Incredible challenges in Indian tobacco Industry

India is the third largest producer of tobacco which is 681 million kilos, next to China and Brazil and the second largest exporter of tobacco with 228,025 Metric Tons, next to Brazil. We have around 130,000 tobacco farmers, among them 89,855 were registered with Tobacco Board as a Flue cured Virginia growers with cultivated area of 2,15,000 hectares. Around 38 million people are directly or indirectly involved in various phases of tobacco industry for their livelihood.

The Indian Tobacco Industry contributes ₹ 4,980 crores of foreign exchange through exports and ₹ 17,415 crores through excise duties on tobacco products. Over 120 million Indians smoke, i.e. 10% of the world's tobacco smokers live in India and 102 billion sticks produced in India every year. India produces the tobacco which has lowest levels of pesticide residues.

We have some incredible challenges in our tobacco Industry which need to overcome.

India is the 6th largest illicit cigarette market in the world and about 16% of Indian tobacco products are illegitimate which the value is 1900 crores of rupees and hundreds of crores cigarette sticks are smuggled  in to the Indian market. Some of the studies say that the contraband market is may increase to 23% by 2016. The growing share of illegal cigarettes is reducing the demand of domestic tobacco industry, erstwhile in 2005/2006, the cigarette market size was 109 billion sticks and now it is reduced to 102 billion. This adverse situation threatens the life of 38 millions of tobacco dependents and big loses to Indian government since the illegal cigarettes evade the all kind of taxes like excise, customs, VAT and others.Allowing legitimate foreign brands into the Indian market is a wise decision to combat the contraband trade and prevent the losses of tax revenue. On top of that the Indian consumers’ tastes have changed and they are looking for world class products.

Indian Tobacco Industry is operated by a few domestic players and there is no effective competition. Farmers are not getting the prevailing price through monopolistic and unfair trade practices by domestic trade cartel. One biggest Indian company is controlling the 80 percent of market and it buys more than 60% of the cigarette variety leaf with lesser price which is nearly 50% below of global average. The company makes heavy margin but the farmers being paid by non-remunerative and unfair prices.

The UPA government banned the FDIs in tobacco industry in 2010, the Japan tobacco international was the victim of Inconsistence policies of the Indian government on FDIs and it has closed its operations in Dec2011. In April, 2012, some of the US trade bodies sent a representation to Indian Ambassador to USA, to consider the abilities of foreign companies to participate in Indian tobacco market and also they opposed the FDI Ban in Indian Tobacco Industry.

Tobacco farmers have been agitating against the monopoly and unfair trade practices and also not allowing FDI’s  is against to the Competition Act 2002 which prohibits anti-competitive agreements, abuse of dominant position by enterprises and also promotes the free and fair competition within the economy. The Department of Industrial Policy and promotion (DIPP) should rethink and review the FDI policies to allow foreign investments in tobacco industry since they allowed foreign investments in other industries. Indian farmers are looking for permanent solution to prevent the tobacco trade cartel's deceptive, monopolistic and unethical trade practices. They are eagerly waiting for international tobacco companies to participate in Indian tobacco industry for getting fair price among the competition and moreover the Indian farmers would like to be competitive to garner the major share in world market.

India has been a forerunner in the Framework Convention on Tobacco Control (WHO- FCTC) which is aimed to reduce tobacco cultivation and restricting the all kind of supports to tobacco farmers. India ratified the FCTC in 5th Feb, 2004, it is the Regional Coordinator for the South-East Asian Region and India has a legal obligation to implement the FCTC guidelines. Most of the Indian tobacco growers don't know about the FCTC, the Ministry of Health never discussed and notified to tobacco farmers while signing this agreement, now Indian government is pressuring the farmers to go out of tobacco cultivation. Cultivation is farmers’ birth right and they have right to grow any legal crop of their choice. Consuming tobacco is a social problem; the government should control the same by creating awareness and educating the civil society. As per article 17 of FCTC, the government should provide economically viable alternate livelihoods to the tobacco farmers while implementing the FCTC guidelines, there is no such thing or any scientific exercises were not conducted so far. FCTC treaty is autocratic and forcibly imposed one, Indian tobacco farmers are opposing the several articles in FCTC guidelines.

Protecting public health is unquestionably noble objective, controlling tobacco cultivation is  a complex and socio-economic issue that needs a pragmatic approach  and make involvement of key stakeholders at every stage for their smooth economic livelihood transition.

Dairy farmers are in dire crisis

India is the largest producer and consumer of the dairy milk in this world producing around 130 million tonnes and the total world production estimates 730 million tones.  FAO estimated 85% of all milk worldwide was produced from cows and the rest is from other species ( 11% Buffalo ,2% got and 2% others.). USA is the second largest producer of milk and the first largest producer of cow's milk. Israel dairy farms are very productive with an yield of 12,546 kgs of milk  per cow per year.

Indian Dairy farmers are in crisis with increased cost of production and non remunerative prices. Return on investment for dairy farmers are very less due to increased costs of feed and medical expenses for animals. Earlier, the cattle used to depend on grazing, natural resources and crop residue for fodder which are decreasing now. The milk farmers are forcibly depend on the packaged cattle feed to increase the milk production, eventually the cost of production has increased. Feed cost has been increasing up to 30- 50 percent from past four consecutive years, but the milk procurement prices have not increased comparatively. Health care also big burden, vaccination and De-warming costs have been increased.

The productivity of the cattle is based on the caring and managing, farmers are slowly decreasing their non performance animals and switching over to efficient breeds like Jersey and Holstein Friesian. Investment on these exotic cattle is heavy burden for the farmers and these breeds need more feed, water and caring since they are not native animals. Farmers are struggling to get loans for milking animals and also the bank charges are very high up to 12% interest rate and insurance cost is additional. With the increased cost of production including  expensive breeds the dairy farming is not remunerative, so the farmers are slowly decreasing their herd size and some of the farmers have giving up the dairy farming.

The procurement prices have not increased comparatively with milk market selling prices, in fact the procurement prices have reduced in Oct and Nov months of 2012. The Andhra Pradesh farmers have faced a bitter experience called "MILK HOLIDAY" due to the false market analysis by milk marketing companies. They have imported low-priced Skim milk powder by estimating that the milk production is going to be less for this year but there is a  consistent growth in milk production. Most of the milk marketing companies including Co-operative sectors have reduced the procurement prices and some of them have stopped to collect the milk from farmers. Animal fodder is the biggest problem for the farmers, decrease in grazing land, natural resources and drought situations  leads tough time for animal fodder. Last year, the dry forage was sold at Rs.2.00 per kg in some arid districts of  Andhra Pradesh. The loan facilities for cattle are too tough for small farmers, a rural poor woman who wants to buy a buffalo she gets the loan with high interest rate up to 14%  with a great struggle, where as in the cities the car loan get approved with 7-8 percent  interest rate without any hurdles.

Our Indian Dairy Industry is in chaotic situation, India is the largest milk producer in the world, ironically...

whereas chemical mixed adulterated milk is widely available in the market.

whereas milk consumption is very less and 68.72 Kg/capita/year.

Whereas The Food and safety standards authority of India ( FSSAI) has announced the 68% of the bulk milk supplies have found to be unsafe and substandard quality.

