NEWS Bulletin from Indian Society for Sustainable Agriculture And Rural Development ------------ 1. Labelling of GM food: Health ministry passes on the buck to FSSA 2. India to concentrate on prawns, shrimps 3. Govt plan to boost livestock sector soon 4. Enhanced animal productivity to ensure food security 5. Rural telecom connectivity poses challenges and opportunities: study 6. Agri-education faces fund shortage On COASTAL EROSION---- 7. Orissa forms panel to study coastal erosion 8. Orissa government begins new PDS programme for rice On MICRO-FINANCE- 9. Sa-Dhan to mkt micro-finance concept to rurals 10. Indian tea industry set for a turnaround, says ICRA ------------ Labelling of GM food: Health ministry passes on the buck to FSSA ASHOK B SHARMA Posted: Oct 13, 2008 at 2318 hrs IST Updated: Oct 13, 2008 at 2318 hrs IST New Delhi, Oct 12 : Mandatory labelling of genetically modified (GM) food in India is likely to be delayed as the Union health ministry has planned to pass on the responsibility to the newly set up autonomous Food Safety and Standards Authority (FSSA). In March, last year, the committee of experts and stakeholders constituted by the Union health ministry under the chairmanship of the additional director-general of the National Institute of Communicable Diseases, Shiv Lal, had unanimously recommended mandatory labelling of all GM foods irrespective of the threshold level. More than a year has lapsed. The panel recommendations on a vital issue like mandatory labelling of GM food has not been implemented due to pressures from the biotech industry and the US, which had cited reasons for hampering global trade. Making several excuses for the delay, the Union health minister, Anbumani Ramadoss speaking to FE said, "We have decided to pass on the recommendations of the panel to FSSA to decide on the issue. I am of the view that all food items should be labelled disclosing its ingredients. The FSSA has been set up in July this year, with PI Suvrathan as its chairman and G Balachandran as its chief executive officer. Under the Food Safety and Standards Act - 2006, the FSSA has powers to regulate GM food. The Genetic Engineering Approval Committee (GEAC), which has exclusive powers to regulate all GM products under the Environment Protection Act-1986 and EP Rules-1989, has also not been proactive on the issue of labelling of GM food, even though the annual amendments to the Foreign Trade Policy made in April 2006 had said that unlabelled GM products import would attract penal action under Foreign Trade (Development and Regulation) Act-1992. Already several NGOs have brought to notice cases of unlabelled GM products being imported. Ramadoss said that he was not satisfied with the FSS Act- 2006 and that his ministry table a bill in Parliament for amending certain provisions. "The draft bill, which subsequently became an Act of the Parliament, was drafted and piloted by the promoter agency, the ministry for food processing industries (MFPI) and therefore has some lacunae. The MFPI insisted that it would anchor the FSSA and it was finally decided that it would be supported by the health ministry," he said. Regarding multiplicity of food laws unified under FSS Act-2006, he said that his ministry was notifying, from time to time, such laws under the Act. Meanwhile the Union ministry for science and technology is gearing up to table a bill in the Parliament for setting up of the National Biotechnology Regulatory Authority (NBRA) replacing the GEAC. It has proposed that NBRA would be anchored by the promoter agency, department of biotechnology (DBT) and would regulate all aspects of transgenic technology, including the labelling of GM food. ------------ India to concentrate on prawns, shrimps ASHOK B SHARMA Posted online: Monday , July 21, 2008 at 02:12 hrs New Delhi, July 20 : In an effort to boost marine exports, India has decided to concentrate on black tiger prawn and Vanammae shrimp. Good quality black tiger prawn seeds are being sourced from Hawaii. A centre for seed multiplication has been selected in Visakhapatnam in Andhra Pradesh for which a MoU was signed between Mona Technologies and the National Fisheries Development Board (MFDB). "We have invited bidders through tender for participation in the seed multiplication project. Once the bids are finalized we will begin with the process of seed multiplication, Kumar said that the seeds multiplied in the centre would be given to farmers. He also said that plans are afoot to source Vanammae shrimps seeds from Thailand, Korea or China. A separate project would be launched for multiplication of Vanammae shrimp seeds in a public-private partnership mode. Kumar said that the draft National Livestock Policy has also promised development of inland fisheries to raise fish production from 6.8 million tonne to 10 million tonne by the end of the 11th Plan period, apart from development and multiplication of black tiger