and 42.99 million kg to the Commonwealth of Independent States.

Banerjee had recently visited Dubai and Muscat to explore opportunities for export there. He also had a look at the Jebel Ali tea processing and trading centre in Dubai.

The West Asia and the Gulf account for almost 30 million kg of exports and this can be substantially increased, Banerjee said.

"There is a lot to learn from Dubai which has become a global re-export hub for tea. The Dubai tea festival has become a key event in the world calendar," he added.

The Tea Board, along with the ministry of commerce, also wants to boost the export of North Bengal tea, which includes the Darjeeling variety. The region contributes around 20 million kg to exports, of which Darjeeling tea accounts for six million kg.

"We want to increase exports from the region and make Siliguri an export hub so that the tea need not be brought to Calcutta but can be processed and exported directly," Jairam Ramesh, Union minister of state for commerce and industry, had said on a recent visit to the city.

Rice exporters fret over basmati norms Monday, September 17,2007 The Telegraph

NEW DELHI: The agriculture ministry's decision to redefine basmati rice may not go down well with exporters.

The new definition plans to do away with the condition that one of the parents should be a traditional basmati variety. The commerce ministry is yet to approve the proposal.

Gopal Sharma of DAD Exports said, "If this happens, then any sub-standard rice can be passed off as basmati. What happens to people like us who are careful about the quality of basmati?"

There have been instances when shipments were sent back from the US and the UAE on concerns over quality. Russia, too, has banned the rice because of quality problems.

Sharma said it was very important to maintain the quality and any aromatic rice should not be allowed to be called basmati as this would earn a bad name for the variety.

Sharma exports around 4,000 tonnes of basmati and 6,000 tonnes of non-basmati rice to countries such as Turkey, Singapore and Qatar.

Manmohan Singh, a patent and trademark lawyer, said if the new definition came into effect, unfair trade practices would come into vogue and inferior aromatic rice would be sold as basmati.

Singh suggested that the aromatic varieties of rice which were not basmati could be labelled as "other Indian aromatic varieties". India produced about 4 million tonnes of aromatic rice, of which about 1.2 million tonnes were exported as basmati last year.

Basmati is registered as a geographical indication and efforts to dilute this certification will have an adverse impact on the market, Sharma added.

Rs 31,500 cr PDS grain stolen in 3 yrs Monday, September 17,2007 The Times of India

NEW DELHI: In the last three years, Rs 31,585.98 crore worth of wheat and rice meant for the poorest of the poor was siphoned off from the public distribution system.

Last year alone, Rs 11,336.98 crore worth of foodgrain that the government is supposed to distribute to the needy at subsidised prices found its way into the market illegally.

Every year, India's poor are cheated out of 53.3% of wheat and 39% of rice meant for them. With the exception of 11 states and Union Territories, there is largescale diversion of PDS grain across India. And, these 11 states and UTs seem to be faring better only because the others are so far ahead in the dirty business.

In the case of wheat, except for 12 states, there's massive pilferage of the grain all over the country. The situation is a tad better for rice, with 16 states having little or no diversion. Exceptions apart, the poor in India simply can't trust the government to deliver them food supplies. The malaise cuts across party lines and categories like progressive, rich states and the poor, less developed ones.

The North-East is in a class of its own. Of the eight states here, not a single grain of wheat supplied to six - Sikkim, Meghalaya, Manipur, Mizoram, Nagaland and Assam - reaches the targeted poor. Arunachal Pradesh can claim to be a little less corrupt as 96.2% of its PDS wheat gets diverted. Manipur takes the cake as 97.7% of its rice allocation is also siphoned off with Nagaland following close behind at 88.6% of rice being diverted.

If political and policing troubles in the North-East can be blamed for such daylight robbery, other states have no alibi. In terms of loss to the exchequer, Uttar Pradesh fares the worst, followed by Left-ruled West Bengal and Madhya Pradesh.

In 2006-07, Rs 3,289.71 crore worth of rice and wheat was stolen in UP. The corresponding figure in West Bengal was Rs 1,913.76 crore and in MP, Rs 1,038.69 crore. While the percentage of diversion may be lower than the NorthEast, the sheer volume of rice and wheat distributed in these states helps black-marketeers make a killing.

‘Wholesalers behind price hike' Monday, September 17,2007 DAWN

LAHORE, Sept 16: The Lahore Karyana and General Merchants Association has demanded accountability of wholesalers for artificial increase in prices instead of crackdown on retailers.

Speaking at a meeting held here on Sunday with Rao Muhammad Akram in the chair, association secretary-general Chaudhry Azmat and other office-bearers alleged that wholesalers always increased the prices by manipulating supplies.