Indian government has opened the gates to FDI's and excited to enter in free trade agreements, already France's DANONE is aggressively marketing it's dairy products in Indian market associated with Dynamix Dairy- Baramathi ( Maharashtra), New Zealand's FONTERRA and DANONE  are interested to acquire major stack in  Hyderabad based Tirumala Dairy products. As we know that all largest milk producing countries are keen to enter in Indian market, most of the developed nations' dairy farming is massively funded and heavily subsidized by the governments with various income support plans like  i.e.  Milk income loss contract payment, Market loss assistance, Dairy Income loss assistance programs, dairy Indemnity, milk marketing fees and so on. Such huge subsidies keep the International milk prices down which are going to affect very badly on our Indian dairy industry. we should oppose as strong as possible to protect our Indian dairy Industry against dumping.

In order to protect our dairy farmers, the milk procurement prices should be fixed based on the cost of production as the practice where implemented in crop farming. The banks should liberalize the policies in cattle loans for Individual farmers to buy one or two animals and Government should  arrange interest free loans to the dairy farmers. Government should invest in co-operative dairies and allot matching grants of subsidies for remunerative milk procurement prices. The government need to take some steps on milk promotion programs by offering small quantity of milk to school going children, lactating women and pregnant women to boost milk consumption. The Indian milk marketing companies including co-operatives all together should run a united advertising campaign which shall create an importance of milk in our daily life.. like www.gotmilk.com by California Milk processor  Board.

We shall have to try all possible options to rescue our milk farmers, if not they will give up dairy farming, therefore India may encounter serious milk shortage which leads to malnutrition.

Re−shaping the small and marginal farmers

Three quarters of the world's farmers cultivate small plots of land, India is the land of marginal and small farmers, the average size of farm land holding is 1.16 hectares ( 2.86 acres). 85% of the Indian framers are cultivating the 70% of farm lands which are below two hectares each, more than 60% of the farm produces come from the small farms only. The productivity of the small farmers is the solution for growing population food needs, the future of the Indian sustainable agriculture is depends on the performance of these small and marginal farmers only. Most of small farmers cultivate the farm land with the support of their family members and local labor which the quality of the work is higher. They spend more time on mulching, trellising, weeding, removing the rock stones, soil conservation and building the irrigation systems which are a part of good agriculture practices . They grow multiple crops and sow as soon as they harvest, small farms have been the most efficient for sustainable and bio-diversified way of agriculture.

India's land holdings average size has been decreasing i.e. 1.16 hectares ( as per 2011 data) and at the same time the number of land holdings are increased to 138 million which are caused by the population growth and family subdivisions. Some researchers argue that small farm land holdings' output is always low and their operating expenses are high. I feel, the farm size is not a constraint for the productivity, small farms are sustainable and the efficiency also more or equal to large farms. Numerous studies have confirmed that there is an inverse connection between the size of forms and yield per hectare, the smaller they are the yield is greater, the contribution of output is higher for marginal and small farmers and they grow high value crops like fruits and vegetables. But small and marginal  farmers have been facing lot of problems like credit and Indebtedness, land titles and tenancy issues, low level education and skills, globalization challenges and climate changes.

The Western model of agriculture is being forcibly advocated by some agricultural policy analysts and economists which is really applicable for only large land holdings. As per Indian agri profile, we can't shift our small farms to larger farms that will cause a decline in food production and also the unemployment of displaced workers that's  going to be a big problem. It is very clear that the Western model of agriculture can't support our Indian agriculture like heavy mechanized, less labor-oriented, chemical-based, high-input agriculture. Actually we should adopt the Eastern model of agriculture which have been implemented in Taiwan, Japan, Thailand, South Korea, Indonesia and China. The far east agriculture practices like experimenting with high yield verities, controlled use of fertilizers, drip irrigation, effective use of manpower, multiple cropping and custom made small farm equipments are exactly appropriate to Indian farm lands. Moreover, Indian small scale family farmers can't afford to heavy farm equipment, extraneous inputs and hired workers, so the Eastern style of agriculture is the way forward for India.

While small shops, hawkers, farmers markets are being wiped out and replaced with super markets and hyper malls, the small farmers loss their customers. The large super markets always need the consistent supply, competitive price, high quality produces with safety standards, this will be a big challenge for the small farmers since most of the farmers deliver their produces to local vendors and open markets. Supplying to large chain supermarkets is a great opportunity to the small farmers, to confront the same, the government should enact the collective farming by combine all small farm land holdings in to a farmers' cooperative for mutual benefit. Under this model, the farmer will be an independent share holder and collectively utilizing the supply chain/value chain with their own operated marketing societies or private processors.(Just like dairy co-operatives).

This is the time to reshape our Small scale farm production and marketing systems since we are allowing the FDIs in retail trade, to integrate with big chain retails markets the small and marginal farmers should be strengthened with modern technologies and policy reforms. We wish the small and marginal farmers avail the market opportunities for better prospects.

Indian farmers need a restructured CACP

The well know basic economic principle for the marketable produces is : Cost of production +  considerable percentage of margin= Price of the product. But this basic principle is not applied to Indian farmers, their farm products are sold at horrible losses. The government and the government  advisory commissions are forcing the farmers to sell their produces with very less prices which are not even matched to the cost of production. The government fixes the Minimum Support Prices ( MSP) for major agriculture commodities  by the  Commission for Agriculture Cost and Prices (CACP) recommendations. The CACP considers various valid  points to determine the support / remunerative prices for the agriculture produces. Nevertheless, the CACP has not been recommended the  remunerative price for farmers from past  ten years.

Based on the " Cost of the production theory of value",  each and every product or service price can be decided by the  cost  for producing  the same. CACP has been considering  the Cost of Cultivation (C2) while  assessing the agriculture commodity prices, but there is some serious flaws in  calculation criteria which causes the underestimate of  actual costs and moreover the MSP doesn't even equal to the actual Cost of Cultivation.  As we know that how the input costs have been increased from past few years such as fertilizers, labor cost, diesel, fodder and cattle feed. The average labor wages have increased by 75% in past three years and the fertilizers are more than doubled. But the CACP has announced the MSP hikes for  2012-2013 crops are ranging  from  16% to 53% on 2008 -2009 data. CACP has been using the old data ( 2008-2009 )for assessing the current crops support prices and also the data of 2008-2009 itself had contested by the farmers organizations  in terms of number of samples and calculation mechanism.

CACP usually depends on Department of Economics and Statistics (DES) of Department of agriculture for data collection and the data contains the information of Area/Production/Yield (APY). But there are some controversies on interpretation of the data among the determining of MSPs and other purposes like  calculating GDP, planning commission and economic indicators. Sometimes CACP also collects the data on its own but it's not collecting ample number of samples and also while computing the cost of production there is no consideration for crop insurance, marketing and transportation cost paid by the farmers. Still, the CACP's recommended MSPs are faulty and unfavorable to the farmers and they are losing  Rs.240,000 of crores every year for just because of underestimated MSPs by CACP.

All farmers organizations have been reiterating  for National Commission on Farmers recommendations  for fixation of the remunerative price i.e. C2 +50% profit margin on C2, but the CACP is computing the prices on the obsolete data of 2008-2009. It has to take previous year data for computing the consecutive year prices and it should consider all prescribed 12 factors while formulating the price recommendations.  Not only 12 aspects but also other issues like inflation, cost of living for farmers, and losses due to import - export  policies. However, Indian farmers need a revived CACP since it fails to protect their best  interests, it should be dismantled and restructured with new terms and references.

