Reading Harish Damodaran is a must to get some idea on Indian agriculture.
In this piece, he writes on how there is a surplus in most crops in India. The policymakers continue to think we live in age of shortage leading to familiar responses of quotas and restrictions. What we need is a change in thinking as we are possibly facing a great depression in Indian agriculture:
Preeti Edakunny, a PhD candidate at Birla Institute of Technology and Science, Pilani in this piece cautions about moving to a global agri mandi:
The farm support policies and subsidies offered by rich nations, including the United States and the European Union, protect the interests of the wealthy in their own countries, while they distort farm produce prices globally. This hampers the possibility of the farmers in developing countries to earn a sustainable livelihood, as well as their access to markets.
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The call to cease all subsidies in the farm sector is the mantra of the hour, the demand coming in both from external economies and from domestic corporates. There is an increased pressure through mechanisms such as the WTO to dismantle (albeit inefficient) agricultural intervention systems and expose the already battered Indian farmer to the distorted market. The urgent pressure is met with responsive eagerness by the government, a fact that needs to be explored through multiple frameworks to understand the reasons for the reciprocity.
Market reforms do not automatically ensure distributive justice. If we dismantle the existing intervention structure, without developing an alternative support system to take its place, we are creating an opportunity for heavily subsidised produce from external economies to enter our markets, killing the only source of employment and sustenance for over 60% of our nation’s population who have no other means of livelihood.
There is continued need for agriculture to receive the protection of the community and the state. Removing these protections would only create an uneven playing field for the farm sector. Without the provision of a real alternative, this will result in the farm sector bearing the brunt of the ever-growing inequity. If such financial unsustainability continues, there will continue to be an exponential migration of farmers out of farming. This comes with multiple societal costs, including loss of national food security. In the absence of the rich nation subsidies, the farmers could be competitive, and even environmentally sustainable food producers.
It is interesting how little things have changed despite several years…
Nice photo essay showing history of tractors in US.
The word tractor came from traction engine:
One just blogged about how Indian pepper farmers have asked government to intervene against cheap pepper imports from Vietnam.
And as expected, the government has decided to intervene by fixing minimum import price:
The Union Ministry of Commerce and Industry has approved the proposal of the Spices Board for fixing the cost, insurance and freight (CIF) value of ₹500 per kg as the Minimum Import Price (MIP) for pepper to protect the interests of pepper growers.
In recent times, decline in the domestic pepper price owing to cheaper import of pepper from other origins has been a major concern among pepper growers. Pepper prices have gone down by nearly 35% in one year and have resulted in a lot of hardship for pepper growers.
Since most of the pepper-producing countries are in the ASEAN region, there have also been apprehensions of pepper from these countries, being routed through Sri Lanka taking advantage of lower duty under SAFTA and ISLFTA, for availing concessional import duty. Farmers’ associations have demanded taking of stringent measures, including fixing of Minimum Import Price for pepper, to prevent cheaper imports of pepper into the country from other origins, a release from the Press Information Bureau stated on Wednesday.
Fixing of Minimum Import Price will help in improving the domestic price particularly when the harvesting season of pepper is fast approaching, it said.
Meanwhile, Nalin Kumar Kateel, MP, welcomed the decision on Wednesday. In a release, Mr. Kateel said that pepper growers had been urging the government for the same.
…..Price of Indian pepper which was ₹650 last year has dropped to ₹380 a kg now.
Eventually politics triumphs over everything else.
Consortium of Pepper Growers’ Organisation have argued for import restrictions on Vietnam pepper:
Prof Darren Curnoe of Univ of New South Wales:
Twelve thousand years ago everybody lived as hunters and gatherers. But by 5,000 years ago most people lived as farmers.
This brief period marked the biggest shift ever in human history with unparalleled changes in diet, culture and technology, as well as social, economic and political organisation, and even the patterns of disease people suffered.
While there were upsides and downsides to the invention of agriculture, was it the greatest blunder in human history? Three decades ago Jarred Diamond thought so, but was he right?
Prof argues that Diamond was indeed right but we can do nothing about it:
Interesting piece and stunning pictures in Nat Geo’s Sep edition:
In a potato field near the Netherlands’ border with Belgium, Dutch farmer Jacob van den Borne is seated in the cabin of an immense harvester before an instrument panel worthy of the starship Enterprise.
