Online edition of India's National Newspaper Monday...

Online edition of India's National Newspaper

Monday, January 31, 2011

Date:31/01/2011 URL: http://www.thehindu.com/2011/01/31/stories/2011013163252000.htm

Inflation control needs newer strategy

Imports as a means to supplement domestic availability may no longer be feasible

There was no doubt that inflation would remain the primary concern of the Reserve Bank of India. The Third Quarter Review of Monetary Policy says so right at the outset. It is not just that the inflation rate remains uncomfortably high. “It is the reversal in the direction of inflation that is striking,'' the RBI says in the policy.

After moderating somewhat between August and November, 2010, inflation rose again in December on the back of sharp increases in the prices of primary articles and the global oil recently. Non-food manufacturing inflation has remained sticky. The RBI attributes it to buoyant demand conditions and rising costs.

In hiking its March, 2011, Wholesale Price Index-based inflation projection to 7 per cent from 5.5 per cent, the RBI is formalising what it had said in the two earlier policy statements — that it would not be meeting its earlier target. In these circumstances, the hike in the two short-term policy rates, the repo and the reverse repo rates by just 0.25 percentage point each seems modest. However, the relatively soft-touch has not only met market expectations, but also gives room for another round of increase, possibly by March. The tone of the policy statement is distinctly hawkish. Even though the inflation control will continue to be at the top of the central bank's agenda, obviously there are other macro economic factors that the RBI will not ignore. Monetary management is becoming increasingly complicated. Food inflation is refusing to decline. It is also becoming more broad-based covering a number of food items. On the other hand, industrial growth is erratic and demonstrating a high degree of volatility.

Although monetary policy cannot directly address supply side factors responsible for inflation, it can anchor inflationary expectations and check the second-round effects, which are transmitted

into the economy through increased wages and higher input costs. Notably, the economy has been growing at a robust pace but may hit roadblocks in the next fiscal. The first half of 2010-11 saw the economy growing by 8.9 per cent, which is close to its trend rate. The GDP outlook for the rest of the year looks promising. However, the RBI has stuck to its earlier projection of 8.5 per cent, with an upward bias. There are concerns over the sustainability of industrial growth. The Index of Industrial Production numbers have been extremely volatile: the November figure was just 2.7 per cent. The central bank expects domestic growth momentum to stabilise, though the GDP growth rate may decline somewhat as agriculture reverts to its trend rate (lower than the above 4 per cent projected for 2010-11).

The Cash Reserve Ratio (CRR) has been left unchanged and this again, like the modest hike in the short-term policy rates, was entirely anticipated. Moreover, given the current bouts of liquidity shortages, sucking out money by hiking CRR is not on the cards. In fact, the RBI had taken special steps to allay liquidity concerns that included a reduction in the Statutory Liquidity Ratio and conduct of open market operations in December 2010 to infuse liquidity. The RBI has done well to highlight the risk factors that can impact adversely on growth (8.5 per cent with an upward bias) and inflation projections (7 per cent end March, 2011). As high food inflation persists even after normal monsoons, the prospect of inflation spilling over to the general inflation process is rapidly becoming a reality.

Second, the global scenario has further dimmed the inflation outlook. Imports as a means to supplement domestic availability for many commodities may no longer be feasible as global growth consolidates and capacity utilisation increases.

Three, the widening current account deficit (CAD) poses a major threat. The overall CAD for 2010-11 is expected to be about 3.5 per cent of the GDP, which is clearly unsustainable. Further, global commodity prices, which had risen when economic growth in the advanced countries was sluggish, are poised to rise further as the world economy consolidates. That has implications for CAD and inflation.

Four, as much as the CAD, the overdependence on foreign portfolio flows to fund it poses a major risk. A faster global recovery may contribute to a reversal of capital flows, which may find investing back home a worthwhile option. This in turn will render the external sector vulnerable.

Five, the need for fiscal policy to work in tandem with monetary policy is once again emphasised. The RBI points out that the recent improvement in the fiscal situation might be transient as it was caused by disinvestment proceeds and one-off revenue from spectrum sales. Rising commodity prices, especially of petroleum, pose significant risks to fiscal consolidation in the year ahead.The government faces an extremely difficult choice. If it restricts the pass through of international prices to the domestic sector, it will have to provide more for subsidies in the budget. This will constrain its ability to reduce the fiscal deficit.If, on the other hand, the government allows global prices to be transmitted fully, it runs the risk of increasing inflationary expectations and undermining fiscal credibility.