Subsidy CUT, Rupee DIP = Fertilizer prices UP

India uses low quantity of  fertilizers against the global average, the monsoon plays major role on consumption pattern in India, a  good rainfall makes  higher usage of fertilizers for enhancing crop yields. Due to Euro zone crisis the world  markets are volatile, Indian economy  also experienced the same negative impact. India has been depending on imports for its major soil nutrient needs and the Rupee value has gone down with new record level so the fertilizers prices are expected to raise. The components for making fertilizers like naphtha ,fuel and natural gas prices  have been increasing year by year and if the fuel price increases, invariably it is going to affect on fertilizer prices.

Indian farmers are already suffering  from high input costs and  the steep increase in fertilizer prices are going to be more burden for them. India imports a quarter of urea, 100% of potash and almost 70% of DAP (Diammonium Phosphate).  DAP  is widely used by Indian farmers, the price has gone up to Rs.987 per bag( 50 Kilos)  and it is expected to be increased more with rupee dip. similarly  Potash has increased to Rs.720 per bag( 50 Kilos). Not only the fertilizers and also the pesticides, insecticides and herbicides prices  have affected  by  rupee slide. Acetamiprid (ACE) and Imidacloprid (IMI) are widely used pesticides in India, their prices have also increased by Rs.100.

The price of fertilizers and pesticides  may increased by 30% due to rupee value decline and subsidy cuts. The government has  decreased the subsidy on DAP and other NPK (Nitrogen, Phosphorous, and Potash) fertilizers by 27% since April 2012, the subsidy for DAP was Rs 19,763 in last fiscal  year now it is  Rs 14,350 per tonne similarly the subsidy for  MOP (Muriate of Potash)  has been fixed at Rs 14,440 per tonne against Rs 16,054 last fiscal. The subsidies for nitrogen, phosphate and potash nutrients have also been lowered by 11.6%, 32.6% and 10.3% respectively. The raw materials for producing fertilizers prices have also increased due to rupee depreciation. so invariably, the kharif crops going to be very expensive for  farmers with raised input costs.

Every Farmer need subsidies since they have been incurred losses without remunerative prices, non availability of credit ,high input costs and many more adverse reasons. If the government feels the subsidy on fertilizers must be reduced  then it should allow the farmers to fix the prices for their produces on their own like other industries and also the government should not intervene in agriculture exports. The UPA government has randomly  increasing  the petrol prices to save the Oil marketing companies from their losses, why can't the government do the same thing for the farmers by fixing the  remunerative prices for farm produces. In fact, the government reduced the fertilizer subsidies as part of their austerity measure to match the fiscal deficit  but the government is claiming that the reduced subsidy funds are going to be diverted to organic manures and bio fertilizers. Actually the organic farmers are very less, organic farming is picking up  but reducing the subsidies on chemical fertilizers are ridiculous since 90% of the farmers are depend on the same.

Ministry of chemicals and fertilizers has intended  to give the subsidies directly to the farmers, it's a welcome move because the retailers are misusing the subsidies and it's not reaching to the real beneficiaries.  At this point of time the government officials should ensure the  fertilizers are sold at MRP prices and most of the retailers might have the old stocks which they got with old prices, they are trying to sell the same stock with new increased prices, the government officials must control the traders not to sell with increased prices. At least it will give little relief to farmers against the increased input costs.

Connecting the rivers is a great idea

Over 60% of Indian agriculture is dependent on rains which is very complex, risk prone and low productivity. The problems with rain fed farming is multifaceted; difficult to adopt modern technologies, uncertainty in output and low income which affect  to  livelihood of farmers  that leads to rural poverty and suicides. Being an agriculture dominant country India should have proper irrigation systems to distribute and manage the river water and floods. Supreme Court of India has impelled the mega project which will link the major rivers in north and south for optimum utilization of water.  As we know that our Indian farmers have been suffering with crop losses due to droughts and floods and also their villages were destroyed in floods. The Inter- linking of rivers (ILR) project assures to manage the water from surplus to lacking and mitigates the flood havoc.  The project expands the irrigated land that can increase the food production and able to feed 1.20 billion of Indians. The increased irrigation land will help to adopt modern technologies in agriculture for higher yields.
 
The river linking project involves on Himalayan and peninsular rivers, the design consists of 30 proposed links i.e. 16 in Himalayan component and 14 in peninsular component.  The grand design of ILR project will add 40 million hectares of irrigated land to India, generates the 34000 million kilowatts of electricity and the navigation controls the floods and mitigates the droughts.  Government of India (GOI) has been implementing the traditional methods like small water tanks, ponds, watershed schemes and lift irrigation schemes which are helpful… but very little, so India needs a durable river management system to fulfill water needs. As we know that how the city dwellers of Chennai, Hyderabad and Bangalore are in fresh water stress for their daily needs and at the same time 60% rainwater is going waste in seas. To avoid the wastage and proper management of water can be possible through river and canals channeling only.
 
There are many positive results with ILR but the other end the project is being criticized on various reasons and making controversial for their vested interests and political prospects. They are arguing on environmental, ecological consequences, international disputes and resettlement & displacement of the project- affected people. We have new Land Acquisition, Rehabilitation and Resettlement Bill to accomplish such issues and India need to learn from our neighboring countries like China, Pakistan and Brazil, how they completed the prestigious dams successfully for their national interest.  Interlinking the rivers is an economic development process; most of the countries are constructing dams and channels for their national benefit and progress and ILR is same kind for our national energy, irrigation and drinking water needs of growing population. Population displacement and resettlement is a tough task, the projects disrupts the lives and lifestyles of the people who live in the affected areas. However, the government authorities must focus on methodologies and processes to involve all stake holders and civil societies to smoothen the process.
 
The arguments of the organizations who are opposing this project are baseless and vested, all these organizations are urban based, non-farm communities and they can’t understand the farmers’ perils. They live in air conditioned rooms, using magnificent and spectacular words to grab the public attention, they are failed to understand the farmer’s agony on water scarcity (so many farmers committed suicides for their crop failures due to drought & floods and unable to repay loans they had taken to drill bore wells) The can’t understand the perils of rural women who walk miles together to get bucketful of drinking water. Some of the political leaders are confusing and exasperating the people by giving the false interpretation i.e. this project is going to divert their own water to other areas. But all these arguments are unjustifiable and their electoral prospects only, because the ILR is a national project and this is for entire nation’s benefit and progress not for particular state.
 
In spite of these critiques and arguments, the ILR project is the only option to fulfill the water needs of growing population. India has been experiencing the floods & droughts and the sufferers used to get ex gratia payments from Prime Minister Relief Fund or Chief Minister Relief Fund, etc. from past 60 years. Instead of that if this gigantic project is completed… all disasters can be prevented, but it requires lot of money and time. As per Millennium Development Goals by UNDP, safe drinking water and sanitation is a human right and our central government should not consider the political limitations for water resources. The central government should take the control on inter-state rivers, the project must be included in five years plan as top priority, make involving all stake holders efficiently and this should be completed in a time bound manner.

FDIs in Agriculture

FDI (Foreign Direct investment) is one of the recent buzz words in India; the word has been in debate among the political circles, social classes and TV studios. I would like to present my views on Private Investments including FDI’s in Agriculture. When the FDI s are possible with retail Industry, why can’t the UPA Government think about the Agriculture, why the governments and Industry are unable to understand the farmer as entrepreneurs. I feel the Government is failed to identify the farmers’ entrepreneur skills and they are not developing the farmers’ core competence which are necessities to Indian agriculture. The government has to liberalize the policies and encourage the Industry to work closely with agriculture…… then only the Indian agriculture will flourish.