From his perch 10 feet above the ground, he’s monitoring two drones—a driverless tractor roaming the fields and a quadcopter in the air—that provide detailed readings on soil chemistry, water content, nutrients, and growth, measuring the progress of every plant down to the individual potato. Van den Borne’s production numbers testify to the power of this “precision farming,” as it’s known. The global average yield of potatoes per acre is about nine tons. Van den Borne’s fields reliably produce more than 20.
That copious output is made all the more remarkable by the other side of the balance sheet: inputs. Almost two decades ago, the Dutch made a national commitment to sustainable agriculture under the rallying cry “Twice as much food using half as many resources.” Since 2000, van den Borne and many of his fellow farmers have reduced dependence on water for key crops by as much as 90 percent. They’ve almost completely eliminated the use of chemical pesticides on plants in greenhouses, and since 2009 Dutch poultry and livestock producers have cut their use of antibiotics by as much as 60 percent.
Superb article on how different institutions and companies are ushering the data driven world. Bruno Sánchez-Andrade Nuño, Data Scientist at World Bank tells you data is being collected from Bhutan’s hazelnut farms:
The farm loan waivers have been criticized severely by one and all.
He says people understand that farmers are under distress but hit out at loan waivers. The view is elite and best summed by RBI:
Pronab Sen provides an altenate view to the ongoing criticism. He says this time the distress and call for loan waivers is mainly due to demonetisation, an action which was mainly enforced by Govt and RBI:
I should have blogged about this piece last week as it came.
Harish Damodaran says the experts got it wrong on the initial impact of demonetisation which was to expect a decline in crop output. The impact seems to have come in the second round as agri prices have declined like never before:
When demonetisation happened, many, including this writer, thought the decision, taken at the start of rabi plantings in November, would significantly impact farm production. We were proved wrong. Good monsoon rains, after successive drought years, besides the timely onset of winter conducive to germination, turned out to be strong motivations for farmers to sow, even if this entailed begging or borrowing. They successfully weathered the DeMo storm by simply replacing cash with deferred payments, for labour, purchase of seed, fertiliser and pesticides. Informal credit networks and “social capital” ensured that, at the end of the day, we had a bumper crop.
Where demonetisation did have an impact, however, was in the prices received during harvest: Potatoes in Farrukhabad, Uttar Pradesh, fetched below Rs 350 per quintal this February, compared to Rs 600 or more last year. Moreover, while prices in 2016 had crossed Rs 1,100/quintal by mid-May, they are stuck even now at Rs 350-400. The same goes for rabi onions in Lasalgaon, Maharashtra, that traded at an average of Rs 450 per quintal in May, as against Rs 750-800 and Rs 1,200 in the same month of the preceding two years. Farmers, likewise, sold tomatoes at Kolar, Karnataka, in early May for Rs 300-400 per quintal, down from Rs 1,500-1,600 a year ago.
When was the last time we saw all three — potatoes, onions and tomatoes — wholesaling at less than Rs 5/kg, and even retail prices within Rs 20/kg? And this, in peak summer!
How did this happen? Eventually the decline in cash impacted the chain.
Well, much of the produce trading in India is cash-based and financed through a chain of mandi intermediaries, processors, input dealers and retailers. While difficult to establish, anecdotal reports suggest that this traditional agro-commercial capital was dealt a body blow by demonetisation. The collateral damage from it has been a haemorrhaging of liquidity from the markets. With the trade, which used to previously buy and stock up whenever prices fell, no longer active — it neither has the cash, nor the confidence now — the produce markets are suddenly without an important source of liquidity. True, this speculative capital was also a source of inflation, wherein, say, a 10 per cent production shortfall led to prices zooming 200 per cent. But today, it’s the opposite: A 10 per cent output increase engenders a 200 per cent price collapse.
One does not know how long it would take for formal finance, banks, commodity trading houses or organised retail, to fill the void left by traditional agro-commercial capital whose transactions were largely in cash. Till that happens and liquidity truly returns, the ultimate sufferer is the farmer, evidence of which is visible in mandi prices and restive hinterlands.
