Veg oil imports cross 10 million tonne-mark in 2011-12

India's vegetable oil imports surged by 17 per cent crossing 10 million tonnes mark in the 2011-12 marketing year that ended last month on strong domestic demand as per industry body Solvent Extractors Association of India (SEA).The country had imported a total of 8.7 million tonnes of vegetable oil comprising both edible and non-edible oils in the 2010-11 marketing year (November-October). The total import of edible oil during November 2011 to October 2012 is reported at 99.81 lakh tonnes, doubled in six years.

According to Solvent Extractors Association of India (SEA), "Local consumption increased by up to 8,00,000 tonnes due to a rise in per capita consumption and population growth. Lower price of vegetable oils also boosted consumption during the year." 

The overall import of vegetableoil has increased by 15.2 lakh tonnes (17.5%) during oil year 2011-12(Nov.-Oct) over the previous year. The main reasons for increase in import of vegetable oil are:
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i) The overall production of veg. oils was down by about 7.0 lakh tonnes due to reduced oilseed crop during 2011-12,

ii) Local consumption increased by about 7.5 to 8.0 lakh tonnes due to increase in per capita consumption (3%) and population growth (1.76%). Also lower price of veg. oils boost the consumption of veg. oils during the year.

iii) Closing stock of imported veg. oils as on 31st October increased by 2.60 lakh tonnes to 15.70 lakh tonnes.

iv) Malaysia and Indonesia pushed the palm oil export into India during the year to reduce their excessive stock burden.

v) Due to inverted export duty structure by Indonesia, import of RBD Palmolein substantially increased during the year.

vi) The overall consumption increased by about 12.5 lakh tonnes, leading to higher import during the year

Current stock of edible oils as on 1st November, 2012 at various ports is estimated at 920,000 tonnes (CPO 600,000 tonnes, RBD Palmolein 95,000 tonnes, Degummed Soybean Oil 125,000 tonnes, Crude Sunflower Oil 85,000 tonnes and Canola Rape Oil 15,000 tonnes) and about 650,000 tonnes in pipelines. Closing stock increased by 2.60 lakh tonnes at the end of the year and reported at 15.70 lakh tonnes.

During Oil Year 2011-12(Nov-Oct) Palm Oil import increased to 76.69 lakh tonnes compared to 65.47 lakh tonnes during the last year and the same time soft oil import also increased to 23.12 lakh tonnes, consisting of 10.79 lakh tonnes of soybean oil, 11.35 lakh tonnes of sunflower oil, 0.91 lakh tonnes of rape oil and 0.07 lakh tonnes of other soft oils compared to 18.24 lakh tonnes during the same period of last year.

Report of the Rangarajan Committee on Deregulation of Sugar Sector in India

Prime Minister had set up a committee under the chairmanship of Dr. C. Rangarajan, Chairman, Economic Advisory Council to the Prime Minister to look into all the issues relating to the deregulation of the sugar sector. The committee has completed its task, after several rounds of deliberations, consultations with stakeholders, and discussion with Chief Ministers of major sugar-producing states. The report was submitted to the Prime Minster on 10-10-2012. Following are the excerpts from the report:

1. A major recommendation of the committee relates to revising the existing arrangement for the price to be paid to sugarcane farmers, which suffers from problems of accumulation of arrears of cane dues in years of high price and low price for farmers in other years. The existing arrangement comprises a Fair and Remunerative Price (FRP) announced each year by the Centre, under the Sugarcane Control Order and on the advice of CACP, as the minimum price of sugarcane. However, many states in north India also announce a State Advised Price (SAP) under state legislation. Generally, the SAP is substantially higher than the FRP, and wherever SAP is declared, it is the ruling price. Instead of the present arrangement, the committee has proposed that at the time of cane supply, farmers be paid FRP as the minimum price, as at present. Further, subsequently, on a half-yearly basis, the state government concerned would announce the ex-mill prices of sugar and its by-products, and farmers would be entitled to a 70% share in the value of the sugar and by-products produced from the quantity of cane supplied by each farmer. Based on the share so computed, additional payment, net of FRP already paid, would then be made to the farmer. Since the sugar value estimate includes return on capital employed, this implies that farmers would also get a share of the profits. With such a system in operation, states should not declare an SAP.

2.The committee has also recommended dismantling of the levy obligation for sourcing PDS sugar at a price below the market price. States should be allowed henceforth to fix the issue price of PDS sugar, while the existing subsidy to states for PDS sugar transport and the difference between the levy price and the issue price would continue at the existing level, augmented by the current level of implicit subsidy on account of the difference between the levy price and the open market price. This will free the industry from the burden of a government welfare programme, and indirectly benefit both the farmer and the general consumer since the industry passes on the cost of levy mechanism to farmers and consumers.

3. The committee has recommended dispensing with the present mechanism of regulated release of non-levy sugar, as it imposes additional costs on factories on account of inventory accumulation.

4. The committee has recommended that cane area reservation ultimately be phased out and contracting between farmers and mills allowed for enabling theemergence of a competitive market for assured supply of cane, in the interest of farmers and economic efficiency. However, in case some states want to continue it for the time being, they should do so while ensuring that area reservation is done for at least three to five years at a time, so that industry has a stake in its development. Further, wherever and whenever a state discontinues area reservation, the Centre should remove the stipulation of a minimum distance between two mills.