My belief is that the Indian agriculture growth will be possible through technologies only, as we know that the green revolution in late 1960s and the recent BT cotton revolution are the best examples for the same. So we need Private partnership model (either foreign or native) in Indian agriculture to build the capacity through innovative practices and methodologies. The agriculture need to be treated as an Industry, government should allow partnership in farming and make the farmers as entrepreneurs. As we know the Indian farmers are facing problems with essential requirements of agriculture like water, labor, Inputs, credit and markets.

Irrigation system plays a critical role in productivity of the land and land prices. As long as the sufficient water available, there is no complaint from the farmers for other things. I strongly believe there is no dearth for lands in India, we have lot of arid and semi arid lands are available but there is no irrigation facilities, that is the reason farmers are not interested cultivate. If the governments work in that direction like minor irrigation projects, lift irrigation projects with World Bank funds, there will be lot of growth in farm production. We know that the Israel’s agriculture… how they are efficient in water consumption in agriculture, they don’t spare even one drop of water. Why can’t our governments invite the Israel’s irrigation companies to invest and develop the drip irrigation systems for our agriculture?  China did the same thing, their deserts are bloomy with the help of Israel companies.

Labor shortage is the biggest threat to Indian farmers, most of the unemployed rural youth are changing their occupations for better income and to avoid the laborious nature of farm work. Modern farm equipment is ideal solution to overcome the labor shortage and physical drudgery. The usage of farm equipment is very less in India though it has largest agriculture economy. Application of modern farm equipment/ machine tools in agriculture will reduce the labor cost and it will improve the productivity and income. In India, we have a harvesting tool called “SICKLE” which has been in use from 3000 BC (found in Indus valley civilization); when the developed nations are moving forward by mechanizing their agriculture….we are still using the 3000 years old tools. We need lot of modern equipments like planting and harvesting machines, fertilizing and pesticide sprayers, dairy equipment and poultry equipment and so on. Our government should emphasize the importance of modern farm machinery and they should invite private investors including foreign agriculture equipment companies to set up their manufacturing units to help our Indian agriculture.

After green revolution, intensity of Indian agriculture has changed to competitive environment. The usage of fertilizers, pesticides and hybrid seeds has increased and simultaneously production also increased. The improved seeds, agro chemicals and modern farm technologies have shown positive impact on socio economic conditions of the Indian farmers. We need crops which are fortified with nutrients and Fertilizers which are added with micro nutrients to feed the soil. As we know the Indian cotton revolution has made by BT cotton only which was invented by Monsanto, we need more technologies and science in farming which are supposed to be create value-added crops, medicinal crops, and bio fuel crops. There is still great need of research on drought resistant, decease resistant and herbicide tolerance crops. Africa is the best example for such innovative crops and practices, our Government of India (GOI) should launch Free Trade Agreements with developed nations or multination research organization to set up their research stations for our agriculture growth.

As we know the Indian farmers are struggling for remunerative prices, suffering with too many restrictions and controls to market their produces. The Indian markets are traditionally operated by middle men, lot of mismanagement, exploitation and lacking with modern agriculture-infrastructure. Reforms in agriculture marketing are inevitable to upgrade our marketing systems and facilities to link with nationwide markets. The new agriculture marketing systems should connect the farmers with food processors and retailers which need to mitigate the mediators’ involvement. I welcome the UPA government decision on allowing FDIs in retail markets; it’s definitely favorable to farmers and it’s nothing but remodeling the Indian agriculture sector. Market efficiency depends on marketing strategies and market Infrastructure; that can be possible with massive investments which are going to fulfill by FDI’s.

India economy is growing and considered as third largest economy in terms of public private partnership. Indian economic policy reforms have given tremendous growth in employment opportunities and living standards of the people. India is the best destination for huge human resource, excellent agro climatic conditions and vast markets… but what we are lacking is modern technologies and infrastructure. GOI should renovate the policies to allow FDIs in Agriculture to overcome our drawbacks and to make the Indian agriculture as prestigious, profitable, successful and sustainable.

Direct cash transfer for farmer’s family welfare

We have been discussing various farmers’ issues from past few years i.e. remunerative price, simple interest loans and all kind of subsidies… no favorable progress in this direction. The conclusion what do farmers expect is a stable income to lead their quality life just the same as others in the society. Each and every profession has its own remuneration for their service and the same way all kind of products have their own market price, but farmers don’t have stable remuneration for their hard work or remunerative price for their produces. Government has been intervening in crop production and marketing issues but still no righteousness for farmers and still they are agitating for all kind of supports. Now the time is up… no more jokes (false promises), no more time killing committees, farmers need a constructive permanent policy with economical reforms which gives care to get out of the agriculture crisis.

I strongly feel that the direct cash payments to the farmers is the best alternative option to support them, government has been giving all kind of subsidies in the form of seeds, fertilizers and so on which are actually going to manufacturers not direct to the farmers. If the direct payment goes to the real farmers; they can use the money wisely creatively for not only on fertilizers or pesticides but also for other farming activities. The government should provide direct cash payments to the farmers to assist in labor wages for farm operations, every body knows that farm labor cost has increased due to expensive cost of living and they have got great bargain power with several social welfare schemes. It’s the best way to integrate the NREG schemes to agriculture. I am very glad about Mr. Nandan nilekani’s proposal on direct cash transfer model for fertilizer subsidies but the implementation methodologies shall be discussed.

Farmers need a fixed amount of crop based cash assistance when the crops don’t reap by natural calamities; direct cash is a security from drought, floods and rising diesel prices. As we know that small farmers and land less farmers can’t survive simply on agriculture, they used to do animal herding but still they are in low socio economic status. They need some fixed amount of cash for reasonable standard of living and away from the poverty. The government should examine the real incomes and living costs while recommending the direct cash assistance every year; the money should go to every agriculture family including share croppers. The direct cash payment program shall be designed to encourage women farmers, organic farming and sustainable agriculture.

In recent survey conducted by India's National Sample Survey Organization showed 40 percent of Indian farmers would like to quit agriculture. If it really happens, the government face huge burden to provide alternative livelihood for all of them and country unable to feed its own population. Nevertheless, what the farmers need is… a substantial income and economical security to restructure their farming activities. The practice of directly giving money to the poor is a popular one in developing countries which has given positive results; I hope the same will be implemented for our Indian poor farmers.

FDI in Retail Industry

As per Indian Department of Industrial Policy and Promotion (DIPP)that FDI (Foreign Direct Investment) is inevitable in multi brand retailing. India has been implementing 100% FDI in single brand(Gucci, Louis Vuitton, Nike, Mcdonald , KFC etc) retailing from past couple of years and trying to get the approval in cabinet for FDI in multi brand retailing (Wal-Mart, Tesco, Carrefour, Metro) with 51% since we have accepted the economic reforms in G20 Canada summit. India is the fifth largest retail destination globally; it has been recognized as very lucrative market for foreign investors in the retail industry.

