April 2008

Chief Editor : Anurag Misra Senior Editor : Dr Sapna N. Singh Editor : Manogyan R. Pal

Vol 52
Joint Director (Prod) : N.C. Mazumder Cover Design : Deepika Dave E-mail (Editorial): editoryojana@hotmail.com : ce.yojana48@yahoo.co.in (Circulation): pdjucir_ jcm@yahoo.co.in Website : www.publicationsdivision.nic.in

Let noble thoughts come to us from every side

Rig Veda

CONTENTS
The Path Forward.................................................................5 P Rama Babu Indian Sugar Industry....................................................13 N Sanyal, R P Bhagria, S C Ray Sugar : Issues.......................................................................18 Sharad Joshi Sugar : Politics and Economics.................................24 S L Jain Insulin to Indias Diabetes Beat the cycle.....................................................................25 V Shunmugam SUGAR & HEALTH...................................................................29 book review. .........................................................................51 J&K Window ......................................................................31 Value-based Societies.....................................................33 Subodh Dhawan Uttarakhand Foothills................................................35 S D Sharma do you know ? ...............................................................37

Role of Armed Forces. .....................................................38 D C Bakshi Growth in Agriculture..................................................40 M S Swaminathan in the news .........................................................................50

Our Representatives : Ahmedabad: Manisha Verma, Bangalore: B.K. Kiranmai, Chennai: I. Vijayan, Guwahati: P. Chakravorty, Hyderabad: V. Balakrishna, Kolkata: Antara Ghosh, Mumbai: D.L. Narayana Rao, Thiruvananthapuram: Madhusudan Verma.
YOJANA seeks to carry the message of the Plan to all sections of the people and promote a more earnest discussion on problems of social and economic development. Although published by the Ministry of Information and Broadcasting, Yojana is not restricted to expressing the official point of view. Yojana is published in Assamese, Bengali, English, Gujarati, Hindi, Kannada, Malayalam, Marathi, Oriya, Punjabi, Tamil, Telugu and Urdu. EDITORIAL OFFICE : Yojana Bhavan, Sansad Marg, New Delhi Tel.: 23096738, 23717910, (23096666, 23096690, 23096696- Extn. 2509, 2510, 2565, 2566, 2511). Tlgm.: Yojana. Business Manager (Hqs.) : Ph :24367260, 24365609, 24365610 For new subscriptions, renewals, enquiries please contact : Business Manager (Circulation & Advt.), Publications Division, Min. of I&B, East Block-IV, Level-VII, R.K. Puram, New Delhi-110066, Tel.: 26100207, Telegram : Soochprakasan and Sales Emporia : Publications Division: *Soochna Bhavan, CGO Complex, Lodhi Road, New Delhi -110003 (Ph 24365610) *Hall No.196, Old Secretariat, Delhi 110054(Ph 23890205) * 701, B Wing, 7th Floor, Kendriya Sadan, Belapur, Navi Mumbai 400614 (Ph 27570686)*8, Esplanade East, Kolkata-700069 (Ph 22488030) *A Wing, Rajaji Bhawan, Basant Nagar, Chennai-600090 (Ph 24917673) *Press road, Near Govt. Press, Thiruvananthapuram-695001 (Ph 2330650) *Block No.4, 1st Floor, Gruhakalpa Complex, M G Road, Nampally, Hyderabad-500001 (Ph 24605383) *1st Floor, F Wing, Kendriya Sadan, Koramangala, Bangalore-560034 (Ph 25537244) *Bihar State Co-operative Bank Building, Ashoka Rajpath, Patna-800004 (Ph 2683407) *Hall No 1, 2nd floor, Kendriya Bhawan, Sector-H, Aliganj, Lucknow-226024(Ph 2225455) *Ambica Complex, 1st Floor, above UCO Bank, Paldi, Ahmedabad-380007 (Ph 26588669) *KKB Road, New Colony, House No.7, Chenikuthi, Guwahati 781003 (Ph 2665090) SUBSCRIPTION : 1 year Rs. 100, 2 years Rs. 180, 3 years Rs. 250. For neighbouring countries by Air Mail Rs. 530 yearly; for European and other countries Rs. 730 yearly. No. of Pages : 56 Disclaimer : = The views expressed in various articles are those of the authors and not necessarily of the government. = The readers are requested to verify the claims made in the advertisements regarding career guidance books/institutions. Yojana does not own responsibility regarding the contents of the advertisements.