Six, the combined risks from inflation, CAD and the fiscal situation contribute to an increase in uncertainty about economic stability that will deter consumption and investment and hence pull down growth. A slower growth is really no option. It may dampen inflation, narrow CAD but it can have a significant impact on capital inflows, asset prices and fiscal consolidation, thereby, aggravating the existing risks.C. R. L. NARASIMHAN


Raise a vegetable garden in your own backyard

Staff Correspondent

Aiding people:The Belaku Society will hold a workshop on organic farming on Wednesday.

DHARWAD: Keen on raising a vegetable garden in your backyard? Well, find out just how to go about it.Belaku Society, a forum striving to promote organic kitchen gardens among citizens, in association with Vijnana Mantapa and Karnatak Vidya Vardhak Sangha (KVS), will hold a workshop on Wednesday to guide householders on meeting the vegetable requirements of their families by raising a kitchen garden.The workshop will be held on KVS premises here. Resource persons B.N. Vishwanath and Swapna G. will speak on the harmful effects of consuming vegetable grown using chemicals and the benefits of cultivating vegetables organically.

‘Diseases on the rise'

In a release, Vijnana Mantapa convenor Prakash Udakeri said several diseases were on the rise because of consumption of vegetables grown using fertilizer. There was a need to lay emphasis on vegetables which could be grown organically in people's houses. Moreover, the workshop would throw light on terrace gardening designed for residents in cities, he said.Mr. Udakeri said the Belaku Society strived to promote organic faming among residents in urban areas and help farmers adopt organic farming in villages. Besides, it would set up ‘Eco Clubs' in schools with the aim of disseminating information on the methods of cultivation, particularly growing vegetables and fruits in their backyards.He said interested persons should register their names by Monday and only the first 50 entries would be admitted. For details, call 9620162242.


Cotton Crop Field Day

DHARWAD: Cotton Crop Field Day organised by the University of Agricultural Sciences, Dharwad, will be held on the university campus on Wednesday from 11 a.m. to 5 p.m.


Compensation for crop loss disbursed

Staff Reporter

KHAMMAM: Government Chief Whip Mallu Bhatti Vikramarka disbursed cheques for Rs 75 lakhs towards compensation for crop losses to farmers at a meeting held at Bonakal mandal headquarters on Sunday.

He said that the government was determined to ensure compensation to the farmers those hit by the cyclone in December last year at the earliest.

Madhira market committee chairman V Srinivas Reddy and others were present.

Later, Mr Vikramarka participated in Rachhabanda meeting held at Nagulavancha SC colony in Chinthakani mandal.


Shamanna stresses need for taking up natural farming

Special Correspondent

BJP Government criticised for promoting organic farming

Remembering the mahatma:Farmers' leader Kadidal Shamanna waters a plant at the Sarvodaya Day function at Manasagangothri's Gandhi Bhavan in Mysore on Sunday.

MYSORE: Veteran farmers' leader and socialist Kadidal Shamanna has taken exception to the farming community succumbing to organic farming instead of opting for cost-effective natural farming.

Garlanding Mahatma Gandhi's bust at Manasagangothri's Gandhi Bhavan to inaugurate the 63rd Sarvodaya Day (Martyr's Day) jointly organised by Gandhi Bhavan and Gangothri High School at Gangothri Extension here on Sunday, he said that though 70 per cent of the population in the country constitutes farmers, agriculture was the most neglected sector.

No attempt was being made to address the agrarian crisis plaguing the country, he regretted.

Wrong path

Though Mr. Gandhi believed that the country could not develop without the economic condition farmers improving and advocated cost- effective natural farming, the farmers were not ready to take it up and instead were relying on organic and chemical farming more and more, which was pushing them deeper into a crisis, he regretted. Mr. Shamanna said that he was greatly influenced by Gandhiji's preachings of a simple life and high values during his childhood.

He deplored the BJP Government in the State for earmarking Rs. 400 crore for organic farming. He also noted that the researches being conducted by agricultural universities were not helping the farming community in anyway.

Noting that the nine-decade-old University of Mysore had enriched various field rich through their contribution, he said that, it was better for the Gandhi Bhavan to take up and promote natural farming to spread the message of Gandhiji.