India is a great retail democratic country, we have plenty of neighborhood kirana stores, traditional, and unorganized retailers who are serving the nation from past several decades. The Indian retail market can be divided in to two categories i.e. Organized and Unorganized with market share of 5 % and 95% respectively, the total turnover is $395 billion and it is expected to grow up to $785 billion by 2015. India has been leaning towards organized retail system from past decade and it’s going to reach up to 20% by 2015. Large Indian companies are entering in to the retail business since there is lot of potential to grow i.e Birla More store, reliance fresh, Bharti Easy Day.

India is slowly emerging as a world class market with high value products; growing middle class incomes, urbanization and changes in consumer behavior which are ideal for super markets or hypermarkets. Our agriculture also need large investments to improve our infrastructure in terms of seed supply, agrichemicals, processing, machinery, storage facilities, rural transportation and value chain management. Experts and economists say that there is lot of prospective benefits to consumers and farmers by FDI in retail.

I believe that unrestricted FDI in multi brand retailing is going to affect badly on micro and small retailers. The multinational retailers are going to fill their aisles with international brands with competitive prices and the micro and small retailers are absolutely not in a position to compete with them. The biggest challenge is how to synchronize the harmony between organized and unorganized.

My recommendations on FDI- Retail

1. Indian retail sector contributes 15% to total GDP and providing 8% of total employment which is the biggest employer after agriculture, so the retail sector should be recognized as an Industry and need to be controlled by a separate ministry.

2. Any kind of corporate owned markets shouldn’t interfere in Public distribution system (PDS) because more than 50% of Indian households are depending on this welfare system and most of them are below poverty line.

3. Ministry of commerce and Industry should fix the limit on foreign Investing amount though they have 51% eligibility. If there is no cap on amount, it’s going be a huge threat to Indian retail companies.

4. The Ministry should initiate the kind of business model; i.e. FDI retailers should deal with all kind products like Fresh produces, dry foods and non food items uniformly in the startup itself. If they don’t consider fresh farm produces, I don’t thinks that they won’t set up the value chain for farm produces.

5. The FDI retail outlets should be allowed on socio economic and demographic factors. Geographical radius must be fixed to set up the stores to mitigate the competition among the local retailers and multinationals’.

6. Stringent policies are required for harmonious trade and to control the multinationals aggressive monopoly trade practices. The Government needs to promote the micro, small and medium local retailers and should take necessary steps to grow them.

7. The new jobs created by the multinational retail chains should be reserved for rural people and the FDI retailers should not destroy the existing unorganized retailers’ distribution setup.

AP farmers want to take a brake

We used to see several ways of mass protests; the employees pen down, workers general strike, business men shutdowns, and factory lockouts so on... Sometimes farmers also organize protests on their issues like lack of farm inputs and better price for their produces, but this time Andhra Pradesh farmers want to protest by stopping the cultivation and they want to take crop holiday. This is not according to their wish or whim, the market conditions and the government impudence drag them to take such disgraceful decision.

Crop holiday is not new to Andhra Pradesh, in the year of 2000-2001 tobacco crop season, the Tobacco board also taken the same decision to clear the accumulated inventory. Indeed, the tobacco crop is commercial one and it doesn’t impact on farmers since they shifted to other commercial crops and a few farmers only depend on the tobacco crop. But paddy is a food crop and widely grown by large number of farmers; despite they want to go for crop holiday because of the distressed conditions by market price crash, heavy input and manpower costs and accumulated inventories at FCI warehouses. It seems to be no choice for farmers to overcome the crisis except the crop holiday
 
India has been lacking with agriculture infrastructure facilities, our food corporation storage houses are bulging with grain stocks of 65.6 million tonnes which the actual storage capacity is 62.8 million tonnes and there is no space for upcoming Khariff crops harvested by September and October. We have lots of grain going rot due to non availability of storage facilities and there is no progress in the issues even after Supreme Court intervened. UPA Government is still in dilemma to take decision on export of excess food grains since they want to support the prestigious National food security bill.

The government agencies are not procuring properly because they don’t have enough storage facilities and some millers are exploiting the farmers and take chance by not paying the prevailing prices since the farmers are in rush to pay their bills and they want to get rid of their debts. The farmers need to have a permanent solution on minimum support price, every time the government announces the price and the millers are not implementing the same. The Food Corporation of India and Civil supplies departments should introduce different kinds of procurement procedures instead of millers’ pride, i.e. promoting IKPs (Indira Kranthi patham) or any self help groups for grain procurements, Inviting private organization for grain collection, storage and necessary terms have to be initiated to control the millers.

Market efficiency depends on marketing infrastructure, there is a massive investment required in storage and processing of agriculture produces, the government has to encourage Public Private Partnership model in grain procuring and storage. We need to apply scientific applications in grain storage to reduce the rotting and wastage and we need to construct innovative storage facilities rather than conventional. I welcome the Andhra Pradesh farmers’ move for taking brake on paddy cultivation; technically it will balance the demand and supply position and it’s a kind of warning to government to fix the farmers’ demands. Let us see... how the government respond and negotiate with farmers because the profound Food security bill is on the way.

Direct Cash transfer is a safety net for poverty

The media and politicians were lampooned on direct cash transfer scheme which was incorporated in Telugudesam party’s manifesto in 2009 assembly elections and political rivals make this scheme as controversial and named Mr. Chandra babu Naidu as ALL FREE BABU. Honestly speaking, I too failed to understand the scheme that direct cash transfer to the poor make the poor become lazy and refuse to work if they get cash for doing nothing. I realized my thoughts were short and the small amount make a lot of difference in their economic lives.

Indeed this is an innovative social policy, it has been in practice from past six years in South American and African countries and some international aid organizations also implementing the same. Providing welfare and social security is the state’s responsibility and the governments have to design the development paradigms to poor people. Economic reforms and liberalization policies are serving their part to eradicate poverty but the change takes lot of time, in the meanwhile welfare schemes are necessary to reduce the pressure on poor and the National rural employment guarantee scheme is the best example for such kind of schemes.

Direct cash transfer to poor households is not like a donation or aid or sanctity or the government is not going to throw the money at crossroads or money is not distributed as handbills. It’s a kind of social security program, identifying the social class and pick the responsible person in the family (mostly homemakers) and transferring the money through banks in certain intervals. It’s a kind of investment to the poor people to support themselves, end to poverty. They can buy good protein based food, can buy medicines, they can send their children to school, they may invest and generate income and small farmers can buy fertilizers or seeds and so on…

In developed countries most of the people are working class, employers or government will deduct the some portion of the amount in their earning and the same will be distributed as social grant. But in developing countries most of the people are working in unorganized sectors and agriculture, they are poor and middle class people, eventually they don’t have choice to get the social grants from their earnings. So governments have responsibility to allocate some money for the welfare of economically poor sections.

According the millennium development goals, reasonable standard of living is became a basic human right and the governments have been working on that direction through reforms or welfare schemes. In developing countries like India, it’s too burden to implement social security grants but eliminating the poverty is our priority. Spending on health, education, infrastructure is important but people need money to access those facilities, so there is a need of social grants for poor.

Poor people are also partial responsible for their own poverty, they should to come out from their dearth and need to improve their standard of living. Ofcourse the welfare schemes are inevitable to reduce the poverty and direct cash transfer is the best among them. I don’t think the little money don’t make the poor people lazy and reluctant to work, everybody has desire to well being and respected, they know how to manage this little money wisely and creatively. Thus, direct money transfer is better for poor, it will help the poor to keep away from their poverty and to lead a gentle life.

www.farmersindia.com

I have a dream that one day our Indian farmer hook up the computer and directly market their products on internet. In pursuit of that objective, I developed a free agriculture classifieds portal (http://www.farmersindia.com/) for everyone who ever associated with agriculture. Please look into that and I appreciate your valuable suggestions.

