NEWS Bulletin from Indian Society For Sustainable Agriculture And Rural Development
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1. 'Modify engine for use of neat BIO-FUELs' - experts
2. Developing countries call for funds to increase FOREST cover
3. Invasive species are threat to forest cover: ICFRE
4. Farm loan waiver: Timely relief, but doubts remain
5. Budget package evades most of needy farmers
6. Brokers oppose commodity futures transaction tax
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'Modify engine for use of neat bio-fuels' - experts
ASHOK B SHARMA
Posted online: Monday , March 10, 2008 at 0014 hrs IST
New Delhi, Mar 9 One of the ways of reducing the cost of bio-fuel production, on which experts are working, is the possible use of neat vegetable oils directly in the engine. The common practice is to prepare the oil extracted from bio-fuel crops through a chemical process of trans-esterification before it is ready for blending with diesel or for use directly in the engine.
"The cost of trans-esterification can be avoided, if the engines are suitably modified to work on neat straight vegetable oils ((SVOs). If one considers the engine and fuel as one system, choosing bio-diesel is a way of modifying the fuel - SVO. Technically, one can also modify the engine to work with SVOs," said the director (technical) of the National Automotive Testing and R&D Infrastructure Project (NATRIP), GK Saxena.
He said that limited field experiences of the direct use of SVOs in existing engines have been quite discouraging. Deposits were found in the combustion chamber, engine valves, piston ring sticking, fuel line, filter, and there were also complaints of the failure of the lubrication system on account of oil thickening, wear of metal components, and the effect on rubber parts. If the characteristics of SVOs are properly studied, then a holistic view can be taken about what minimum interventions would be required for a cost effective modification of the engine.
According to WL Roberts of the department of mechanical and aerospace engineering in the US-based North Carolina State University, the CentiaTM process is a method for converting vegetable oils or animal fats to transportation fuel. The process can produce a range of fuels, including jet fuel, diesel or gasoline. Unlike other bio-fuels such as ethanol or bio-diesel, CentiaTM fuels are designed to meet the exact specifications of their petroleum counterparts. The process is also designed to take advantage of low-cost and low-quality feedstock like waste vegetable oils and fats.
D Chiaramonti of the University of Florence in Italy said that agriculture tractor - AgroPlus 85 produce by Deutz Fahr - modified by installation of a kit, showed promising results when neat rapeseed oil was used. The Italian Economical Law 2007 has allowed the use of vegetable oils with taxes for use in farm tractors.
According to MVS Murali Krishna of Chaitanya Bharathi Institute of Technology, Gandipet use of vegetable oils in low heat rejection engines showed an improved performance, while its use in conventional engines showed a deterioration. Pongamia oil showed a higher peak brake thermal efficiency, but at peak load operation it showed a deterioration and an increase of pollution levels marginally in comparison with crude Jatropha oil operation....
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Developing countries call for funds to increase forest cover
ASHOK B SHARMA
Posted online: Monday , March 10, 2008 at 0022 hrs IST
New Delhi, Mar 9 A group of developing countries has called for financial incentives for increase in forest cover, conservation and sustainable management with a view to combat climate change.
Taking the cue from the Bali declaration on the pay-and-preserve scheme for reducing emissions from reducing deforestation in developing countries (REDD), the two-day international workshop organised by Indian Council of Forestry Research and Education (ICFRE) which concluded in Delhi last Saturday called for financial assistance for maintenance and stabilisation of forest resources as well as for capacity building. ICFRE is under the administrative control of the Union ministry of environment and forests.
It went a step ahead of REDD in demanding equal incentives for increase in forest cover and sustainable management and conservation of forests
The recommendations of the workshop called for compensation for reducing deforestation, conservation and sustainable management of forests. Countries should also demonstrate enhancement of carbon stock to meet the objectives of UNFCCC, it said.
As maintenance, stabilization and conservation of forest resources involve opportunity cost, the developing countries require financial assistance and incentives, the recommendations said and also called for same basket of funds for increase in forest cover and reduced deforestation and degradation as well. As similar enhancement of carbon stock imply similar value and as eco-system services have additional value, the rate of incentives should be the same for one unit of carbon saved through reduced deforestation and degradation and one unit of carbon added through conservation of forests. Evaluation of baseline carbon stock should be considered including one time payment at reduced rates, the workshop resolved.
The international workshop was organized to discuss the possible methodological approaches and modalities for assessing positive increment in forest carbon stocks due to increase in forest cover, conservation and sustainable management of forests. The workshop had participations from forest departments and forestry institutes of China, Papua New Guinea, Sri Lanka, Thailand, Bhutan, Malaysia and UK apart from India.