Seminar on canola sowing Monday, September 17,2007 DAWN

SAHIWAL, Sept 16: The government was spending Rs58 billion on import of edible oil every year and this foreign exchange could be curtailed by boosting indigenous oil seeds production in the country, Oil Seed Development Board provincial director Nasir Ali Shah told a seminar here on Sunday.

He urged growers to sow canola, whose season was starting from Sept 15 and would continue till Nov 15, and said they could get 40 maunds per acre yield within a short span of time.

Mr Shah said canola's per maund rate in the market was Rs1,300 and thus the growers could earn a handsome return.

Board's Regional Director Amir Hamza said canola was useful was heart patients besides having full nutritional value.

TICKETS: The Majlis-i-Shura of Jamiat Ulema-i-Islam-Fazl (JUI-F) Sahiwal chapter has nominated Hafiz Tariq Masood and Mufti Muhammad Usman as party candidates to contest the National Assembly constituencies NA-160 and NA-162 respectively. Announcing this here on Sunday, JUI-F district information secretary Rana Muhammad Shahzad said the district Shura had also recommended to the central Shura to issue party tickets to the nominees.

Huge growth in tea industry Monday, September 17,2007 Daily News

COLOMBO: Sri Lanka's tea industry has shown a significant improvement compared to last year according to recent statistics on tea production, export and marketing, Sri Lanka Tea Board Chairman Lalith Hettiarachchi said.

A kilo of tea received an average US$ 2.60 except for one or two weeks, Hettiarachchi said.

The farmer also received an amount closer to the same for green leaves based on the average price at the export market.

"The depression in the production which started with 20 per cent due to adverse weather and strikes has now come down to nine per cent," Hettiarachchi said.

The Chairman was hopeful of reaching the 305 million kg target compared to the last year's 310 million kg. He expressed displeasure over what he called an "unethical" wage increase on the cards, after nine months of previous negotiations which is valid for two years.

The total tea production for July 2007 was 26.2 Million kg a rise of 2.5 Mkg or 10.3 per cent when compared with the 23.7 MKg produced during the corresponding month in 2006. This rise in tea production is recorded in all three elevations.

The rise in monthly production was recorded in both Black and Green tea sectors. Black tea showed an increase of 10.1 per cent against the preceding year and Green tea production was up by a sizable 32.1 per cent. However, the cumulative figures could not surpass last year's crop.

The share of CTC component in total black tea production up to July 2007 was 6.2 per cent which is slightly less than the 6.3 per cent achieved in 2006.

Meanwhile, the monthly Bio/Organic tea production of 72.9 MT in July 2007 recorded an increase of 56.3 percent with respect to the monthly production of 46.6 MT in 2006.

The cumulative Bio tea production of 738.2 MT recorded a 21.1 per cent increase as against the manufacture of 609.7 MT in 2006.

During the period under review, both monthly and cumulative instant tea production recorded 184.4 MT and 1,029.4 MT in year 2006. Referring to tea exports in July 2007, Hettiarachchi said it was moderately higher than that of the same month in 2006.

The monthly total tea exports in 2007 exceeded the 2006 figure by 6.8 per cent, which could be attributed mainly due to the upward variation in exports of tea packets, he said.

Cumulative export volumes of bulk tea, tea packets and green tea was still behind the corresponding records last year. The total exports in all categories in 2007 was 29,319,770 kgs compared to 27,442,562 kgs in 2006 which is an increase of 6.8 percent amounting to 1,877,208 kgs.

However all types of monthly exports other than instant tea reported growth in their unit prices, which resulted the FOB price in July 2007 to increase by Rs 82.62 or 30.9 percent against the price in 2006.

This led to an increase in the cumulative export earnings of Rs 58.4 billion in 2007 compared to Rs 50.9 billion in the previous year. However the growth of FOB in 2007 recorded an increase of 23.0 percent compared with the price in 2006.

The main 10 destinations of Sri Lankan teas led by Russia included UAE, Iran, Syria, Turkey, Japan, Iraq, Saudi Arabia, Libya and Ukraine with a 17.3 per cent of exports share during the period under review, but showed sa decline of 3.8 MKg in total tea imports from Sri Lanka.

A significant increase in exports of value added products was recorded - teabags 37 per cent, packets 19 per cent, instant 78 percent, Green 14 per cent and other teas 20 per cent.

FAO criticises India for wheat imports Tuesday, September 18,2007 Indian Express

NEW DELHI: The world may achieve its Millennium Development Goals for Human Development, but the targets for attaining global food security are unlikely to be met, according to a senior official from the Food and Agriculure Organisation (a UN body leading efforts to fight global hunger).

