Saturday, October 12, 2013

Incredible challenges in Indian tobacco Industry




India is the third largest producer of tobacco which is 681 million kilos, next to China and Brazil and the second largest exporter of tobacco with 228,025 Metric Tons, next to Brazil. We have around 130,000 tobacco farmers, among them 89,855 were registered with Tobacco Board as a Flue cured Virginia growers with cultivated area of 2,15,000 hectares. Around 38 million people are directly or indirectly involved in various phases of tobacco industry for their livelihood.

The Indian Tobacco Industry contributes ₹ 4,980 crores of foreign exchange through exports and ₹ 17,415 crores through excise duties on tobacco products. Over 120 million Indians smoke, i.e. 10% of the world's tobacco smokers live in India and 102 billion sticks produced in India every year. India produces the tobacco which has lowest levels of pesticide residues.

We have some incredible challenges in our tobacco Industry which need to overcome.

India is the 6th largest illicit cigarette market in the world and about 16% of Indian tobacco products are illegitimate which the value is 1900 crores of rupees and hundreds of crores cigarette sticks are smuggled  in to the Indian market. Some of the studies say that the contraband market is may increase to 23% by 2016. The growing share of illegal cigarettes is reducing the demand of domestic tobacco industry, erstwhile in 2005/2006, the cigarette market size was 109 billion sticks and now it is reduced to 102 billion. This adverse situation threatens the life of 38 millions of tobacco dependents and big loses to Indian government since the illegal cigarettes evade the all kind of taxes like excise, customs, VAT and others.Allowing legitimate foreign brands into the Indian market is a wise decision to combat the contraband trade and prevent the losses of tax revenue. On top of that the Indian consumers’ tastes have changed and they are looking for world class products.

Indian Tobacco Industry is operated by a few domestic players and there is no effective competition. Farmers are not getting the prevailing price through monopolistic and unfair trade practices by domestic trade cartel. One biggest Indian company is controlling the 80 percent of market and it buys more than 60% of the cigarette variety leaf with lesser price which is nearly 50% below of global average. The company makes heavy margin but the farmers being paid by non-remunerative and unfair prices.

The UPA government banned the FDIs in tobacco industry in 2010, the Japan tobacco international was the victim of Inconsistence policies of the Indian government on FDIs and it has closed its operations in Dec2011. In April, 2012, some of the US trade bodies sent a representation to Indian Ambassador to USA, to consider the abilities of foreign companies to participate in Indian tobacco market and also they opposed the FDI Ban in Indian Tobacco Industry.

Tobacco farmers have been agitating against the monopoly and unfair trade practices and also not allowing FDI’s  is against to the Competition Act 2002 which prohibits anti-competitive agreements, abuse of dominant position by enterprises and also promotes the free and fair competition within the economy. The Department of Industrial Policy and promotion (DIPP) should rethink and review the FDI policies to allow foreign investments in tobacco industry since they allowed foreign investments in other industries. Indian farmers are looking for permanent solution to prevent the tobacco trade cartel's deceptive, monopolistic and unethical trade practices. They are eagerly waiting for international tobacco companies to participate in Indian tobacco industry for getting fair price among the competition and moreover the Indian farmers would like to be competitive to garner the major share in world market.

India has been a forerunner in the Framework Convention on Tobacco Control (WHO- FCTC) which is aimed to reduce tobacco cultivation and restricting the all kind of supports to tobacco farmers. India ratified the FCTC in 5th Feb, 2004, it is the Regional Coordinator for the South-East Asian Region and India has a legal obligation to implement the FCTC guidelines. Most of the Indian tobacco growers don't know about the FCTC, the Ministry of Health never discussed and notified to tobacco farmers while signing this agreement, now Indian government is pressuring the farmers to go out of tobacco cultivation. Cultivation is farmers’ birth right and they have right to grow any legal crop of their choice. Consuming tobacco is a social problem; the government should control the same by creating awareness and educating the civil society. As per article 17 of FCTC, the government should provide economically viable alternate livelihoods to the tobacco farmers while implementing the FCTC guidelines, there is no such thing or any scientific exercises were not conducted so far. FCTC treaty is autocratic and forcibly imposed one, Indian tobacco farmers are opposing the several articles in FCTC guidelines.

