Vol. 11, No. 26 (June 01- 07, 2007)

Regoverning Markets (www.regoverningmarkets.org [1]) is a global research and policy support programme that aims to advice public and private sector organizations on approaches that can anticipate and manage the impacts that dynamic changes in local and regional agri-food markets are having on small-scale producers.

This weekly newsletter gives you news stories appearing in the newspapers in the 7 South Asian Countries that are members of South Asian Association for Regional Cooperation (SAARC). This is purely for academic purposes and any citation should be referred to original sources.

Unions oppose FDI in tobacco sector Friday, June 01,2007 The Hindu [2]

NEW DELHI: Five central trade unions have urged the Government not to allow foreign direct investment (FDI) in the tobacco sector and ensure that multinational companies manufacturing cigarettes do not enter the Indian market. Their entry would directly affect bidi manufacturers and local cigarette producers.

In a representation submitted at the Prime Minister's Office here on Thursday, the CTUs said recent statements from the Commerce Ministry has caused immense worry as it had been talking of allowing FDI in the tobacco sector and free entry to foreign cigarette manufacturers.

India has the largest tobacco sector in the world and stability of this sector will allow employment levels to be maintained. Strangely, though India has the largest number of employees in the tobacco sector, an extreme anti-tobacco legislation has also been passed.

The multinationals will introduce cheap cigarettes and eventually take away bidi users through advertising and sales. The main objective would be to dominate the market and marginalise the local producers, the memorandum said. Experience has shown that multinationals create a monopoly for the buyer and this harms the local producers and farmers.

Once the foreign companies enter any sector, it is impossible to withdraw permission or curtail their activities. These companies slowly start demanding more concessions and use international media and other financial pressures to get what they want, the CTUs said.

Pointing out that India has anti-tobacco legislation, the memorandum said the Government was moving in the opposite direction by allowing FDI in the tobacco sector. By allowing multinational companies, use of tobacco will increase.

The bidi industry was already shocked over the mandatory labelling and pictures on all packets. FDI would be the ``last nail in the coffin.'

Tobacco sector employees millions of poor people and any negative impact would destroy their lives and the Government had no social security net to help workers and farmers.

The spate of suicide by farmers and bidi workers should caution the Government that there should be no experimenting on such socially sensitive sectors.

The Centre of Indian Trade Unions, the All-India Trade Union Congress, the Hind Mazdoor Sabha, the Trade Union Coordination Centre and the United Trade Union Centre signed the memorandum.

Profit attracts people to potato farming Friday, June 01,2007 NEW AGE [3]

RANGPUR: The farmers of five northern districts have become more interested in potato farming in recent times because of high profit with less investment. Potato is now the second cash crop after rice of the farmers in Rangpur, Kurigram, Lalmonirhat, Gaibandha and Nilphamari. The land under potato cultivation in these districts has increased to 78,000 hectares at present from 68,000 hectares in 2005.

It is cultivated on 40,000 hectares in Rangpur, 15,000 hectares in Nilphamari, 7,000 hectares in Kurigram and 8.000 hectares each in Gaibandha and Lalmonirhat. In the past, the farmers of the greater Rangpur district mainly cultivated paddy, jute, wheat and tobacco. Potato started replacing other main crops since nineties. About 16.5 lakh tonnes of potato have been produced in these districts this season surpassing the target by over 40,000 tonnes, sources in the Department of Agriculture Extension said.

Nearly 40 per cent of the total production of potato in the country comes from the greater Rangpur district. The potato of this region is marketed to Dhaka and other districts of the country. The potato growers are extremely happy for its high price this season. One kilogram of potato is now selling at Tk 22 to 24 in the local markets as against Tk 10 to 12 last year. Asheq Ali of Nabdiganj under Rangpur sadar upazila grew 260 maunds of potato from his one acre of land this season. He earned a profit of Tk 75,600 by selling it. His economic condition vastly improved after he switched over to potato cultivation. On the other hand, Tamijuddin, a farmer of village Dhakhin parul under Pirganj upazila in Rangpur, produced 100 maunds of paddy by cultivating one acre of land. He earned a profit of Tk 7 to 8 thousand only by selling paddy.