5. On external trade, the committee has favoured a stable policy regime with modest tariff levels of 5% to 10% ordinarily, and dispensing with outright bans and quantitative restrictions. The committee has also recommended dispensing with the mandatory requirement of jute packaging. In respect of molasses, the committee favours free movement and dismantling of end-use based allocation quotas that are in vogue in several states, to enable creation of a national market and better prices for this valuable by-product as well as improved efficiency in its use.

Rice exports from India to be record 10 MT in 2011-12 year: USDA

According to the US Department of Agriculture (USDA), rice exports estimated for India are revised upward by two million tonnes to a record 10 million tonnes in the 2011-12 marketing year (October-September) after taking into account the official trade reports.

India re-entered the rice exports market in September 2011 after a four-year ban on exports of non-basmati rice.

It said that the country is estimated to have shipped 8.2 million tonnes of rice in the first nine months of the 2011-12 marketing year. Of which, 5.5 million tonnes was non-basmati rice and 2.7 million tonnes basmati rice.

“Assuming some spill-over of export shipments lying at Kakinada to October, rice exports during July-September are likely to exceed 1.8 million tons, which will take rice exports in 2011-12 to a record 10 million tonnes,” it added.

Quoting trade sources report, the USDA said that export of basmati and non-basmati rice have been steady during the months of July through September on strong export demand and relatively stable Indian rupee vis-is US dollars.

That apart, the USDA said, “Indian non-basmati rice for export remains very price competitive, with Indian common rice varieties ranging from $375—450 per tonne on freight on board (FOB) in the fourth week of September.”

The “unexpectedly” strong export demand for rice has resulted in port congestion at Kakinada in the east coast with reports of about 6,00,000 tonnes of rice currently lying in the port for export shipment, it noted.

Lower rainfall in July-August, particularly in coastal Gujarat and Andhra Pradesh, has also facilitated movement of rice for export, it added.

The report also said that the government is likely to continue with the current rice export policy due to surplus domestic supplies and abnormally large government foodgrain stocks.

The government rice stocks stood at 25.59 million tonnes as on September 1, nearly 2.9 million tonnes higher than the last year’s level.

India, the world’s largest rice grower, had produced a record 104.32 million tonnes of rice last year due to good monsoon.

Pulses and edible oils production may fall this year

Though rice, wheat and sugar production is expected to be at comfortable levels, production of pulses and edible oils may fall short of requirement this year, said K.V. Thomas, Union Minister of State for Consumer Affairs, Food and Public Distribution.

Talking to a group of journalists after inaugurating the Centenary Building of National Test House (Southern Region) yesterday, he said according to the assessment of the Meteorology Department and the Ministry of Agriculture, this year production of rice and wheat will be as good as last year.

Last year, production of paddy was to the tune of about 103 million tonnes and wheat was to the tune of 94 mt. More or less, the same quantity of rice and wheat is expected this year as well.

He said his department has discussed with various State Government officials for the procurement of rice and wheat. All arrangements have been made, including jute bags.

His Ministry has called for a meeting of the Food and Public Distribution Ministry officials of all states on October 29 and 30 in Delhi. All other procurement details will be worked out that time.

On storage capacities, he said five years ago there was a capacity to store 55 mt of foodgrains. Now, it has been expanded to 75 mt. By the end of this year, another 45 lakh tonne capacity will be added.

About 151 lakh tonnes of new capacity will be added by the end of 2013. Besides, two million tonnes of silos will also be constructed. “Hence, I don’t see any problem as far as the storage issue is concerned.”

Regarding sugar, he said last year the production was projected at 240 lakh tonnes. However, finally it ended up with 262 lakh tonnes, while the domestic need was only 220 lakh tonnes.

This year, the projection is at 230 lakh tonnes, which is quite sufficient. “We think, even this year, sugar production will surpass the projection and go up to 240-245 lakh tonnes,” he said.

But, he said his Ministry is “slightly worried” about the pulses and edible oils situation. Chances are that the production of pulses and edible oil come down this year. Even internationally, availability is slightly low.

With this in mind, he said, the Government has decided to continue with the supply of pulses and edible oils at subsidised price. This year, the subsidy on pulses will be Rs 20 a kg and on edible oils Rs 15 a litre. States are also allowed to import pulses and edible oil for distribution and it will be subsidised by the Central Government, he said.

Besides, the Central Government has decided to computerise the Public Distribution System end-to-end — from the Food Corporation of India godowns to state-run ration shops, every movement will be computerised. It is a 50:50 project, funded by the Central and respective State Governments.

Earlier there were 20 crore ration cards in the country. After the computerisation process began in some states, two crore cards were found to be bogus and eliminated from the system, he said. “PDS system has to be modernised. All the loopholes are to be plugged to strengthen the system, and make it more efficient,” he said.

Talking about the Food Security Bill, he said the Bill is being considered by the Parliament Standing Committee, and is likely to be passed. And, the Standing Committee is expected to submit its opinion in a month. “The Bill may be passed in the coming Winter Session,” he said.

Answering a question on wheat exports to Iran, he said the exports are going on under Open General Licence scheme. The central pool has 80.5 mt of wheat, while what is required for public distribution is only 55 mt. So, exports will continue till the need to stop it arises.