Protecting public health is unquestionably noble objective, controlling tobacco cultivation is  a complex and socio-economic issue that needs a pragmatic approach  and make involvement of key stakeholders at every stage for their smooth economic livelihood transition.

Wednesday, July 10, 2013

India needs nutritionally enriched Food security


On July 5th the Food security ordinance was approved by the President of India, the ordinance will guarantee 5 kg of rice or wheat or millets  a month to poor at a discounted rate of Rs. 3, Rs. 2 and Re. 1 respectively.  Food security means ....not only  providing  5 kilograms of subsidized food grains but  also that should ensure the nutrition security. I don't  think  that 5 kgs of food grains is not enough to feed  one person per month. Average consumption per year for each person is around 178 kgs. ( 15 kgs per head/monthly) and average family size in India is  4.8 persons,  so each family needs at least  65-70 kgs of grains per month.  Food habits have been changing gradually, people are slowly shifting from grains to more protein and nutritional based foods. Edible oil, pulses  are good source of nutritional values , each person needs minimum 1kg of edible oil and the same way 1kg of pulses per month, though which  is less than nutritionist 's recommendations  i.e. 16kgs of edible oil and 20kgs of pulses per capita. I don't know, how come this bill is going to ensure the food security by just giving  5 kgs of grains and the same way how it's going to reduce the malnutrition by just giving grains without any nutritional food items.

India ranked 65 among the 79 countries which are listed in global hunger index. ( High number means most vulnerable) . As we know  that our working class poor people are still in calorie deficient and they definitely need the nutrients to get strength, endurance and productivity at their workplace. The UPA-2 government is trying to mesmerize the people that it is doing a big favor to below poverty line by the Food Security Act. The edible oil and pulses are essential for human beings to sustain proteins, vitamins and minerals. The market prices of edible oil and pulses are very high and have been increasing , the government  doesn't have any control  over the prices and price mechanism . The nutritional food items  must be reasonably priced to consumers, then only the people will get comprehensive food security otherwise it 's  going to be a futile exercise.

The Public Distribution Systems is not functioning efficiently,  it’s all corrupted and controlled by the second fiddles of local MLAs. Everybody  knows that the PDS food ration is going to the black markets and  also too many   fake ration cards. The PDS system shall be pruned to remove the bottlenecks  in supply chain of food distribution especially  for  this upcoming Food Security program. The UPA's National Food Security bill doesn't have any time bound or any target orientation.  There is no clarity in elimination of malnutrition and how many people will be moved out of hunger in next 5 years or next 10 years and so on. The Bill is just targeted for 2014 elections for their electoral prospects and it is political hoax .

The government must focus on 4 Ps i.e. Production, Procuring, Preserving and Proper distribution of food grains. Food security act will not only serving the poor but also encourages the production of food grains which is directly  benefit to the farmers since the consumption will be more. At the same time, the farmers should not be burdened  with the cost of subsidizing the supply. India needs to be self sufficient in food grain production to meet this new demand, so the agriculture should  have high priority in National Food Security program.

Friday, May 03, 2013

My way of thinking on GM crops



Developing countries are adopting the Biotech crops at faster rate, Genetically Modified (GM) crops have been cultivated more than 1. billion hectares worldwide, 10 % of the world crop lands were planted by GM crops in 2010, 17.3 million farmers grew GM crops in 2012. India cultivated 9.4 million hectares of GM crops in 2010. Major scientific academies and regulatory bodies of the world from the US, Canada, UK, Germany, France, South Africa, Brazil, Argentina, Japan, Russia, Australia and  New Zealand  have completely  endorsed the safety and efficacy of the science and technology of GM crops. Most of the developed nations experience with Biotechnology crops are  reliable, alternatives to traditional pests, reduced input costs, quality in crop yields and finally income benefits to farmers.

