NEWS Bulletin from Indian Society For Sustainable Agriculture And Rural Development ------------ On WTO---- 1. Agriculture issues continue to haunt Geneva talks 2. Revised WTO texts do not offer much to the developing world On BIO-FUEL---- 3. GoM approves national bio-fuel policy 4. Govt favours fiscal incentives for viability of bio-fuel programme On BIRD FLU--- 5. India to tackle bird flu on a war footing On Monsoon Rains - No El Nino--- 6. Rainfall in peninsular India may improve by July-end --- Emergence of El Nino ruled out, which removes severe drought possibility ------------ Agriculture issues continue to haunt Geneva talks ASHOK B SHARMA Posted online: Monday , July 21, 2008 at 23:16 hrs Agriculture still remains to be a contentious issue as Geneva gets ready to host the mini-ministerial for reviving the multilateral trade negotiations. In agriculture, both the offensive and defensive interests are likely to come to the fore with equal vigour From the side of the developing countries, Brazil has made clear that that the developed nation's heavy subsidies and high tariff barriers for agriculture products the biggest obstacle to an agreement on the Doha round. India and other developing countries would also join Brazil in demanding a drastic cut in developed countries' trade-distorting farm subsidies, particularly asking US to reduce its subsidies from $ 55 billion to $13billion. Brazil and India are member of G-20 group of developing countries. Though US has indicated that it is prepared some reduction in its subsidy, TomHarkin, chairman of the Senate Committee on Agriculture, Nutrition and Forestry joined by his colleague Saxby Chambliss and 15 other members of the panel have cautioned the US trade representative Susan Schwab saying " reduction in trade-distorting domestic support must be accompanied by real market access gains that are compatible in magnitude and will provide net gains for US agriculture. Anything less will not receive our support." They further said " The provisions of the most recent text on sensitive products, special products (SPs), the proposed new special safeguard mechanism (SSM) and exceptions for recently acceded members do not inspire much confidence that a balanced agreement can be reached Twice before, the US rightly rejected an unbalanced framework agreement and opted instead to continue discussions towards achieving a comprehensive result that will generate new trade flows. Neither US agriculture nor individual commodities should have to shoulder an unfair burden of the negotiations. If you are presented with an unbalanced text, we urge you to reject it in favour of continued negotiations. The US senators call for real market access gains that are compatible in magnitude to cause net gains to US agriculture clashes with the interests of the developing countries which are eager to protect their food and livelihood security. The group of developing countries led by G-33 is interested in self-designation of SPs based on select indicators, which would not be subjected to tariff cuts. G-33 has also demanded a strong and effective SSM to prevent any possible surge in cheap imports. The revised farm draft released on July 10 by the chair, Crawford Falconer has not emphasized much on drastic cuts in farm subsidies and tariffs of the developed countries. It has suggested a very complicated SSM for developing countries, practically making its application difficult and ineffective, while the developed countries continue to invoke special safeguard (SSG) clause. India which is a member of G-33, has demanded at least 20% of the farm tariff lines to be designated as SPs. The Indian commerce minister, Kamal Nath has threatened that he may walk out if the deal fails to protect small and marginal farmers and infant industries The revised NAMA draft released by Don Stephenson has sought to take away the flexibilities to industries in the developing countries with the introduction of 'anti-concentration Like the May draft, It has linked tariff reduction coefficients with flexibilities. India has demanded that flexibilities have to be treated on stand-alone basis and there should be no trade-off between flexibilities and tariff reduction coefficients. The proposal for negotiations in remanufactured goods finds place in the revised draft indicating convergence on this issue, which is far from reality. In the earlier draft, the issue was under the square brackets reflecting lack of consensus on the subject. The controversial coefficient ranges for developed and developing countries for cutting tariffs through a "Swiss formula" still remains in the May text as also the percentages of tariff lines that can have flexibilities from the full tariff cuts, according to a "sliding scale". The revised NAMA draft has also attempted to create a division in the unity of the developing countries by proposing additional flexibilities