NEWS Bulletin from Indian Society For Sustainable Agriculture And Rural Development
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1. WTO draft recognises livelihood security-- Does little to address Third World problems --- (Quick Comments)
2. IFPRI moots steps to curb global price rise
3. Cuba invites Indian investment
4. Row over imposing export duty on Basmati continues
5. Global timber market characterised by mixed Q1 results
6. Ministry's paper poses threat to bidi sector - (TOBACCO)
7. Micro-finance yet to take root in UP
8. In NE, traditional credit bodies still going strong: study
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WTO draft recognises livelihood security --- (Quick Comments)
Does little to address Third World problems
ASHOK B SHARMA
Posted online: Tuesday , May 20, 2008 at 2034 hrs IST
Posted online: Tuesday , May 20, 2008 at 2034 hrs IST
With a view to revive the negotiations in the multilateral trade, the WTO released two revised draft texts on Monday evening – one on agriculture and the other on industrial goods.
The new draft issued by the chair of the farm negotiating committee, Crawford Falconer contains revised formulae for cutting tariffs and trade distorting subsidies. Falconer has claimed that the new draft text is the result of discussions held since September, last year. Similarly the chair of the NAMA group, Don Stephenson claimed that the revised draft released by him is the product of the bilateral and plurilateral consultations he had over the last few weeks and is also built upon the past years of negotiations. He, however, said "this revised text is another step in the process and might be subjected to further revision."
The new drafts show very little areas of convergence despite the WTO director-general Pascal Lamy claiming to the contrary.
The farm draft has ignored the very basic aspect of food and livelihood security of the Third World. Though it has recognized the developing countries right to self-designate their special products based on food and livelihood security and rural development, it has proposed the minimum limit of 8% of the tariff lines and maximum limit of 20% of the tariff lines. The crucial issue is the maximum extent of self-designation of special products by developing countries which is in square bracket, implying the need for further negotiations.
One good thing is that the draft has recognized the developing countries right to self-designate special products guided by indicators based on the criteria of food and livelihood security and rural development. G-33 countries suggested the minimum limit of 20% for self-designation of special products. Many of the farm products crucial for food and livelihood security in a multi-crop country may not be covered under 20% of the tariff lines. Thus capping of special products by a percentage of tariff lines may not solve the problem.
The special safeguard mechanism (SSM) provided in the draft for protecting the developing countries farmers from a surge in imports is complex and complicated. This needs to be made simpler.
The draft does not provide for conversion of all the complex and specific tariffs in the developed countries into their ad valorem equivalent, which would lead to greater transparency. The draft reflects an uncertainty related to desired reduction in subsidies in the developed world. It only indicates some range of cuts that too within square brackets, implying the need for further negotiations.
Regarding the NAMA draft the disturbing element is the attempt to establish a link between tariff reduction coefficients and flexibilities for the developing countries. The flexibilities for developing countries should be treated separately and not linked to any other criteria.
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IFPRI moots steps to curb global price rise
ASHOK B SHARMA
Posted online: Monday , May 19, 2008 at 2154 hrs IST
Posted online: Monday , May 19, 2008 at 2154 hrs IST
New Delhi, May 18 This global food crisis is a complex problem that cannot be solved with simplistic approaches. More effective and coherent action is needed now to help the most vulnerable populations cope with the drastic hikes in their food bills and to assist developing countries with strategies to increase agricultural productivity, according to the director-general of the International Food Policy Research Institute (IFPRI), Joachim von Braun
IFPRI is one of the 15 affiliated institutions of the Consultative Group on International Agricultural Research (CGIAR)
"We call for a short term emergency package to stem the tide of the humanitarian crisis. We also call for a resilience package to strengthen the capacity of poor people," said von Braun.
According to Braun the emergency package consists of donor governments providing increased assistance for poor people's food and nutrition, removal of subsidies on bio-fuels and excessive blending quotas of ethanol with gasoline, freezing bio-fuel production at current levels, enacting a moratorium on the use of grains and oil seeds for bio-fuels.
At the same time, there needs to be support for development of bio-energy technologies that do not rely on food crops, he said and added that a moratorium on grain-based bio-fuels would quickly unlock these commodities for use as food. "This measure might bring corn prices down globally by about 20% and, as a consequence, decrease wheat prices by about 10%," he said.
The IFPRI director-general also said that countries should not impose export bans or impose high tariffs as these measures were likely to backfire by making the international market smaller and more volatile. Export restrictions have harmful effects on import-dependent trading partners. For example, export restrictions on rice in India affect Bangladeshi consumers adversely and also dampen the incentives for rice farmers in India to invest in agriculture, he said.