Afforestation programme to improve green cover


165 saplings representing 28 natural species planted

— Photo: Special Arrangement

For a pretty picture:Students planting saplings at Dhodahanni village, near Kotagiri, on

Saturday.

Udhagamandalam: In a bid to enhance awareness about global warming among the children in rural areas and improve the ambience of villages which lack adequate green cover, an afforestation programme was organised under the aegis of the Island Trust at the Panchayat Elementary School in Dhodahanni village near Kotagiri on Saturday.

Since trees belonging to the natural species were hard to come by in the area, the organisers planted 165 saplings representing 28 natural species with the help of the students and teachers of the school and the villagers.

Addressing the gathering, Executive Director, Island Trust, M.L.Alphonseraj underscored the need to bring more area under tree cover. Stating that prizes would be given to those who nurture the saplings properly, he expressed the confidence that in course of time the school would present a pretty picture.

Pointing out that the saplings had been made available by the Forest Department, he said that more would be obtained.

Climate change researcher Lisa referred to the consequences of climate change in various places.

Chief Coordinator, Island Trust, Balasubramaniam also spoke.


‘State spending can spur food production'


Per capita food grain absorption in India on the decline: Patnaik

State Planning Board vice-chairman Prabhat Patnaik seeks more focus on food problem

THIRUVANANTHAPURAM: State Planning Board Vice-Chairman Prabhat Patnaik has said that larger State expenditure, financed by enlarged fiscal deficits, would be inevitable for generating higher demand for food grains and higher food production.

Delivering the P.K. Gopalakrishnan memorial lecture on world food crisis, organised as part of the Kerala Science Congress, here on Sunday, Prof. Patnaik pointed out that neither the seriousness of the world food problem nor the intimate relationship between the world food problem and the world financial arrangements had received the attention it deserved.

Over the last two decades, there had been an absolute decline in the per capita cereal output for the world as a whole. For the period 1980-85, the average annual per capita world cereal output, according to the Food and Agriculture Organisation (FAO), was 335 kg. This declined to 310 for 2000-05. This decline in per capita output was certainly accompanied by a decline in world per capita consumption, which meant that the world, on an average, is hungrier today than it was two decades ago.

Focusing specifically on India and China, he pointed out that the per capita food grain absorption in India was on the decline currently as compared to the late 1980s and that even in the case of China, per capita absorption of cereals for food and feed had shown a steady and sharp decline between 1996 and 2003. This had got reversed thereafter, but the level in 2005 was still lower than that in 1996. Given the decline in the rate of growth of population in both these economies, the reason for lower food grain absorption per capita must lie in an even more rapid decline in the rate of growth of the supply of food grains.

The very process of undertaking expenditures for increasing food grain production, which would have to focus on Third World countries, would put purchasing power in the Third World countryside. Even if only a part of the enlarged world fiscal deficit was devoted to expenditures for increasing world food grains production, the process of recovery from the crisis would simultaneously entail larger food grain production. There would be a time-lag between the expenditure devoted to increasing food production and the actual increase, during which there may be food price inflation, but as world food grain stocks were fairly comfortable at the moment, such inflation could be kept in check.It was not often recognised that ‘income deflation' played a role similar to inflation in compressing demand. The primary means of income deflation in the era of globalisation — with respect to Third World economies — were relative reduction in the scale of government expenditure, the destruction of domestic productive activities under the impact of global competition and long-term shift in the terms of trade against petty producers of primary commodities, particularly the peasantry. The most disturbing aspect of income deflation was that, unlike profit inflation, which created an incentive to increase output, it did not have a supply augmenting effect, which invariably resulted in lower food production and absorption, he said.


Expedite release of funds for flood relief, Karunanidhi tells Pawar

J. Balaji

NEW DELHI: Tamil Nadu Chief Minister M. Karunanidhi on Sunday urged Union Agriculture Minister Sharad Pawar to help the State by releasing funds at the earliest to speed up relief works in the flood- affected areas.

Mr. Karunanidhi requested Civil Aviation Minister Vayalar Ravi to expedite the Rs. 2,015-crore Chennai airport expansion work, being carried out by the Airports Authority of India (AAI).

Minister of State for Finance S.S. Palanimanickam, who was present at the meeting, reminded the Minister about taking up renovation of the Thanjavur airport, for which Mr. Ravi agreed and sought a detailed request.

Mr. Pawar and Mr. Ravi met Mr. Karunanidhi here after the Chief Minister arrived to participate in the meeting on internal security scheduled for Tuesday.