Like potato growers the potato traders are also reaping high benefits. Potato trader Abul Kashem of Rangpur bought 500 sacks of potato at the beginning of the harvesting season and kept them in the cold storages. He earned a net profit of Tk 3,00,000 lakh by selling it. Most of the potato growers of this region said that the scarcity of quality seeds, high prices of pesticides, fertilisers and other inputs were the major stumbling block in the cultivation of this vegetable.' Scarcity and high prices of these inputs always keep the potato growers in high tension', potato cultivator Quddus said.

Abu Taleb, deputy director (seed) of BADC in Rangpur, said the total demand of potato seeds in the five districts is about 2.40 lakh tonnes.But BADC can supply only 6 to 7 thousand tonnes of seeds, he added. Overwhelming majority of the potato growers either preserve seeds or buy it from different NGOs and organisations at high prices.

Abdur Rahim, deputy director of DAE in Rangpur, said the area under potato cultivation will increase sharply in the greater Rangpur district if the potato growers get quality seeds and other inputs easily and at reasonable prices.
Khwaja Ahmed, president, Potato Farmers' Association, said many of the small potato growers are compelled to take loans from money lenders at high rates of interest as they have no access to institutional loans and micro-credit from the NGOs.

Most of the profits of the small potato growers are eaten up by the loan sharks, he noted. He pointed out that preservation of the potato is the main headache of the growers. 25 cold storages in the district have a capacity to preserve only 1.54 lakh tonnes of potato, he added. He called upon the entrepreneurs to set up cold storage in accordance with the demand of the region.

He was of the view that establishment of 200 or more cold storages in the region would only ensure the preservation of potato but also create employment opportunity for many people of this monga prone region.
He also laid stress on the setting up of potato based industries. Many varieties of tasty foodstuffs could be produced in these industrial units to meet the demand of the consumers in and outside the country, he opined.

Lack of facilities hamper fruit export Saturday, June 02,2007 THE HINDU [4]

Krishnagiri: The vast potential for export of fresh fruits, especially mangoes from Krishnagiri, district comes as sweet news but lack of adequate infrastructure facilities is turning it sour. The district has the highest mango production in the State with nearly 40,000 hectares coming under it. The average yield per hectare has been estimated to be around nine tonnes per hectare with Tothapuri accounting for 70 per cent of the yield. Of the remaining 30 per cent Neelam accounts for about 15 per cent while the rest are choice varieties like Alphonsa, Banganapalli and Malgova.

"Realising the tremendous export potential a number of multinational companies have entered into joint ventures with farmers in the district for export of fresh fruits. Although Krishnagiri is a major mango producer in the State, export of fresh fruits is very negligible. Post-harvest methods and packing house facilities, a vital link in the supply chain, are yet to be developed in the State. "As a result, only a few traders with minimum facilities export mangoes to Gulf countries," says R. Durairaj of Mother India Farms.

Though the average fruit production has increased over the past few years only 40 per cent is fit for exports because of lack of post-harvest infrastructure. A few export-oriented units in Chittoor in Andhra Pradesh and Maharashtra alone possess irradiation and vapour free treatment and common effluent treatment plant. The major destination for export of fresh fruits is West Asia and the Far East. Processed products such as mango pulp, dried mango slice, juices are exported to Malaysia, Singapore, European Union, Africa and West Asia.

The Government should create a packing house facility with pre-cooling chambers and other infrastructure facilities on a larger scale to exploit the ample export potential in Krishnagiri, say fruit exporters. Department of horticulture should educate farmers on good agricultural practices and create a promotional campaign to increase productivity, say sources.

Divergent views on size of wheat crop Saturday, June 02,2007 DAWN [5]

LAHORE: Wheat trade stakeholders on Thursday expressed their reservations about official optimism on crop size this year, describing the prime minister's insistence on 23.5 million tons as wrong and misleading. Speaking to Dawn, they said simple statistics and market situation belied the official claim of having such a huge crop. Had it been so as claimed by Prime Minister Shaukat Aziz, the wheat price would have crashed. In fact, wheat price in the market had been rising ever since harvesting began, they said.

They said traditionally 30 per cent of the total crop came to the market as marketable surplus. If the crop size (23.5 million tons) was true, they said, at least 7.8 million tons should have come to the market for trading. Out of this quantity, the Punjab food department had been struggling to procure anything beyond 2.5 million tons. The Pakistan Agriculture Storage and Services Corporation (Passco) was nearing its target of 1.3 million tons and Sindh had bought only 550,000 tons of wheat. It all made only 4.35 million tons, still leaving 3.45 million tons of wheat missing, they claimed.