Speaking on the potential of biotechnology to help meet global food security needs, the FAO's director of plant production, Shivaji Pandey, also castigated India for its chronic neglect of agriculture since the 1980s and said the country would not have needed to pay the extremely high price of $350 per tonne of wheat as it is doing now if it had invested in agriculture like China did.

Pointing to rising food prices across the world-11 per cent in India and 30 per cent in Italy last year, for instance- Pandey said the trend was unlikely to change in the future as more and more farmers switch to biofuels from food crops. Arguing that the answer to national and global food security "does not lie in WTO negotiations" but in "providing support to your farmers and prioritising investments in agriculture," Pandey stressed that given the right support, farmers would be able to produce all the food a country needed.

Taking a dig at India's current predicament over wheat imports, Pandey added, "You won't have to depend on other countries for food, you won't have to pay $350 a tonne for wheat that you are paying now. You have to respect and support your farmers, not insult and injure them.

he countries you are now paying $350 for a tonne of wheat, are the ones that have invested in agriculture."

Centre prepares to hike wheat MSP Wednesday, September 19,2007 Asian Age

NEW DELHI: The Centre is getting ready to announce a further hike in the minimum support price of wheat from the present Rs 850 per quintal (an MSP of Rs 750, plus an incentive bonus of Rs100) to Rs 1,000 per quintal in a month. Speaking to reporters on the sidelines of the National Agricultural Conference for Rabi-2007 campaign, Union agriculture secretary P.K. Mishra gave indications to this effect. An official of the Commission for Agricultural Costs and Prices (CACP), said it will be announced by the end of October, positively.

The CACP has already sent communication to various ministries and state governments for comments on the recommended price for wheat, barley and gram, among others, according to sources.

The decision follows the hue and cry raised over import of wheat in the past few months at a price quite higher than the MSP, plus bonus of Rs 850 paid to Indian farmers for domestic procurement by the Food Corporation of India (FCI). "As for paddy, the decision will be taken after sometime. We usually announce new MSP four months before the seasonal harvest. Rice commands a reasonably good price of Rs 650 per quintal," chairman of the CACP Dr T. Haque said.

However, paddy growers of various states have been unhappy that they are getting a raw deal from the Centre. The Union agriculture, food and consumer affairs minister Sharad Pawar announced a hike of Rs 40 per quintal on paddy on August 24. The decision was taken after different political parties represented to him about the big hiatus between the MSPs of wheat and rice, even if the production cost of rice exceeds that of wheat in many states. The grouse of the representatives of farmers' associations has been mainly at the poor comparison between the prices of paddy and wheat. "The Centre's apathy towards paddy is not justified on two counts. One, the ideal MSP as recommended by the parliamentary standing committee is actual cost plus 50 per cent of the factor cost of production. Secondly, the unit cost for production of paddy exceeds that of wheat," general secretary of the Confederation of Indian Farmers' Associations P. Chengal Reddy told this newspaper.

Only last month, MPs of both the Congress and the Telugu Desam of Andhra Pradesh approached Mr Pawar for a hike in the MSP of paddy. "The MSP of wheat was Rs 360 per quintal and that of paddy stood at Rs 340 per quintal in 1994-95. By 2007-08, they stood at Rs 850 and Rs 620 per quintal respectively," a memorandum of the Telugu Desam Parliamentary party to Prime Minister Manmohan Singh said.

The MPs also wanted the government to streamline the procurement of paddy by the FCI for PDS, as being adopted in the wheat belt.

US praises poppy progress Wednesday, September 19,2007 AOP NEWS

WASHINGTON: The United States says Afghanistan has made some gains in its fight against the cultivation of opium poppies. But in its annual report on drug trafficking around the world, the State Department also said opium accounted for one-third of Afghanistan's economy. And it urged Kabul to increase its efforts against poppy cultivation, which provides much of the world's heroin supply.

Christy McCampbell, the head of the department's Bureau for International Narcotics and Law Enforcement. said the Bush administration was aware that Afghan President Hamid Karzai faced great difficulties in ending cultivation of the opium poppy and that Bush applauded Karzai's efforts in the midst of a war with a resurgent Taliban.

"Opium accounts for one-third of their economy, according to UN statistics," McCampbell told reporters. "This contributes of course to the widespread public corruption, to the damages of economic growth -- of licit economic growth, and it definitely strengthens the insurgency problems there."

North-south Divide

The report also acknowledges that poppy cultivation in Afghanistan has increased by 17 percent this year over last year. But McCampbell emphasized that this increase was, in her words, "almost exclusively" restricted to the country's southern regions bordering Pakistan, where the Taliban has more influence.