Achieving food and nutritional security is tough task, we need to try all possible options like GM and conventional. Malnourishment still exists in India, India ranked 65 among 79 nations in global hunger Index. ( High ranked = Most vulnerable).Everyone concurs that sustainable agriculture plays a critical role for future food needs and better environment. The first green revolution achieved by applying the chemistry and petroleum, but now the Biotechnology, information technology and renewable energies are crux  for the next green revolution. It's something modern way of thinking for food security, economic development and environment. Now the most of farming community has been dependent of information, communication and technology, they are adopting modern growing techniques of precision farming  like  System of Rice Intensification Method  in paddy cultivation, modern farm implements, organic farming and also cultivating the transgenic commercial crops like BT cotton.

Applying Biological solutions instead of Chemical applications has been growing in agriculture. In India, lot of hurdles to integrate the biotechnology into agriculture research I.e technical, political, environmental, intellectual property, biosafety and trade related issues. Based on the demand, it is suggested to implement Biotechnology applications in strategic areas where the agriculture get more gains. As we know that, parliamentary standing committee and a Supreme Court of India jointly appointed the Technical Experts Committee (TEC) to perceive the pros and cons on GM Crops, TEC has recommended a ban on field testing of GM crops which are under development in both public and private labs for a decade, but it was dismissed by the courts and now the Environment and Forests Ministry has allowed the field trials on 20 GM crops such as cotton, rice, tomato, groundnut, potato, corn, sorghum, okra, brinjal, mustard, wheat, watermelon, papaya, sugarcane, rubber, castor, banana, pigeonpea and chickpea. Out of 20 crops, field trials were initiated for only three crops ( Cotton, Corn, Mustard) upon obtaining the no objection certificates from the state governments. 

All these actions indicate that India has positive approach towards transgenic crops, the real challenge is that how the scientific regulatory bodies monitor the process of trials and research. The regulatory precautions should be implemented very meticulous and ultimately those crops must not negatively affect on human health and  environment or animals and other crops. In India lot of apprehensions on GM crops which are related to safety aspects of human health and environment, let us wait and watch.. how the scientists and policy makers are going to address the public apprehensions on the GM crops which are now in field trials  Everything should be transparent in the field trial process and the research data, nothing should be hide, farmers and consumers must be better informed.

GM seeds are expensive and the technology is protected with stringent intellectual property laws and patented. Some of the international seed companies are monopolizing the business by merging the small seed companies and they are pushing their GM seeds in place of conventional. To break the monopoly of big biotech companies, government should encourage the extensive research and field trials through private companies and universities, so that  the enhanced competition will help the small and marginal farmers to afford the GM seeds. Nonprofit organizations and public sector scientific agencies should focus on safe and effective application of biotechnology to the extremely important crops for the benefit of small and poor farmers.

Sunday, March 03, 2013

The dire crisis of dairy farmers


India is the largest producer and consumer of the dairy milk in this world producing around 130 million tonnes and the total world production estimates 730 million tones.  FAO estimated 85% of all milk worldwide was produced from cows and the rest is from other species ( 11% Buffalo ,2% got and 2% others.). USA is the second largest producer of milk and the first largest producer of cow's milk. Israel dairy farms are very productive with an yield of 12,546 kgs of milk  per cow per year.

Indian Dairy farmers are in crisis with increased cost of production and non remunerative prices. Return on investment for dairy farmers are very less due to increased costs of feed and medical expenses for animals. Earlier, the cattle used to depend on grazing, natural resources and crop residue for fodder which are decreasing now. The milk farmers are forcibly depend on the packaged cattle feed to increase the milk production, eventually the cost of production has increased. Feed cost has been increasing up to 30- 50 percent from past four consecutive years, but the milk procurement prices have not increased comparatively. Health care also big burden, vaccination and De-warming costs have been increased.