According to them, official statistics show export of just over 400,000 tons which included crop from the last season as well. Even if the entire quantity was taken out of the current crop, it still left a question mark over the availability of three million tons of wheat, they said.

"The millers, who procure around one million ton, have not purchased wheat this season because of high interest rates," said Chaudhry Salahuddin of the Pakistan Flour Mills Association. With the current interest rate of around 16 per cent, every bag would cost some Rs12 a month on interest head alone. Storage and fumigation charges would be in addition to those charges. The average wheat price in the open market remained well over Rs425 for 40kg. A four-month storage could have taken wheat price well over Rs445 for 40kg - a price at which the government released wheat. Thus, it did not make economic sense for the millers to procure wheat, he said.

During the season, they hardly procured wheat but for daily grinding, he said and added: "Some millers have stored some wheat, but it should not be more 25 per cent of their normal purchases." If the millers had procured some 250,000 tons of wheat, it still left 2.75 million ton missing.

Ministry of Food, Agriculture and Livestock Additional Secretary Raja Shahid said the government's claim that exporters, hoarders and millers had made these purchases was based on second survey of wheat carried out during the peak harvesting time. The first official survey had put the crop figure at 22.7 million tons and that was carried out in a limited area - Sindh and Bahawalpur (Punjab) - and did not present correct picture. But the second survey was taken during harvesting and was normally close to reality. The prime minister's claim was based on that survey, he insisted.

Not only traders, exporters and hoarders, but the farmers also had stored wheat this year because they received very good price of rice and had good money on them.

"All the provincial governments carry out this survey and the federal government only consolidates the figures. So the crop size claim is true and so are calculations made for marketable surplus. But missing wheat is lying with exporters, hoarders, farmers and millers. With suspension of export, the official procurement figures have started improving and the trend will continue. The government is determined to take its stocks to five million tons and it hopes to succeed soon."

Ibrahim Mughal of AgriForum alleged that the government was trying to hide the weaknesses, but the fact remained that the crop size was not as big as was being claimed. "There seems to be an overestimation of at least one million ton if not more. Had it been 23.5 million tons, the price could have crashed but it had not been the case. Wheat price remained up and kept increasing ever since fresh crop hit the market."

Another indicator was flour price which increased right in the middle of procurement and harvesting season. There might be some additional buying by exporters or storage by big farmers, but 2.7 million tons were too much to go missing between these two players, he said.

Mango festival begins today Tuesday, June 05,2007 DAWN [6]

MIRPURKHAS, June 4: The district government on Monday gave final touches to the arrangements for the 42nd annual national mango and summer fruits festival, which would run from June 5 to 7 at the Gama Stadium.

Arguably the biggest mango festival of the country it was initiated way back in 1965 when Fazal Ellahi Malik was the deputy commissioner of Tharparkar. Nawab of Kalabagh Malik Ameer Mohammad Khan, then governor of West Pakistan was the chief guest at the first festival.

In-charge of registration and exhibition committee Ghulamullah Jarwar told journalists that more than 500 stalls including 30 commercial stalls would be installed in the exhibition and 531 growers had so far obtained forms for participating in the festival.

He said that the committee had also invited local and foreign exporters to the festival which would showcase many varieties of mango and other summer fruits. Some commercial varieties like Sindhri, Dasehri, Saroli, Langra, Gulab Khas, Bombay Alfanso, Neelam, Chaunsa, Began Phalli, Collector, Anwar Ratol, Swonrika, Desi, Jagirdar, Anmol and Shahenshah would also be put on display, he said.

Management committee chairman Anwar Gondal said that he was in contact with Pakistan Horticulture Development and Export Promotion Bureau, agriculture businesses and foreign embassies to invite them to festival.

The district government had spent Rs1 million for the mega event. Other district departments had also put in their efforts to make the festival a success, he said.

A centrally air conditioned mango exhibition hall, auditorium and food technology laboratory except a Mali (gardener) Training Institute, which the chief minister had announced during the last festival were in final stages in the premises of Sindh Horticulture Research Institute.

District Nazim Dr Sughra Junejo who is president of the management committee will inaugurate the festival on June 5 in the Gama Stadium while chief minister will be the chief guest at the prize distribution ceremony on June 7.

Grain bowl states not most productive Thursday, June 07,2007 Business Standard [7]

NEW DELHI: States like Punjab, Haryana and Uttar Pradesh may account for very large shares of the total agriculture production in the country, but in terms of productivity, they are way below others like Himachal Pradesh, Jharkhand and, in some parameters, even Nagaland.