On food subsidy bill and whether the government plans any cut, he said the government is bound to give food items on subsidised rates. At present, he said, food subsidy alone accounts for Rs 88,000 crore, and it will continue. “There is nothing to be worried,” he said.

Indian Rice Exports Eased Global Prices

Agriculture Minister, Shri Sharad Pawar yesterday sought to highlight India’s role in stabilising global food supplies and moderating price rise.

The Minister was addressing the meeting of the ‘High Level Regional Consultation on Policies to Respond to High Food Prices in Asia and the Pacific Region’ organized by FAO at Bangkok.

From an importing nation India has now become a nation that exports wheat and rice, the Agriculture Minister said. “I am glad to inform that our efforts are showing excellent outcomes. From having to import about 6.5 million tonne of wheat in 2006 and 2007 we are now not only meeting the domestic demand but have also begun contributing to global supply through exports. Similarly, in case of rice, we faced problems in 2009 as our buffer stocks kept for supplies under public distribution system had dipped due to inadequate production. In the past twelve months, however, due to record production over the years, we have already exported about 8 million tonne of rice. The exports from India has not only stabilized the global supplies but have helped in easing the ruling high prices to affordable levels.”

Stating that increasing agricultural production and diversifying the production base has become the need of the hour, he said, “India has been following since 2007 the strategy of agricultural development by widening the production base and focusing attention to high potential low producing areas through intensive promotion of technologies in order to bridge the yield gaps.”

Laying stress on the global food economy in domestic context he went on to state “In order to better understand the global food economy in domestic context we in India have initiated a study project on developing Agricultural Outlook where situation analysis and forecasts are prepared periodically for the short and the medium terms. We are grateful to FAO for supporting this initiative with technical assistance on international exposure and capacity building. We believe that informed decisions based on sound analysis help develop better understanding of food situation internationally and locally.”

Informing the various international organizations and policy experts gathered at the consultation meeting he informed: “India is actively involved in the evolution of these mechanisms, for shaping the information system for a sound real time analysis of the developing situation on supply, stocks, trade, demand and prices of food grains in different parts of the world. We believe that credible information generated by the system would be a valuable input for any policy initiative at the country level should any of the supply, price or trade shocks cause disruption in food availability. Better information is the key to being better prepared.”

He further said, “South Asian Countries have started a SAARC Food Bank to service the needs of the member countries in case of any supply shock as a result of calamities or otherwise. There is need to strengthen such regional cooperation instruments to respond to the developing global food crisis. It is our collective responsibility to reach out to those vulnerable populations whose access to food is compromised due to high food prices.”

CACP favours MSP hike for rabi pulses, oilseeds

The Commission for Agricultural Costs and Prices (CACP) has recommended to the Government a hike in minimum support price for winter-sown pulses and oilseeds by up to Rs 500 a quintal.

The Agriculture Ministry will move a Cabinet note on this after seeking comments from the ministries concerned and the state governments.

A senior government official said the CACP has not recommended raising the minimum support price (MSP) of wheat and barley for the 2013-14 rabi marketing season (April-March) in view of excess supply in the country following record production last year.

It suggested keeping the MSP of wheat and barley unchanged at Rs 1,285 per quintal and Rs 980 per quintal, respectively.

The Commission has recommended no increase in wheat MSP because the wholesale prices of the grain are currently ruling below support price at Rs 1,160 per quintal.

But the production cost was around Rs 1,066 per quintal in 2012-13. A similar trend was seen in barley, the official said.

“However, the CACP has suggested the Government to announce 10 per cent bonus to wheat and barley farmers if exports are banned next year,” the official said.

To boost the production of pulses and oilseeds, the CACP has proposed increase in the MSP of gram by Rs 200 to Rs 3,000 a quintal and masur dal by Rs 100 to Rs 2,900 a quintal for 2012-13 rabi season.

Similarly for oilseeds, the Commission has recommended increase in the support price of mustard seed by Rs 500 to Rs 3,000 a quintal and safflower by Rs 300 to Rs 2,800 per quintal.

The reasons given were that the cost of production of pulses and oilseeds has increased substantially over the last few years and the increase in support price will encourage farmers to grow these crops, the official said.

While sowing in rabi (winter) season starts from October, the harvesting of crops is undertaken during April-March.

The Government aims to achieve foodgrains production of 130 million tonnes during the 2012-13 rabi season. Of this, 86 mt would be wheat, 12.5 mt of pulses, and 15 mt of rice.
Source: Hindubusinessline

117.18 MT Food grain Production Estimated in the Kharif Season

As per the First Advance Estimates of production of Kharif crops, 117.18 million tonnes (MT) food grains is likely to be produced in the current season.

These production estimates are higher than the average of the first advance estimates of the last five years (113 MT). Final estimates are generally 5 to 10% higher than the first estimates. Even as compared to the average of final estimates (118.86 MT), the current estimates are lower by 1.68 million tonnes or about 1.4% despite deficient and late rains this year.

These estimates were released by Agriculture Minister, Sharad Pawar today. Speaking on the occasion, the Minister said, the estimates were higher than expectations considering the truant monsoon rains.

The assessment of production of different crops is based on the feedback received from States and validated with information available from other sources.