to some. Also the farm draft has proposed relaxation for least developing countries (LDCs), small vulnerable economies and 'other developing countries'—this may possible divide the unity amongst the developing countries, if not tackled effectively The mini-ministerial will also be faced with demands from many diverse groups. Cotton producers – Benin, Burikina Faso, Chad, Mali – are seeking cuts in US subsidies. The Cairns group, primarily of farm exporters, are seeking radical reforms in both developing and developed markets. G-10, representing food importers like Iceland, Japan, Israel, Liechtenstein, Mauritius, Norway, South Korea, Switzerland and Taiwan is stressing the importance of non-trade issues in agriculture like environment and community development. These countries have high tariffs. Banana war between the Latin American producers and European Union has remained unresolved On the issue of 12 tropical products there is a tug-of-war between Latin American countries and the African, Caribbean and Pacific (ACP) producers over the reduction in tariff. ------------ Revised WTO texts do not offer much to the developing world ASHOK B SHARMA Posted online: Wednesday, July 16, 2008 at 01:10 hrs Updated On: Wednesday, July 16, 2008 at 01:10 hrs The revised texts for multilateral trade negotiations in agriculture and industrial goods released on July 10 do not offer much to benefit the developing world. There is practically not much difference in spirit of the drafts issued in July and those released in May. The negotiations on designation of Special Products and use of Special Safeguard Mechanism (SSM) are vital for the developing world in protecting their agriculture and livelihood from a possible surge in cheap imports. The revised draft released by Crawford Falconer has largely disappointed the developing countries. The May draft had proposed a 30% threshold before the price trigger could be used for SSM. It also said the SSM-supported duty cannot exceed the pre-Doha or Uruguay Round bound rates and that the additional duty shall not exceed 50% of the difference between the import price and the trigger price. These provisions would render application of SSM almost difficult and ineffective. The revised draft has suggested a single option for volume-based trigger for application of SSM as compared to two options suggested in the May draft. There is, however, a relaxation for least developing countries (LDCs), small vulnerable economies and 'other developing countries'—this may possible divide the unity amongst the developing countries, if not tackled effectively. According to the revised draft, SSM can be used when the import price falls to a trigger price equal to 85% of the average monthly MFN sourced price for that product for the most recent three-year period preceding the year of import. The developing countries represented by G-33 had suggested that the trigger price should be determined on the basis of the average monthly price for the recent three-year period before the year of import. The revised draft also proposed that an additional duty should not exceed 85% of the difference between the import price and the trigger price. G-33 had suggested that an additional duty can be imposed up to the difference between the import price and the trigger price, so that the new price after the SSM duty can be the trigger price. While the May draft offers a weak safeguard mechanism for the developing countries' agriculture, it has not done much in calling for a reduction in overall trade-distorting subsidies in developed countries and also for reduction in their high-tariff barriers. The revised draft has not called for a reduction in Blue Box subsidies. There is no change in the revised draft relating to the sensitive products of developed countries. The revised text has said that developing countries shall be entitled to self-designate Special Products guided by indicators based on the criteria of food security, livelihood security and rural development to the extent of 10% to 18% of tariff lines. However, a footnote said that below this level developing countries need not resort to guidance by these indicators. This implies that above this number, developing countries can designate more SPs provided these are guided by indicators. The revised draft further said "up to 6% of the number of tariff lines may have no cut. The overall average cut shall, in any case, be 10-14%". The July draft has removed option for developing countries to "transfer" unused entitlement on sensitive products to obtain additional special products—which was available in the May draft. The revised NAMA draft released by Don Stephenson has sought to take away the flexibilities to industries in the developing countries with the introduction of 'anti-concentration' clause. While the July 2004 Framework agreed that the flexibility cannot be used by developing members