Regarding price controls, von Braun said that it reduce farmers' incentives to produce more food. On the other hand, the elimination of export bans would stabilize grain prices fluctuations, reduce price levels by as much as 30% and enhance the efficiency of agricultural production, he said and called for providing improved seeds, fertilizer, credit, and other resources to small-scale farmers in developing countries would quickly improve production, increase incomes, and lower prices.
As part of the long-term resilience package, von Braun suggested greater investment in agriculture and technology transfer, improving grain stocks and enacting regulatory measures to curb market speculations and successful completion of the Doha Round negotiations in the WTO.
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Cuba invites Indian investment
ASHOK B SHARMA
Posted online: Tuesday , May 20, 2008 at 1853 hrs IST
Posted online: Tuesday , May 20, 2008 at 1853 hrs IST
New Delhi, May 20: Cuba has invited Indian investments in oil and gas, tourism, mining and energy, including renewable energy.
The Cuban deputy minister for foreign trade, Eduardo Escandell Amador at a business meeting organised by the Confederation of Indian Industries here on Tuesday gave a comprehensive presentation on Cuban Economy and industry, listing out the sectors where India and Cuba can cooperate with each other. He said "while Cuba needs to import food and health products, transportation and energy services from India, India can import from Cuba health products and services, tobacco and rum". He specifically spoke about the huge investment opportunity for Indian Companies in the energy sector in Cuba, particularly in renewable energy, folic energy and hydro energy and also in oil and gas sector.
Amador is leading the biggest trade delegation from Cuba in recent years to India. The delegation consists of representatives from a wide cross section of industry including tourism, textiles, chemicals, agri-business, energy, oil and gas, pharmaceuticals, logistics, wood and paper, automobiles and auto-components and construction sector.
Referring to the relations between India and Cuba, Amador thanked India for reopening the lines of credit as this will increase bilateral trade between the two countries.
Myra Penichet from the Cuban ministry of tourism informed about the huge opportunity that exists for Indian Companies in investing in the tourism sector in her country. She said that Cuba needed investment of $ 200 million for refurbishment of existing installations, $ 170 million for investing in new hotels and tourism activities, besides requiring investments in roads construction, water supply and water recycling.
Caridad Campos from the Cuban Chambers of Commerce urged for greater business exchange between India and Cuba.
Chairing the session, the managing director of Chemon Group of Companies and Trustee IBEF, Chetan Seth said that while historically India and Cuba shared strong political relations, the trade relations between the two countries remained low. He attributed the low trade figures to high transportation cost, small volume of orders for goods, difficulties of access to foreign exchange in the hands of importing entities and payments problems.
He welcomed joint ventures with Cuban Companies especially in the field of pharma and biotech and hoped that the visit of this delegation would increase interest of business on both sides and help in promoting trade and investment opportunities between India and Cuba.
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Row over imposing export duty on Basmati continues
ASHOK B SHARMA
Posted online: Monday , May 19, 2008 at 0031 hrs IST
Posted online: Monday , May 19, 2008 at 0031 hrs IST
New Delhi, May 18 The row over India imposing export duty on the premium basmati rice is not yet over. Quite recently it was the Riyadh Chamber of Commerce and Industry, which complained about the heavy duty being passed on the Saudi Arabian importers as the India exporters were unwilling to bear it at their end.
Now, the Federation of Indian Chamber of Commerce and Industry (Ficci) has written to the prime minister, Manmohan Singh to scrap the controversial export duty.
India has imposed export duty of Rs 8,000 a tonne on basmati rice, which translates into $188.23 a tonne at the current exchange value of $1 at Rs 42.50. A minimum export price (MEP) for basmati rice has also been fixed at $1,200 a tonne, which the government assured to bring it down to $1,000 a tonne.
Last Friday a delegation of All India Rice Exporters' Association (AIREA) met the Union agriculture minister, Sharad Pawar and had suggested that the export duty should be scrapped as number of exports contracts have been booked earlier which did not factor in this new duty.
If the government wants to impose an export duty, it can impose it at the beginning of the next year. AIREA also suggested that instead of bringing down the MEP for basmati from $1,200 a tonne to $1,000 a tonne, it should be raised to at least $1,400 a tonne, thus bringing it close to the global prices.
The government's measures of raising the MEP and imposing export duty on Basmati rice were a part of the efforts aimed discouraging exports and augmenting the domestic supply to fight the inflationary trend in prices.
The government believes that with the gradual depreciation of Indian rupee vis-à-vis US dollar the impact of the export duty would be minimised to an extent.