The estimated production of major crops during Kharif 2012-13 is as under:

Food grains ‒ 117.18 million tonnes
Rice ‒ 85.59 million tonnes
Coarse Cereals ‒ 26.33 million tonnes
Maize ‒ 14.89 million tonnes
Pulses ‒ 5.26 million tonnes
Tur ‒ 2.78 million tonnes
Urad ‒ 1.14 million tonnes
Oilseeds ‒ 18.78 million tonnes
Soyabean ‒ 12.62 million tonnes
Groundnut ‒ 3.82 million tonnes
Castorseed ‒ 1.40 million tonnes
Cotton ‒ 33.40 million bales (of 170 kg each)
Sugarcane ‒ 335.33 million tonnes

As per 1st advance estimates, production of Rice estimated at 85.59 million tonnes, though lower as compared to last year’s record Kharif production, is higher than the average production of 83.17 million tonnes.

The estimated production of Coarse Cereals, is however, lower than average production by 3.65 million tonnes mainly on account of loss in area coverage under Bajra and Maize in the States of Gujarat, Haryana, Maharashtra, Karnataka and Rajasthan.

The estimated production of Kharif Pulses is also lower than the average production by 0.45 million tonnes mainly due to shortfall in Moong and other Kharif Pulses.

Though there is a significant increase in estimated production of soya bean, yet due to decline in the production of Groundnut, total production of Kharif Oilseeds estimated at 18.78 million tonnes is lower than the average production by 0.61 million tonnes.

The current year’s production of Sugarcane estimated at 335.33 million tonnes is higher by 10.22 million tonnes as compared to average production.

The estimated production of Cotton at 33.40 million bales (of 170 kg each) has registered an increase of 5.32 million bales as compared to average cotton production of 28.08 million bales. Production of Jute is also estimated to be marginally higher than the average production.

Sugar output to surpass demand

The country’s sugar production is set to exceed domestic consumption for the third consecutive year in 2012-13 season starting October. This is despite a lower crop in Maharashtra and Karnataka, where dry spells triggered by poor rain in early part of the monsoon, hurt the standing cane crop.

The loss in these two States, which contributed to around 45 per cent of the country’s total output, is largely made up by Uttar Pradesh, where farmers – buoyed by higher returns last year – have planted cane on an additional area of 2.2 lakh hectares.

Moreover, the sharp decline in cane arrears has aided the trend. The overall cane acreage is higher by 4.5 per cent at 52.88 lakh hectares than last year’s 50.63 lakh hectares. Though the rains have recovered in late August, the damage triggered by dry spells is unlikely to be neutralized.

Despite a decline in output, the industry expects the surplus for exports to be around 1.5 million tonnes against 4 million tonnes last year. The higher surplus coupled with rise in output kept Indian exporters active in the global markets, with shipments touching about 3.5 million during 2011-12 season.

The opening balance at the beginning of 2012-13 season is pegged at 6 million tonnes, marginally lower than last year’s 5.5 million tonnes. The third successive year, where production has been higher than consumption, points towards a stabilizing trend in the sugar industry.

The bullish trend in sugar prices, which the millers are comfortable with should possibly help them break the cycle. The uncertainty in Maharashtra crop sparked a rally in prices, which are now in the Rs 33-35 a kg at the ex-factory level, against Rs 28-29 the previous year. The prices are expected to remain firm going forward on strong demand, which is growing over 2.2 per cent annually.

The consumption in 2011-12 is estimated at 22 million tonnes. The firm trend should augur well for millers helping them pare their losses. In Maharashtra, the output according to ISMA’s estimates is at 6.5 million tonnes, down from 8.95 million tonnes last year.

The dry spells did force the farmers to divert cane to fodder and ISMA estimates that up to 3.5 million tonnes cane was diverted to fodder since May. The cane area reported by the State stood at 9.04 lakh hectares in August (10.25 lakh hectares).

In Karnataka, ISMA estimates a 21 per cent decline in output at 3 million tonnes (3.8 million tonnes). The cane area in the State has dropped by 2 per cent and the sugar recovery will be hit as scanty rain has affected the crop.
However, production in Uttar Pradesh is expected to be 13.27 per cent higher at 7.9 million tonnes on good rains helping yields and recovery.

UP produced 6.97 lakh tonnes of the sweetener last year. Meanwhile, in Andhra Pradesh, sugarcane area will be 10-20 per cent lower than the normal area of 2 lakh hectares. Multiple factors have led to this situation.

While farmers in some areas shifted to maize and soya, those in the delta area feel that the cane coverage could be 75 per cent of the normal area.
Source: Hindu Business line

All India Sowing Report

According to the latest data released by the Ministry of Agriculture, rice has been sown in 356.07 lakh hectares, as compared to 347.10 lakh hectares, a week back. Normal area under rice for this week is 344.69 lakh hectares. The cropped areas of major Kharif crops as 07th September 2012 as compared to last week and the normal area for this week are as follows:

India's foodgrain production hits record 250 million tonnes

Foodgrains production in India is estimated to have reached a record 250.42 million tonnes in 2011-12, up 18.35 million tonnes compared to 232.07 million tonnes in the previous year.