shrimp and Vanammae shrimp. He said that territorial waters were over exploited and therefore there was a need to concentrate on deep sea fishing, particularly with high-tech vessels tuna fishing around Amdamans. India's marine exports are around $ 1.8 billion and the government has plans to boost exports to about $ 2.5 billion ------------ Govt plan to boost livestock sector soon ASHOK B SHARMA Posted online: Monday , July 14, 2008 at 22:44 hrs New Delhi, July 13 : The Centre is working on a plan to boost the capacity in the livestock sector to increase growth in agriculture. Shrinking area under cultivation and stagnation in crop productivity, is all likely to come in the way of the government for achieving a target of 4% growth for the agriculture sector. The draft National Livestock Policy is soon likely to see the light of the day. The department of animal husbandry has convened a meeting of state ministers on July 22 to discuss the draft policy and suggest changes. "The policy is ready. We need to seek the consensus of state governments. If the conference of ministers do not take place on July 22, we will fix another date very soon," said secretary, animal husbandry department, Pradeep Kumar. It is estimated that different areas of the livestock sector have the potential to grow between 6% to 8% annually. Livestock contributes more than 31% to agriculture. It contributes more than 5.3% to the GDP. Yet the sector suffers from serious neglect. Its share in the Central Plan outlay is only 0.28% and within the total outlay for agriculture its share is 9%. The allocation to livestock sector under Rashtriya Krishi Vikas Yojana is around 9%. The 11th Plan has recognised the importance of the livestock sector and has promised an outlay of Rs 8,174 crore over a period of five years. But the annual releases of the outlay have still remained inadequate. In the previous year it was Rs 910 crore and in the current year Rs 1,000 crore was sanctioned by the Planning Commission against a demand for Rs 1,891 crore put by the department of animal husbandry. Livestock is categorised as 'allied sectors of subsidiary occupation'. "This tag should go," said Kumar and added "Livestock should be seen as a vibrant sector of the economy and for this reason we are coming out with a livestock policy." The foot-and-mouth disease (FMD) in cattle causes an annual loss of Rs 10,000 crore. Outbreak of Avian Flu has also caused huge losses to the poultry sector. Measures for control of FMD are in operation in 54 districts. The proposed draft policy seeks to eradicate FMD on a war footing with six-monthly vaccination programme for 6 years and demarcate areas free from FMD. To solve the problem, the proposed policy promises not only to provide quality veterinary services at the doorstep of the farmers but also upgrade infrastructure, skilled manpower and artificial insemination for quality breeding. Though the onus of regulating the livestock sector vests with state governments under the Constitution, the Centre has a definite role to play. Marine and livestock have a major share in the country's export basket. India has emerged as the largest producer of milk. Animal breeding depends upon geo-climatic conditions and the policy paper suggests breeding and genetic improvement for each species including the small ruminants like sheep, goats, pigs and rabbits. The genetic improvement will aim at both increasing lactation and meat in animals. In India milk produced by animals is less than 1,200 litre per lactation as against the world average of 2,300 litre per lactation. In Israel it is 12,000 litre per lactation. In Brazil, the Gir cow, which was once imported from India, now produces four time more milk than its mother race in India. The policy paper calls for breeding of good quality of bulls and male buffalo and mandatory certification of quality semen. "We will take care to protect and conserve indigenous breeds of animals as they can resist disease and adverse weather conditions more than the crossbred ones. Some indigenous breeds have high lactation," Kumar said. The policy document also ensures availability of feed and fodder. It also promises development of inland fisheries to raise fish production from 6.8 million tonne to 10 million tonne by the end of the 11th Plan period. It noted that territorial waters are over exploited and there are no adequate high-tech vessels for deep sea fishing. Hence, inland water bodies need to be leased out for fish arming. High-tech vessels are needed for tuna fish catchers around Amdamans. It suggested multiplication centres for Black Tiger Prawns and Vannami Shrimps. The draft policy suggested marketing, storage, processing, value addition and quality assurance for all livestock products. ------------ Enhanced animal productivity to ensure food security http://www.financia ASHOK B SHARMA Posted: Jul 28, 2008 at 2338 hrs IST Updated: Jul 28, 2008 at 2338 