The sole representative from Annex-1 (industrial) countries, Jim Penman of UK Department for Environment Food and Rural Affairs (DEFRA), however, opposed certain parts of the resolutions relating to financing incentives. He suggested that the conclusions of the workshop should not be termed as "resolutions" and it should be better termed as a "views expressed by different participants."
On capacity building, the workshop called for the need to develop expertise in modern technological tools to assess forest carbon pools and changes therein, financial assistance for capacity building in developing countries and sharing of facilities and resources for capacity building among developing countries.
On technological issues, the workshop suggested a common methodology for assessment of changes in forest carbon stocks, national level accounting mechanism and national reference emissions level linked to country specific baseline year or period. It also suggested remote sensing combined with field inventory as an important and cost effective toll in assessing and verifying forest carbon stocks. A blue print for national forest carbon estimation should be formulated for developing countries....
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Invasive species are threat to forest cover: ICFRE
ASHOK B SHARMA
Posted online: Monday , March 10, 2008 at 0024 hrs IST
New Delhi, Mar 9 The Dehradun-based Indian Council of Forestry Research and Education (ICFRE) has identified about 75 forest invasive species (FIS) in different parts of the country, which are a threat to the natural forest cover.
Besides there are 36 other FIS which are localised in limited areas.
FIS can displace native plants, eliminate food and cover for wildlife and threaten rare plant and animal species. These species can change the functions of ecosystems and increase loss in forestry and natural resource management costs. FIS pose a danger to the biological diversity and other human enterprises as well as on human health. Many of invasive species have naturalized in India. Few of them are being used for various purposes such as making medicinal uses, furniture making and composting.
A species that reaches its location without assistance from human activity is called native plant. A non indigenous or non-native plant or animal is referred as exotic and introduced into a new location by activity of human, either with any objective or by accident. A non- native species that is able to move aggressively into a habitat and monopolizing resources such as light, nutrients, water and space to the detriment of other species is called invasive species. An invasive species typical of forest ecosystem is referred as FIS.
A special FIS cell has been set up in ICFRE under the chairmanship of the director-general, Jagdish Kishwan. "We are studying the behaviour of FIS and finding out ways of eradicating them from forest areas also undertaking research on utilization of FIS," said Kishwan. The ICFRE's biodiversity and climate change (BCC) division has prepared a country reporton – Stocktaking of National Activities on FIS – which has been submitted by the Union ministry of environment and forests to Asia Pacific Forest Invasive Species Network (APFISN).
According to ICFRF out of the identified 75 FIS, 61 are species of plants, including 12 species of fungi and 14 are species of insects. These 75 FIS are found in different forest regions of the country. There are also 36 FIS found localized in some areas. ICFRF also concluded that out of these identified FIS, 28 species are native to India but have but have taken invasive proportions in other bio-geographical regions of the country.
Some of the identified FIS are Acacia mearnsii or De Wild., Ageratum conyzoides or (L.) Sieber, Ageratum houstonianum or P.Mill, Chromolaena odorata or (L.) King and Robinson Cytisus scoparius L, Eichhornia crassipes or (Mart.) Solms, Eupatorium adenophorum or Spreng, Ipomaea carnea or Jacq, Lantana camara L, Mikania micrantha or (L.) Kunth, Mimosa invisa or Mart, Parthenium hysterophorus L., Salvinia molesta or DS Mitch, Ulex europaeus L, Xanthium strumarium L, Ectropis deodarae or Prout, Lymantria obfuscate or Walker, Pityogenus scitus or Blanford, Polygraphus longifolia or Stebbing, Fusarium monoliforme or Sheldon. ...
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Farm loan waiver: Timely relief, but doubts remain
ASHOK B SHARMA
Posted online: Sunday , March 09, 2008 at 2226 hrs IST
The Rs 60,000 cr (Rs 600,000 million) loan waiver package presented by the Union finance minister P Chidambaram is now engaging the attention of the banking sector, economists and policymakers alike.
Some sections have put forward the argument that the relief package may not really bring too much cheer to some segments of debt-trapped farmers, particularly poor farmers in the dryland areas and those in the remote hilly regions of the country.
Several experts have said that the finance minister's move has been made keeping an eye on the elections, a fact which both the government and sections of observers have also rubbished. Some have, however welcomed it saying "it is just a beginning of recognizing farmers' problems" and the move has initiated a debate on the issue. Chidambaram has already said that he would not overburden the banks by this measure, and help would come from government sources.