YOJANA April 2008

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YOJANA April 2008

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YE-4/08/3

ndia is known as the original home of sugar and sugarcane. In global sugar economy, the Indian sugar industry has achieved a number of milestones. It is the second largest producer of sugar in the world. Sugar industry in India is well developed with a consumer base of more than billions of people. This industry is the second largest agro processing industry in India. More than 500 thousand people are directly employed. Including farmers, and their family member, more than 45 million people of the rural population of India depend on sugar industry for their livelihood. Its contribution to the Central and State exchequers is of high order. The Indian sugar industry has been accounting for around 1% of GDP of the country in the recent past. Sugar production in India is concentrated in six states namely Maharashtra, Uttar Pradesh, Gujarat, Tamil Nadu, Karnataka and Andhra Pradesh which together account for 85-90% of sugar production in the country. The Indian sugar industry is highly fragmented with over 450 mills and no single player having a market share of over 5%. Around 60% of the mills are in the cooperative sector, 35% in the private and the rest are in public sector. The sugar industry can be broadly classified into two sub-sectors, the organized sector i.e. sugar factories, and the unorganized sector i.e. manufacturers of traditional sweetener like gur and khandsari. Over the years, the sugar production has fluctuated noticeably. During the years of shortages, the country turned a net importer. Thus the overall scenario has been that of marginal export of sugar. A High Powered Committee of the Government of India studied the matter and has recommended total liberalization of sugar sector to ensure steady and stable growth in production. Recently, in a move to bring relief to the beleagured sugar mills, the Centre has announced a new scheme extending these mills financial assistance. As part of this scheme, sugar mills which have been facing a crisis due to a production glut and low prices, will get interest free loans to help them pay the dues of the farmers who supply them sugarcane. This issue of Yojana discusses how to improve sugar economy. The experts debate how the sugar sector can be put on a more sustainable path, helping both the industry and the farmers.
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About the Issue

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ECONOMIC INDICATORS
ANNUAL INDICATORS
Population (as on 1 Oct) GDP at current market prices (new series) GDP:Per Capita (current prices) Gross domestic savings (current prices) Gross domestic capital formation (cur. pr) Central Govt. Gross Fiscal Deficit Sectoral shares (of GDPfc at current prices) Agriculture & allied Industry Services Prices (Annual Average) WPI of All commodities (wt 100.00) CPI-IW General index: India Agriculture: Production Foodgrains Cereals Rice Wheat Pulses Oilseeds Sugar cane Industry & Energy Index of industrial production (wt 100) (Annual Average) Commercial energy production Electricity generation by public utilities External Transactions Exports US $ mln. 44147 43958 52823 63886 83502 103075 126246 124160($) Apr 1993=100 % change MTOE # bln. kwh 162.7 5.1 230.9 501.2 167.0 2.6 237.9 517.4 176.6 5.8 246.9 532.7 189 7.0 259.2 565.1 204.8 8.4 272 594.5 221.5 8.2 281.4 617.5 662.5 247.1 11.5 mln. tns. 196.8 185.7 85.0 69.7 11.1 18.4 296 212.9 199.5 93.3 72.8 13.4 20.7 297.2 174.8 163.7 71.8 65.8 11.1 14.8 287.4 213.9 198.3 88.5 72.2 14.9 25.2 233.9 198.4 185.2 83.1 68.6 13.1 24.4 237.1 208.6 195.2 91.8 69.4 13.4 28.0 281.2 216.1 201.9 92.8 74.9 14.2 23.9 345.3 219.1 204.6 93.1 75.6 14.6 26.4 365.0 Apr 1993=100 Jul 2001=100 155.7 95.93 161.3 100.07 166.8 104.05 175.9 108.07 187.2 112.2 195.5 117.2 206.1 125.0 % of GDPfc 23.4 26.2 50.5 23.2 25.3 51.5 20.9 26.4 52.7 20.9 26.1 52.9 18.8 27.5 53.7 18.3 27.6 54.1 17.5 27.9 54.6 Units 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 (Proj.)

in crores Rs.crore Rupees % of GDPmp

101.9 21,02,375 20,632 23.7 24.3 5.7

103.8 22,81,058 21,976 23.5 22.9 6.2

105.5 24,58,084 23,299 26.4 25.2 5.9

107.3 27,65,491 25,773 29.7 28.0 4.5

109 31,26,596 28,684 31.1 31.5 4.0

111 35,67,177 32,224 32.4 33.8 4.1

112.2 4145810 36,950 34.9 36.1 3.4

3.2

Imports Forex reserves ^ Foreign direct investments in India (net)