Wheat production is expected to have reached a record 88.31 million tonnes, pulses 17.28 million tonnes and cotton 34.09 million bales (of 170 kg. each) this year, as per second advance estimates of crop production released on Friday.

Total production of rice in the country is estimated at 102.75 million tones, which is an all-time record.

The record foodgrain production, resulting from the significant increases in the production of rice and wheat, has helped production levels to breach the target of 245 million tonnes fixed for the year.

The estimated production of foodgrains for the year is also higher by 5.64 million tonnes compared to the record foodgrain production of 244.78 million tonnes achieved last year.

Production of pulses and oilseeds is estimated at 17.28 million tonnes and 30.53 million tonnes, respectively.

Production of cotton, estimated at 34.09 million bales (of 170 kg bales), is also a new record.

Sugarcane production is estimated at 347.87 million tonnes, which is higher by 5.09 million tonnes compared to last year.

Minimum Supprot Price (MSP) for kharif crops for 2010-11

MSP for pulses has been raised substantially over the MSP for the last season. This is expected to encourage farmers to invest in pulses production. Among other crops, MSP for paddy has been raised by Rs. 50 per quintal.

India's food production expected to exceed the target in 2011-12

Agriculture and Food Processing Industries Minister, Shri Sharad Pawar, has expressed the hope that with record production in kharif and rabi seasons this year, the food production will exceed the target in 2011-12.

The Minister also stated that strategies for rejuvenating agriculture sector have been working well and the targeted 4% growth in agriculture sector would be achieved.

Shri Pawar said this in the Economic Editors’ Conference on 19th October 2011.

The following is the text of the Minister’s address:

“I am very happy to participate in this edition of Economic Editors’ Conference. It is a great opportunity for sharing with you our initiatives, successes and challenges in the field of agriculture and allied sectors. Your valued feedback will be important input to improve implementation of our existing schemes/programmes and to formulate future strategies. My office has already circulated the background note. I, therefore, have decided to limit myself to only the salient and important issues.

You are all aware that foodgrain production has reached a record level of 241.6 million tonne in 2010-11. We have also achieved highest ever production of wheat, pulses, oil seeds and cotton. Overall farm output has also achieved an impressive growth rate of 7.5% during the last quarter of 2010-11 thus helping Agriculture GDP to register a growth of 6.6 % during the year. This also makes average growth rate in current plan to be 3.2% which we could achieve under some of the worst climatic conditions like drought, un-seasonal rains, flood, frost etc. in recent past.

Monsoon 2011 has been very encouraging and our production outlook too. As per 1st Advance Estimates, Kharif 2011 production of Rice in the country is estimated at 87.10 million tonnes which will be an all time high. We are also expecting record productions in Cotton and Oilseeds this year. We hope to see a substantial expansion in crop area and to achieving record production in coming Rabi season too. We are confident that we will be able to surpass our own production record set last year.

All these give me great optimism that strategies for rejuvenating agriculture sector have been working well and we will now be able to achieve targeted 4% growth.

While the results are encouraging, we also have challenges ahead. Demand of food grain will grow rapidly in next few decades not only due to growing population but also due to rise in per capita income and various governmental interventions to ensure food and nutritional security to less advantaged people.

We have to produce more for ensuring food and nutritional security of our nation. But, this will be achieved with more competitive demand on land and water, progressive fragmentation of land holdings, degrading natural resource base and emerging concerns of climate change.

We know that increase in agricultural production would have to emanate only by enhancement in farm productivity from existing cultivated area. We have concentrated on enhancing production and productivity both by bringing in high yielding varieties, hybrids and efficient farm equipments. For this we need more investments in this sector.

We have, over last few years, been able to ensure higher investments both private and public. Gross Capital Formation (GCF) as percentage of agricultural GDP clocked 18.7% during first three years of current plan, which is significantly higher compared to 12.5% during whole of tenth plan. Simultaneously, we have been able to enhance Plan outlay substantially to reach Rs. 21, 530 crore in 2011-12.

Rashtriya Krishi Vikas Yojana (RKVY), launched in August 2007, has become the principal instrument for increasing the States’ investment in this sector. Outlay under RKVY has been substantially increased to Rs. 7,810 crore in 2011-12, which now includes several commodity specific measures namely ‘Bringing Green Revolution to the Eastern Region of India”, ‘Special Initiative for Pulses and Oilseeds’, ‘Accelerating Fodder production’, ‘Creating Vegetable Clusters’, ‘Nutri-Cereals’, ‘Oil Palm development’ etc.

Alongwith RKVY, National Food Security Mission (NFSM) has also emerged as another path breaking intervention. I take pride to mention that NFSM has already accomplished its target of producing additional production of 20 million tons within 4 years of its implementation.

With successful implementation of MGNREGA and other anti poverty programme of the Government, there is now pressure on availability of farm labour. While we are attempting to innovatively utilise MGNREGA for augmenting activities that directly add to farm productivity; for compensating scarcity of labour, I am proposing a large programme for agricultural mechanisation during 12th Plan.

Agriculture Credit plays an important role in improving agricultural production, productivity and mitigating both climatic and non-climatic risks. Our concerted effort has seen surpassing credit flow target in 2010-11 by about 19%. We are hopeful to surpass target in this year too. Similarly, price signals are an extremely effective tool for increasing agricultural production and productivity. Government has been upwardly revising MSP of major crops such as paddy, wheat and pulses at regular interval for incentivising farmers to produce more.

