Agrinews – 07-04-08

HEADLINES:

Mail Today

New Delhi, 5 April 2008

HIGHER prices of vegetables, edible oils and some manufactured goods pushed the countrys annual rate of inflation to a three- year high of seven per cent for the week ended March 22, according to official figures released on Friday. The inflation rate, based on the wholesale price index ( WPI), rose by 0.32 per cent from 6.68 per cent in the previous week. During the week, prices of vegetables went up by four per cent, gram by three per cent, masur by two per cent and urad and moong by one per cent each and cereals by 0.2 per cent. Edible oils continued to burden household budgets as the price of sunflower oil increased by nine per cent and mustard oil by four per cent. Butter was costlier by one per cent. At the retail level, price of refined sunflower oil shot up by a whopping 18 per cent over the last one month. However, there was some consolation for non- vegetarians as the prices of eggs, meat and fish dropped by 0.8 per cent. Similarly, prices of condiments and spices too declined by two per cent. The rise in retail prices is even higher. Retail prices of gram, sugar, mustard oil, vanaspati and onion have increased by up to 11 per cent in the national capital in last one month. The prices of gram rose by 2.7 per cent to Rs 38 per kg on April 1 as against Rs 37 a month earlier, according to the data provided by the department of consumer affairs. Sugar prices increased by nearly 6 per cent at Rs 18 per kg, mustard oil by 2.6 per cent to Rs 77 per kg, vanaspati by 10.14 per cent at Rs 76 per kg and onion by 11.11 per cent at Rs 10 per kg. As part of the measures put in place to bring down the inflation rate, government withdrew incentives on export of Basmati rice so that domestic availability goes up. The government has already banned the export of non- Basmati varieties of rice. The Cabinet committee on prices had earlier this week revised the export bar by increasing the minimum price to $ 1,200 per tonne of basmati rice. The price of average quality basmati rice has gone by 50 per cent in the last six to eight months. In the minerals category, iron ore prices rose by as much as 46 per cent from a year ago. This showed that steel manufacturers who have been asked to reduce prices do have a cause for complaint. The prices of steel ingots went up by 57 per cent during the week. The government had, on Thursday, forced steel firms to roll back price increases and the effect of this move is expected to show up in the coming weeks. Economists are of the view that with the inflation rate continuing to go up, the Reserve Bank of India ( RBI) may be forced to go in for a tight money policy which would lead to a hardening of interest rates. This, in turn, would also tend to bring down the growth rate of the economy as the demand for goods and services drops. I think things are spinning out of control, at least in the short term, said Abheek Barua, chief economist at HDFC Bank.

Business Line

New Delhi, 5 April 2008

Thailand sells fragrant rice for record price

Thai exporters have sold premium grade fragrant rice to Hong Kong importers at historic high prices above $1,000 a tonne, a senior Thai trader said on Friday. Thai 100 per cent parboiled rice was sold at a record $880/tonne to African importers for May shipment, Ms Korbsook Iamsuri, Secretary-General of the Thai Rice Exporters Association, told Reuters. ”This has never happened before in Thai rice export history. Buyers are buying despite very high prices as they fear that supply would get even tighter,” she said. Thai 100 fragrant rice was quoted at $990/tonne and 100 per cent parboiled rice was at $790/tonne this week. The prices have risen more than 40 per cent this year. The rising prices induced Thai millers to hoard rice in hope of big profits when prices peak, forcing Thai exporters to quote much higher prices to avoid losses when purchasing for loading, traders said. ”There is less rice left in the market at very expensive prices, so exporters have to sell only in small lots,” MS Korbsook said.

The Statesman

New Delhi, 5 April 2008

Nabard credit in state rises

The West Bengal regional office of the National Bank for Rural and Agricultural Development (Nabard) had sanctioned loans amounting to Rs 583.89 crore under the rural infrastructure development fund (RIDF) in 2007-08, as against the usual allocation of Rs 570 crore. The total financial assistance provided by Nabard, by way of refinance to banks and direct financing to the state government, amounted to Rs 1,309 crore, an increase of 12 per cent from the previous year.