Mr. Pawar told The Hindu that the Chief Minister explained to him the damage caused by floods to lives, crops, cattle and infrastructure in nine districts during the October-December northeast monsoon, which claimed over 120 lives.

A Central team had assessed the damage and submitted its report to the Home Ministry.

The Agriculture Minister told Mr. Karunanidhi that the report of the Central team was with the government and soon a committee, headed by Finance Minister Pranab Mukherjee and having as members himself (Mr. Pawar), Home Minister P. Chidambaram and Planning Commission Deputy Chairman Montek Singh Ahluwalia would meet and finalise the amount to be released to the State.

“I told Mr. Karunanidhi that I will do my level best to take up the issue for the speedy release of funds,” he said.

Tamil Nadu had received 1,169 mm of rainfall in 2010 during the northeast monsoon against the normal average of 945 mm.

Coastal districts were hit by floods and the State had sought a Central assistance of Rs.1,832 crore.

Airport expansion

Mr. Ravi told The Hindu that he would discuss the progress of the Chennai airport expansion works with officials and direct them to speed it up.

After modernisation, the airport will be able to handle 40 aircraft movements an hour, up from 30, with the number of aircraft parking bays going up to 84 from the current 70.

Traffic projections for the airport show that while it handled 1.05 crore passengers in 2009-10, this figure is expected to touch 1.19 crore in 2011-12 and reach about 1.30 crore in 2012-13.


Milk producers demand hike in procurement price


Plan to launch an indefinite strike from February 7

TIRUCHI: The Tamil Nadu Milk Producers Welfare Association has urged the State government to increase the procurement price of cow's milk to Rs.20.50 a litre and buffalo milk to Rs.31 a litre.

It has also demanded an incentive of Rs.4 a litre for the producers, on the lines of a scheme in vogue in Karnataka.

Addressing reporters here on Sunday, K.A. Sengottuvelu, State president of the association, said fodder prices had been escalating and the hike of Rs.1.10 a litre of cow's milk and Rs.2.20 a litre for buffalo milk, announced by the government recently, was too meagre and unacceptable.

Though the retail price of milk was less in the State, the producers bore the brunt. The State government should come to the rescue of producers by sanctioning a special subsidy, on the lines of rice. M.G. Rajendran, general secretary of the association, said dairy development projects should be taken up on a war footing in the State. The procurement, processing and distribution network should be expanded.

The procurement had come down from 25 lakh litres in 2001 to 18 lakh litres a day now, indicating the need for extending priority to this sector.

R. Rajendran, legal advisor of the association, said that the State government should also regularise the services of the employees attached to the cooperative milk producers' societies with a time scale of pay and retirement benefits.They said that the association has planned to launch an indefinite strike in support of these demands from February 7. A meeting would be held in Erode in a couple of days to chalk out the agitation plan.

© Copyright 2000 - 2009 The Hindu

Mon,31 Jan 2011

Weather

Chennai - INDIA

Today's Weather

Clear

Monday, Jan 31 Max Min31.5o | 22o

Rain: 00 mm in 24hrs Sunrise: 6:35 Humidity: 79% Sunset: 18:09 Wind: Normal Barometer: 1013.0

Tomorrow's Forecast

Cloudy

Tuesday, Feb 1 Max Min 30o | 23o

Extended Forecast for a week

Wednesday Feb 2

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Sunday Feb 6

29o | 23o 28o | 23o 27o | 22o 26o | 22o 24o | 22o Cloudy Cloudy Cloudy Cloudy Cloudy

Mon, Jan 31, 2011 | Updated 09.09AM IST

31 Jan, 2011, 12.36AM IST, Nidhi Nath Srinivas,ET Bureau

Risks rising fast in cotton

India’s cotton market is in a race against time. There is an urgency to buy. There is an urgency

to ship out cotton. And there is an equal rush within government to increase the quantity that

can be exported.

Prices crossed a record Rs 50,000 for a candy this week. At the bottom is greater panic in New

York. Traders in New York are willing to pay $1.68 for a pound of cotton in March. But they wish

to pay $1.54 for it in July. That’s a 14-cent difference. Converted into rupees, in March, cotton is

worth Rs 59,964 per candy on the world market. By July, it fetches Rs 54,970. Goodbye to

almost Rs 5,000.