to exclude entire HS Chapters, the latest draft suggested restrictions beyond this mandate. Such unduly restrictive clause disregards the realities and sensitivities of the industries in the developing countries. Flexibilities are more needed for the protection of small and medium-sized industries. The revised NAMA draft still continues to link tariff reduction coefficients with flexibilities. The flexibilities have to be treated on stand-alone basis and there should be no trade-off between flexibilities and tariff reduction coefficients. The latest NAMA draft has also attempted to create a division in the unity of the developing countries by proposing additional flexibilities to some. The proposal for negotiations in remanufactured goods finds place in the revised draft indicating convergence on this issue, which is far from reality. In the earlier draft, the issue was under the square brackets reflecting lack of consensus on the subject. The controversial coefficient ranges for developed and developing countries for cutting tariffs through a "Swiss formula" still remains in the May text as also the percentages of tariff lines that can have flexibilities from the full tariff cuts, according to a "sliding scale". ------------ GoM approves national bio-fuel policy ASHOK B SHARMA Posted online: Thursday , July 10, 2008 at 23:44 hrs New Delhi, July 9 : The group of ministers (GoM) headed by the Union agriculture minister, Sharad Pawar on Wednesday approved the National Bio-fuel Policy drafted by the ministry for new and renewable energy sources. It could not finalise many other pending issues and took a short-cut route by approving formation of National Bio-fuel Coordination Committee under the chairmanship of Prime Minister, Manmohan Singh to deal with any emerging problem. "The proposals of the GoM, including the approved draft National Bio-fuel Policy would be sent to the Union Cabinet for consideration," said a senior official in the Union ministry for new and renewable energy sources. National Bio-fuel Policy, however, assures that bio-fuel programme would not compete with food security and fertile farm lands would not be diverted for plantation of bio-fuel crops. The policy draft also deals with a number of issues like minimum support prices (MSPs) for bio-fuel crops, subsidies for growers of bio-fuel crops, marketing of oil-bearing seeds, subsidies and fiscal concessions for the bio-fuel industry, R&D, mandatory blending of auto-fuel with bio-fuel, quality norms, testing and certification of bio-fuels. The GoM consisting of the science and technology minister, Kapil Sibal, Planning Commission deputy chairman, Montek Singh Ahluwalia, panchayati raj minister, Mani Shankar Aiyer, rural development minister, Raghuvansh Prasad Singh, finance minister P Chidambaram, new and renewable energy minister, Villas Muttemar, and communications and IT minister, A Raja still could not resolve the tussle between the two rival ministries – rural development ministry and new and renewable energy sources ministry – over the budgetary allocations for their proposed programmes on bio-fuel. The new and renewable energy ministry has suggested the setting up of a National Bio-fuel Development Board (NBDB), which would determine the MSPs for bio-fuel feedstocks like jatropha, karanja seeds, and other oil-bearing materials. It also suggested that the government render financial support to oil processors for a period of five years. Though the GoM could not finalise the proposal for setting up of the NBDB, much of the proposals of the new and renewable energy sources are coved under the approved draft National Bio-fuel Policy. The delay in setting up of the NBDB would also not be a problem as the National Bio-fuel Coordination Committee under the chairmanship of the prime minister, Manmohan Singh would deal with the issues. The rural development ministry has demanded a gross budgetary support of Rs 1,340 crore for five years to set up a National Mission on Bio-Diesel and the launch of its first demonstration phase of jatropha cultivation in 4,00,000 hectare. This, however, was not decided in the GoM meeting on Wednesday. ------------ Govt favours fiscal incentives for viability of bio-fuel programme ASHOK B SHARMA Posted online: Monday , July 14, 2008 at 22:24 hrs New Delhi, July 13 : The government is of the view that the bio-fuel programme would need subsidies, support and fiscal incentives for making the production economically viable on a largescale. Experiences world over have already shown that bio-fuel initiatives can sustain and compete with fossil fuel through adequate state patronage and support. India, following the global experiences has drafted the National Bio-fuel Policy incorporating a number of issues like the minimum support prices (MSPs) for bio-fuel crops, subsidies for growers of bio-fuel crops, marketing of oil-bearing seeds, subsidies