The situation in northern Afghanistan is altogether different, McCampbell said.

"There is one model of success that can be drawn by comparing the marked difference in cultivation between the northern and southern provinces," she said. "Thirteen of the northern provinces are now poppy-free. That's seven more than last year that [were] poppy-free. In the north, sufficient security has allowed for alternative development programs to take effect, and it's helped the farmers to improve their economic livelihood."

Although Afghanistan doesn't face an immediate threat of a cut in U.S. aid, McCampbell said the Bush administration still wanted it to increase its efforts against poppy cultivation, which provides much of the world's heroin supply.

"President Bush looks to the government of Afghanistan to take further steps to combat poppy cultivation and corruption," McCampbell said. "Despite the significant gains the country has made since 2001, the country does continue to face tremendous challenges. Not addressing these challenges now could undermine security, compromise democratic legitimacy, and imperil international support for vital assistance to that country."

'Little Change' Elsewhere

Afghanistan is one of 20 major drug-transit and drug-producing countries identified in the report.

McCampbell said those were the same as in 2006. They include countries in Latin America such as Bolivia and Guatemala; Caribbean countries like Haiti and Jamaica; and East Asia nations, including Laos and Myanmar.

The report designated these countries as having "demonstrably failed" to slow the spread of illegal drugs.

In some cases, the consequence for that failure could be a reduction in the amount of U.S. aid they receive.

The report said Washington would not impose penalties on Bolivia, the world's third-leading producer of coca, because it believes the government in La Paz, like Kabul, made a good-faith effort to fight its production last year. The coca leaf is the basis for cocaine.

Also, the United States identified Venezuela and Myanmar as having failed to fight the spread of illegal drugs in 2006. It said Venezuela's government did little to keep its territory from being a transit point for narcotics, and it accused Myanmar of being Asia's largest producer of methamphetamines.

Govt purchases $1.1 million seed Wednesday, September 19,2007 AOP NEWS

ROME: The United Nations World Food Programme has announced a 1.1 million dollar purchase of 4,000 metric tonnes of locally grown wheat in Hirat, Afghanistan. The WFP said the purchase was a bid to overcome security problems hampering food deliveries and support poor Afghan farmers. "WFP makes every effort to buy wheat locally or regionally wherever it can do so without disrupting markets."

"Extended drought and conflict has had a devastating effect on Afghanistan's wheat crop in recent years. But this year, we have had a better harvest, and WFP can buy a significant quantity of wheat locally," said Rick Corsino, the organisation's Afghanistan director.

" Insecurity on the southern ring road means we have been unable to move food for well over two months. With seriously depleted stocks, poor and hungry people in the west of the country have been suffering."

For the first time, the WFP has also purchased 9,000 tonnes of wheat from Iran, which will be distributed in Badghis and Ghor provinces.

The recent break in supply affected over 100,000 people in the western region, including Afghans recently deported from Iran, men and women who carry out community work, and those enrolled in vocational courses under food-for-training schemes.

"When WFP can, and when a good harvest allows, it makes good sense to purchase locally grown cereals for our assistance programmes," said Tony Banbury, WFP Asia Regional Director.

"This wheat purchase will bring food to vulnerable people in Afghanistan who really need our help, and WFP's payments will help local farmers recover their livelihoods - a critical step for Afghanistan."

Insecurity in many parts of Afghanistan, where WFP aims to provide food to 5.4 million Afghans in 2007, presents a major obstacle to humanitarian deliveries and continues to threaten projects.

Since June 2006, there have been 28 security incidents involving trucks carrying WFP food. The vehicles have been attacked and looted, and seven people have died. An estimated 750 tonnes of food has been lost.

Wheat import: Centre to go slow Thursday, September 20,2007 Asian Age

NEW DELHI: Union agriculture minister Sharad Pawar said on Wednesday the Centre will go slow on wheat imports as adequate stocks are available as of now.

However, the Centre is watching releases from godowns and international prices carefully, he said.

Mr Pawar sought to brush aside criticism over wheat imports, as allegedly amid glut and at very high prices. He also referred to increasing demand for wheat in the southern states of late. He said imports are sometimes needed irrespective of increase in production and gave the case of pulses, oilseeds and edible oils as examples.

Referring to wheat production estimates, he said, "Despite a high projection of 74.9 million tons of production, there is still a demand-supply gap. The global picture is also changing very fast. Edible oil prices soured in the international market all of a sudden. The USA is now supporting bio-fuels and area under wheat has declined as a result. So, we need to take such factors into account at appropriate time." Referring to the new-found southern state's love for wheat, Mr Pawar said, "Dietary habits are changing. Three years ago, I used to pursue southern states to off-load more wheat. Today, chief ministers of seven states are demanding me for more wheat. The chief minister of Kerala told me that the younger generation in his state are consuming bread in the mornings. Demand for wheat from the north-eastern states is also on the rise," he said.