From a policy point of view, this would mean public investments in creating irrigation and other agriculture infrastructure in states like Jharkhand would deliver better results.

According to economics research firm Indicus Analytics' latest report India Agri-Gross District Domestic Product 2005-06, Wayanad district in Kerala has the highest productivity of land and delivered Rs 261,342 of crop per hectare in 2005-06.

This was in terms of the net cropped area (NCA). But since land is often cropped more than once a year, such estimates can also be done in terms of gross cropped area or GCA (if one hectare of land is double cropped, it is counted as two hectares of GCA) - in terms of GCA, surprisingly, Indicus' figures show that Tuensang in Nagaland is the topper, delivering Rs 173,272 worth of crop per hectare (ha) in 2005-06.

While Punjab accounts for a fifth of the country's wheat production (and 12 per cent of all foodgrain), district Moga with its highest production figures has a productivity of just Rs 51,499 per hectare (GCA) and is ranked 77th in the country.

Even more interesting, in terms of the net cropped area, is that Moga's productivity is a higher Rs 1,00,107, indicative of the fact that there are decreasing returns to scale in the state. Ludhiana, the next most productive district in the state, is ranked 79th in terms of GCA productivity (Rs 50,549) and 35th in terms of NCA productivity (Rs 99,174).

Ironically, Punjab has lower land productivity despite intensive use of water and fertilisers that are largely subsidised. While Moga's fertiliser consumption was 243 tonnes per ha in 2005-06, Wayanad in Kerala used 49 tonnes per ha, Chatra in Jharkhand only 67 tonnes per ha and Tuensang in Nagaland just 0.07 tonnes per ha.

The reason why states with higher productivity have much lower share in output has to do with the amount of land available for cultivation. So, while just 2.1 million hectares (GCA) of land was available for cultivation in Jharkhand (this is 1.1 per cent of the all India GCA), the figure was a much higher 7.8 million hectares (GCA) in Punjab (this is 4.2 per cent of the all India GCA).

Indeed, none of the wheat bowl states (Uttar Pradesh accounts for 34 per cent of wheat production and Haryana accounts for 13 per cent) figure on the list of the top 10 most productive districts.

Instead, in terms of GCA, four of the top 10 districts are from Nagaland, three from Jharkhand, and one each from Tamil Nadu, Kerala, and Assam. In terms of the net cropped area (NCA), Kerala and figure once, while West Bengal figures twice and Jharkhand thrice. West Bengal is the country's largest rice producer, accounting for 16 per cent of all-India production in 2004-05.

Apart from these differences across states, the productivity differences within states are equally large. Of the 23 districts in Andhra Pradesh, for instance, seven districts have a productivity that is 30 per cent less than the mean for the state - while Nellore had a land productivity (based on the GCA) of Rs 93,100 in 2005-06, this fell to as low as Rs 15,336 in the case of Anantapur.

In Maharashtra, where 9 of the 32 districts have a productivity lower than 30 per cent of the state's mean, productivity ranges between Rs 50,729 per ha in Kolhapur and just Rs 7,346 in Nagpur. Buxar district in Bihar with land productivity of Rs 43,196 fares better than the Nawanshahr district of Punjab (Rs 42,919).

Bean cultivation creates self-reliance Thursday, June 07,2007 NEW AGE [8]NEW AGE [9]

KURIGRAM: Cultivation of borboti (bean) has at last opened a new window of earning handsome profit for a poor farmer in Kurigram. Abdul Latif, 35, a poor farmer of village Shibram under Kurigram sadar upazila, tried in vain for the last several years to change his lot for the better by cultivating karalla, lalshak, pui sakh, kalmi shak and other
varieties of vegetable. Finally he took to borboti cultivation on an experimental basis. Latif's last venture was immensely successful. He cultivated borboti on 18 decimals of land this year.

He is now selling five to seven maunds (one maund: 37.4 kgs) of borboti every day at the rate of Tk 240 per maund. Latif told New Age that he invested Tk 6,000 only for its cultivation and he expects to earn of profit of at least Tk 40,000 this season. He has purchased a mobile phone with the profit money. The people of his village fondly call him ‘borboti latif' for his success in the cultivation of this vegetable. He attributed his success in harvesting huge quantity of borboti to good care, use of mainly compost fertilisers, use of quality seed, suitable soil and favourable weather.