hrs IST New Delhi, July 27 : Food security is just not related to increasing the yields of crops, but also increasing the lactation in animals and also its meat content. The knowledge of sequencing of genes has given scientists the tool to understand and deploy the properties to genes for increasing the productivity in animals. Buffalo—an integral part of agriculture in Asia and India in particular—not only contributing to 54.2% of the total milk production, but also valued for its meat for consumption and its usage as a draft power. The Indian Council of Agricultural Research (ICAR) launched a project for sequencing of buffalo genome which would help in better breeding practices. The 5-year project will be implemented by the Karnal-based National Bureau of Animal Genetic Resources (NBAGRs) and the Hisar-based Central Institute for Research on Buffaloes, said ICAR director-general, Mangla Rai. Indian scientists had successfully participated in the global project for sequencing of rice genome. Scientists have also sequenced human genome and around the world scientists are working on sequencing genes of cattle, chicken, pig, mouse and rat. "We have taken up the onus of sequencing buffalo genome, as 56% of the world's buffalo are found in India and this animal is very important for our economy," said ICAR deputy director-general of animal sciences, KM Bujarbaruah. "Though India is the largest producer of milk, the per capita per day availability of milk is only 10.8 gram as against the world average of 25 gram.It is for this reason we are launching a National Livestock Policy," said the animal husbandry secretary, Pradeep Kumar. The yield of milch animals in India is 1200 litre per lactation as against the world average of 2300 litre per lactation. In Israel it is as high as 12,000 litre per lactation. Scientists say that exploitation of new technologies to identify genetic markers associated with trait of interest is a promising area of research. ------------ Rural telecom connectivity poses challenges and opportunities: study ASHOK B SHARMA Posted online: Monday , July 14, 2008 at 22:48 hrs New Delhi, July 13 : Telecom connectivity in rural areas poses a challenge and yet a highly profitable enterprise. Telecom companies across the country understand the business imperative of expanding into this domain, according to a study done by Ernst & Young in collaboration with the Indian Chambers of Commerce and Industry (FICCI). The study noted that the need for subsidisation of rural telecom projects are on the decline and in this context proactive regulation regarding spectrum, new technology and infrastructure sharing can help facilitate rural coverage. India has 63.5 million telecom subscribers in rural areas, which includes 52.5 million wireless and 11 million wire lines – approximately 7.5 million net additions each quarter. Telecom penetration in rural areas is about 7.9% and average revenue collected per user is Rs 150. According to ITU report of May 2008, India has connected 91% of its some 600,000 villages with payphones. Listing out the challenges of rural connectivity, the Ernst & Young-FICCI study said that low income and geographical variance pose difficulties for network layout as well as for setting up of distribution channels in remote areas. Low average revenue per user generated by rural customers does not offset return on investment and revenue for rural outlay for private operators. Lag in the accrual and disbursement of Universal Service Obligation funds for setting up technologically advanced schemes, including IP based network, Very Small Aperture Terminals (VSAT) also poses a problem. Besides there are non-availability of sufficient back-haul capacity between district headquarters and the block headquarters in rural areas. In some cases the optical fibre network only reaches up to district headquarters. The study called for an urgent need to shift emphasis from the present village phone terminal subsidy and individual district exchange line subsidy to infrastructure growth empowering subsidy. It also suggested the need for customized applications and content in local languages in the handsets to suit rural subscribers. The study noted that the necessity and value of a comprehensive network expansion have been identified by stakeholders. Business models that are tailored to reduce operational costs and promote savings on capital expenditure are being redefined to meet the rural opportunity. It suggested that the operators can learn from interesting business models that have been experimented across the developing world for expanding rural connectivity. It noted that marketing innovations are being implemented that help establish a comprehensive sales and distribution channel to enable reach and access of the communication products to the remote locations. Emphasis has begun to shift from a marginal increase in teledensity to reaching a critical mass