and fiscal concessions for the bio-fuel industry, R&D, mandatory blending of auto-fuel with bio-fuel, quality norms, testing and certification of bio-fuels. The drafted policy prepared by the Union ministry of new and renewable energy sources and which was recently cleared by a group of ministers headed by the agriculture minister, Sharad Pawar has been sent to the Union Cabinet for approval. "Global experiences show that the bio-fuel programme needs adequate support and hence in our draft policy we have proposed subsidies and fiscal incentive to make the production economically viable on a largescale," said a senior official in the ministry of new and renewable energy sources. According to a study done by Miloslaw Kozak of Poznan University of Technology in Poland bio-fuels are not competitive in terms of production costs. The production cost of one litre of ethanol is 70% higher than that of gasoline. The production cost of one litre of bio-diesel is 60% higher than that of diesel fuel. An effective public support and promotion for bio-fuels are, therefore, necessary. Poland has adopted a long-term National Programme for Promotion of Bio-fuels and other renewable fuels for the period 2008-14 promising adequate support to the industry. Brazil, which is a major producer of fuel ethanol, heavily supported its programme in the initial stages and after and the support was gradually removed when the sugar industry was deregulated. "Brazil has produced fuel ethanol at largescale for more than 30 years. Considering the scale of production, subsidies are no longer required and production can be increased without direct public investment. Though it can be concluded that ethanol production in Brazil is a success from an economic point of view, there are still criticisms," said Arnaldo Walter of the State University of Campinas in a research paper. Brazil has also recently launched its bio-diesel programme and Walter said : "The Brazilian government have a very optimistic evaluation of the existing conditions for largescale production of bio-diesel. It has been clear that much more support and planning will be required in order to get a reasonable share of the production based on small farmers and just in mid-term these actions can be taken. It seems more adequate to accept a partial failure on the results in the following years rather than accept the pressures of large farmers and companies that can go faster with production. It is clear that subsidies will be required anyway even in a country with favourable conditions and with a considerable experience on bio-fuel production." According to FD Yamba of the Centre for Energy Environment and Engineering, at present only few feedstocks are competitive with fossil fuel production cost. For ethanol, sugar based feedstocks are promising and for bio-diesel Jatropha appears to be competitive. The viariability of other feedstocks will largely depend on future of crude oil prices, a scenario which is difficult to predict. However, there are other experts who estimate that Jatropha-based bio-diesel programme would need an investment of more than Rs 60,000 per hectare. Some have also suggested inter-cropping along with Jatropha to enable economic viability for farmers. Other have suggested that second generation bio-fuel programme from microalgae, rice straw, biomass, wastes, cellulosic ethanol would be more viable and would not cause food security problem. ------------ India to tackle bird flu on a war footing ASHOK B SHARMA Posted online: Monday , July 14, 2008 at 01:06 hrs New Delhi, July 13 : India is finally gearing up to effectively deal with the bird flu menace, which had occurred thrice in the country since 2006 causing huge economic losses. A project is being proposed by the Indian Council of Agricultural Research (ICAR) to develop birds resistant to the dangerous avian flu virus, H5N1. It has been noted that many species of indigenous poultry birds are resistant to bird flu virus. Exotic and crossbred birds are more vulnerable to the attacks of the bird flu virus. Therefore it is planned to segregate species of indigenous birds, which have a high degree of resistance. "We need to study the genetic makeup of indigenous birds, which make them highly resistant to the deadly bird flu virus. After the resistant genes have been identified in the indigenous birds we can proceed to the empower the crossbred ones with the power of these genes," said the ICAR deputy director-general for animal sciences, KM Bujarbaruah. There are plans to select an isolated and uninhabited island in the Andaman & Nicobar, where experiments on different species of indigenous birds collected from all over the country would be conducted to test their resistance power. The birds would be exposed to the bird flu virus and the scientists conducting the experiments would be well protected with masks and other equipment to prevent any