Clearly, bales shipped in March will be more valuable than those shipped later. Exporters

allowed to sell 1.9 million bales in January immediately benefit. And the bonanza will become

part of folklore if government fattens the goose further. The commerce ministry is ever keen to

play fairy godmother. Unfazed by opposition from the textile ministry, the commerce secretary

himself is pitching for addition of 1.5 million bales to export quota. As it usually takes a month

after the decision for shipments to start, if exporters are to make maximum money, the moment

is now or never.

That’s why all eyes are on the meeting of the committee of secretaries next week. If the

committee develops cold feet and postpones the decision to March, the groans will be heard all

the way to New York.

Meanwhile, commerce has sent spinning mills to the ball. Perhaps that’s because it understands

so little of the business. Or just a desire to be even handed. Spinners were allowed last week to

export yarn made from imported cotton. There is no restriction on quantity. There is no

stipulation to only use cotton imported henceforth. Nor is a correlation necessary between the

quality of cotton imported and yarn exported.

Sitting on the world’s cheapest cotton, no spinner has the wildest chance of finding Chinese

buyers for Indian yarn made from expensive American or Egyptian cotton. It won’t even recover

the making charges. Even commerce should have found that deal hard to swallow.

The upshot is that mills which routinely import up to 5 lakh bales extra long staple cotton

annually for superfine cloth can now use it as an excuse to export yarn made from ordinary desi

cotton. Their existing yarn export quota is extra. Cinderella never had it so good.

All this still doesn’t explain why 7 million bales (if you add that extra 1.5 million to the original

limit of 5.5 mn) should have enough power to pull up the five times larger Indian market of 33

million bales. It’s after all the exportable surplus, the cotton India doesn’t need. There ought to

be plenty left. Surely correction is inevitable.

But for once the tail seems indeed to wag the dog. Between exports and scurry to secure raw

material, spinners and weavers too are caught in buying frenzy. Government-owned Cotton

Corporation of India alone plans to trade 3 million bales for profit.

Record prices can turn a self-fulfilling prophecy. And that’s really the biggest danger today.

Everyone is so bullish that no one is hedging risk. Or can’t. Normally, when a company hopes

physical market will rise, it bets on prices falling in futures trading. That evens out profit and loss

and the business is ‘hedged’. No more. Multinational trading companies are scalded. They

bought large quantities of Indian cotton.

To offset that, they bet on prices dropping on New York’s ICE exchange. They never expected

futures to rise by the maximum permissible limit for days in a row. The consequent margin calls

have wiped out profit in the Indian market.

Local traders and ginners are using personal cash, without a semblance of risk management. If

the market corrects, they are bankrupt. Textile companies are no better. They use bank finance

to buy raw material. But they remain equally exposed to inventory losing value and messing up

credit lines. Most don’t use futures for hedging. Their bankers ought to be extremely worried

right now. Ditto their equity investors. It has become in everyone’s interest to keep cotton prices

high — farmers, traders, spinners, exporters and CCI. That’s an explosive situation.

Exceptional rewards come hand in hand with exceptional risks. You can’t take one without the

other. How far cotton rises is not important. Will it boomerang on our faces is the real question

now.

0 Jan, 2011, 11.28AM IST,PTI

CCI team to visit Nashik's onion wholesale market soon

NEW DELHI: The officials of competition watchdog CCI will next week visit Nashik's wholesale

onion market to probe the role of traders in the skyrocketing prices of the essential kitchen item,

which became a major political issue.

The investigative team of the Competition Commission of India (CCI) is expected to visit the

Lasalgaon mandi, Asia's biggest onion market, some time next week, CCI sources told PTI.

"We have learnt that onion traders had met before the price hike and then the announcement

came. It it clearly the influence of big traders, else no demand-supply study explains the sudden

rise in the price of onion to this extent," a CCI official said.

On January 7, in tandem with a spurt of steps taken by the government to control the price of

onion, which shot up to Rs 75-80 per kg, the CCI had ordered its Director General

(Investigations) to probe a possible cartelisation by onion traders.

The Commission sources have said that "prima facie there exists a case" for probe.

Further, the DG was asked to submit its report on the probe within 45 days.

High onion prices also soared India's food inflation, which accelerated to 18.32 per cent for the

week ended December 25 from the previous week's 14.44 per cent.

Finance Secretary Ashok Chawla had last month called a meeting of the CBDT Chairman

Sudhir Chandra and CCI Chief Dhanendra Kumar to understand the situation that lead to the

sudden rise in onion prices.