RURAL INDIA_ FOR SALE @ INDIA.CO.IN

Our economists are stating that India is vibrant and it’s going to be one of the super powers by 2025, I am confused… what kind of super power it’s going to be, is it in software, defense power, Industrial development or agriculture? Being an agriculture enthusiast, my hopes and horizons are diminishing due to violent economic reforms. While the governments are grabbing all the farm lands in the name of Economic reforms, how can we expect the India as super power in agriculture? When all the farm lands are diverting to non agriculture usages like Industrial corridors, Special economic zones, It industries, Airports, Power plants and sea ports, how can we ensure the India’s food security?

Now the rural India turned violent during the protests over the forcible acquisition of farm lands i.e.  in Noida & Agra in Utter Pradesh, Ambala in Haryana, Mansa in Punjab, Singur in West Bengal , Jaitapur in Maharashtra, Mangalore & Sullia in Karnataka,  and Srikakulam in Andhra Pradesh. Thousands of acres of land being forcibly transferred to industries in the name of development by devastating the fertile lands and the government is promising that it will provide the employment to the displaced farmers as resettlement. I have a big question that what kind of employment positions will be given to the farmers in SEZs, Industries and power plants?  Most of our Indian farmers are qualified with mediocre education and they are not technocrats, so…. imagine that these refugee farmers should work as porters, gardeners, scavengers or peons. Nevertheless, why should farmers dispense their hard earned or ancestral profitable fertile lands and why should they work for some others in their own lands?

The governments are saying that massive industrialization will improve the quality of life, I strongly agree with the same, provided that shouldn’t be harmful to other occupations. But this is a forced migration from agriculture, farmers are already self sufficient, they are creating rural employment, feeding the country and they are contributing to GDP. Why should leave their lands and change the profession... I don’t know what kind of economics these are? There are some critics in compensations of resettlements which are not transparent not reasonable to the farmers and the policy makers are favoring to the Industrialists for their personal gains by allotting the thousands of acres of farm lands. Some state governments are forcible acquiring the lands by lesser rates and reselling the same lands to Industrialists for better price. Sometimes these lands are sold and resold for higher prices changing hands to real-estate companies. It seems to be that the Governments are operating like REAL ESTATE COMPANIES and the Chief Ministers are functioning as a PROPERTY DEALERS for Industrialist by SELLING the RURAL INDIA.

Before independence most of lands were acquired by few land lords (Zamindars), after that the Government initiated land reforms and lands were distributed among landless farmers. Now the history is repeating and the lands are going to few industrialists in the name of vicious economic development. Now the farmers are very vigilant, they don’t want to loose their fertile lands and don’t want to become beggars by filthy economic policies and politicians. They are strongly protesting against forcible acquisitions and the audacious governments are using police force to restrain them which eventually turned to violence and the farm fields are becoming battle fields in all over the places in India i.e. Noida or singur or Srikakulam.   

As Indian population grows, crop production need to be increased to feed them, the World Bank estimates that 1 hectare of land will need to feed 5 people in 2025 and ironically the Indian farm land has reduced by 0.43 percent to 182.39 million hectares in last five years. Indian agriculture also provides opportunities for growth, jobs and significant contribution to GDP. I strongly support the industrial development which leads to progress but protecting agriculture is important too. Governments should restrict the usage of farm land for Industrial purpose and if necessary, the land owners must be allowed as partners in the upcoming projects by allotting share or some stable income. However, we need mutually beneficial economic policies which can ensure the agriculture and industrial growth then only the agriculture and Industrialization can flourish evenly.

Women in Indian agriculture

We know that most of the developing countries depend on agriculture for livelihood and food security. Agriculture needs manpower, if the manpower split into gender wise, amazing fact is that the women contribution is greater or equal to men. The rural women are very active in cultivation, dairy, fisheries, crop processing and other allied areas. Nearly 70% of Indian rural women are employed in agriculture and they are responsible for 60-80 percent of food production. They play major role in animal husbandry, horticulture and poultry which are their main source of income and it is noticed that they always involved in labor and tolerance intensive works like transplantations and weeding operations.

Among the rural women workforce, most of them are agriculture labor and some of cultivators. There are lot of variations in involvement of women in agriculture which is based on their culture, economic status, regions and crop selection. While the men are moving to cities for better occupations the women are taking care of cultivation and some times they used to work as farm labor to support their family needs. The weaker section of the women used to market their produces such as selling vegetables and other food crops in farmers market or door to door. Most of the women cultivators are involved in food crops rather than cash crops since cash crops need more marketing efforts which are traditionally taken care by men. The women in higher socio economic sections are not involved directly in cultivation or live stock and they used to help in labor administration, supporting activities and accounting.

Ironically, we often define the men as farmers, in fact the women also equally involved in agriculture in all phases. If we think beyond the conventional definition of “FARMER”, most of the rural women should be considered as farmers but they are ignored. Still Indian society has some gender boundaries, but the rural women involve in multiple productive roles and it is necessary to give equal opportunity in agriculture. Most of the women farmers are marginal or small farmers, landless tenant farmers and farm labor, they don’t have enough land to cultivate, less knowledge, limited access to innovative technologies, low capital and less credit facilities.

In order to empower and improve the women farmers’ productivity, they need to have proper farm training and capacity building programs to compete various challenges in their rural livelihood. Women land ownership plays a major role in their credit worthiness, if they have right on the agriculture land they will have access to financial resources and savings. New legislations have to be taken place in farm land reforms like allocating the wasteland to women self help groups (SHG). Rural women have been acknowledged as the core food producers and processors, banks should recognize them as entrepreneurs, loans and Kissan credit cards have to be approved for them. Special support and market connectivity has to establish for rural women artisans to sell their agro based handicrafts. The farm labor wages should be the same without gender differences and the equal employment benefits have to be given in all rural schemes like NREG. Sufficient political representation must be required by rural women in local level councils, it directs them as an equal partners in political, economical and legal decision making.

We must appreciate Government of India for implementing various rural women welfare schemes and also the NGOs who are working on women empowerment for poverty alleviation. I want to say kudos to Deccan Development Society because they are promoting the small scale women farmers in various aspects like cultivation, seed management, biodiversity conservation, marketing knowledge and media. Click for DDC Videos
Pic Courtesy: guardian.co.uk

Andhra Pradesh Agriculture Markets go online

Andhra Pradesh made a congressional acceptance for E-Trading on Agricultural and livestock produces by amending the Agriculture produce market committee act (APMC). This is a good trend, to integrate the farmers to electronic markets with transparency in prevailing prices. The E- Trading has been implementing in Delhi, Gujarat, Madhyapradesh, Utter Pradesh and Tamil nadu markets. Some of the big horticulture markets like Azadpur mandi in New Delhi and Apple markets in Himachal Pradesh also have been in online trading since several years. Most of the state governments have APMC act to regulate the agriculture produce markets in terms of transparency in transactions, coordinate the demand and supplies and encourage the farmers to produce more. In India, we have 7557 regulated markets consist of 2428 principal markets and 5129 sub yards.