The productivity of the cattle is based on the caring and managing, farmers are slowly decreasing their non performance animals and switching over to efficient breeds like Jersey and Holstein Friesian. Investment on these exotic cattle is heavy burden for the farmers and these breeds need more feed, water and caring since they are not native animals. Farmers are struggling to get loans for milking animals and also the bank charges are very high up to 12% interest rate and insurance cost is additional. With the increased cost of production including  expensive breeds the dairy farming is not remunerative, so the farmers are slowly decreasing their herd size and some of the farmers have giving up the dairy farming.

The procurement prices have not increased comparatively with milk market selling prices, in fact the procurement prices have reduced in Oct and Nov months of 2012. The Andhra Pradesh farmers have faced a bitter experience called "MILK HOLIDAY" due to the false market analysis by milk marketing companies. They have imported low-priced Skim milk powder by estimating that the milk production is going to be less for this year but there is a  consistent growth in milk production. Most of the milk marketing companies including Co-operative sectors have reduced the procurement prices and some of them have stopped to collect the milk from farmers. Animal fodder is the biggest problem for the farmers, decrease in grazing land, natural resources and drought situations  leads tough time for animal fodder. Last year, the dry forage was sold at Rs.2.00 per kg in some arid districts of  Andhra Pradesh. The loan facilities for cattle are too tough for small farmers, a rural poor woman who wants to buy a buffalo she gets the loan with high interest rate up to 14%  with a great struggle, where as in the cities the car loan get approved with 7-8 percent  interest rate without any hurdles.

Our Indian Dairy Industry is in chaotic situation, India is the largest milk producer in the world, ironically...

whereas chemical mixed adulterated milk is widely available in the market.

whereas milk consumption is very less and 68.72 Kg/capita/year.

Whereas The Food and safety standards authority of India ( FSSAI) has announced the 68% of the bulk milk supplies have found to be unsafe and substandard quality.

Indian government has opened the gates to FDI's and excited to enter in free trade agreements, already France's DANONE is aggressively marketing it's dairy products in Indian market associated with Dynamix Dairy- Baramathi ( Maharashtra), New Zealand's FONTERRA and DANONE  are interested to acquire major stack in  Hyderabad based Tirumala Dairy products. As we know that all largest milk producing countries are keen to enter in Indian market, most of the developed nations' dairy farming is massively funded and heavily subsidized by the governments with various income support plans like  i.e.  Milk income loss contract payment, Market loss assistance, Dairy Income loss assistance programs, dairy Indemnity, milk marketing fees and so on. Such huge subsidies keep the International milk prices down which are going to affect very badly on our Indian dairy industry. we should oppose as strong as possible to protect our Indian dairy Industry against dumping.

In order to protect our dairy farmers, the milk procurement prices should be fixed based on the cost of production as the practice where implemented in crop farming. The banks should liberalize the policies in cattle loans for Individual farmers to buy one or two animals and Government should  arrange interest free loans to the dairy farmers. Government should invest in co-operative dairies and allot matching grants of subsidies for remunerative milk procurement prices. The government need to take some steps on milk promotion programs by offering small quantity of milk to school going children, lactating women and pregnant women to boost milk consumption. The Indian milk marketing companies including co-operatives all together should run a united advertising campaign which shall create an importance of milk in our daily life.. like www.gotmilk.com by California Milk processor  Board.

We shall have to try all possible options to rescue our milk farmers, if not they will give up dairy farming, therefore India may encounter serious milk shortage which leads to malnutrition.

Saturday, January 19, 2013

Plate full food ends up in Landfill


A survey by University of Agricultural Sciences (UAS), Bangalore says that  annually, Bangalore alone wastes 943 tonnes of quality food during weddings and the total food wastage in the city is estimated at Rs 339 crores. As per data from the solid waste management department of the Pune Municipal Corporation (PMC), around 140 tonnes of leftover food is collected daily from the hotels and restaurants in the city which nearly 50 percent is good to consume. India is facing the loss of Rs.50,000 crores worth of food items.  United states, the food waste worth is $180 billion every year, Canada's food waste is approximately 40 percent and worth of $27 billion, around 5.3 million tonnes of food waste goes to trash in UK that's worth is £12 billion, the food wasted in Italy can feed the entire population of Ethiopia. The FAO estimates  that more than 30% of the global food production goes to garbage that counts 1.3 billion tonnes which can cater to 3 billion people.