The CCI's decision to order the probe is believed to be a follow-up of the high-level meeting

called by Finance Secretary on December 28.

Onion prices, however, are on a downward march now, trading at about Rs 35-40 a kg in retail

market in the national capital.

Cooperatives like NCCF, Kendriya Bhandar and Mother Dairy are selling onion at Rs 24 per kg

in the national capital.

Stung by the zooming retail prices of onion in the country, the centre in December abolished

import duties on onion and banned its exports for an indefinite period.

State-run trading firms had also imported about 1,100 tonnes of onion from Pakistan to ease the

supply shortage.

Lacklustre demand pulls down jaggery

VDS Rama Raju / Chennai/ Visakhapatnam January 31, 2011, 0:24 IST

Despite low arrivals, jaggery prices at the Anakapalli market have declined by another 15 per cent during the current season. At the start of the season, prices had dropped 25-30 per cent.

Attributing this to almost nil demand from states like Orissa and Chhattisgarh, KLN Rao, president of the Anakapalli Jaggery Traders Association, said traders of these two states were preferring Chittoor, Kamareddy and Mandia markets as prices there had plunged significantly.

In mid-December last year, black jaggery was available at Rs 190-200 per 10 kg and the deluxe variety at Rs 210-215 per 10 kg, but today traders are paying only Rs 172 for black jaggery and Rs 180-185 for the deluxe variety. Last season, black jaggery had touched Rs 300-310 per 10 kg.

The season is also seeing lower arrivals. Usually in January 25,000-30,000 lumps (each lump contains 15kg) arrive a day, but currently 18,000-20,000 lumps are coming daily to the Anakapalli market.

Rao said local sugar mills were paying Rs 1,800-2,000 for per tonne sugarcane and this had affected jaggery production this season.

Traders, however, expect the price to rise from next month when they start purchasing jaggery for stocking, which can be sold after May-June.

Monday, Jan 31, 2011

Coffee arithmetic likely to see a change in India

Debasis Mohapatra / Bangalore January 30, 2011, 0:19 IST

Consumption set to rise as global players arrive to brew coffee.

With global coffee retailers setting up shop in India, domestic consumption is set to rise and growers are likely to get a buffer against international price fluctuations.

Experts feel these global retailers would also help in popularising coffee among youngsters in non-traditional areas.

Coffee Board of India Chairman Jawaid Akhtar agrees domestic consumption will witness an upward trend due to the entry of global coffee retailers into India, but said, “It’s difficult to predict the growth rate. However, it will be definitely higher.”

According to the board’s estimates, domestic coffee consumption witnessed two per cent growth during 1990-2000. It went up to six per cent during 2001-2008. A recent survey of the board indicated that this growth rate had gone up to eight per cent for 2008-09. Domestic coffee consumption stood at 102,000 tonnes in 2008-09, compared to 94,000 tonnes a year earlier.

In fact, consumption has seen an upward trend in the last two decades, with the entry of private retailers like home-grown Cafe Coffee Day, Italian Barista Lavazza and Costa Coffee. These retailers have 1,250 outlets and the number is likely to increase to 5,000 in the coming years, according to industry experts.

The world’s largest coffee retailer, Starbucks, recently entered into an agreement with Tata Coffee to open retail outlets in the country. “The entry of Starbucks shows the growth potential of coffee retailing market in the country and the domestic consumption level should reach 140,000-150,000 tonnes in the next five years from 102,000 tonnes as of now,” A Nanda Belliappa, a Karnataka-based planter said.

Coffee planters will also get some kind of buffer against fluctuations in international prices, as these retailers will source their produce from local planters, he said. India produces around 300,000 tonnes coffee a year, out of which 70 per cent is exported. “There is also a constant

fear of conversion rate swings and less dependency on exports will work in favour of local planters,” he said.

K Ramakrishnan, president (marketing) of Cafe Coffee Day, said there was space for every one in the Indian coffee market, as per capita consumption was very less in the country.

“Per capita consumption of coffee in our country is around 85 grams as compared to six kilograms in the United States. Domestic consumption will be activated by the expansion of the industry,” Ramakrishnan said.Out of more than 3,000 cities in India, coffee retailers are present only in 170 cities, which indicate the growth potential of the industry, according to him.He said domestic growers would be definitely benefited, as they would have assured market for their produce.