exposure to the deadly virus. The birds, which survive, would be identified for a genetic study for isolation of the resistant genes. The area will also be sanitised after the experiment. India has suffered the incidence of bird flu thrice since 2006. In 2005 there were reported cases of mass mortality of birds but the incidence was not officially reported as linked to bird flu. In early 2006, bird flu on poultry occurred in western parts of the country. In July 2007 bird flu occurred in Manipur, in the north-eastern part of the country. In 2006, the poultry industry suffered an estimated loss of Rs 30,000 million, while in 2007 it was Rs 6,700 million. On January 15, 2008, bird flu was confirmed in the areas bordering Bangladesh, which rapidly spread to 13 districts of the state namely Birbhum, Dakshin Dinajpur, Nadia, North 24-Parganas, Murshidabad, Burdwan, Cooch Behar , Malda, Uttar Dinajpur, Howrah, Bankura, Hoogly, and Purulia. Bird flu did not reach Kolkata, though it reached the surrounding districts like North 24-Parganas, Burdwan, Howrah, and Hooghly. Bird flu also reached Kurseong Block of Darjeeling district, which was confirmed on May 5, 2008 and the presence of bird flu was also confirmed in Bijanbari Block of the same district on May 16. Bird flu also spread to Tripura, which borders Bangladesh. Several experts are of the view that the 2008 incidence of bird flu in India was due to the virus entering through the Bangladesh border. India has already proposed that South Asian countries need to work in cooperation to effectively deal with the bird flu menace and the SAARC forum has begun working on it. ------------ Rainfall in peninsular India may improve by July-end Emergence of El Nino ruled out, which removes severe drought possibility ASHOK B SHARMA Posted online: Monday, July 21, 2008 at 0025 hrs New Delhi, July 20: The July rainfall has practically disappointed farmers in the southern peninsula, Gujarat, Maharashtra and parts of northeastern India. The official weather forecasting agency, India Meteorological Department (IMD), has not extended any immediate hope for the revival of the situation. Its numerical weather prediction models have said "subdued rainfall activity would continue over central and western India in the next three to four days". The US-based Center for Ocean Land Atmosphere Administration (COLA) in its short-term forecast for the period till July 26 has also confirmed low rainfall of 20 to 35 mm in western and parts of central and southern India. It, however, predicted heavy rainfall of over 150 mm in the heartland of north India, eastern and northeastern India, Andhra Pradesh and parts of central India. According to COLA, the situation is likely to improve after July 27, when most parts of the country would receive good showers. The other US-based agencies like Climate Prediction Center, National Centers for Environmental Prediction and weather service of National Oceanic and Atmospheric Administration (NOAA) have noted the transition from La Nina to neutral conditions in the central and east-central equitorial Pacific during June. La Nina or cooling of Pacific waters below normal is usually responsible for good rains and the country enjoyed good rains in June, this year. However, the possibility of emergence of the spoilsport, El Nino (warming of Pacific waters) is ruled out. This dispels the apprehensions of a severe drought year to an extent. Weather conditions also depend upon the surrounding sea surface temperatures (SSTs). The International Research Institute for Climate and Society (IRICS) predicted "a weak positive dipole" in the equatorial Indian Ocean with slightly below average SSTs near Indonesia and slightly above average SSTs near the African coast. July rainfall is crucial for Indian agriculture in the four-month S-W Monsoon season. The IMD has predicted the country will receive rainfall amounting to 98% of its long period average of 293 mm on cumulative basis in July, subject to a model error of +/-9%. Till the middle of the month the cumulative rainfall has been 321.8 mm which is 4% more than the normal. But Gujarat, Maharashtra, Karnataka, Kerala and Andhra Pradesh and parts of northeastern India did not receive good rainfall and as a result sowing operations were badly affected in these areas. Sowing operations for groundnut, red gram, black gram, green gram, cotton, sugarcane and millets like jowar were affected. The July Fallout •13 out of 36 meteorological subdivisions received deficient rains •Marathwada worst hit •35% of meteorological districts received deficient to scanty rains •Peninsular India gets 34% less rains •Rainfall deficient over central India by 3% •Areas under groundnut, red gram, black gram, green gram, cotton, sugarcane and jowar shrink •Hope hinges on good rainfall distribution by month-end ------------ |
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