Food waste can be occurred in three levels 1. Farm level ,2. Distribution level, 3. End user level.

The major food waste happens in the farm level. Before harvesting, the crop losses could be with  pest, birds, rodents and wild animals and the natural disasters also can cause for crop damages. Losses may be high in harvesting process since the machine harvesters are unable to detect the difference between ripen and half grown crops and also it collect some part of the crop and the rest will be left in the field itself. Some crops like horticulture produces must be harvested by hand picking only, then some root crops may damaged  by careless hand harvesting and acute labor shortage lead to the yield loss as crops are not harvested and decayed in the fields.

At the distribution level, supply chain & value chain losses are very frequent due to lack of storage facilities, no proper transportation and unable to access the markets on policy issues. A nation-wide study on quantitative assessment of harvest and post harvest losses for 46 agricultural produces in 106 randomly selected districts was conducted by CIPHET in 2010 revealed that wastage in fruits and vegetables is between 5.8 - 18.0 % for different crops. Wastage are lower for other items as compared to fruits & vegetable: for crop (3.9 -6.0%), cereals (4.3-6.1%), pulses (4.3-6.1% ), oilseeds (6.0%), Meat (2.3%), fish (2.9% ) and poultry(3.7%). Although the food stored in proper facilities, some portion get waste by the pests and microorganisms, supermarkets always reject the produces for slight cosmetic imperfection though they met the edible standards. Retail stores, farmers markets and whole sellers are losing huge amounts in unsold fruits and vegetables, we can't ignore the export losses in food products since they don't meet the agriculture, safety and health standards. Altogether, a significant quantity of food produced goes waste during the processes of pre & post harvesting, supply & value chain.

Food waste can be seen everywhere in our daily life, in kitchen at home, restaurants, in big fat weddings, gala parties, in work place canteens  and so on. Some social behaviors have lead to food waste like cooking surplus food, ordering excess food in the restaurants, load-up the plates with more than sufficient items in buffet. Once in a while when we check our refrigerator, we may find some leftovers and uneaten food that ends up in the trash can. Super markets promotion sales also push the consumers to buy more than enough food and which is frequently throw away.

Waste happens in throughout the food system in all stages like farming,  transportation, processing, distribution, supermarkets, restaurants, food service providers and  households which accounts  around 40% of the food we produce.

Recycling and disposal expenses are additional burden to the food waste, all uneaten food ends up in our landfills which generates green house gas emissions and it is estimated that 14% of the world’s CO2 emissions are caused by food waste itself. This huge waste of food puts heavy pressure on agriculture as it must provide for growing  population that is wasting up to 2 billion tonnes of food a year. Agriculture consumes  70% of water reserves in the process of food production, 3000 liters of water required for our daily food needs, management of water is the key for our food production and water is going to be more expensive in future. One more important issue is land usage, if we lose the food with wasteful habits  the demand will be increased for extensive usage of  land for farming and livestock. The food waste has ripple effects on other industries like energy, fertilizers and pesticides which are produced by coal, chemicals, fuel, natural gas and so on, all these incremental cost is driven by uneaten food.

Wasting a food is a cultural habit, by not wasting food we can express ourselves as well mannered and responsible. The most important thing is... to buy only whatever our actual need and use it completely. The super markets should liberalize their purchase practices  i.e. rejecting the food stocks for just small flaws in physical characteristics. Government should set a national goal to reduce the waste and sensitize the public against the waste of food by creating awareness and should encourage the NGOs who are working against food waste. Modern engineering and technologies should be implemented in  Pre/Post harvesting stages and fully integrated infrastructure should be created for transport, storage and processing. Elimination of  food waste will provide a lot more food for growing population, it reduces the carbon foot print and mitigates the heavy load on agriculture.