Reforms in agriculture marketing are inevitable process for restructuring the agriculture sector, it’s necessary to upgrade our marketing systems and infrastructure to connect with nationwide markets in the liberalization of our trade policies. Setting up an electronic network among the physical markets is certainly improves the linkage between farmers, food processors and retailers and that can mitigate the mediators’ involvement. Some of the corporate companies have taken the initiative to create the market awareness in farmers i.e. ITC limited has been working with e-choupal Kiosks over 40,000 villages which give the information on weather, modern farm practices and market information. Multi Commodity of Exchange India ltd (MCX) has started the Gramin Suvidha Kendra (GSK) kiosks in 3 northern states which provide the information on warehousing, quality testing, expert advices and MCX spot and futures prices of agriculture produces.

The E-trading system shares the nationwide commodity exchange information to the farmers, so that they can sell their produces according to their choice of market/price and the buyers also can choose the products from different markets with specified quality /quantity. In the E-trading, the regulated markets are connected with National APMC and the trading operations are conducted by the APMC’s licensed traders. Ticker boards would be placed at APMCs which display the current prices of different commodities in different markets and the farmers can select their choices. Some of the markets are supported by the bankers’ online banking facility to manage the trading among the buyers and farmers. The National APMC has to take the trade approval from respective state government on selective commodities. So far, the trading in existing APMCs is on spot basis only and in future the markets may go on forwards trading.

Government needs to give importance to both the farmers and industry equally, when ever the market infrastructure improves then the market efficiency gets progress. If the trading system goes on pace….the storage, transport and processing facilities have to be in the supporting standards but our markets are lacking with modern agri-infrastructure. There is a massive investment expected in the post harvest facilities, the government has to encourage Public Private Partnership model in agriculture marketing and extension activities. Nevertheless, E- Trading is an impressive reform in agriculture markets in Andhra Pradesh but the main drawback of Indian farmers is that they are qualified with mediocre education. I hope, one day the Indian farmer hookup the computer and market his produces directly on internet.
FYI: Agricultural Marketing Information Network  & National Agriculture Produce market Committee
Please do comment :YashwanthX@yahoo.com

A Profitable Proposition

Yetiketham batti yei putlu pandinchi yennadu metukerugadanna- cherabanda raju
(He grapples to pull the bucketful of water from lake and harvested bountiful crop with immense strive but he never had even one grain) I used to memorize the above poetry when I think about the farmers’ income. National sample survey speaks about the farmers monthly income was an average of Rs.2115 in 2003 but positively it could be Rs.2700.00 in 2011. We have been in the regimes of lot of parties from past 60 years, too many budgets and many 5 years plans, no improvement in farmers’ income level except green revolution which was aimed for national self sufficient in food grains. Every government has been chanting that they want to make farmers as kings and the UPA government aimed the growth of 4% in agriculture and proclaiming that the policies and budgets are in the same direction. In fact, are these policies really going to help the 600 millions of Indian farmers from their agrarian crisis? However, the key point is how to maximize the farmers’ income and make the agriculture as a profitable proposition.

The increased cost of cultivation dragged the farmers into distress and the farmers are not getting remunerative price for their produces. The Swami nathan committee recommended the Minimum Support Price should be the cost of production plus 50% profit, but presently the cost of production perpetually increasing in terms of inputs, farm labor wages and land rent. If the farmer receives 60%-70% of the share which the price paid by the consumer, it really helps the farmers get out of their burdens. The government needs to try on some selected produces for remunerative prices which are a percentage on the prevailing market prices paid by the consumer.

The agriculture Insurance Scheme is still in experimental phase since 1985 and that has been connected with crop loans by banks since the banks want to be safe against their loans (Insurance companies are protecting bankers interest not farmers). The small and tenant farmers have limited access to the banks and most of the farmers don’t have awareness on crop insurance schemes. The Insurance company agents and agriculture extension officers have to make the farmers known about the insurance policies and have to form the units with group of farmers. The crop insurance schemes are covering the pre harvest crop only and we have been talking about the 40% loss of post harvest, does it make sense to insure the post harvest? Of course the modalities have to be defined….

According to National Crime Records Bureau (NCRB), the farmers’ suicides were reported 16196 and 17000 in 2008 and 2009 respectively despite the government waived off the crop loans. It clearly explains that most of the farmers were not beneficiaries of the loan right off scheme since they borrowed the money from private money lenders because they don’t have access to bank credit facility. The government or Reserve bank has to formulate the strict guidelines to the commercial banks on extending credit facilities to the small and marginal farmers with low interest rates. In fact some commercial banks are extending the low interest loans to agribusiness people in the veil of agriculture sector and these things should be curbed. Government and local bodies have to make the special provisions to the tenant farmers to avail the loans from the banks. Asper National Commission on Farmers recommendations, 4% of the interest rate on crop loans would be suggestible and helpful to small and marginal farmers.

According to National Sample Survey Organization, more than 45percent of farmers would like quit farming. There is a need of direct income support to farmers as fixed monthly income, at least to some small farmers based on their land holding. The subsidies whatever the government has been giving to farmers are very low which compared to the incentives for corporate houses. In the last budget the Government written off Rs.500, 000 crores of tax amounts for corporates and the government named the budget as Pro- Farmer budget.  Government is spending lot of amount on fertilizers subsidies which the total amount goes to the industry not to the farmers. Giving direct subsidy to the farmers is best alternative since the farmers will get the real benefit, fair distribution of subsidies and it stops the illegal trading.

Agriculture is a life science, modern technologies are indispensable for better farming. Using mechanical engeenering, Information technology and Bio technology are required for agronomic and social growth. Biological solutions are necessary to replace the chemical applications in agriculture and safeguard the soil ecology. Organic farming is going to be vital in future agriculture and government has to promote the Organic farming among the small farmers. Public Private Partnership is required to promote agro-processing, agro-industries which can prevent the post harvest losses, Value addition to produces and farmers will get remunerative prices.

India has lot of young people who are looking for employment and if everybody prefers IT or White collar jobs then who are going to feed us. We need large number of people to choose the modern agriculture as their profession, the government has to promote the youth in farming and agriculture allied services to ensure that can provide a decent income. Farmers and farm laborers are working very hard to produce food for us and enriching our economy, it’s our responsibility to make sure their lives should be cherished with good quality. I have a dream that one day the agriculture will recapture its fortune as mainstream of the economy and I hope it would be a profitable proposition.

India economic summit - Agriculture sector

My beloved Mentor Hon'ble Chengal reddy can be seen in the panel discussion.
Mr. Reddy's comments @ 32.30; 49.08 ; 1.07.00 ; 1.25.00

Watch live streaming video from worldeconomicforum at livestream.com

Barak - The bilateral salesman

US President Mr. Obama completed his three-day visit in India with a bunch of US merchants. India honored the esteemed guest with great state banquets. Obama praised that India is not simply emerging…India has already emerged world power. He made magnificent statements on Indian heritage, culture, science, civilization, Father of nation and so on. Everything went well, everyone was happy. The big question of normal Indian is what was the purpose of his visit? As usually many of them are in the notion of Indo-US strategic partnership and better trade relationships for prosperity. But Mr. President successfully played a role of a salesman to close lucrative deals to USA.