Since wheat cannot be grown south of Vindhyas, the traditional wheat-growing states like Punjab, Haryana, Bihar, Uttar Pradesh have to find ways to increase crop productivity to meet the demand, he said. Mr Pawar also said that the package of incentives for sugar mills are being worked out by the group of ministers set up for this purpose and that the food ministry is willing to allow the process of direct conversion of sugarcane juice into ethanol.

'Farmers reaping benefits of Bt Cotton' Thursday, September 20,2007 Indian Express

NEW DELHI: Every extra rupee invested by farmers in Bt Cotton seeds has fetched a return of Rs 11.6, translating into a benefit of Rs 7,000 crore to India's cotton economy, according to a national study by market research firm IMRB International. IMRB covered 500 villages in all the nine states where Bt Cotton is grown and interviewed 6,000 farmers.

The study, whose findings are available to The Indian Express, indicates that the perception of cotton farmers committing suicides due to high cost of Bt Cotton seeds is a myth, IMRB Research Director Sanjiv Chaudhary pointed out.

Focusing on the economic as well as socio-economic impact of Bt Cotton's advent, the study found that apart from significant financial returns, biotech seeds have increased the quality of cotton as well as the quality of cotton farmers' lives.

"The very farmers who till yesterday were struggling to make ends meet are today thinking of buying a tractor or more land, educating their children and marrying off their daughters," Chaudhary said.

Eighty seven per cent of Bt Cotton farmers believe they have a better life, while 84 per cent believe they spend less time on the field and are less worried about the crop. From the point of view of farm suicides, however, what is significant is that 67 per cent of farmers are glad they can rid themselves of accumulated debt, thanks to their increased income.

"History will never spare anyone," Chaudhary said about farmer suicides. "The first farmer suicide case in cotton was in 1995, when Bt Cotton was not even introduced. More than 95 per cent of farm suicides are simply due to debts," he said. In fact, the BT Cotton technology has helped the average farmer, as the improvement in lint quality means Indian farmers will now get the same price which prevails in the international market, he added.

Even as productivity has risen from 301 kg per hectare in 2002-03 to an estimated 580 kg per hectare this year, Bt Cotton has also translated into savings of around Rs 800 crore on pesticide costs in 2006. Farmers' pesticide costs are down by 32 per cent (savings of Rs 934 per acre) as Bt Cotton seeds require 4.6 sprays less than conventional seeds per acre. So even though Bt seeds cost two-and-a-half times more than conventional seeds, the 50 per cent jump in yields, better quality crop and lesser spends on pesticides mean farmers' revenues have gone up by as much as 162 per cent or Rs 7,800 per acre.

The 37 districts covered in the study were randomly picked. "We have also tried to achieve the right mix of marginal, small, medium and large farmers. However, remember that marginal farmers in India refers to farmers with less than a hectare of land, whereas in a country like Argentina, it refers to farmers with less than 100 hectares of land," Chaudhary said.60 percent of farmers covered by the study were Bt Cotton users while 40 per cent used conventional seeds. The study was conducted when the farmers were in the midst of their final yield assessments.

Govt orders wheat crisis inquiry Thursday, September 20,2007 DAILY TIMES

ISLAMABAD: The federal government has ordered an inquiry to ascertain facts about wheat production in 2006-07 to fix the responsibility for the current wheat crisis, a senior government official told Daily Times on Wednesday.

Wheat production was projected to reach 23.5 million tonnes upon completion of wheat harvest season against the official target of 22.5 million tonnes fixed for this fiscal year. Officials are of the view that estimates of wheat production were not correct and this has now been accepted by the authorities concerned.

Wrong data of wheat harvest was provided to the federal government which resulted in an early decision of allowing wheat export. When the government came to know of the actual size of the crop, it had to ban wheat export, said an official.

Senior officials are conducting the inquiry to recheck the estimates which were reported to the government in the early harvest season. The findings of the inquiry would bring forward the true picture, he said.

The Economic Coordination Committee was informed in the early harvest season that the country is going to have a record wheat crop and after meeting the country's requirements about two million tonnes of wheat would be available for export.

After receiving this report, the ECC allowed export of 0.5 million tonnes of wheat. About 0.45 million tonnes of wheat was actually exported. Besides this, massive hoarding of wheat in the country resulted in increase in the price of wheat which impacted the price of wheat flour. Realizing this situation the government had to ban export of wheat to normalize wheat prices, but the situation became worse when the provincial food departments failed to release wheat quota to flour mills from September 1 to September 7. Imposition of sudden ban on the export of wheat led to the cancellation of export orders.