Systematic investment plan in farming yields fruits

Business Line Sprinkler irrigated arecanut plantation of Mr Prabhakara Mayya at Nada village in

Dakshina Kannada district. - A.J. Vinayak

Mangalore, Jan. 30:

Does any farmer think about earning daily, weekly, monthly, quarterly, half-yearly, and yearly income from his field? A few may think so, if they have large chunk of land and enough manpower to do this.

Achieving this would have been ruled out if it was only six acres of dry land with minimum manpower. But not for Mr Prabhakara Mayya, a teacher-turned-farmer from Nada village in Belthangady taluk of Dakshina Kannada district.

The 40-year-old Mayya took farming on a dry land with minimum investment of 5 kg each of ginger and elephant yam 10 years ago. Now he grows paddy, vegetables, arecanut, coconut and cocoa; rears seven cows; collects honey from bee hives; gets manure from vermiculture in the backyard; and supplies fishes from the natural pond, earning a decent income on a periodic basis.

The planning, determination, and market intelligence of this farmer was visible when this reporter met him at his house at Nada recently.

NEAR ZERO INVESTMENT

As usual, the first question for him was about the investment in developing the land. Near zero, comes the reply from Mr Mayya, adding that 5 kg each of ginger and elephant were the initial investments in this land. In four years, he harvested around 50 quintals of them.

“I invested the money earned in ginger cultivation for digging borewell,” he says, pointing at the green stretch of various crops in his farms.

In the subsequent years, he planted arecanut, coconut, cocoa, teakwood and mahogany saplings in the field. Now his field consists of 1.5 acres of paddy, half acre of coconut, 2.5 acres of arecanut, and an acre of forest wood such as teakwood, mahogany, and cinnamon, among others. Half acre of land is exclusively earmarked for growing green fodder.

PERIODIC EARNING PLAN

The main focus for him while venturing into agriculture was to put in place a periodic earning plan. Seven cows at home help his undivided family of nine people to earn daily income.

More than 100 vines of betel leaf help him earn the weekly income.

He is dependent on banana plants, organically grown vegetables and 70-odd coconut trees for monthly to quarterly income.

SRI method

Mr Mayya harvests nearly 20-22 quintals of paddy by implementing SRI (system of rice intensification) method for earning half-yearly income.

Crops such as arecanut, cocoa and pepper bring him the annual income from his field.

Keeping the long-term yield in mind, he has planted 150 teakwood and 250 mahogany plants.

The entire family involves itself in carrying out farming activities, he says with pride.

MANURE

Showing different species of earthworms in the vermicompost tank, he says that this has helped him cultivate vegetables organically.

The gobar gas plant helps meet the entire fuel requirement of the family.

The compost prepared from the slurry and other bio-degradables has helped him save manure worth around Rs 60,000, he says.

MARKET INELLIGENCE

Mr Mayya highlights the need for market intelligence to sell the commodity in the local market.

“I take vegetables to the local market on a periodic basis without any interruption. This ensures a ready base of customers for us. For arecanut, I sold in December at Rs 110 a kg when the arrivals were thin,” he adds.

Though being vegetarian, he uses the natural pond in his field for rearing fishes.

“I don't have to market this, as people come here to collect fishes from the pond,” he says indicating at the pond situated in the middle of the arecanut plantation.

RISK FACTOR

Like a true entrepreneur, Mr Mayya has taken risk factors such as natural calamities and plant diseases into consideration while venturing into farming. “By the grace of god, I did not face much problem in these areas. Any how, I have opted for crop insurance scheme of the Government to tide over any unforeseen problems,” he says with a smile.

Returns on investment

When wanted to know returns from near-zero investment, he said: “In the last two years, I earned an income of around Rs 1.5-2 lakh a year. I was able to save some amount out of this.” Now if you think that SIP (systematic investment plan) works only in mutual funds, then you are wrong. The integrated farming method adopted by farmer like Mr Mayya could also help you reap good returns.

Prices ease at Kochi tea auction

Tea garden (file photo)

Kochi, Jan 30:

Demand waned and prices eased at the Kochi tea auction for both the dust and leaf tea. There was 11,47,500 kg of dust and 2,69,500 kg of leaf tea on offer .

Prices of several CTC dust teas fell by Rs 3-5. Exporters remained subdued and covered only negligible quantities at the auction.

Tata Global was relatively active at the dust auction while AVT and Kerala State Civil Supplies Corporation lent fair amount of support. Hindustan Unilever also remained subdued and covered nominal quantity.

