OIL SEEDS AND PULSES-AN ANARCHIC SITUATION COMPROMISING ON NUTRITION SECURITY IN INDIA!

Recent reports about the galloping imports of edible oils and pulses raise several questions regarding the priority of successive governments ruling the country during the last 3 decades in its development agenda. While the balance of trade on a global level is heavily skewed against India, there does not appear to be any concern that the country is spending billions of dollars in foreign exchange to import oils and pulses to meet the domestic needs of the citizens. From time to time tall claims are made by the politicians as well as the Babus at Delhi regarding various projects they "plan" to take up and their past "Herculean" efforts in the past to make the country self reliant on foods. In stead the food dynamics present a sad picture of utter confusion and disarray as manifested by over production of cereals while the production of pulses and oil seeds has been almost stagnant year after year. Is the country, with its much acclaimed achievements in rocketry, nuclear technology and capabilities in space science, running out of ideas when it comes to feeding the nation? It seems so if the latest statistics on imports of edible oils and pulses are to be taken seriously. Have a look at these figures below: 

"Imports of both, edible oils and pulses grew significantly (by 15.5 and 26.21 per cent, respectively) in 2012-13 year-on-year, as India struggled with flat production and rising demand in these two food items.
While imports of edible oils crossed $10 billion in 2012-13 from $9.7 billion, those of pulses were still comparatively less. India imported $2.33 billion of pulses last financial year compared with $1.85 in 2011-12. Analysts blamed the pricing policy of the government in favour of rice and wheat, which do not factor the changing consumption pattern. Oilseed production dropped almost 8.25 per cent to 29.79 million tonnes in 2011-12 (November-October) because of low kharif harvest on account of uneven rains. In 2012-13 too, oilseed production is expected to be only marginally better than last year also because of poor rains in the main growing regions of Maharashtra and Gujarat. It is estimated to be around 30.7 million tonnes".

Food security, according to Government of India, seems to be synonymous with distributing cereals like rice and wheat at throw away prices to the population incurring billions of dollars of subsidy coming out of tax players' money! Government does not lay much importance for nutrition security as reflected by high costs and scarcity of protective foods like protein rich pulses. Added to the woes other healthy foods like fruit and vegetables are priced in the market so high that millions of people find it impossible to access these foods at affordable price. With no sustained, practical, visionary and far-seeing agriculture policies evident, the country is trapped in a regime where more emphasis is placed on commercial crops like Sugarcane and others resulting in locking up of millions of acres of precious and fertile agricultural lands for them, not available for raising health promoting crops like pulses. When will common sense and ground realities guide the government in shaping its policies and action? A disturbing question that may not find any answer in the near future. 

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

PLUGGING THE OIL AND PULSES SHORTAGE-A PRIVATE INITIATIVE

Criticizing multinational companies is a trait deep rooted in India which had seen how Britishers were able to bleed this country of its precious resources during their 300 years of rule. But such an attitude may not be relevant to day because there are many Indian companies which are multinational in character having operations out side the country. Also the framework of WTO regime within which India has sworn to work does not allow unreasonable restrictions on investors from member countries. Recent policy shift allowing foreign retailers to invest in India is a pointer to things to come in future. Under these circumstances the recent announcement by some Indian investors about forming a consortium for buying land in countries like Ethiopia and Uruguay and producing oil seeds and pulses should not come as a surprise to any one. 

The report quoted below does not really say much about any action taken so far but the likelihood of such mega agricultural projects, coming in technology and money starved but land rich countries, can be a distinct possibility. 

A consortium of over half a dozen companies, primarily leading oilseed processors, under the aegis of the Solvent Extractors' Association (SEA), is planning to acquire agricultural land in Latin America (LatAm) for planting edible oilseeds and pulses. Earlier, these companies had plans to acquire land in Ethiopia. But, the worsening law and order, poor infrastructure and complicated government policies in the African country, forced them to move to LatAm, where these issues are well addressed. The oilseed processors' drive assumes significance as these companies failed to expand their business horizontally through backward integration, as a result of corporate farming not permitted in India. Despite over 60 per cent of its edible oil requirements being met through imports, the government of India refuses to grant permission to big corporate players for acquisition of land for self-driven agricultural purposes. While contract farming, involving farmers as stakeholders, is allowed, the model has not worked to anyone's benefit. "We are looking at Uruguay in Latin America for growing soybean and pulses with around 6,000 hectares of land on lease for a couple of years initially. If it proves profitable, we would acquire land in Uruguay for full fledged planting," said B V Mehta, executive director of SEA.Mehta did not divulge the name of the consortium or the companies involved in the deal on fears of land price rise in Uruguay. He, however, confirmed that talks are in advanced stages and the Indian companies would begin soybean planting as early as next season. If successful, this would be the first entry of any Indian companies into Latin America for plantation. SEA has conducted detailed analysis of both countries - Ethiopia and Uruguay. In comparison with Ethiopia, Uruguay is more peaceful, has sustained agriculture policy and advanced infrastructure. In Ethiopia, Indian companies would need to invest on a sustained basis for over a decade to develop the requisite infrastructure, which may or may not be profitable for them in future. Besides, the presence of pirates in neighbouring Somalia has made transportation of oilseeds from Ethiopia a risky affair. Investing in Uruguay, which has agro-climatic conditions similar or even better than Ethiopia, does not entail any of these issues".