50056 39554 4031

51567 51049 6125

61533 71890 5036

78203 107448 4322

111472 135571 5987

149144 145108 8901.0

190438 191924 21991

191566($) 291250 @ -

Portfolio investments in India (net) Rupee exchange rate Indicators: Monthly

Prices Wholesale price index (All Commodities) Agriculture Actual rainfall (All-India) Dev. from normal rainfall Stock of Rice (Central pool) Stock of Wheat (-do-) Millimetres Per cent mln. tns. mln. tns. 50 33 12.1 5.6 1993-94= 100 % change 209.1 5.49

Rs / USD

2760 45.61 Jan 07

208.8 6.38

2021 47.55 Mar 07

209.8 6.61

979 48.30 May 07

212.3 5.45

11356 45.92 Jul 07

213.6 4.71

9311 44.95 Sep 07

215.1 3.51

12494 44.28 Oct 07

215.2 3.13

7004 45.29 Dec 07

216.4 3.83

39.93 @ Jan 08
217 3.91

Units

Nov 06

Dec 06
208.4 5.68

Feb 07
208.9 6.34

Apr 07
211.5 6.27

Jun 07
212.3 4.52

Aug 07
213.8 4.14

Nov 07
215.9 3.25

Feb 08
218.4 4.58

12 -24 12.0 5.4 Mar 01 14,28,449 4,539

2 -92 12.6 5.4

30 32 14.0 5.1 Mar 02 15,12,975 6,108

32 14 13.2 4.6

27 -20 13.5 11.6 Mar 03 14,10,828 7,196

48 -31 12.6 13.3

153 8 10.6 12.8

259 0

299 -2 6.7 10.9

194 14 -

75 -22 10.65 9.02 -

16

19 -19 Dec 07

19 -14 -

11.15 7.35 Mar 07 44,77,398 12,725

Investments (CMIE CapEx database) Project investments outstanding* (as on) Rs.crore project count

Mar 04 15,28,611 9,070

Mar 05 19,73,426 9,822

Mar 06 28,12,111 10,050

55,34,374.96 14,144

Note: (a) % change is year on year (y-o-y) basis; (b) # MTOE: Million Tonnes of Oil Equivalent; (c) ^ Total value of foreign currencies held by Govt. of India (excl. gold & SDRs); (d) @ as on 29th Feb 2008; (e) ($) Apr 07 - Jan 08; (f) * It is the sum total of the project costs of all the outstanding (Live) capital expenditure projects happening in the country. These projects may be under announced or under-implementation stage. Source: i3 (i-cube) at Planning Commission, New Delhi, Centre for Monitoring Indian Economy (CMIE)

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ECONOMICS OF SUGAR
The Path Forward

IndeptH

P Rama Babu

ugar has an age old association with this country. India is believed to have pioneered production of sugar from sugarcane around the 4th century CE. In fact, the English word sugar is believed to have originated from the Sanskrit word sharkara. Alexander the Greats soldiers, after their visit to India, are reported to have marveled at the production of honey without the intervention of bees !

Thailand, the Caribbean islands, etc. Sugar beet, on the contrary, is grown mainly in the temperate regions like Europe, Japan, etc. It is also produced in syrup form from sources like corn (High Fructose Corn Syrup or HFCS) in countries like the U.S.A.. India is the largest consumer of sugar in the world with annual consumption of about 19 million MT. It also happens to be the second largest producer of sugar, next to Brazil, with production in the sugar year 2006-07 crossing 28 million MT. Global production from cane as well as beet is around 170 million MT currently. About 80 % of global sugar production is from sugarcane. It has been clearly established that sugarcane is the cheapest source of sugar; the cost of sugar production through the cane route can be as low as 40 % of that of sugar from the sugar beet route. One of the major producers of sugar through

The Indian sugar industry is green and will be increasingly valued in future
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Sugar is used by mankind as a sweetener of food and drinks. As an additive in food products, it is also valued for its qualities of feel, texture & preservative nature. It is a major source of energy with 1 kg of sugar capable of yielding as much as 3900 KCal. In its crystalline form, it is produced primarily from sugarcane and to a lesser extent, from sugar beet. Sugarcane is cultivated in tropical / semi-tropical climates in countries like Brazil, India, China,