Business Line

New Delhi, 5 April 2008

Hind Unilever will source agri-products from farmers

Hindustan Unilever Ltd will be sourcing farm products for its leading foods brand Kisan from farmers across rural India, as part of its social initiatives to mark the completion of 75 years of its corporate existence in India. Addressing shareholders at the companys 75th annual general meeting here on Friday, Mr. Harish Manwani, Chairman, said the company was initiating several programmes to enhance livelihood. Kissan is targeting to source agricultural raw materials from primary producers. Now what makes it really special is that we intend to pass on the economic benefits of this backward integration back to the farmers, he said. The company also intends to enhance the livelihoods of 75,000 women across rural India in 2008. We plan to partner with NGOs to augment their efforts by bringing in technical and managerial expertise in this area. The other leg is Project Shakti, our rural distribution initiative. It has made a big difference already to 45,000 women across 15 States by providing them sustainable livelihoods. Our target is to cover one lakh villages across India by 2010, he said. It has identified five key platforms to drive its sustainable strategy and as part of this it would work in the areas of health and nutrition, women empowerment and focus on water conservation and cutting greenhouse gases. On the environment front, Mr. Manwani said the company embraced Unilevers target of 25 per cent reduction in carbon dioxide from energy in manufacturing operations for every tonne of production by 2012. It recently developed a new process of manufacturing soap based on plough share mixer technology, which eliminates the need for steam in soap making. This technology cuts carbon emissions by 15,000 tonnes per year, the Chairman pointed out. Unilever, now a $ 55-billion global company, plans to increase its business from the Developing and Emerging (D&E) market like India from the present level of 44 per cent of its total business to 50 per cent by 2010.

The Financial Express

New Delhi, 5 April 2008

Herbal market likely to reach Rs 14,500 crore by 2012

Indian herbal market is registering an extremely significant growth and is likely to reach Rs 14,500 crore by 2012 and the exports to Rs 9,000 crore with a CAGR of 20% and 25% respectively, according to findings of the associated chambers of commerce and industry of India (Assocham). Chamber study on ‘herbal industry biz potential’ has revealed that currently, the Indian herbal market export size is estimated at Rs.7000 crore and over Rs 3600 crore of herbal raw materials and medicines. Assocham has organised an international herbal expo in Delhi on Friday in which 50 international buyers will be participating. The reasons cited for the herbal industry experimental growth comprises setting up of herbal farm clusters by the government for improving quality of drugs and promotion of exports, doubling the cultivation of medicinal plants by converting existing farmland, continuous focus for R&D on product and process development and effective marketing of herbal products, the study said. The study also revealed that out of 700 plant species commonly used in India, only 20% were earlier being cultivated on commercial scale and 90% of medicinal plant used by the industries are collected from the wild. On the whole, India is stated to have 45,000 plant species (nearly 20% of the global species) in the Indian sub-continent. Out of these, about 4,500 species of both higher and lower plant groups are of medicinal value. The study, however, said that the major hurdle for cultivating medicinal and aromatic plants as a sustainable agricultural profession was the lack of organised and regulated Markets in India. The regulated production on scientific lines, effective enforcement of licensing system and setting up of export promotion zones (EPZ) in select states will push up exports of herbal material and medicines. Apart from that, the Indian herbal drug exporters face the stringent quality norms imposed by the EU through the traditional herbal medicinal products directive (THMPD), food supplement Directive (FSD) and these directives also encouraged the high quality products and subsequently, the unorganised sectors sub-standard products rejected by them. India followed by China is the largest producer of medicinal plants, having more than 40% of global diversity. The states which are major producer of herbal plants having the highest medicinal value include Gujarat, Rajasthan, Haryana, Tamil Nadu, Andhra and the Himalayan Range. According to Assocham estimates, over 70% of the plant collections involve destructive harvesting because of the use of parts like roots, bark, wood, stem and the whole plant in case of herbs. This poses a definite threat to the genetic stocks and to the diversity of medicinal plants if biodiversity is not sustainably used.