However, the FICCI general secretary, Amit Mitra in a letter to the prime minister, Manmohan Singh has expressed concern over the possibility of Indian exporters losing their market to their counterparts in Pakistan, if the export duty was not scrapped. In 2006-07 India exported 1.06 million tonne Basmati rice. Suadi Arabia imports about 625,000 Basmati rice, out of which 575,000 are from India. Mitra said that Pakistan took a wise decision of not imposing export duty and hiking the MEP for low grade Basmati rice to $ 1300 a tonne and that of high grade Basmati rice to $ 1500 a tonne
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Global timber market characterised by mixed Q1 results
ASHOK B SHARMA
Posted online: Monday , May 19, 2008 at 0034 hrs IST
Posted online: Monday , May 19, 2008 at 0034 hrs IST
New Delhi, May 18 Mixed results have characterised the global timber market in the first quarter of 2008 with Brazil's exports declining, Argentina's exports increasing, Japan's imports of southsea log falling, China's plywood exports experiencing a dip, and prices of Indonesian, Malaysian Guyana timber shooting up, according to the Tropical Timber Market Report (TTMR).
The International Tropical Timber Organisation (ITTO) in its latest market report noted that Ghana's non-traditional exports revenue for 2007 crossed the target of $1 billion mark for the first time, reaching an all time high record of $ 1.165 billion, principally from agriculture, processed and semi-processed products and handicrafts.
Brazil's first quarter exports from alta floresta and sinop declined by 2.4% and 20% respectively, but they continued to be the major wood cluster regions in the country. Brazil's furniture exports to the US tumbled 27% in value in the first quarter of 2008, but Argentina's share climbed by 38% in value over the same period. Guyana's exports of piles began to recover after falling earlier in the year. Prices for Guyana's dressed lumber were also at record highs, with purpleheart prices exceeding $1,000 per cubic metre over the first two weeks of April 2008.
Japan's imports of southsea logs fell by 25.6% in 2007 from 2006 levels, largely due to the impact of its revised Building Standards Act. As a result the shortage of southsea logs in Japan prompted price hikes for hardwood, plywood and plywood logs. Another contributing factor for plywood price rise was that China's first quarter 2008 plywood exports through Shandong port dropped nearly 20%.
Prices jumped for Indonesian and Malaysian timber due to global commodity price rise, higher fuel costs and bad weather – prices of Sarawak log ranging between $ 239 to $ 320 per cubic metre on FOB basis and that of Malaysian sawnwood prices ranging between $ 426 to $ 447 per cubic metre and that of Seraya Scantlings between $ 709 to $ 747 per cubic metre
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Ministry's paper poses threat to bidi sector - (TOBACCO)
ASHOK B SHARMA
Posted online: Monday , May 19, 2008 at 2158 hrs IST
Posted online: Monday , May 19, 2008 at 2158 hrs IST
New Delhi, May 18 Bidi tobacco is cultivated in around 30% of the total area under tobacco crop and its production accounts 33% of the total tobacco production. About 2,90,000 farmers grow bidi tobacco in India and around 4.4 workers are employed in production of bidis. This employment-oriented sector has become controversial with a recent paper of the Union ministry of health and family welfare entitled – Bidi Smoking and Public Health Hazards.
The director of the Karnataka-based Centre for Multi-Disciplinary Development Research (CMDDR), RR Panchmukhi, health scientist of the US-based Centers for Disease Control and Prevention, Trevor Woollery and SN Nayanatara of CMDDR who jointly contributed a paper on bidi economics for the report found that India alone accounts for more than 85% of the world's bidi production.
Bidi is widely used in other Asian countries like Pakistan, Bangladesh, Nepal, Sri Lanka, Singapore and Malaysia. It is a poor man's substitute for cigarette and consists of 0.2-0.3 gram sun-cured smoking tobacco loosely packed and rolled inside a rectangular piece of dried tendu leaf and tied with a cotton thread.
Tendu leaf or Diospyros melanoxylon is the main non-tobacco component of bidi.Tendu leaf is flexible, durable and widely available in Madhya Pradesh, Maharashtra, Orissa, Andhra Pradesh, Bihar and Uttar Pradesh. Around 150,000 tonne of tobacco and 30,000 tonne of wrapper tendu leaves are used annually for manufacture of bidis.
In the mid-1990s, a niche overseas market, particularly in the US, was developed for flavoured bidis (strawberry, cherry, chocolate) and has become viable and profitable for foreign exchange earnings. India accounts for 85% of the world's bidi production. The average yield of bidi tobacco is 1000 kg per hectare in Karnataka , 1800 kg per hectare in Gujarat and 1300 kg per hectare in Maharashtra. Despite lower yield, Karnataka Nippani bidi tobacco is considered to be of superior quality.
