Agri still plays vital role in providing jobs: OECD

The Financial Express
New Delhi, 19 March 2009

While the economic importance of the agricultural sector is falling relative to other sectors, it continues to play a vital role in providing employment and contributing to food security especially in countries like Brazil, Chile, India, Russia, South Africa and Ukraine. A report titled “Agricultural Policies In Emerging Economies :Monitoring and Evaluation 2009” by Organisation of Economic Cooperation and Development (OECD) finds that although weather conditions can cause large short-term fluctuations, over the longer-term both agricultural production and, in particular, agro-food trade are growing rapidly. Brazil , Chile , India and Ukraine are net exporters of agro-food products, while China and Russia are net importers. Along with a large number of other countries, the seven emerging economies made various policy interventions in response to higher food prices. The most common policy response taken by the emerging economies - and also worldwide - has been to reduce or suspend import tariffs on food products. The products on which tariffs were reduced, and the time and quantity limit varied between economies, as well as the extent of the tariff reduction. For example, while Brazil has provided tariff-free access for 2 million tonne of wheat, the MFN applied tariff is just 6%. Changes of this magnitude can be expected to make only a limited impact on inflation. The next most common response has been to impose export barriers in the form of export restrictions or export taxes. The measures imposed by India , Russia and Ukraine were particularly significant given the potential quantities involved. Export barriers are likely to lower domestic prices for the products concerned but have serious spill-over effects, impeding price signals to producers and decreasing supplies for importing countries. As far as India is concerned, improvement of rural infrastructure has been given a high priority to make India ’s growth “more inclusive and equitable”. A large part of this rural investment is to be undertaken within a programme Bharat Nirman focussing on the expansion of irrigation area, improved water management, support for rural roads, housing, electrification, telecommunication, research and diversification of economic activities. The National Policy for Farmers, introduced in 2007, places greater emphasis on the economic well-being of farmers and rural development rather than just on agricultural production. In 2006, a new package was introduced to revive the short-term rural co-operative credit structure and to expand credit available to farmers at preferential interest rates. In 2008, the government announced a large scheme to waive overdue and unpaid debt, initially for small and marginal farmers, but then extended to include commercial producers. Retail price controls have been introduced in China , Russia and Ukraine . China and South Africa made changes to their biofuel policies to reduce pressure on food security. Chile and South Africa provided additional direct transfers to those most vulnerable to the effect of higher food prices: a cash-based transfer in Chile and the provision of food in South Africa .

Govt stops wheat sale in North on fears of recycling

The Financial Express
New Delhi, 18 March 2009

The Centre has stopped selling wheat through Food Corporation of India in the growing belt of Punjab , Haryana and other states on fear of recycling as it prepares to procure the grain in a fortnight. Wheat sale under the open market sale scheme (OMSS) has been extended till March-end only in the non-growing states, a government official said, adding that in the growing belt the scheme expired on February 28. “The Centre did not want a situation where the same wheat taken from FCI at a cheaper rate be sold to it at a higher rate when the procurement begins from April 1,” he said. The government in September last year had decided to sell 9.09 lakh tonne of wheat under OMSS while raising it further to 13.84 lakh tonne in phases. Under the scheme, the states were offered wheat from FCI at the minimum support price of Rs 1,000 a quintal (excluding transport and taxes), fixed for 2008-09 season. The reserve price of wheat for states in the northern region, barring Himachal Pradesh, is between Rs 1,023 and Rs 1,063 a quintal, which is below the MSP of Rs 1,080 a quintal for 2009-10 season. The scheme was initially valid for two months but the government extended it to keep a check on domestic prices. It expired on February 28 in the wheat growing belt. Another reason for extending the scheme was the demand for wheat in southern states -- Tamil Nadu, Andhra Pradesh, Kerala, Karnataka -- which have been allotted nearly four lakh tonne out of 11.55 lakh tonne across the country, the official said. “The lifting of wheat, however, stands at 5.95 lakh tonne in the country,” he added. The official also said that the Centre had not extended the scheme of selling wheat to the states, which expired on February 28, as the states lifted only about 80,000 tonne of wheat while the central government wanted to offload nearly one million tonne. Meanwhile, the Centre is all set to start wheat procurement from April 1 for the 2009-10 season and is expecting another bumper purchase. Last year, it had procured 226 lakh tonne of wheat. The government expects a wheat production of 77.78 million tonne this year.

Agri Dept to submit amended proposal to EC

The Agriculture Department today decided to amend its proposal on farm subsidies, which was rejected by the Election Commission (EC). The amended proposal to be submitted to the commission tomorrow stresses on agri-equipment and fertilizer needed in next two months before the start of paddy season in the state. Sources said in the amended proposal it had been recommended farmers be allowed to import mechanised transplanters and laser levellers. It has also sought from the commission permission to distribute gypsum to farmers on subsidised price to treat soil before the onset of paddy season. Sources said the department aimed at facilitating the import of 700 mechanised transplanters and offer subsidy of 50 per cent of the cost of the machine or Rs 1.50 lakh per machine. The department has proposed to give subsidy of 33 per cent or Rs 1.25 lakh per machine on laser levellers. The new proposals are comedown from earlier proposal to allow sale of rotavators, happy seeders and other equipment through over 200 agricultural societies in the state on subsidy to farmers. The department will plead denial of permission for these subsidies would hit t the farmers and the two- year old programme to mechanise paddy transplantation. Meanwhile, Bharatiya Kisan Union (Lakhowal) president Balbir Singh Rajewal met state Chief Electoral Officer Kusumjit Sidhu and requested her to take back the ban on agri subsidies announced by the commission. Rajewal said agri subsidies, including those on mechanised transplanters were essential to ensure smooth transplantation of paddy.. He said use of laser levellers was prerequisite for a farmer wanting mechanised transplantation. Meanwhile, the Election Commission today recommended suspension of Talwara Block Development and Panchayat Officer (BDPO) Baldev Singh. There were complaints he had distributed cheques. The commission also ordered the transfer of two Bathinda naib tehsildars Gurmail Singh and Subhash alleged to be working in their home districts. The commission has also directed the secretary, Punjab State Electricity Board (PSEB) to give report on allegations that the office of PSEB, north under Chief Engineer TS Thind had distributed meters and violated and model code of conduct.