The Times of India

New Delhi, 5 April 2008

Ducks, not chicken, cause of bird flu outbreaks: Study

Endless paddy fields and large duck populations not the number of chickens raised is the major factors behind outbreaks of highly pathogenic bird flu in Southeast Asian countries, a report has said. In an interesting study called Mapping H5N1 highly pathogenic avian influenza risk in southeast Asia: Ducks, rice and people, published in the April issue of the Proceedings of the National Academy of Sciences (PNAS), experts from Food and Agriculture Organisation (FAO) looked at the series of H5N1 highly pathogenic avian influenza in Thailand and Vietnam between 2004 and 2005. What the scientists found was a strong link between duck grazing patterns and rice cropping intensity. Ducks feed mainly on leftover rice grains in harvested paddy fields, so free-ranging ducks in both countries are moved to different sites in line with rice harvest patterns. These peaks in congregation of ducks indicate periods in which there is an increase in the chances for virus release and exposure and rice paddies often become a temporary habitat for wild bird species. Initiated and coordinated by FAO senior veterinary officer Jan Slingenbergh, the researchers applied a modelling technique to establish how different factors contributed to spread of the virus, including the numbers of ducks, geese and chickens, human population size, rice cultivation and local geography. Defining this pattern was made possible through the use of satellite mapping of rice paddy agriculture over time, cropping intensity and duck grazing locations. The intersections among these, together with the chronology of disease outbreaks, helped the scientists pinpoint critical situations in time when bird flu risk was greatest. Slingenbergh said, We now know much better where and when to expect H5N1 flare-ups, and this helps to target prevention and control. In addition, with virus persistence becoming increasingly confined to areas with intensive rice-duck agriculture, evolution of the H5N1 virus may become easier to predict.

The Financial Express

New Delhi, 5 April 2008

Centre plans to rope in states to curb hoarding

The Centre will soon convene a meeting of states to discuss steps to curb inflation, including invoking the Prevention of Black-marketing & Maintenance of Supplies of Essential Commodities Act, 1980, which empowers states to take action against hoarders. Official sources said agriculture minister Sharad Pawar would convene a meeting with state chief ministers to discuss available evidence on hoarding, as well as measures to identify and detain those indulging in profiteering. The government might also announce incentive schemes to states for better implementation of the legal provisions against hoarding, sources said. The Centre is simultaneously gathering evidence regarding whether the benefits of measures taken to boost domestic supplies and bring down prices are being passed on to consumers. The steps include allowing duty-free import of crude edible oil and corn, cutting import duty on refined edible oil to 7.5% and banning the export of rice and pulses. However, the sources said the authorities are also aware of the politician-criminal nexus in hoarding. Official sources said they have information on instances where individuals and Companies are indulging in hoarding of essential commodities like edible oil and wheat despite the huge demand. The latest data shows that retail prices of vanaspati and onions went up by 10.14% and 11.11%, respectively. That of gram, sugar and mustard oil rose by 2.7%, 6% and 2.6%, respectively.

Business Line

New Delhi, 6 April 2008

Aries Agro plans 100 mobile rural retail units

Aries Agro, a speciality plant micro-nutrient company, plans to set up 100 Rural Retail Vehicles (RRVs) to visit farms, conduct soil testing and prescribe suitable fertilizers and nutrients. Dr Rahul Mirchandani, Executive Director, Aries Agro, said: We have formed eight RRVs which are working in North India. We will form 100 RRVs at a cost of Rs 8 crore before kharif season begins in July. Each vehicle will be equipped with soil-testing kits and travel around the country according to the crop season. It will also arrange for supply of nutrients and fertilizers through the dealers network. The company has been able to bring down the cost of nutrients and fertilizer for farmers by negotiating with the dealers, besides getting valuable inputs to develop new products, said Mr. Mirchandani. Farmers can also save about 15-20 per cent on transportation cost, he said. The company has over 65,000 distributing channels spread across States and four manufacturing units. As part of its advisory services, Aries Agro plans to send SMSes to farmers on commodity futures prices. Terming it as knowledge arbitrage, Mr. Mirchandani said middlemen are taking advantage of farmers unawareness on futures price trend; besides farmers can select their crop based on the futures price trend. The company in association with Bidhan Chandra Krishi Vishva Vidyalaya, an agriculture university, recently tested soil samples from 30,000 villages in West Bengal and submitted a Soil Wealth Map to the State Government. Similar efforts have been undertaken in Maharashtra and Andhra Pradesh. Aries Agro plans to set up new manufacturing units in Panvel (Maharashtra), Ahmedabad and Lucknow and double capacity by September to 1.8 lakh tonnes a year. The company recently inaugurated a high-tech manufacturing unit of 32,400 tonnes a year capacity in Hyderabad.