in rural areas that have access to and affordability of telecom services. ------------ Agri-education faces fund shortage ASHOK B SHARMA Posted online: Monday , July 21, 2008 at 02:17 hrs Higher education in agriculture in India has not yet got the needed support to modernise and upgrade itself to meet the challenges of global competition. The state agriculture universities, numbering about 41, are suffering from severe financial constraints. The state agriculture universities (SAUs) in particular, suffer on account of inadequate support from state governments, which is not enough to meet even the salaries and establishment charges. The Indian Council of Agricultural Research (ICAR) extends financial support to the SAUs, which amounted to about 58.62% of ICAR's Xth Plan outlay. An effective assessment of the critical needs of SAUs was made during the terminal year of the Xth Plan. The XIth Plan Working Group on Agricultural Research and Education constituted by the Planning Commission also made an in-depth analysis and recommended Rs 10,000 crore as funding support to SAUs out of Rs 30,000 crore total recommended for ICAR. However, the Planning Commission has made an allocation of Rs 12,023 crore out of which ICAR plans to allocate Rs 3,000 crore for education. In addition, an additional amount of Rs 760 crore was proposed for developing farm facilities and limited essential equipment. Further, in response to the PMO's initiative for revamping agricultural universities, over and above the normal ICAR support, a sum of Rs 1,710 crore was proposed. Also, during the follow up meeting in the prime minister's office (PMO) on October 12, 2007, it was opined that funds to the universities be provided for region-specific technology development which may cost around Rs 500 crore during the XIth Plan. Thus, over and above ICAR planned outlay for universities, an additional total sum of Rs 3,000 crore have been proposed in response to various initiatives. Apart from low funding India's higher education in agriculture suffers from low access—gross enrolment ratio being about 10% compared with 60% in the US and Canada and 40% in several European countries. Several SAUs are not accredited yet, and hence difficult to ensure quality standards. Other constraints which need to be overcome are gender participation, old course curricula and delivery methods, inbreeding and lack of faculty-competence in cutting edge technologies. Under changing global scenario, issues such as the cutting-edge technologies, quality of produce and products, competitive pricing, value chain, sustainability, climate change and gender mainstreaming are becoming the key elements to be addressed under higher agricultural education system. Excellence is the outcome of quality. For bringing in excellence in SAUs, the state-of-art facilities, faculty development, promoting ICTs, improved course curricula and delivery methods, personality development measures are, therefore, needed to be promoted and developed. This will ensure meeting the contemporary and emerging needs in this globally competitive era in regard to teaching, training, demonstration and entrepreneurship development for sustainable and economically viable agricultural production system. In view of the above concerns, several high level deliberations have been held including those in the vice chancellors' conferences organised by the ICAR. Keeping in view the minimum essential requirements, which can bring about tangible changes at the ground level, several new initiatives were put forth in this meeting in PMO. As a synthesis, 11 areas are identified by ICAR that need financial support, target-setting and effective monitoring for much desired output, outcome and long-term impact. These 11 areas are—modernisation of farms and laboratories including provision for refurbishing, renovation, equipment, implements and farm machinery; ICTs, connectivity, video conferencing and modern delivery systems; training, reorientation and faculty development especially in frontier areas of science and technology; provision of visiting faculty and adjunct professorship to fill the critical gaps and excellence-promotio However, an additional sum of Rs 500 crore has been agreed by the Planning Commission to cater to the needs for expansion of teaching facilities and enhancing research capability of SAU's in identified priority areas. This fund is to be used as complementary funding of proposals submitted by state governments and SAUs for the 11 identified areas, including any time-bond research or proposals received from the universities on strategic research. The SAUs through state governments can avail of funds under Rashtriya Krishi Vikas Yojana (RKVY) to formulate such proposals. The recent conference of vice-chancellors of SAUs held in January this year had proposed that the regionwise, locationwise and situation and system specific cutting-edge development, and