But the public sector bankers appear to be a happy lot. The bankers have welcomed the finance minister's decision. The chairman of Punjab National Bank, KC Chakravarty, told FE : "The government has taken up the responsibility of clearing some outstanding loans of farmers. This will help the banks to reduce their NPAs and extend fresh credit. It is also good for the farmers and agriculture."
As per general definition, a marginal farmer is one who has holding up to one hectare (2.47 acre) and the small farmer is one who has holding up to two hectare (5.94 acre). According to the recent edition of Union agriculture ministry's Agricultural Statistics at a Glance, resource poor farmers in dryland areas of Rajasthan have holding ranging between 54 acre to 175 acre. These lands do not have any assured irrigation and are entirely dependant on erratic monsoon rains. Similar are the cases in other parts of the dryland regions in different states like in Tamil Nadu where the holding is up to 60 acre, in Haryana, Madhya Pradesh and Maharashtra up to 54 acre, in Sikkim up to 50 acre, in Uttar Pradesh up to 45 acre, in Andhra Pradesh between 35 to 54 acre, in Bihar up to 30 to 45 acre, in Gujarat between 20 to 54 acre, in Haryana up to 54 acre, in Himachal between 30 to 75 acre, in Orissa between 30 to 45 acre.
Official figures say that only about 40% of the crop area in the country is covered under assured irrigation – some of these grow two crops and in other places one crop a year is grown.
According to the 2001 Census data, 742.6 million people or 72.2% of the country's population live in rural areas and are directly or indirectly dependant on agriculture. The average annual exponential growth rate of the population is estimated at 1.95%. Out of the total population of 742.6 million people, Chidambaram has identified 40 million people as beneficiaries under the Rs 60,000 crore loan waiver package. All agriculture loans of 30 million small and marginal farmers that were disbursed by banks till March 31, 2007 and were overdue on December 31, 2007 and remained unpaid till February 29, 2008 would be waived off.
According to government's estimate, these unpaid loans would aggregate to Rs 50,000 crore. For another 10 million farmers, the government has decided to offer a one time settlement package for clearance of their outstanding loans relating to these dates. The package would offer a 25% rebate to farmers for payment of the balance 75%.
Farmers, whose loans were restructured and rescheduled in 2004 and 2006, will also be eligible for benefits of a waiver or one time settlement package. The package implementation is expected to be completed by June 30, this year. But in the meantime, the farmer who gets the assurance for waiving of his loans or who enter into a one-time settlement of loans can avail fresh loans from banks. .
The director of the National Centre for Agricultural Economics and Policy Research, PK Joshi, has termed the finance minister's offer as "mirage bonanza for agriculture". He said: "The argument in favor of such a provision was that the majority of farmers, who committed suicide, could not repay their loans. This bonanza will undoubtedly give some relief to roughly 35% of small and marginal farmers and nearly 50% of large farmers; largely confined in favorable environment. Those who are located in underprivileged and marginal areas (especially rainfed and backward) are often deprived of credit from the formal banking sector, such as commercial banks, cooperatives and regional rural banks, will not gain from it.
Such farmers largely rely on village moneylenders, traders and input dealers. On the other side, the honest farmers who repaid loans even at the cost of their many pressing needs may also be disappointed. Economists argue that such a policy may also induce indiscipline in the financial sector. Undoubtedly, farmers need a relief package to augment their income and empower them to repay their credit, but the mode could have been different, it is argued. Instead of this scheme, the defaulters could have been made eligible for another loan with a condition that the previous loan would be waived-off if three installments of the present loan are repaid in time. This, they say, could have prevented a recurrence of the problem.
According to Joshi, the loan waving is a temporary relief to the farmers and may not stimulate investment and trigger growth. Instead, the government should have taken steps to ensure that such a situation does not arise in future, he says. For that, the foremost requirement is to strengthen agricultural insurance sector and widen its scope with large coverage. At present it is in infancy stage, and less than 10% farmers are covered under present schemes.
To mitigate production risk, all bank loans and crop failure can be insured. This requires development of agri-insurance products, meteorological laboratories in a cluster of 4-5 villages and institutional arrangements for their effective governance. Until agricultural insurance is effectively operationalized, a fund could have been constituted to compensate farmers adversely affected as a result of droughts and floods.
The Rangaranjan Committee has also noted that only 27% farmers in the country are covered under institution credit system and many farmers source credit from local money lenders.
The president of Bharatiya Krishak Samaj, Krishan Bir Chaudhary, says: "We welcome the finance minister's proposal for waiving off farmers' loans. But more steps should be taken to alleviate the sufferings of farmers in dryland and hilly areas, who are not adequately covered under the package. Efforts should also be made to waive off loans of highly indebted farmers who have taken loans from the informal sector."