In Karnataka bidi tobacco cultivation has also increased the fertility of the soil. According to an assessment done by the study shows that 13% of the bidi tobacco growers are below the poverty line, 49% are of middle income group and 38% are of high income group
According to the Union health ministry study bidi tobacco is a Nicotiana tobacum variety, unlike the Virginia variety used in cigarettes. The quasi-governmental body, the Tobacco Board of India regulates the production and marketing of flued-cured variety (FCV) tobacco, while production of other varieties of tobacco are governed by contracts with traders and companies. The Union health ministry's reports comes at a time posing new problems to the higly employment-oriented bidi sector in the country.
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Micro-finance yet to take root in UP
ASHOK B SHARMA
Posted online: Monday , May 19, 2008 at 2217 hrs IST
Posted online: Monday , May 19, 2008 at 2217 hrs IST
New Delhi, May 18 : Micro-finance disbursement in one of the country's most populous state, Uttar Pradesh (UP) is yet to take roots, while in Tamil Nadu it has made some dent taking advantage of high literacy rate even among the rural poor. In Orissa non-availability of adequate funds is a major constraint for expansion of income generating activities.
A study undertaken by the apex organisation of micro-finance institution, Sa-Dhan in these three select states found that in UP there was not much of an enterprise activity as compared to that in Tamil Nadu. Most of the people setting up their own enterprises make the initial investments themselves and the average investment ranges between Rs 1,275 to Rs 25,000.
Setting up of small grocery or cosmetic shop is one of the most favored livelihood option in the rural areas of UP. Analysis shows that small shops are not quite viable as they have very small margin while the interest burden is high. Other preferred livelihood options are driving, tailoring and rendering professional services like cycle mechanics, barbers, carpenters, carpet weavers, able operators, masons, courier service, insurance agents, mobile repair, sarge weaving.
Though UP ranked fifth in the absolute size of self help groups (SAGs) in 2001, in terms of SHU bank linkage the state ranked even lower at a modest seventh. The micro-finance institutions in the state suffer from poor growth. In 2000-02 while the micro-finance institutions in Rajasthan registered a five-fold growth that in UP registered a growth of mere 1.5 times.
In Tamil Nadu, about 37% of the rural entrepreneurs source money from money lenders and 20% of them source credit from micro-finance institutions for setting up of shops, while the remaining make their own investment. Only 13% of the households set up small shops, while 25% of them prefer providing professional services. Here too the most favored option is driving and tailoring but the rates are far higher than in UP.
In Orissa, apart from non-availability of adequate fund for income generating activities, other constraints are lack of market linkage, non-availability of raw materials and access to technology.
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In NE, traditional credit bodies still going strong: study
ASHOK B SHARMA
Posted online: Monday , May 12, 2008 at 2331 hrs IST
Posted online: Monday , May 12, 2008 at 2331 hrs IST
New Delhi, May 11 : The formal banking system's penetration in north-eastern India is quite poor, according to a study by the apex body of micro-finance institutions, Sa-Dhan. The region consists of Sikkim, Arunachal Pradesh, Assam, Nagaland, Manipur, Mizoram, Tripura and Meghalaya.
Though financial Markets do exist in the region, it is characterised by small and frequent requirement and is segmented, particularly in the hills. Majority of the formal credit flows as personal loans to urban customers, largely comprising government employees and professionals. Within this group, the smaller size financial needs are the most neglected regarding institutional credit, the study says.
However, the region is rich in traditional institutions of financing, which mainly function on the basis of social bonding. Interestingly, women in this region are economically more active compared with the rest of the country.
The study noted how traditional credit institutions, like Marup in Manipur, evolved itself in different ways to survive. Similar traditional credit systems exist among readymade garment traders of Jorhat district in Assam and in the form of Village Development Boards in Nagaland, Kebang in Arunachal Pradesh and Assam, Dorbars of Khasi and Jaintia hills in Meghalaya, Dong Committees of Bodos and Namghar Committee in Assam
The Sa-Dhan study, making a plea for the development of the region said, "it becomes therefore imperative that all institutions desirous of seeing sustainable growth in the region recognize this and support and facilitate such an initiative by the MFIs so that the industry can go forward and be able to service 1.5 million clients (including groups) and have an outstanding of Rs 5 billion by 2011. With a demand for Rs 26 billion microfinance services for the region, it could be easily possible."
One of the study done by M-Cril, a credit rating agency for micro-finance institutions (MFIs), shows that the northeastern India needs Rs 25,000 million. M-Cril study is based on the estimates of 2.1 million rural poor households, 3.1 million rural "not-so-poor" households, 0.4 million urban poor households and 1.2 million urban "not-so-poor" households. It said that while the poor may need credit, only 0.8 million rural "not-so-poor" households and 0.3 million urban "not-so-poor" households will need credit. M-Cril has estimated credit need of Rs 6000 per rural poor households, Rs 8000 per rural "not-so-poor" households and urban poor households and Rd 10000 per urban "not-so-poor households.
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