We all know that Animal Husbandry, Dairying and Fisheries plays significant role in supplementing incomes and generating gainful employment in the rural areas, particularly among the landless labourers, small and marginal farmers and women. It also acts as an insurance against vagaries of nature like drought, famine and other natural calamities. For sustaining growth and enhancing productivity in this sector, ICAR has initiated several special efforts namely establishment of elite herds of important buffalo breeds, diagnostic kit ‘DIVA’ for differentiating Foot and Mouth Disease Infected and vaccinated animals, characterisation of new goat breeds etc.

As a result, India continues to be the largest producer of milk in the World. Small, marginal farmers and landless labourers are majority producers of milk in India. To ensure a steady market and remunerative prices for them, about 14.08 million farmers have been brought under the ambit of about 1.35 lakhs village level dairy cooperative societies in the country.

Food processing industry is now increasingly being seen as a potential source for driving rural economy towards prosperity by brining increased farm gate prices and reduced wastages. During current plan, we are giving special emphasis on developing Infrastructure for food processing. So far projects for 15 Mega Food Parks, 49 Cold Chain and 10 Abattoir are already approved by the Ministry. Besides special focus is being given for capacity building, R&D, quality assurance and skill development with selective but active collaboration with established foreign universities etc. I take pride to inform you that Indian Institute of Crop Processing Technology (IICPT) has been fully functional for the last three years and National Institute for Food Technology and Entrepreneurship Management (NIFTEM) is coming up fast on the outskirts of Delhi at Kundli.

With a large diversified production base, coupled with modern technology and low manpower cost, the Indian food processing sector is poised for growth.

Future of Indian agriculture would be technology driven; whether be in Biotechnology or efficient mechanisation or use of remote sensing tools. ICAR through National Initiatives on Climate Resilient Agriculture (NICRA) has been creating synergy with other ongoing research projects. Its National Agricultural Innovation Project (NAIP) is helping to foster and strengthen partnerships with stakeholders’ including in Private Sector for ensuring sustainable development of Indian agriculture.

ICAR is gradually becoming a one stop destination for innovative agro-industry and entrepreneurship. AGRINDIA has been established for promoting spread and commercialisation of R&D Outcome, protecting Intellectual Property Rights (IPR) and forging partnership with Industries. A range of other business incubation and promotion efforts are helping rural youths, budding entrepreneurs and Industries.

I would like to conclude by saying that for the whole world and for developing nations in particular, development in its truest sense can only take place when economic growth fosters social equity. For this to happen we have to keep agriculture in the forefront of our nation’s developmental effort.”

Agriculture Minister Calls for Reforms in Agriculture Marketing

Minister of Agriculture and Food Processing Industries Shri Sharad Pawar has called for reforms in agricultural marketing. He said, the prevailing system which comprises regulated markets set up by the States under APMC Act has become a constraint on farmers’ ability to market their produce at the best possible prices. Shri Pawar was addressing the Parliamentary Consultative Committee attached to his Ministry here today.

The Minister said, large number of intermediaries and large transaction costs, such as market fee, entry tax make marketing reforms a priority. He said, “ We continue to pursue this with States and have achieved some success. Our model APMC Act of 2003 has been adopted, to varying degrees so far by 17 States and nine States have also framed the Rules . There is no APMC Act in Bihar, Kerala, Manipur, Andaman & Nicobar Islands, Dadra, & Nagar Havel, Daman & Diu and Lakshadweep.”

Shri Pawar said, “Farmers, specially small and marginal are unable to take advantage of the market system and often have to resort to distress sale. Access to safe and scientific storage facility, coupled with efficient credit is the solution.” The Minister said that Centre endeavours to provide this through Grameen Bhandarn Yojana. Since inception of the scheme in 2001, over 25 000 godowns representing incremental capacity of about 290 lakh MT with a total investment of Rs. 800 crore have been sanctioned.

Under the Grameen Bhandaran Yojana subsidy is being provided @ 25% of the project cost to all categories of farmers, Agriculture graduates, cooperatives & CWC/SWCs. All other categories of individuals companies and corporations are being given subsidy @ 15% of the project cost. In case of NE States, hilly areas and SC/ST entrepreneurs, their cooperatives and women farmers, the subsidy is 33.33%.

This scheme has now been further rationalized, on the basis of feedback and suggestions received from the states. Capital Cost norms have been revised to more realistic levels: from Rs. 2500/- to Rs. 3500/- per tonne in respect of godowns of capacity up to 1000 tonnes and from Rs. 1875 to Rs. 3000 per tonne for godwons exceeding 1000 tonne capacity. For the North Eastern and hilly States, the norm permissible is now Rs. 4000/- per tonne. Similarly, the scheme which hitherto could take up schemes of maximum capacity of 10,000 tonnes can now go upto 30,000 tonnes (25,000 for NE and hilly States).

Madhya Pradesh To Witness Strong Rise In Rabi Sowing In The Current Year

The total sowing acreage of rabi crop in Madhya Pradesh is set gather strong gains in the current season due to heavy rainfall in the state during the monsoon season.