strategic research, individual institutional proposals need to be developed at the state level. The state-line departments would pose the researchable issues to the SAUs, which would in turn examine them and submit their proposals to the Union agriculture ministry. Funds in this regard would be allocated within the RKVY and managed by the Union agriculture ministry. Support to university should be linked to their assuring technological backstopping to Krishi Vigyan Kendras and in turn to ATMAs and other technology-transfer departments at the district level. Setting up of an educational museum in each of the SAUs in the XIth Plan is a new concept. Such museums will evolve continuously in developing appropriate instructional strategies and methods for enhancing scope of teaching. The educational museums would be set up with 100% funding by ICAR under the Plan scheme of "Strengthening and Development of Agricultural Education". The new programme—niche areas of excellence was started in the Xth Plan with the objective to achieve educational excellence in teaching, research, consultancy and other services. Total 28 niche areas of excellence centres were approved and are in operation. A provision of establishment of experiential learning units and hands-on-training was made in the Xth Plan to link education with building professionalism among agricultural graduates by transcending limited practical training in laboratories into comprehensive practice sessions involving every aspect of an agricultural enterprise from cultivation to consumption. ICAR sanctioned total 183 such experiential learning units in 43 SAUs with an allocation of Rs 70.36 crore. The IV Deans Committee has also made a strong recommendation for inclusion of hands-on-training to UG students. With a view to enhancing the quality and relevance of agricultural education in the country, ICAR started accreditation of agricultural universities in 1996. A total of 14 agricultural universities have so far been accredited and proposals for another five agricultural universities have been finalised. However, a majority of agricultural universities have yet to pursue the submission of the Self Study Report so that the accreditation process is completed in the shortest possible time. ------------ Orissa forms panel to study coastal erosion http://www.financia ASHOK B SHARMA Posted: Aug 11, 2008 at 0219 hrs IST Updated: Aug 11, 2008 at 0219 hrs IST Bhubaneswar, Aug 10 : You can put the blame on the after effects of dreadful Tsunami of December 2004 or the mean sea-level rise on account of climate change, but there is no immediate permanent solution to the rapid erosion of Orissa coast. The ingress of sea waters along the tourist highway connecting Puri and Konarak and the entire Belabhumi area including Paradeep port, Chilika lake, Gopalpur and Rajnagar has invited fresh worries for the Orissa government. Chief minister Navin Pattnaik called an emergency meeting of the cabinet after reviewing the situation with senior officials and was quick to announce a Rs 7 crore package to protect the Puri-Konarak tourist highway from further erosion. The action proposed is filling the area with sand bags and largescale plantation of trees. But this would be a temporary measure to save the situation. "We have constituted an expert group headed by the chief engineer of water resources to find out the causes for erosion of the coast and have been asked to submit its report by early next month. Experts from the Indian Institute of Technology (IIT), Chennai have also been asked to study the situation and suggest remedies," said the state's revenue minister, Manmohan Samal. The state government has also planned to check other areas of the coast at an estimated additional investment of Rs 15 crore. However sand filling along the coast would be only a temporary measure. it is also not much dependable. Though the reports from expert panels are due, the state has received some initial feedback, which suggests that the current situation may be due the disturbances caused in the sea bed due to the dreadful Tsunami of December 2004. Added to this is the problem of rise in the mean sea level, particularly in the Bay of Bengal. Rise in the mean sea level is global phenomena caused due to fast melting of glaciers and snow caps on account of global warming. The state government has referred all these issue to the expert panels for their indepth review. There may be another cause for the situation. Orissa usually receives good showers and also intermittent rains around the year. Often the state experiences floods due to rise in reservoir levels, but the erosion of coast is now a new phenomena. Experts believe the cause of the current problem may not be due to good monsoon downpour but due to after effects of December 2004 Tsunami and the rise in the mean sea-level. ------------ Orissa government begins new PDS programme for rice http://www.financia