Interestingly, he adds inflation targeting has a role as well. Given high weight of food items in CPI inflation, its success depends on dampening of the agri prices:
But even assuming demonetisation’s effects to be transitory, there is another elephant in the room in the form of “inflation targeting”. The finance ministry and the RBI, in February, 2015, signed a monetary policy framework agreement, obliging the latter to achieve an annual consumer price index (CPI) inflation target of 4 per cent, subject to a plus/minus 2 per cent band. While such inflation targeting may have been adopted by some 29 other countries, the Indian case is unique because of the sheer weight of food and non-alcoholic beverages in its CPI. At 45.86 per cent, this is way above the corresponding combined share of these items in the official CPIs of the United Kingdom (10.3 per cent), Canada (16.41 per cent) or New Zealand (18.84 per cent).
Given the high weightage of agricultural products in its CPI, the success of inflation targeting in India is predicated on what happens to food prices. And since inflation at the retail and not just the wholesale level is what’s being targeted, it inherently incentivises policy actions that depress farm prices (“fire sales” may, after all, not be all that bad a thing for the five wise men and one woman constituting the RBI’s monetary policy committee). That could also explain why our policymakers today are naturally predisposed towards imposing controls on stockholding, domestic movement and export of farm goods, alongside allowing duty-free imports, at the slightest hint of a price increase — while doing nothing when produce realisations hit rock bottom.
Inflation eventually isn’t just a matter of the prices of goods and services going up or down. It is also about whose prices are rising and whose are falling — in other words, winners and losers. In the current deflationary environment, the farmers are the clear losers.
Hmmm… Never really thought from this perspective.
One can’t even blame MPC alone here. We have ignored agricultural economics for a while. Much of agriculture analysis is plain noise. There is hardly any understanding of the sector which drives much of Indian economy and politics. The role of MPC just glamorises the already over the top macro models. An MPC should have clearly tried to be more diverse bringing insights from local economies and sectors.
The article lists a few agri markets/mandis:
…Garlic and methi (fenugreek) seed prices at Mandsaur — the district in Madhya Pradesh’s Malwa region that’s become synonymous with the ongoing farmer unrest — averaged Rs 3,400 and Rs 3,100-3,200 per quintal in April, whereas these ruled at over Rs 4,100 and Rs 4,700-4,800 respectively during the same time last year. Farmers in Nashik, which has also witnessed large-scale street action, along with the rest of Western Maharashtra, had to dump Sonaka grapes at about Rs 12 per kg in March, having sold the same green seedless variety for Rs 45 or so last year.
Even more illustrative is the story of soyabean, a kharif crop that, at harvest time in November, quoted at Rs 2,800-2,900 in Indore — that price has barely moved since then, even as sowing for the new season has commenced. A similar fate has befallen arhar/tur (pigeon-pea), which realised Rs 4,300-4,500 in January-February at Gulbarga, Karnataka.
How many of us even know of these mandis?
After jackfruit, it is encouraging to see kokum fruit too get some attention too. Also really nice to see a common name behind both these initiatives: Shrre Padre of Adike Pathrike.
Squash, juice, ointment, jam, multi-purpose powder — all value added products made from Kokum — attracted visitors at the first Kokum Mela of Dakshina Kannada and Udupi at Muliya village, near Vitla, on Monday.
Dried Kokum rind and a spicy value added product of Kokum were among the other attractions. The ointment was made from Kokum butter.
Adike Pathrike, a farm monthly, Puttur; Halasu Snehi Koota, Neerkaje; and Western Ghats Kokum Foundation jointly organised the mela.Speaking at the workshop to highlight the scope for marketing Kokum and its value added products, Shree Padre, Executive Editor, Adike Pathrike, likened the fruit to “Kalpa Vruksha”.Mr. Padre said that probably only 30 % of Kokum available in the Konkan belt was being used now for making value added products or for direct consumption. Marketing potential for the fruit was high.
Somashekara B.S., author of Garcinia Brothers, said that as Kokum has three major attractive colours — red, yellow and green, the scope for marketing was high. Mr. Somashekar said that there was high scope for Kokum hybridisation.
He said that fruit vendors showcased fruits such as apple better in stalls by giving least priority for wild fruits and local fruits during season. Sometimes, they even kept local and wild fruits on the floor.
One got introduced to Kokam Sharbat on Mumbai’s local train stations and always looked forward to drinking the same. It was really refreshing and provided respite from Mumbai heat.
But how all these local fruits have been lost to fancier varieties.