In such a future scenario a larger question is whether Indian entrepreneurs will be able to cope up with the investment and working environments in the foreign countries where operations are planned. The recent experience of Indian companies in countries like Maldives, France and others does not inspire much confidence about the success of such ventures. After all India is one of the countries which does not allow large corporate players to buy land for agriculture and if one single reason for the low productivity of agricultural crops is to be cited, it is lack of technology and resources in this sector mostly dominated by millions of impoverished rural farmers. Another assumption by Indian investors in foreign countries that they will be allowed to export their production freely out of the invested country may not turn out to be true because every country invariably tries to meet the domestic food demand before allowing exports. Any how this is an experiment worth trying and learn valuable lessons for similar projects in future.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

   

THE "OILY" MESS-THE CONTINUING SAGA OF INDIAN CONSUMER

Edible oil has always been the "Achilles Heel" of the Government of India while the pulses situation borders on a trauma! No matter who rules the country the edible oils and pulses have always been the "playing field" for hoarders, industry, traders and importers to make money at the expense of the citizen. Except playing lip sympathy Government has proved its impotence in addressing the problem of shortage with the oil mafia holding the consumer to ransom year after year. Whether oil is an essential commodity required ad libitum for the health of the consumer is a bigger question that was never answered, considering it is one of the root causes of obesity and other food related diseases. If the per capita availability of edible oils in the country is taken into consideration it meets the average nutritional need of a person but averages never tell the real story with consumption invariably being lop sided. A report that the vegetable oil imports have registered a quantum jump recently is alarming though the reasons for this undesirable development may be many. Here is a gist of the above report which deserves serious attention by all concerned to think about the way India can get out of this perennial trap.

"A sustained slowdown in domestic oilseed crushing activity has led to an increase in the import of vegetable (veg) oil in recent months. Consequently, overall import of veg oil shot up 73 per cent in the second quarter of the current oil year (November 2011–October 2012) as against 31 per cent growth in the first quarter, to meet a deficit created by lower production from domestic sources. Data compiled by the Solvent Extractors' Association (SEA) showed overall veg oil import rose 95 per cent to 897,404 tonnes in April alone, compared with 475,123 tonnes in the corresponding month of the previous year. During the last quarter of the current oil year, import surged to 2.52 million tonnes (mt) compared to 1.46 mt in the same period last year. With a marginal decline in the first quarter, owing mainly to increased availability from domestic sources on intensified local crushing, the overall import of veg oil recorded a 31 per cent increase at 4.71 mt, against 3.6 mt in the comparable period last year".

Is there a serious flaw in the planning of agriculture in this country and if so who is responsible for it? Can all those who ruled in the past and present can be absolved of the responsibility in bringing the country to such a sorry pass? Excuses are galore when it comes to enforcing accountability but such excuses need to be brushed away mercilessly to punish those guilty. What type of planning is done by the much touted National Planning Commission during the last 5 decades? It is simply common senses to understand that the production problems of oil seeds and pulses are closely linked to the agricultural policy and the governments do not seem to have the required determination to evolve a long term policy for the agriculture. After all farmers will produce only those crops that will give maximum returns to his labor. Look at the sugarcane policy which ensures high returns in the range of Rs 50,000  per acre and if the land is suitable or water is available 365 days as in areas near Mandya District in Karnataka, farmers cannot be forced to switch over to other crops. It is for the government to persuade the farmers to grow certain crops as a part of the national policy through various fiscal incentives. Unless this is done India will remain a massive importer of oils and pulses eternally.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

INDIA'S GRAIN HARVEST-QUANTITY VS QUALITY

Government of India (GOI) appears to be gloating over the performance of the farmers in achieving a record production of food grains this year, as being predicted by its expert forecasters. Whether this has happened because of GOI or in spite of it, is a million dollar question. Interestingly if there were shortfalls, GOI would have blamed failure of rains or trotted out some other excuse while farmers' success story is promptly touted as its own with no sense of shame!  A closer look at the statistics of production at the disaggregated level will reveal a different story. While wheat and other cereals except coarse grains have shown higher production, it is alarming to see the production of pules and oil seeds dipping to dangerous levels with decreased production to the extent of 10-15% and the aam aadmi cannot but shiver looking ahead what is in store for him in the coming months vis-a-vis the the availability and cost of these vital foods. If GOI cannot bring about a positive change in the nutrition quality of grains produced by increasing the production of oil seeds and pulses, it has no right to claim that it is working for the interests of aam aadmi! If this is not a failure of GOI agricultural policies, what else it can be? Here are the details of this sad story coming out of GOI's own backyard!