ASHOK B SHARMA Posted: Aug 11, 2008 at 0135 hrs IST Updated: Aug 11, 2008 at 0135 hrs IST Bhubaneswar, Aug 10 : Ensuing polls for the state assembly due early next year and the current situation of rising prices of essential commodities have compelled the Orissa government to announce its special subsidised rice programme for the poor. The scheme would entail a state government subsidy amounting to Rs 8,000 crore and it would benefit 5.579 million families. Taking its cue from Tamil Nadu and neighbouring Chhattisgarh, the Orissa government has announced the distribution of rice at Rs 2 per kg to families below the poverty line (BPL). This new scheme is also intended to cover beneficiaries under the Antyodaya Annapurna Scheme, students in hostels meant for scheduled castes and tribes and families above the poverty line (APL) in the erstwhile KBK region. "The price of salt is Rs 8 per kg, that of potato is Rs 8 per kg, that of onion is Rs 14 per kg and prices of pulses and other vegetables range between Rs 20 to Rs 40 per kg. Subsidised rice at Rs 2 a kg is just a drop in the ocean," said Maheswar Mulia, a slum dweller in Bhubaneswar. The scheme was formally launched by chief minister, Navin Pattnaik on August 2 in Bhubaneswar and the implementation of the scheme commenced from August 5 in all districts. Rations under the scheme would be distributed through fair price shops on the 5th, 6th, 7th, 20th, 21st and 22nd days of each month. The state government however denied that the move was intended as a populist measure keeping in view the polls. "The Tamil Nadu government is giving rice to the poor at Rs 2 per kg, the Chhattisgarh government is giving at Rs 3 per kg. The central issue price for rice for BPL families is Rs 5.65 per kg and that for APL families is Rs 8.50 per kg. We are prepared to subsidise on our own in the interests of the poor," said a senior official in the state's department of food, civil supplies and consumer welfare. ------------ Sa-Dhan to mkt micro-finance concept to rurals http://www.financia ASHOK B SHARMA Posted: Aug 25, 2008 at 0032 hrs IST Updated: Aug 25, 2008 at 0032 hrs IST Bhubaneswar, Aug 24 : The apex body of micro-finance institutions in the country, Sa-Dhan, has drawn up an action plan to help vigorously market its concept to the rural folk in the eastern part of the country, particularly Orissa and West Bengal. It has planed a two-day policy conclave— Breaking the vicious cycle of poverty: synergy between micro-finance and livelihood—from August 25 in Bhubaneswar. The conclave aims to bring together stakeholders in micro-finance and livelihoods to deliberate and identify the critical gaps that constrain the efforts on poverty reduction. It also aims at bringing synergy in their roles vis-à-vis enhancement of livelihoods opportunities via the provision of micro-finance services. The conclave would also be an interactive forum for forging partnerships between those working on livelihoods and micro-finance separately and carve out the way. Orissa chief minister, Navin Pattnaik is expected to inaugurate the conclave. The state finance minister has also agreed to participate. The conclave will be attended by major development banks like Sidbi and Nabard; secretary, planning commission; key functionaries from departments of finance, planning, rural development, social welfare and panchayati raj, representatives from major public and private sector banks; prominent micro-finance and livelihoods organizations, social entrepreneurs of repute and eminent experts from Orissa and West Bengal. According to Sa-Dhan executive director Mathews Titus, as poverty remains a formidable challenge, continuous efforts are being made by various stakeholders including the governments to fight against it. Micro-finance sector is contributing its pie in reaching the last mile of financial inclusion and poverty reduction agenda. The outreach and impact of micro-finance is different in different states. The eastern states of India have also a different dynamics where awareness and the level of literacy have made the micro finance interventions easier. But the major challenge faced by the people of these states is lack of livelihoods opportunities. This session will look at the present micro-finance scenario, approaches and challenges in the states of Orissa and West Bengal. The conclave will look into the opportunities in reaching out to the unserved and underserved in the targeted area. "Provision of micro-finance services is meant to help the poor develop their micro-enterprises and sustainable livelihoods. Micro-finance plays the role of a catalyst in livelihood generation and enhanced income for the low-income households. However, this intervention requires development of customized product, usage of the financial assistance for productive purpose, livelihoods support system and many more," said Titus. In order to understand the economical and