Investors procured wheat and stored it in their godowns. National Accountability Bureau (NAB) on the directive of the government identified the places and people involved in the hoarding of wheat and handed over their lists to the ECC. The ECC in its meeting held early this month handed over these lists to the provincial governments to take stern action against hoarders, but the provinces failed to come up to the expectations of the federal government.

The ECC also directed the provincial food departments to release wheat to flour mills liberally from September 1 so that the price of wheat flour could be brought down.

Wheat stock of 4.6 million tonnes lying with the government was also found insufficient and the government was left with no option, but to allow import of one million tonnes of wheat.

About smuggling of wheat to neighbouring countries, officials say that Pakistan-India border has been fenced by the Indian authorities and movement of wheat in large quantities is totally out of question. On the other hand, Afghanistan has no flour mills to grind the wheat, so there is no possibility of wheat smuggling to Afghanistan.

An official also dispelled the impression of smuggling of wheat or wheat flour through Samjhota Express from Pakistan to India and explained that some 15 law enforcement agencies check the luggage of the passengers traveling to India which leaves no opportunity for the passengers to carry this commodity in large quantity.

The official said that wheat flour worth Rs 2 billion has been exported to Afghanistan since July 2007 and this export is allowed even today.

Farmers face seedling, fertiliser crisis Thursday, September 20,2007 NEW AGE

PABNA: WITH recession of floodwater, there are signs of devastation all around but farmers are in fields with new hopes to grow aman paddy and early winter vegetables. They said they were now facing seedlings and fertiliser crisis.

The New Age Pabna correspondent visited different areas of the district, where farmers said they faced crisis of aman seedlings and fertiliser that hamper cultivation. They are collecting seedlings from far away places at high prices as the seedbeds had gone under floodwater.

Adul Kader of Bera said he had purchased seedlings at Tk 300 per 80 bundles for his one and a half bigha (one bigha is equal to 0.3306 acre) of land. But the seedlings were sold at between Tk 70 and Tk 80 last year.

Many farmers said they were transplanting aman seedlings for the second time in about a month as the first transplantation was damaged by flood.

Some farmers said they had borrowed money from local moneylenders to cultivate crops after flood.

All of them said they now needed smooth supply of fertiliser.

Akhtarul Afgan, deputy director of the Pabna DAE, told New Age that about 79,033 tonnes of urea fertiliser were needed for the district this season but they had a stock of about 22,755 tonnes.

He, however, said a good number of farmers had already set up comprehensive seedbeds with their own initiatives.

Pabna is one of the worst affected districts with most areas of its seven upazilas reeling under water of the mighty rivers Padma and Jamana this year.

According to district agriculture officials' estimate, crops including paddy, jute, sugarcane and vegetables worth at least Tk 82 crore on 37,407 hectares of land were damaged by flood.

Officials in the local Department of Agriculture Extension said there were 47,317 hectares of cultivable land at 67 unions under seven upazilas of the district. The flood damaged crops on 12,762 hectares fully and 14,645 hectares partially, affecting about 2,20,000 families.

Meanwhile, a Tk 2.50-crore post-flood rehabilitation programme has been taken up to offset the losses suffered in the recent deluge in agriculture sector in the district.

Under the programme a total of 18,750 small and marginal farmers will get seedlings and fertiliser free of cost to cultivate crops on 3,500 hectares of land.

According to the DAE, the support will be provided for cultivating boro paddy, wheat, mustard, HYV maize, pulse and various kinds of vegetables.

In Lalmonirhat, the DAE started distribution of aman seedlings among flood-hit farmers on Tuesday in damaged fields. Only 2 thousand out of 30 thousand flood-hit farmers were getting seedlings. But most of the rest 28 thousand farmers have become frustrated for not getting seedlings from the DAE. They said they were struggling to manage the seedlings, which are selling in markets at exorbitant price.

The Lalmonirhat DAE on Tuesday distributed seedlings of high yielding Navijat variety of aman paddy ‘Bina Shail' among the flood-hit farmers at Barobari, Kulaghat and Rajpur unions in the district headquarters. The Lalmonirhat deputy commissioner, Rafiqul Islam, and the local army camp commander, Major Mahfuzur Rahman, led the distribution.

Rajob Ali, a flood-hit farmer of Bowalmari char in the district headquarters, said he had eight bighas of land damaged by the flood. But the DAE-distributed seedlings could meet up the demand for only one bigha of land. ‘I don't know how I could manage for the rest,' he said.