There was very little orthodox dust grades on offer at the auction and price remained fully firm to dearer.

Bulk of the orthodox dust was absorbed by HUL and exporters.

Leaf Auction

Select high grown whole leaf grades, bolder broken and fannings were firm to dearer at the orthodox leaf auction.

Most other grades were irregular and quoted lower. Medium whole leaf and bolder broken grades also quoted higher following quality.

Medium smaller broken grades and fannings from some areas were barely steady and often eased in price.

Exporters to Russia and HUL were active. Exporters to Tunisia confined themselves to medium grades. CTC leaf quoted lower by Rs 3-5 and sometimes even more.

Upcountry buyers lent some amount of support while exporters remained subdued.

Top Prices

Pasuparai FD fetched the top price at the dust auction at Rs 136 followed by Pasuparai SFD at Rs 129, Pasuparai RD at Rs 124 and Pasuparai SRD at Rs 116.

At the leaf auction, Glendale pekoe fetched the top price at Rs 210 followed by Quinshola FP and Chundavurrai Pekoe at Rs 205 while Rajamallay Pekoe fetched Rs 201.

Recovery good in collateral free loans to fisherwomen

Mangalore, Jan. 30:

The collateral-free loans extended to fisherwomen in Mangalore by Indian Overseas Bank have been registering prompt repayment, according to Mr Ramachander Baikampady, former Chairman of Karnataka Fisheries Development Corporation (KFDC).

Speaking at a function organised by the ‘Central Dry Fish Seller Fisherwomen Association' in Mangalore on Sunday, he said nearly 150 fisherwomen were given a collateral-free loan of Rs 1 lakh each by Indian Overseas Bank.

These fisherwomen have repaid around 45 per cent of the loan in the last five months. The repayment will be completed in 11th month, he said.

Village adoption

Speaking on the occasion, Mr M. Narendra, Chairman and Managing Director of Indian Overseas Bank, said that IOB is ready to extend its assistance to the people of coastal Karnataka.

The bank is planning to adopt some villages in the vicinity of Mangalore for their development.

Mr Krishna J. Palemar, Karnataka Minister for Port and Fisheries, urged the bank to increase the collateral-free loan to fisherwomen from Rs 1 lakh to Rs 2 lakh.

The Karnataka Government can be associated in this direction, he said.

Fisheries jetties

Mr Yogish Bhat, Deputy Speaker of Karnataka Legislative Assembly, said that the tender process for the construction of all-weather fisheries jetties is in progress at Hoige Bazar and Bengre in Mangalore.

The projects are planned to be taken up at an estimated cost of Rs 57.6 crore.

NCDEX to re-launch rubber futures

Mumbai, Jan 30:

The National Commodity and Derivatives Exchange (NCDEX) plans to re-launch rubber futures contract (Rubber RSS 4) on Monday.

Mr Vijay Kumar, Chief Business Officer, NCDEX, said the exchange is constantly striving to improve contract specifications to suit the needs of value chain participants, particularly hedgers.

The contract size will be one tonne and the price quotation will be in Rs /quintal. The tick size will be Rs 10.

Delivery centres

The basis centre will be Kochi with additional delivery centres as Kottayam, Kozhikode, Thrissur, Manjeri and Palakkad.

Trading in a contract shall be permitted right until the day of expiry (20th of every month, unless otherwise specified).

Any depositor of rubber will receive the warehouse certificate immediately after the deposit at an NCDEX-accredited warehouse.

Milk dearer in Bihar from Feb 1

Patna, Jan 30:

In a bitter pill to the consumers, the state-owned Patna Dairy Project has hiked the milk prices by Rs. 1.50 per litre on all its four brands with effect from February One next citing rising prices of the petroleum products.

The Animal Husbandry and Fisheries Minister Mr Giriraj Singh told PTI here that the milk prices have been hiked on all four brands as the input cost had increased substantially following multiple rise in petroleum products’ prices.

Under the new price mechanism, a litre of Sudha healthy milk will cost Rs. 23.50, while Sudha smart brand will cost Rs. 24 per litre, he said. A litre of Sudha Shakti brand of milk will cost Rs. 25.50, while Sudha Gold will sell for Rs. 27.50 per litre.

The Patna Dairy Project has also hiked by Rs. One per litre on the milk purchased from dairy producers, he said.

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