The Financial Express

New Delhi, 6 April 2008

Assocham seeks ban on futures trading in agri commodities

Industry body Assocham has called for a temporary ban on futures trading in agri commodities with a view to arrest the price inflationary trend in the country. It has also called for a temporary ban on agri exports. Releasing a study, India s FTAs and Indian Industry, here on Saturday, Assocham president Venugopal N Dhoot said, The price inflation has touched a 40-month high level of 7% for the week ended March 22. It is a matter of grave concern as it may eat into the benefits of the growing Economy. Our Economy should grow well over 9%. Futures trading in agri commodities should be banned for sometime till the situation improves. I am confident that the situation would improve by August, this year. He also suggested that the government should take measures like banning exports of agri commodities to increase its availability in the country. If necessary, the government should subsidise some essential commodities and facilitate smoothening of its distribution. Dhoot also urged that the Reserve Bank of India should take steps to increase the bank interest rate and the cash reserve ratio (CRR) as these measures would help to contain the price inflationary trend. Regarding the proposed free trade agreements (FTAs), which India has planned to sign with other countries, Dhoot said that industry should be taken into confidence before the final deal. We are in favour of trade, but the deal should be designed in such a manner so that it turns out to be a win-win situation for both parties. We want that a preferential trade agreement (PTA) should be signed before an FTA. He said that India should be careful in signing FTA with China as that country enjoys an added advantage of keeping its currency devalued under a different condition. He said that India with a higher tariff regime at about 12.5% may be called upon reduce its duty to the level of china at 6%, which may cause problems to the industry. Another concern was the growing India s trade deficit with Chinafrom $ 506.74 million in 1994-95 to $ 1424.04 million in 2004-05, he said.

Indian Express

Chennai, 5 April 2008

TN to waive another Rs 187 cr farm loans

The Tamil Nadu Government on Thursday announced another loan waiver for farmers in the State. Replying to the discussion on the demand for grants for the Agriculture department, Agriculture Minister Veerapandy S Arumugam sprang a surprise and announced the government would write off Rs 187.06 crore loans of farmers due since April 1, 1980. Ryots could not repay loans, availed for soil conservation works, due to heavy damage caused by flood and drought, Arumugam justified, and pointed out that only Rs 5.02 crore of the total Rs 192.08 crore loan was repaid in the last 28 years. Other surprise announcements include the revised farm policy, which enables entrepreneurs involved in manufacturing agricultural machinery and food processing to avail of benefits on par with the privileges enjoyed by industries now. Likewise, the 2008-09 policy note of the Agriculture department has attempted to plug in the seed demand by forming the Tamil Nadu State Seed Producing Agency. Arumugam said the agency would render the much needed fillip to the public seed farms and also meet farmers’ demands with private support.

In an attempt to intensify irrigation projects in the State, the government has planned to integrate key irrigation projects like DPAP (Drought Prone Areas Programme), IWDP (Integrated Waste Land Development Project) and NWDPRA (National Watershed Development Project for Rain fed Areas) in the current fiscal. Also, 50 per cent subsidy would be provided for promoting Drip and Sprinkler irrigation over 50,000 hectares in TN in the financial year 2008-09. Keeping in view the fast growing machinastion of agriculture in the State, the government has decided to purchase 90 modern tractors, 60 sowing and 40 harvesting machines for paddy, 10 automatic maize harvesting machines and 300 weeding machines by availing of funds under the National Agriculture Development Project. The Tamil Nadu Government on Thursday announced another loan waiver for farmers in the State. Replying to the discussion on the demand for grants for the Agriculture department, Agriculture Minister Veerapandy S Arumugam sprang a surprise and announced the government would write off Rs 187.06 crore loans of farmers due since April 1, 1980. Ryots could not repay loans, availed for soil conservation works, due to heavy damage caused by flood and drought, Arumugam justified, and point- ed out that only Rs 5.02 crore of the total Rs 192.08 crore loan was repaid in the last 28 years. Other surprise announcements include the revised farm policy, which enables entrepreneurs involved in manufacturing agricultural machinery and food processing to avail of benefits on par with the privileges enjoyed by industries now. Likewise, the 2008-09 policy note of the Agriculture department has attempted to plug in the seed demand by forming the Tamil Nadu State Seed Producing Agency. Arumugam said the agency would render the much needed fillip to the public seed farms and also meet farmers’ demands with private support. In an attempt to intensify irrigation projects in the State, the government has planned to integrate key irrigation projects like DPAP (Drought Prone Areas Programme), IWDP (Integrated Waste Land Development Project) and NWD- PRA (National Watershed Development Project for Rain fed Areas) in the current fiscal. Also, 50 per cent subsidy would be pro- vided for promoting Drip and Sprinkler irrigation over 50,000 hectares in TN in the financial year 2008-09. Keeping in view the fast growing mechanisation of agriculture in the State, the government has decided to purchase 90 modern tractors, 60 sowing and 40 harvesting machines for paddy, 10 automatic maize harvesting machines and 300 weeding machines by availing of funds under the National Agriculture Development Project.