This is a fascinating article which points how Kiwis were actually Chinese gooseberries which somehow came to NZ. Then one of the firms renamed it to Kiwi fruit as its shape resembled the Kiwi bird of NZ. Then it just took off:
Historical consensus — as presented on New Zealand’s official history website — suggests that the first seeds arrived on New Zealand at the turn of the 20th century.
It all began in 1904, when Mary Isabel Fraser, the principal of an all-girls school, brought back some Chinese gooseberry seeds from China. They were then given to a farmer named Alexander Allison who, planted them in his farm near the riverine town of Whanganui. The trees went on to bear their first fruit in 1910.
New Zealand’s appropriation of the Chinese gooseberry wasn’t inevitable. Around the same time the first seeds were introduced to New Zealand, the species was in fact also experimented with as a commercial crop both in the U.K. and the U.S., wrote New Zealand plant physiologist Ross Ferguson, one of the world’s top kiwifruit researchers, for Arnoldia, the magazine of Harvard’s Arnold Arboretum.
But, as luck would have it, neither the British nor the American attempt at commercializing the fruit was as fruitful. For example, the first batch of seeds brought to Britain’s Veitch Nursery all produced male plants, thwarting the growers’ plans to produce edible fruit. The same fate befell the U.S. government’s attempt. “It seems ironic that the sending of seed by a missionary to an amateur gardener should eventually lead to a new horticultural industry, when the efforts of the Veitch Nursery and the U.S. Department of Agriculture were so much less successful,” Ferguson remarked in his 1983 essay.
The gooseberry’s rebranding didn’t happen until almost 50 years after Allison’s trees bore fruit, according to New Zealand’s official history, when agricultural exporter Turners & Growers started calling their U.S.-bound Chinese gooseberries “kiwifruits” on June 15, 1959.
The fruit’s importer told Turners & Growers that the Chinese gooseberry needed a new name to be commercially viable stateside, to avoid negative connotations of “gooseberries,” which weren’t particularly popular. After passing over another proposed name, melonette, it was finally decided to name the furry, brown fruit after New Zealand’s furry, brown, flightless national bird. It also helped that Kiwis had become the colloquial term for New Zealanders by the time.
Demand for the fruit started to take off, and by the 1970s, the name kiwifruit took root across the Chinese gooseberry trade, cementing its popular imagination as the quintessential New Zealand product. All this happened while China was busy tearing its own social fabric to pieces, during the decade of terror that was the Cultural Revolution.
“I think it was a matter of luck and suitable climate” that the fruit thrived in New Zealand, Ferguson tells TIME. Now an honorary fellow at the New Zealand Institute for Plant & Food Research, he helped classify the Actinidia deliciosa — the furry, green kiwifruit — as a separate species in the 1980s.
In a twist of irony, Chinese are both the largest producers of Kiwifruit and also think the fruit as foreign..
This is amazing. To see kiwi originate in china is quite similar when people in India are told that potatoes came from Portugal.
This is a great story of Mr. Shree Padre, exactly the kind which make your day. These are unsung individuals who are making amazing contrbutions in their own way. Mr Padre is a founding editor of Adike Patrike, journal on arecanut farming:
Living continents apart, Miriam Martinez Joya and Shyamanna have little in common but their deep and abiding love for the humble jackfruit. Joya, a California-based entrepreneur, drives her jackfruit truck selling value-added jackfruit products every day, while Shyamanna, a practicing doctor, steals time away from his patients to care for the thousands of jackfruit trees growing in his orchard in Devanahalli, on the outskirts of Bengaluru.
Those who would consider such passion for a fruit misplaced, should meet Joya and Shyamanna’s inspiration – a man named Shree Padre who has become a self-appointed global campaigner for jackfruit in Swarga, Kerala.
At 61, Padre describes himself as “a farmer by profession and a journalist by obsession”. Padre is the founding editor of Areca News – later re-branded as Adike Patrike or the Areca nut magazine – a Kannada publication aimed at educating farmers. Though the magazine once primarily focused on areca nut farming, it came as no surprise to anyone who knew Padre, when Adike Patrike began to publish stories on jackfruit from 2006 – the year Padre took it upon himself to bring the fruit back into the limelight.
He says jackfruit is the ultimate Kalpavriksha, a tree whose every part is useful..
Superb coverage..