Arun Kumar, an economist from the Jawharlal Nehru University, says: "The biggest concession and the maximum publicity has gone to the debt waiver and relief scheme for the farmers. It is no doubt true that in semi arid and arid areas the definition of small and marginal farmer ought to be different from that in the irrigated areas. Further, it is also true that loans from private parties which form a major component of the problem is not being tackled. In spite of these two factors, if the amount of relief announced reaches the farmers, it will make a positive impact on their lives."
He says "the Budget has not spelt out where from the Rs 60,000 crore would be mobilized for waiving off farmers' loans. It has also not said whether the measure would worsen the fiscal and possibly the revenue deficits. Once the government makes it clear how the relief would be funded, many old questions will be answered. But no doubt, new ones will also crop up....
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Budget package evades most of needy farmers
ASHOK B SHARMA
Posted online: Monday , March 03, 2008 at 2001 hrs IST
New Delhi, March 3: The Union agriculture ministry is faced with the problem of identifying indebted small and marginal farmers under the recently announced loan waiver scheme.
The ministry officials feel that criteria fixed by the Union finance minister, P Chidambaram for identification will not do justice to many needy farmers particularly in dryland and semi-arid areas.
Besides the Budget package (Rs 600,000 million) is designed to help only 40 million farmers out of 750 million farmers in the country.
Chidambaram while presenting the Budget in the Lok Sabha, last Friday, had defined marginal farmers as having holding up to one hectare and small farmer as having holding up to two hectare.
"The official criteria for small and marginal farmers differs in different agro-geo-climatic zones in the country. In the hilly regions, dryland and semi arid zones, were there is no assured irrigation, the holding sizes of both small and marginal farmers are substaintially higher than that stated by the finance minister. If we are to go by the criteria laid down by the finance minister many needy farmers would be deprived of the desired benefit," said a senior official in the Union agriculture ministry.
According to official records, farmers in the dryland and semiarid regions are more hard pressed and debt-burden due to repeated crop failures on account of erratic monsoon rains. The incidences of suicides are on the rise in the dryland and semi-arid zone where there is no assured irrigation, like the Bundelkhand region in Uttar Pradesh.
The Uttar Pradesh chief minister, Mayawati has written to the Prime Minister, Manmohan Singh, finance minister, P Chidambaram and agriculture minister, Sharad Pawar alleging that the benefits designed in the Budget for the debt-trapped farmers would not reach the most backward regions of her state. She has also alleged that her government had asked for a package of Rs 7016 crore for the drought-prone regions of UP, which did not find any mention in the Union Budget. Apart from this she had also asked for several assistance for development of the backward regions of UP which were also ignored.
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Brokers oppose commodity futures transaction tax
ASHOK B SHARMA
Posted online: Monday , March 03, 2008 at 2342 hrs IST
New Delhi, Mar 3 Brokers have opposed the government's decision to levy commodities transaction tax (CTT) on options and futures, saying that such a measure would encourage transactions in gray Markets.
The Union finance minister, while presenting the Union Budget 2008-09 said, "The commodity futures have come of age in the country and should be treated at par with the equity market." He brought the commodity futures exchanges under service tax net and slapped CTT on options and futures on the lines of the existing securities transaction tax (STT).
The government's move to impose CTT is aimed at curbing manipulations and excessive speculations in the commodity futures. In the recent past the government had to suspend trading in wheat, rice, black gram and tur when reports of market manipulations leading to abnormal rise in prices took place.
MD of Anand Rathi Commodities International (ARCI), Vijay Sardana, however, discounted reports of market manipulations and said that the rise in prices in the recent past was due to the short supply of commodities in the country.
Opposing the imposition of CTT, he said: "The profit or loss arising out of transactions in equity futures and options are treated as business income or loss, which can be off against any other business loss or profit. But profit or loss arising out of commodity derivatives is treated as speculative profit or loss, which is not allowed to be offset against other business profit or loss. Treatment of profit/loss relating to commodity derivatives as normal business income/loss is a long pending justified demand of the industry, to make it at par with the global commodity markets."
He said that in stock market, both spot and futures were well regulated and conducted under the umbrella of electronic exchanges. In commodity market, physical spot market was outside the purview of electronic exchanges and hence the imposition of CTT does not seemed justifiable, he said added that the new measure would create distortion in prices, divergence of spot and futures at maturity and render wrong price signals.
Several brokers were of the view that when the Indian Economy was integrating with the global Economy the cost of transactions at Indian commodity exchanges has to be at par with leading global exchanges, otherwise the entire volume would shift to gray Markets or international exchanges
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