occupational profile of the SHG/MFI Borrowers, usage of the loans, pattern of livelihood enterprises and need of support system, Sa-Dhan conducted a study on "Livelihoods Profiling of MFI/SHG Borrowers". Findings of the study will be discussed in the conclave while also identifying the challenges and opportunities in livelihood finance. The conclave would also look at existing models of such interventions in other states. "The efforts of microfinance need to be supplanted with social security measures for the poor people in order to keep them out of the vicious cycle of poverty. Therefore, the provision of insurance- life, health and asset, pension, remittance and other services are the stepping stones in this direction. Though many institutions in the eastern region are working towards the social security of their clients, it is imperative to look at social security as an integral part of the microfinance movement", said Titus. According to Sa-Dhan a three pronged strategy is required to enable micro finance for promoting continuous resource flow to the poor for sustainable livelihoods development. First, livelihoods and micro finance institutions need to forge partnerships at the grassroot to increase the capacities of the poor and make opportunities available to them. Second, institutional mechanisms including infrastructure building (Rural marts), hand holding of small venture, forward and backward linkages(procuremen ------------ Indian tea industry set for a turnaround, says ICRA http://www.financia ASHOK B SHARMA Posted: Aug 11, 2008 at 2351 hrs IST Updated: Aug 11, 2008 at 2351 hrs IST The India tea industry has been plagued by closure of a number of tea estates or gardens. The main causes for sickness/closure include inherent weaknesses of the gardens due to poor yields arising out of poor condition of the garden and factory (affecting tea quality and price realisations) India's tea production declined 1.2% to 944.7 million kg (mkg) in 2007, compared with increases of 1.1% in 2006, and 5.9% in 2005. During 2007, tea production declined in both North and South India. In the earlier part of the year, tea production had declined because of extreme weather conditions in Assam, severe drought conditions in most of the tea plantations in South India, heavy rains in Kerala, and labour shortages because of disease outbreaks. During 4M2008 (January-April 2008), India's tea production increased 11.8% (yoy) to 169.97 mkg. After a decline during the winter months, tea production in North India recovered significantly during April 2008. Production in South India increased 18.8% (yoy) to 74 mkg. Competitive intensity in the Indian tea industry is high because of the high number of players, which are backed by series of incentives. There are about 1,700 processing units engaged in tea production activities. However, while around 1,671 big growers have an annual output of 700-725 mkg, the estimated 0.141 million smallgrowers have an annual output of only around 237 mkg. India's large tea plantations are most concentrated in Assam and North India. In these regions, a large proportion of tea is grown in large plantations of more than 100 hectares (ha). By comparison, India's smallholder production is most concentrated in the Nilgiris, where they account for around 53% of total tea production in the region. However, the ICRA study gave hopes for the revival of the Indian tea industry. It said : "After a decline in production during 2007, India's tea production is expected to increase to around 960 mkg in 2008. Exports could recover to around 200 mkg mainly because of higher production in India, and lower production in some key tea exporting countries such as Kenya. Thus, India's tea exports could increase to destinations such as Egypt, UK, and Pakistan. The opening of the tea promotional office could also help in increasing volumes" However, the ICRA study cautioned that Indian tea producers could continue to face stiff competition from Sri Lanka. India's tea exports could also increase in the medium term because of recent initiatives by the TBI to increase production of orthodox tea. Orthodox tea exports are likely to rise in the next few years due to higher demand from Russia and other European countries and stagnant production in Sri Lanka, a major exporter. Russia's consumption is now shifting towards orthodox from CTC, and India is trying to increase its orthodox exports to the country to regain its lost share. Indian CTC tea quality is almost on par with Kenyan CTC tea. However, Kenyan tea is now preferred in the UK, and it may be difficult for India to increase market share over the long term. Although Indian tea has a good reputation in the UK, India's tea exports are primarily of blends, especially of Darjeeling and Assam teas, which dilutes their high brand image in the market, and inhibits exports. ------------ |
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