This is just an amazing photo essay on what 21st century agriculture looks like atleast in some places if not all of them (HT: MR blog).
Our industrialized food system nourishes more people, at lower cost, than any comparable system in history. It also exerts a terrifyingly massive influence on our health and our environment. Photographer George Steinmetz spent nearly a year traveling the country to capture that system, in all its scope, grandeur and dizzying scale. His photographs are all the more remarkable for the fact that so few large food producers are willing to open themselves to this sort of public view.
Amazing pictures of cranberry fields, Turkeys (scary actually to see just one person amidst so many birds), calves and so on. Must watch..
An interesting book review on history and growth of Ecuador banana industry.
Role of geography was just crucial:
Ecuador’s many assets for having a successful industry are also identified. It has optimal soils for growing the fruit, an appropriate and relatively storm-free climate (bananas are easily damaged by strong winds), and an ample labor force already living in the lowland regions that would become the country’s banana zones. In addition, it had just experienced the failure of its prior primary export crop, cacao, adding some urgency to the interest in switching to bananas on the part of many farmers.
Another unique dimension of the Ecuadorean industry is its relatively late beginning. The country’s location on the west coast of South America had been the biggest deterrent to the successful export of the fruit prior to 1914 when the Panama Canal opened. While Colombia and Central American exporters all had Caribbean coasts through which their exports could pass, Ecuador’s trading links to Europe and most of North America involved an arduous voyage around the southern tip of the continent. The canal alleviated that necessity and, while adding on the expense of the canal toll, it allowed Ecuadorean bananas to be competitive in foreign markets. The country first attempted to develop a banana export industry in the 1930s but the Great Depression and the ensuing world war caused major reductions in global demand for the fruit. Instead, the industry got its real start in the late 1940s and took off during the first half of the following decade when Ecuador became the world’s leading exporter of the fruit, a position it continues to occupy. The late start actually worked to its benefit as it was able to learn from the problems confronted by its competitors in the region to its north. That helped both its entrepreneurs and its government make better choices, while also taking advantage of the U.S. Consent Decree of 1958, an anti-monopoly measure that required United Fruit to divest many of its landholdings in Latin America.
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Foremost among Ecuador’s distinctive characteristics is the prior existence of an important port city, Guayaquil (now the country’s largest city). Guayaquil has played a significant role from the colonial period on and, in the process, fostered the development of entrepreneurial skills of many of its residents. These were largely in place by the time bananas became a major export commodity for the country in the 1950s. The city spawned several entrepreneurs who would be instrumental in the development of the banana industry. The most notable among these was Luis Noboa. His story, recounted at length throughout the book, was a classic rags-to-riches tale of a driven man who became Ecuador’s wealthiest man and whose firm ultimately became its largest banana trading company (and the fourth largest in the world).
Fascinating to know all this…
Agriculture linked to trade is as old and as modern as it can get..
Nice piece by Niranjan Rajadhyaksha of Mint.
He says APMC were designed with the right intent but have eventually got caught up with similar troubles it was expected to address:
This is a superb piece based on this research.
The authors track where most of our foods come from and how much of our food supply is globalised. On an average in most countries around 70% of food come from elsewhere. There are images and maps to figure all this interesting bit:
When this blog posted about urgent need to inform and communicate about agricultural sector, these are the kind of developments one was talking about.
Apparently, there has been a surge in cocnut supply in Karnataka leading to drop in prices at wholesale level. But you guessed it -Consumers continue to pay high prices:
It was just shocking to hear prices of litchis costing Rs 250 per kg in Bangalore. The prices of fruits have increased significantly in last years. So much so, one wonders whether mango people will be able to consume mangoes and other fruits in future? Or fruit consumption like Picassos, will be seen as a sign of inequality in future?
Surinder Sud has an article on improving litchi fruit’s domestic trade and enhance India’s share in the global litchi market. Leave global markets, first make it accessible and affordable for domestic consumers:
Litchi is one of those fruits that don’t get as much attention as they should. It has substantial export potential, much of which remains untapped. Its domestic marketing, too, is riddled with formidable problems – primarily because of its transient shelf life – which are detrimental to both the producers and consumers.