Some other flood-hit farmers of Char Bowalmari, Char Kulaghat and Char Bongram villages who came to Kulaghat union parishad premises for getting aman seedlings told New Age that they did not get seedlings as they were not enlisted by the DAE.

Hares Ali of Char Kulaghat said, ‘My four bighas of land were damaged by the flood. But I was not enlisted for unknown reason.'

The Lalmonirhat DAE deputy director, Aftab Uddin Khan, said they had enlisted only the worst affected farmers.

The Kulaghat UP chairman, Mohammad Shahjahan, said only 100 flood-hit farmers of his union got seedlings given by the DAE, whereas over one thousand flood-hit farmers had lost their aman paddy by the recent flood. Little distribution of seedlings will not bring fruitful result in cultivating aman paddy in damaged land, he observed.

Attempts to tea harvest losses Thursday, September 20,2007 COLOMBO PAGE

Colombo: The Ministry of Plantation says that new transport methods will be introduced in tea industry to minimize the harvest losses. The Ministry says that the methods are now being tested by the Tea Research Institute to minimize the losses that occur while transporting. Around 30% of the quality of tea leaves is lost due to damage that take place while being transported. Traditionally, the tea leaves are tightly packed in gunny bags and transported in open vehicles, in most cases the workers traveling on them.

Contract farming: Centre firm Friday, September 21,2007 Asian Age

NEW DELHI: Notwithstanding setbacks faced by corporate retailers of fresh farm produce like the Reliance in sates like Uttar Pradesh, Centre remains firm in its support for the big corporate players' entry into selling vegetables and fruits in cities and towns. Union minister of agriculture, consumer affairs, food and public distribution Sharad Pawar said on Thursday that contract farming can empower farmers with technology and provide them better market access.

Inaugurating the national conference on emerging platform for agriculture marketing here, Mr Pawar expressed hope that pricing arrangements through contract farming can significantly reduced the risk and uncertainty of market place for the toiling farmer. The minister stated that emergence of organised retailing in recent years has led to demand for quality product and thereby private investment in supply chain infrastructure is getting a boost.

"Modern food retailing will lower marketing costs and lead to lower prices for consumers and higher realisation for farmers. However, concerns being expressed about the impact of contract farming and organised retail chains for rural India and the small farmers need to be addressed," he added.

Mr Pawar said that the establishment of modern Terminal Market complexes would ensure both backward and forward linkages to farmers. The newly proposed electronic spot markets can provide a viable alternative to the existing practice of the mandi system, by improving the decision-making capability of the farmers and strengthening their bargaining power. The minister called for an in-depth analysis of how marketing development infrastructure can be catalysed in public-private partnership mode.

The union agriculture ministry has organised national workshops in collaboration with the US department of agriculture under the Indo-US agricultural knowledge initiative. An agreement to this effect, was reached simultaneously during the Centre's in-principle agreement with the US on the civilian nuclear deal.

Buy PDS grains from open market: Pawar Friday, September 21,2007 The Tribune

NEW DELHI: Feeling elated that the farmers were selling their produce to private traders for higher prices, union agriculture minister Sharad Pawar on Thursday said the government should buy foodgrains from the open market for distribution under the social welfare schemes.

"I am very happy when the farmer is getting proper price. If any government wants to implement the scheme (PDS), it should provide money from the state revenue to purchase foodgrains from open market," Pawar said at a two-day FICCI conference on agriculture marketing here.

Concessions that the government wants to extend to the economically weaker section of society should be factored into the budget, he said. He expressed reservations over fixing the minimum support price for procuring foodgrains from the farmers to fulfil government's social responsibilities.

Pawar said, a few years ago the farmers had no choice but to sell their produce to the designated agency. He was referring to farmers selling their produce to private traders at higher price than government-fixed rate, making it difficult for official agencies to procure adequate amount of food grain for welfare schemes.

On import of wheat, Pawar said he was not worried despite getting brickbats for the decision. The Food Corporation of India, which buys foodgrains on behalf of the government for distribution in the PDS and other welfare schemes, procured 11.1 million tons against a target of 15.1 million tons in the 2006-07 rabi marketing season. He said contract farming could empower farmers with technology and provide them better market access. He expressed the hope that pricing arrangements through contract farming can significantly reduced the risk and uncertainty of market place.

The minister stated that emergence of organised retailing in recent years has led to demand for quality produce and thereby private investment in supply chain infrastructure in getting a boost.

Modern food retailing will lower marketing costs and lead to lower prices for consumers and higher realisation for farmers. Concerns being expressed about the impact of contract farming and organised retail chains for rural India and the small farmers need to be addressed, he added.