He made splendid statement On India that has an emerged global power. Has India really emerged, Shall we need to believe the same since Obama praised? According to Human Development Index, India has ranked low of 119 among the 169 countries and India is lowly 67th among 84 vulnerable countries in the Global Hunger Index. If we still in the notion of emerged nation that’s absolutely foolishness, Obama is simply demonstrating his selling skills by praising the customer (India).He clearly revealed his strategy in Mumbai that his purpose of visit to India is to generate the 50,000 employment opportunities in USA. He closed $10 billion worth of commercial deals with job opportunities like
30 no’s of Boeing 737 aircraft to Spice Jet Airlines (12,970 Jobs),
10no’s of Boeing C-17s military transport planes to Indian air force (22,160 Jobs),
107no’s of GE F414 jet engines to the Indian military (4,440 Jobs),
$917 million worth of Mining equipment and services from Bucyrus International to Sasan Power in Madhya Pradesh (3,460 jobs),
6 no’s heavy duty gas turbines from GE to Reliance Energy (2,650 Jobs) and so on…

No doubt, he has a mission with an organized TODO LIST and strategies to market his products and services but our leaders don’t have the TASK LIST except MENU to arrange the banquets. Our political leaders are simply shaking hands, applauding the Obama’s speech because he praised that India is great and they don’t know what we need to obtain from USA. If the US corporations’ are making such profitable deals with India, why our politicians can’t propose the Dow Chemicals (Successor Company of Union Carbide) to arrange the compensation to Bhopal Gas disaster victims and cleaning the chemical wastage in Bhopal. No politician has pressurized the issue of Business Process Outsourcing from USA which has been providing lot of jobs to India and some of the Tech business men have asked inconsequential questions like H1 fees issue rather than unique Software solutions propositions. Our leaders didn’t mention to waive the US farm subsidies especially on cotton which is very badly effecting to our cotton farmers due to subsidized cotton dump from USA. When we open our markets for US agribusiness for the companies like Monsanto, DuPont and Cargill… why can’t we propose cotton textile, apparel exports to US since we have sufficient cotton stocks.

Mr. Obama has also failed to talk about Pakistan connection in 26/11 attacks and Kashmir issue to pursue the peace. He mentioned that Indo- US strategic partnership is going to be WIN-WIN relationship to both countries but he never committed on outsourcing which gives employment to Indian professionals. United States is pushing India to remove all trade barriers to export their products and India liberated most of the policies according to USA pressure. Some of them are…
Allowing American Food Giants (McDonalds, KFC, Pizzhut ….)
Indo-US Knowledge Initiative on Agriculture (Monsanto, Cargill, DUPONT...)
National Biotechnology Regulatory Authority bill (Genetically Modified produces)
India is going to accept foreign direct Investments (Welcome to Wal-Mart)
Indo-U.S. civilian nuclear agreement
As usual defense deals of Fighting Jets, warships, Military Aircrafts
No import tariffs on food grains, Pulses and edible oils

I don’t know... what further more Obama expects from India, Does he want to make India as a DUMPSTER for US products ? I can’t understand the logic in his WIN-WIN scheme.
Please do comment : YashwanthX@yahoo.com

Micro Credit – Macro crisis

The Father of Microfinance and Nobel peace prize winner Mr. Muhammad Yunus would never expect that the social mission of microfinance is going to be bad in India. He is the founder of Grameen Bank and he developed the concept of Micro credit model In Bangladesh to eradicate the poverty in rural community. The fundamental of microfinance / Micro credit is to empower the poor people by giving the small loans with low interest rate. In the past few days, 24 number of rural Micro finance borrowers have committed suicides in Andhra Pradesh who are harassed by the Micro Finance Institutions (MFIs).

The Andhra Pradesh state government has been following the best model of Indira Kranthi Patham by Society for elimination of Rural Poverty (http://www.serp.ap.gov.in/) which arranges the loans from nationalized banks to the Self help groups with subsidized interest rate. In the early 1990s, the Development of Women and Children in Rural Areas (DWCRA) model was also very successful one in Andhra Pradesh. From the past few years, the micro finance sector is growing massively. Most of MFIs are forcing the poor women to enroll and majority of them are already members in self-help groups who are well nurtured by the Government schemes. They indulge in very unethical practices in collecting their loan money. The MFIs are humiliating and dampen the self respect of the borrowers, those deeds are pushing them to suicides. The MFIs are charging very high interest rates i.e more than 30% per annum from the poor borrowers and enjoying this money with high paid salaries and perks to their CEOs. They are just like private money lenders in corporate way by utilizing the Self Help groups.

On October,14th, the AP state government came out with legislation to control the MFIs. That is a good sign to help the poor rural borrowers from the clutches of fraudulent MFIs. As per new ordinanace, the government is going to help the MFI’s victims by debt-swapping through commercial banks by providing new loans with low interest rates. We hope the new ordinance will control and regulate the Micro finance system and Reserve Bank of India intervention must be required to formulate the guidelines for MFIs. Brief note on ordinance: http://bit.ly/cF1p7a

India's wealth in Switzerland

If the money is earned and stashed by unfair, illegal, corruptive practices and kept in secret to avoid the taxes is called BLACK MONEY. Circulation of unaccounted money is big a threat to economy and loss of revenue to the government. The generation of black money is against to basic objectives of economic planning for India, those are eradicate of poverty, removal of disparities of poor and rich, generation of employment and building the nation.Money laundering is the practice of engaging in financial transactions to conceal the identity, source, or destination of illegally gained money, but in actual scenario the definition has broadened by governments and international authorities.

The Prevention of Money-Laundering Act of India (PMLA) - enacted in 2002 and came into effect on 1 July 2005 which prevents money laundering and the parallel economy. According to this act, Reserve bank of India has given the guidelines on the cash transactions, deposit tracking, reporting, operation and maintenance of the records to the all financial institutions and non banking companies, I.e KNOW YOUR CUSTOMER (KYC).However the domestic black money is turning around in our economy and it is productive up to some extent. But we need to think about the money which was stashed in foreign banks are not useful to India. Some of the estimates are stating that a $1500 billions (about 70 lakhs Crores) of Indian unaccounted money is lying in Swiss and other foreign banks. This is the highest amount accumulated outside any country, from among the countries of the world. If that money brings back to India, every family in our country would get nearly Rs. 2.5 Lakhs, the national debt will be cleared and people would get a tax- free budget for 30 years.

Just for your information that Hinduja Brothers (Bofors guys) started a Swiss regulated bank (http://www.hindujabank.com/) in 1994 and this is the only Swiss bank which is owned by Indians. We can easily figure it out that all unauthorized money could be belongs to some of the leading politicians, top industrialists, celebrities, lobbyists and underworld mafia. Recently Swiss government has liberated their banking policies due to international demands and last year UBS bank revealed 4450 secret accounts details to US Government. Still the Indian government has not initiated the process to get the Indian Individuals accounts’ details though India is the member of Financial Action Task Force (FATA) which combats on money laundering and terrorist financing. Being a FATA member, Indian can get the real-time information on money laundering from member countries and pressurize the other countries on stashed Indian money by diplomatic approach. One important thing is that all the account holders’ information (Names and whereabouts) may not be genuine because they are not fools to hold such a huge amount on their real names which can be traced back to them. The government should probe into this unaccounted money and all deposits which are not claimed by any individual must be nationalized. More information on the same, please read Mr.LK Advani’s blog: blog.lkadvani.in

keep attention on this righteous cause and share your innovative ideas: Yashwanthx@yahoo.com