As per latest estimates of State Agriculture Board, the rabi sowing area is expected to rise by eight lakh hectares to around 104 lakh hectares. The total sowing area of all food grains will rise from 46.53 lakh hectares to 50.50 lakh hectares, pulses from 40 lakh hectares to 42.33 lakh hectares and oilseeds from 8.70 lakh hectares to 10.68 lakh hectares.

According to Weather Department, 25 districts of the state have received above average and the rest of 25 districts average rainfall this year. The average rainfall of the state is 938.4 mm against which 1134 mm rains were registered, which is 21 percent more than the average.

Due to sturdy rainfall, water level in wells, reservoirs, rivulets and rivers has also risen. More crops are expected to be sown due to dampness sustained by the soil also. According to departmental assessments, bumper rise will be registered in sowing and production, if the conditions remain the same.

India's Oil Meals Exports Rise By 48% During April To Sept 2011

The Solvent Extractors’ Association of India has just compiled the export data for export of oilmeals for the month of September 2011 and reported at 394,877 tonnes compared to 354,252 tonnes in September 2010. The export of oilmeals during April-September 2011 is reported at 2,034,117 tonnes compared to 1,376,209 tonnes during the same period of last year i.e. up by 48%

During current oil year 2010-11 (Nov.’10 to Sept. ’11) export of oilmeals increased due to:

a) Sharp increased in oilseeds production during current year (2010-11) compared to previous year (2009-10).
b) Increased availability of oilseeds lead to higher crushing and production of oil and meals for domestic and export and
c) Good crushing parity due to high price of oils and export demand for oilmeals. It may be noted during 2009-10, due to lower production of oilseeds, coupled with disparity & lower demand, the export was down to lowest in last few years.

Oilmeal import by Japan from India during April-September 2011 was reported at 498,249 tonnes compared to 388,778 tonnes last year consisting of 485,055 tonnes of soybean meal and 13,194 tonnes of rapeseed meal. Vietnam imported 249,123 tonnes compared to 224,342 tonnes last year consisting of 155,442 tonnes of soybean meal, 17,666 tonnes of rapeseed meal and entire quantity of 76,015 tonnes of rice bran extraction. China imported 216,749 tonnes compared to 182,007 tonnes, consisting 209,465 tonnes of rapeseed meal, 2,288 tonnes of groundnut meal and 4,996 tonnes of soybean meal. South Korea imported 338,746 tonnes compared to 181,803 tonnes of last year, consisting of 144,374 tonnes of castor seed meal, 192,026 tonnes of rapeseed meal and 2,346 tonnes of soybean meal. Europe and other countries have imported about 49,833 tonnes compared to 10,571 tonnes of last year.

Chana market crashes

Chana spot market crashed in the last few days due to weak market sentiments caused by the imposition of stock holding limit on Chana. Similarly, the futures prices too nosedived after the exchanges were asked by the Forward Markets Commission (FMC) to impose a special margin of 10% on long side of all running contracts of chana from 30th September 2011.

Earlier, limited stocks available in the market and disappointing first advance estimates of pulses production by the agriculture ministry encouraged traders to take huge long positions in the futures market. Chana prices in the spot market increased by almost Rs.500 a quintal in the September month to touch a high of Rs.3700 a quintal (Source: NCDEX September spot price). Weak supply in major chana producing states amid strong demand ahead of festivals supported prices at higher levels. Prices of pulses across the board remained steady on account of rising demand in the domestic market and slow arrivals from farmers and traders to the wholesale markets.

As per the first advance estimates of production released by the Ministry of Agriculture, chana production (Kharif) is estimated at 6.43 million tonnes against 7.12 million tonnes in 2010-11, a decline of almost 10 per cent. Production of tur (pigeon peas/arhar) is projected to be at last year’s level of around 2.9 million tonnes, while urad (black gram) and moong (green grams) would see a shortfall in production.

According to the weather watch report from the Ministry of Agriculture, the total sowing acreage of kharif pulses as on 30th September 2011 stood at 110.14 lakh hectares as against 121 lakh hectares that were reported last year in the same period. This was mainly on account of shift in crop area of pulses towards oilseeds and cotton in major producing states such as Maharashtra and Andhra Pradesh.

Globally production of chana is likely to decline by almost 6% in 2011 due to poor crop harvesting expected in Australia and Canada. The Australian Pulses Traders Association has mentioned that he total production of Australia’s desi chickpeas is likely to decline by almost 10-12% to 3.05 lakh tonnes despite strong sowing acreage of almost 5.02 lakh hectares reported in 2011. This will be on account of poor productivity of chickpeas crop.

Similarly in Canada, Agriculture and Agri - Food of Canada has mentioned in its latest report that in 2011-12, pulses area is forecast to fall by 48% from 2010-11. This is much lower than originally intended because of excessive moisture in many growing areas. Production is expected to fall sharply to 65,000 tonnes, the lowest since 2004-05. Supply is forecast to be lower than last year and is expected to limit exports by 90% to 50,000 tonnes in the international market.
All the above mentioned factors had been supporting chana prices at higher levels. However, in the last two-three days, china prices in the spot as well as futures crashed as the commodity exchanges imposed a 10% long margin on chana contracts.