Pawar pointed out that the establishment of Modern Terminal Market complexes would ensure both backward and forward linkages to farmers. The newly proposed electronic spot markets can provide a viable alternative to the existing practice of the mandi system, by improving the decision making capability of the farmers and strengthening their bargaining power.

The minister called for an in-depth analysis of how marketing development infrastructure can be catalysed in public-private partnership mode.

Centre, Punjab behind flour crisis Friday, September 21,2007 THE NEWS

ISLAMABAD: The wheat crisis emerged because of the follies committed both by the federal and Punjab governments. The former took the decision to export 0.5 million tonnes of wheat without analyzing its availability and the latter released to millers only restricted stock.

The wheat crisis that snowballed over the last couple of weeks or so has greatly irked the common people as prices of atta witnessed an unprecedented surge. A federal government official who is involved in decision making process told The News Thursday that it was the mistake of the federal government to allow export of 0.5 million tonnes of wheat without ensuring its availability in the domestic market.

"The private sector got involved in wheat procurement for export purposes which was later banned by the government, when 0.4 million tonnes of the commodity had already been exported," a high-level official said.

According to official estimates, there is around 0.8 million to 1 million tons of wheat stocked by hoarders at the moment. Regarding Punjab's mistake in the wheat and flour crisis, the official said that the ECC which met last month with Prime Minister Shaukat Aziz in chair, directed the Punjab government to release wheat stocks on the eve of Ramadan after September 1, 2007 but the provincial authorities released only restricted stocks during this period.

"Punjab released 8,000 to 9,000 tonnes of wheat per day during the initial days of September that was insufficient to meet the demand. Now the provincial government is releasing around 18,000 tonnes per day in order to match with the requirements, said the official.

Declining trend in wheat prices has been witnessed because of the increased supply of wheat to millers and prices have come down to the extent of Rs1,600 to Rs1,400 per tonne in the wholesale market in Karachi. The government wants to see wheat prices coming down to pre-Ramadan level.

Another official who also served at a key post in the Ministry of Food, Agriculture and Livestock (MINFAL) said the government, including provinces and Passco, have stocks of up to 4.8 million tonnes piled up in godowns. "Why did the government allow exports without analyzing its domestic stocks," he questioned and added the Punjab government released less wheat that resulted in a crisis like situation.

The government's decision of allowing import of one million tonnes wheat was aimed at ensuring "over protection" as the stocks currently available in the country are quite sufficient to meet consumers' demands.

He said the government knew fully well about hoarders who had stocked the commodity by obtaining banks loans. But speculators also got involved in the market for exacting their share as the prices of wheat was much higher in international market.

The price of wheat was $200 per tonne in Pakistan whereas the prices of commodity in international market hovered around $400 per tonne. This gave economic justification to smugglers to send wheat through illegal ways to India, Afghanistan and

Central Asian Republics (CARs). "We can overcome this crisis by augmenting supply side and taking stern administrative actions," said the official and added that both steps will have to be taken simultaneously.

Khalid Mustafa adds: With the atta crisis worsening, Prime Minister Shaukat Aziz expressed his doubts about the genuineness of the claims of ‘bumper' wheat crop. The prime minister doubted the assessment of his economic team and questioned whether the wheat crop this year was indeed bumper and whether it was in fact 23.5 million tonnes. This was confirmed by Dr Salman Shah, Advisor to Prime Minister on Finance and Revenue.

However the authorities concerned told the prime minister through presentation that wheat produce estimates are correct and all the government departments who are involved in collecting the wheat produce data have reported every thing right.

Dr Shah said that there is no doubt that country received a bumper crop. However, he said that private sector managed to procure wheat from growers at higher prices than the support price offered by the government. He said that government had already banned the export of wheat and would not allow its export in future.

Dr Shah said that border with Afghanistan is too long and porous and it is not possible to keep a strict vigil on the smuggling activities there. However, the customs authorities have been directed to tighten up vigilance at eastern and western borders of the country to check the illegal movement of atta.

Quoting costumes authorities in Sindh, Dr Shah said that wheat smuggling has not taken place to India. When asked if there is no smuggling of atta, and the country has a bumper crop, then why masses are being made to suffer the pangs of unprecedented price hike, Dr Shah held hoarders responsible for the crisis. He said that provincial governments have initiated crackdowns on hoarders and flourmills.

He said that chief secretary NWFP himself conducted raids and the result is that prices have come down considerably. In the Punjab too with strict administrative measures, the government has succeeded in bringing down the price of atta to Rs310 per 20kg bag and within days the prices would further tumble to Rs295 per 20 kg. He said that Punjab government has released 100,000 bags of atta owing to which masses have got some solace.