"The government's food grain storage woes have turned more acute, with food grain production for 2011-12 estimated at an all-time high of 252.56 million tonnes, almost 3.1 per cent more than that the previous year's production. This may help provide a minor boost to India's economic growth in the previous financial year, estimated at 6.9 per cent. While releasing the third advanced estimates of agricultural production in 2011-12, Agriculture Minister Sharad Pawar said storing such huge quantities of grain was a concern. "The overall food grain production is good. The only problem is storage," Pawar told reporters, adding the issue was being addressed by the food ministry. Pawar had recently urged Prime Minister Manmohan Singh to call a high level meeting of all stakeholders to discuss the storage problem. He had said if the issue was not resolved, it might affect the morale of growers. According to official estimates, the country's food grain stocks are expected to rise to 74 million tonnes by June-end, compared with the available storage capacity of about 64 million tonnes".

The situation becomes more pathetic when it is conceded that the MSP policy of the government is attracting farmers to dump their grains at the doorsteps of FCI which has no idea where the newly procured grains are going to be stored! It is known during the last few years that precious little has been done to establish a sound storage infrastructure for long term and safe storage of procured grains. Every citizen in this country has to hang his head in shame when it is universally known that the food grains stored in FCI grain storage structures are of very low quality with substantial portion unfit for human consumption!. In stead of finding ways and means to remedy this situation, the great policy paralysis and bureaucratic inertia at the government level is continuing to bleed the nation grievously. It is time that government takes proactive steps to address these woes through concrete action rather than indulging in bald and meaningless proclamations without any substance.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

   

BUSINESS CAN BE A "BINDING FORCE"-THE "PULSE" AGREEMENT

A hungry China is a sure bet for good business for many developed countries as the Chinese foreign exchange holdings are very high sufficient to pay for import of goods required by the population there. USA and Canada are two countries which produce lot of excess agriculture crops including food which are more than that required by their population. Interestingly pulses are never a significant part of neither American nor Canadian diets but still commodities like dry peas and Lentils are produced in these two countries most of which need to be exported. Chinese is also not a legume consuming country and the recent agreement for China to import legumes from Canada is therefore surprising. Here is a take on this new bon homie between Canada and China. 

"We've been told China is a hungry country looking for partners to help feed it. Canada, a country heavily dependent on exports, is emerging as an important player in this quest. China has the ways and means to pay its bills, and represents a superb opportunity for North American farmers. It's becoming increasingly aggressive in wanting to sign food-related deals with the western world. Although it claims to be about 95 per cent self-sufficient in grains, its agricultural trade deficit grew by almost 50 per cent last year, as its population grows interested in an increasingly varied and healthy menu. Among its new interests are pulses — peas and lentils among them, which despite having been around forever are becoming renowned for their exceptional nutritional benefits. Canadian farmers grow the world's best pulses, and last year Pulse Canada, the progressively minded commodity group representing these crops, began collaborating with the Chinese Cereals and Oils Association to pursue new product development using pulses. Pulse Canada says Canadian and Chinese researchers are now working together to introduce pulses into Chinese staple foods such as noodles, steamed breads and dumplings, as well as snack foods and meat products. Last week, Canada and China signed a new memorandum of agreement — in which education, agriculture, science and technology were specifically mentioned — to increase the connection between the two countries, opening even more doors for development as the two countries drive toward a potential free-trade agreement. At the signing of the memorandum, Prime Minister Stephen Harper said the rapidly increasing commercial, cultural and scholastic ties between our two countries are creating new jobs and economic growth. Indeed, this is a hot market and a growth area that Canada does not want to miss."

One is reminded of the historic attempts in the past by the US in expanding wheat consumption in Asian countries like Korea so that the surplus wheat production can be exported to these countries. Organizations like the Wheat Associates were conspicuous by their promotional activities in countries like India till recently and to day wheat has become a standard item in the menu of many erstwhile rice eating nations. Same is happening in legumes also and the presence of agencies representing the growers in the US and Canada are working over time to find markets for their pulses in these places. The unfortunate aspect of this development is that the imported pulses compete directly with domestic produce and with heavy subsidies received by the farmers in these countries the market price for the imported pulses are invariably much less than that of the local produce. China may well aware of these implications while operationalizing the bilateral agreement.

V.H.POTTY

http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com