Government’s announcement to have a contingency plan for additional production of pulses in Rabi 2011-12 to overcome losses of Kharif pulses also supported the bearish market sentiments. Alleged rumors of government taking an extreme step to control rising prices of essential commodities (read inflation) by banning trading in futures (or some commodities) also created a fear in the market. Hence, market participants in the futures market started liquidating their positions to cover their losses (or book profits) to maintain the margin limit on the exchange.

The government of Rajasthan too, acted by imposing a stock limit on chana separately from the other pulses. Henceforth, total pulses stock limits shall be 550 tonnes instead of 500 tonnes for wholesalers (per license). For chana, the stock limit has been fixed at 250 tonnes and for other pulses it is 300 tonnes.

The Central Government has set a target for itself to achieve an additional production of 2.78 million tonnes pulses during the ensuing Rabi season through area expansion and productivity enhancement.

Disclaimer:The views expressed are my personal and all the information contained herein is based upon information available in the public domain.

All India Sowing Report-Increase in acreage under rice and oilseeds

As per the latest data releaseds by the Minstry of Agriculture, rice has been sown in 383.69 lakh hectares as on 30 September 2011. It represents an increase of 33.26 lakh hectares over last year’s acreage on this date. Higher area coverage has been reported from West Bengal, Bihar, Jharkhand, Uttar Pradesh, Madhya Pradesh and Tamil Nadu.

Oilseeds have been sown in 179.59 lakh hectares, 4.79 lakh hectares more than the last year. Higher area coverage has been reported from Maharashtra, Madhya Pradesh, Uttar Pradesh and Rajasthan.

However, there has been a sharp decline in pulses area. The area under pulses has declined sharply by around 9 per cent and stood at 110.14 lakh hectares as against 121 lakh hectares reported in the same period last year.

Coarse cereals have been sown in 200.19 lakh hectares. Higher area coverage has been reported from Madhya Pradesh, Andhra Pradesh, Assam and Jammu & Kashmir.

Cotton has been sown in 120.21 lakh hectares. Higher area coverage has been reported from Gujarat, Rajasthan, Maharashtra and Haryana.

All India Sowing Report

The lastest data released by the Agriculture Ministry shows that area under rice and oilseeds have increased as compared to last year. However, area under pulses has shown a sharp decline. The data shows that rice has been sown in 381.32 lakh hectare as 23rd September 2011. It represents an increase of 33.54 lakh hectare over last year’s acreage on this date. This was mainly on account of higher area coverage reported from West Bengal, Bihar, Jharkhand, Uttar Pradesh, Madhya Pradesh and Tamil Nadu.

Oilseeds have been sown in 178.60 lakh hectare, 5.58 lakh hectare more than last year. Higher area coverage has been reported in Maharashtra, Madhya Pradesh, Rajasthan and Uttar Pradesh.

Coarse cereals have been sown in 200.19 lakh hectare. Higher area coverage has been reported from Andhra Pradesh, Madhya Pradesh, Jharkhand and Jammu & Kashmir.

Cotton has been sown in 120.03 lakh hectare. Higher area coverage has been reported from Gujarat, Rajasthan, Maharashtra, Haryana , Madhya Pradesh and Andhra Pradesh.

First Advance Estimates of Crop Production 2011-12

The First Advance Estimates of production of major crops grown in the country (India) in kharif season has been released and the total foodgrains production is likely to be 123.88 million tonnes (MT) as compared to 120.20 MT in 2010-11 (fourth advance estimates), an increase of about 3.68 MT over the last estimates.

Rice production in the country in the kharif season is likely to be 87.10 million tonnes as compared to 80.65 million tonnes in 2010-11 kharif. Production of kharif pulses is expected to be 6.43 million tonnes as against 7.12 million tonnes last kharif.

Oilseeds production in the kharif season is likely to be 20.89 million tonnes as against 20.85 million tonnes last season. Cotton production is estimated to be 36.10 million bales as against 33.43 million bales last season. Sugarcane production is estimated to be 342.20 million tonnes as against 339.17 million tonnes in 2010-11.

Details of the estimates of crop production are as follows: -

Rains not to affect wheat production

Allaying fears that the recent rains may damage wheat crop, the government today said the recent downpours in North India will not affect productivity and output of the staple food-grain. "Recent rains will not adversely impact wheat productivity and production, "Agriculture Commissioner Gurbachan Singh told reporters.

He, however, said the cool weather that creates moisture in the crop (due to rains triggered by western disturbances) may further delay arrival of the wheat crop in the mandis. Wheat arrival in the mandis has already been delayed by two weeks in the major producing regions.

Giving reasons for the delay, he said wheat harvested by the farmers contain moisture because of rains and they have to be dried before moving them to the mandis. Western disturbances are common during this time of the year.

"If western disturbances are followed by too much of rains, hailstorm and winds, then it is a matter of concern," he added.

Western disturbances is continuing and it is more this year as compared to the last year, he said. Singh said 60 per cent of the wheat crops in Punjab and Haryana are yet to be harvested. He said wheat yields are expected to be better than last year as the cool weather is contributing to better productivity of the produce. Wheat harvesting which started from April one is yet to pick up.

The Commissioner said that there may not be a problem in harvesting as Meteorological Department has forecast clear weather in the next 15 days. The country is all set to witness a bumper wheat production of 84.27 million tonnes in the current crop year (July-June).