India enjoys some inherent advantages over other major litchi exporting countries in terms of geographic location and the timing of the fruit availability. Besides, the country also grows some good quality litchis with distinct flavour and high pulp-to-stone ratio, which are preferred in foreign markets. Indian litchis are harvested between mid-April and June-end when good quality stuff is not available from any other litchi exporting country, barring Thailand. It doesn’t, therefore, have to compete with countries such as Madagascar, South Africa and Australia, where the litchi crop is marketed between November and February. Nor does it need to vie with Israel, where litchi is harvested from July to October. This leaves the vast litchi markets in the Gulf and Europe for India to exploit, especially during the summer.
However, a lot of constraints need to be overcome to enhance India’s share in the global litchi market as also to improve its domestic trade. Thanks to its highly perishable nature, litchi needs specialised handling and transportation to ensure its prompt marketing and consumption. The paucity of infrastructure of roads, cold stores, reefer vans and other components of the cold chain management is one of the biggest hurdles in the smooth internal and external trade of litchi. Experts from the Muzaffarpur (Bihar)-based National Research Centre on Litchi (NRCL) feel that these problems need immediate attention. There is also a need for pack-houses at or near airports for the proper pre-shipment treatment of export consignments. The other limiting factors include poor pre- and post-harvest fruit handling at the field level and the unavailability of reliable market intelligence to the producers.
Commercial production of litchi has traditionally been confined to areas such as Bihar, Uttarakhand, West Bengal and Jharkhand. Bihar alone, in fact, accounts for nearly half of the country’s total litchi output. In recent years, litchi cultivation has begun to spread to non-traditional litchi growing areas such as Punjab, Himachal Pradesh, Assam, Tripura and Odisha. Moreover, some of these states have recorded higher crop productivity than that in the conventional litchi belt. The average per hectare output of litchi in Punjab in 2012-13, for instance, was estimated at over 15 tonnes, which was almost double of the output in Bihar. Besides, litchi grown in the Gurdaspur and Hoshiarpur areas of Punjab can be exported from the international airport in Amritsar.
Standard stuff on agriculture likely to standard ignorance. Agri in India should be promoted as aggressively as Make in India..
Nice article by Vignesh Radhakrishnan of Hindustan Times.
He looks at how Indians diet patterns have changed since 1960s:
In the last 50 years, India’s population has surged, its food policies have been revised multiple times and the influence of western products on our eating habits has increased significantly, but the primary diet of Indian families has remained mostly vegetarian.
While our calorie intake has increased over the years and the sources of our vegetarian foods have changed, the percentage of meat consumption has not gone up comparatively. According to National Geographic, next to Rwanda and Ethiopia, Indians have consumed less meat per person than any other country.
According to United Nations’ Food and Agriculture Organization, any diet can be divided into the following 6 groups – grain (rice, wheat, maize, other cereals), dairy and eggs (eggs, milk, animal fats), plant produce (vegetables, fruits, starchy roots), meat (beef, pork, poultry, seafood, other meat), sugar and fat (sugar and sweeteners, vegetable oils, oil crops, sugar crops), others (pulses, alcoholic beverages).
Let us look at how the diet of Indian families changed in the last 5 decades. In 1961, an average Indian family member consumed 2,010 calories in a day. It grew to 2,458 calories in 2011. According to the graphic, while our grain intake reduced from 63% to 57% (6 percentage points decrease) of the total intake in the past 5 decades, consumption of dairy, eggs and plant produce doubled. Our sugar and fat intake also increased by 3 percentage points. However, our meat consumption remained the same – 1% of the total intake – in these 50 years.
It goes to show that as our economy gathered momentum, a part of our population started spending more on these products and spent less on grains.
Let us now compare India’s data with the world average. In 1961, an average world family member consumed 2,184 calories in a day which grew to 2,874 calories in 2011. Though grain intake reduced by 4 percentage points and plant produce and dairy and eggs intake went down by 1 percentage point each, sugar and fat consumption went up by 4 percentage points. As per the graphic, the world meat intake increased from 6% in 1961 to 9% in 2011 – an increase of 3 percentage points.
Thus, as the economy grew in the past 50 years, families around the world reduced their consumption of grain, dairy, eggs, plant produce and started spending more on meat, sugar and fat intake.
At the same time, Indian families reduced only their grain intake and started spending more on dairy, eggs, plant produce, sugar and fats. And there was no change in our meat intake.
It has useful graphics to look at the changes as well..