The author is Managing Director, E.I.D.-Parry (India) Limited. 5

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the beet route, the EU, has already begun cutting down on production realizing the futility of competing with cane. Increasingly, therefore, sugarcane would be the route for sugar and related products manufacture. he bulk of the Indian sugarcane cultivation and hence, location of the sugar mills, is in the states of Uttar Pradesh, Maharashtra, Tamil Nadu, Karnataka, Andhra Pradesh, Gujarat, Punjab, Haryana & Bihar. The annual production is in the range of 300 to 350 million tons of sugarcane out of which about 30 % is used for gur and chewing purposes and the balance for producing sugar. Sugar production during 2006-07 was a little over 28 million tons second only to Brazils production of about 33 million tons. Uttar Pradesh with 30 % and Maharashtra with 27 % of the sugar production top the nine states. While Bihar, Punjab & Haryana are at the other end of the spectrum with less than a million tons of production per annum, the balance states produce in excess of 1 million tons each per annum. Production growth over the last half century has been a little under 5 % CAGR with typical cycles of 4 to 7 years. Of the total of about 450 mills in the country, over 60 % are either in the co-operative or government sector and the balance of about 40 % in the private sector. The states of Maharashtra, Karnataka & Tamil Nadu have relatively larger share of co-operative mills. However, over 50 % of the output is accounted for by the private mills and the share of the private sector has been steadily increasing.
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The average land holding of cane farmers is very small and fragmented. The bulk of the holdings are reported to fall between 1 and 4 hectares. Around 50 million farmers, including indirect labour, are believed to be dependent on this crop. It is also very labour intensive in terms of cutting labour required for harvesting cane. Indian farm productivity ranges from 40 tons per hectare to 110 tons per hectare against the global average of about 64 tons per hectare; however, even within India, States like Tamil Nadu have farms reporting harvests in excess of 120 tons per hectare. Sucrose content wise, it ranges from 9 to 11 % with an overall national average of about 10 %. The cost of sugarcane is as high as 70 % of the value of the sugar produced by the mill. Farm productivity and sucrose content of the cane are, hence, critical factors which impinge on the economics of operations. Sugarcane is also highly perishable with the sucrose content dropping drastically beyond 24 hours from the time of cutting. In fact, perhaps owing to the rather un-economical land size & populist pressures, Indian cane prices are probably the highest in the world. Paradoxically, Indian domestic retail sugar prices are one of the lowest in the world thanks to the paranoid reluctance of the Government from letting them rise to their natural levels. Every ton of sugarcane can produce about 100 kgs of sugar on an average as also about 45 kgs of molasses and 300 kgs of bagasse. Alternatively, the sugarcane juice can be converted directly into about

70 litres of alcohol in lieu of the sugar and molasses. The Indian Government has now decided to permit millers to convert the sugarcane juice either into sugar and molasses or directly into alcohol. Demand Domestic demand for sugar is about 20 million tons with average annual growth rate of about 3.5 % (against the world average of about 2.2 %). India is the worlds largest consumer of sugar; total global demand is in the region of 160 million tons. Unlike Brazil which exports over half of its production and Australia which exports over 70 % of its production, the bulk of Indias production is consumed domestically with occasional imports or exports of a few million tons to tide over deficits/surpluses. Increasing GDP and changing life styles and food habits are driving down the demand for gur in India with a proportionate increase in demand for sugar. About 70 per cent of the sugar demand is from institutions including confectionery units, soft drink plants, etc. while the rest of the volume is accounted for by households for direct consumption. CONTROLS THE INDIAN WAY The Indian industry has been, traditionally, a regulated one arising out of a sound rationale. On the one hand, the sugarcane industry has been the precursor to the much touted contract farming system which is in fashion today. Given the thousands of farmers with miniscule individual land
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holdings on the one side and the relatively large and dominant sugar mill owners on the other side, our forefathers perceived a distinct imbalance in the negotiating strengths of the two parties. The distinctive sweet tooth that most Indians have, the deeply rooted cultural importance of sugar and the need to make sugar, as a source of organic energy, available at affordable prices to the Below the Poverty Line (BPL) consumers were factors which drove the need to protect the consumer from unaffordably high prices for sugar. The vulnerability of the interests of the small farmer and the common consumer thus drove the need for creation of checks and balances by the Indian Government, leading to various legislations and controls under the Essential Commodities Act (ECA). Essential Commodities Act As a developing nation emerging from the brink of poverty, the country needed to ensure that the poor were assured the availability of cheap and good quality of essential food items; sugar was included as one such item under this rigorous Act of Parliament. The Act gave the Government sweeping powers not only to regulate distribution, storage and pricing of levy sugar but also gave it widespread powers for punishing the offenders. The Act spawned subsidiary Orders / Rules like the Sugar Cane Control Order, Sugar Control Order, etc. which covered the gamut of sugar production, starting from sugarcane to the levy of a cess on sugar sales for the creation of a fund for the development of the industry.
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Among other things, the Act facilitated the following: a. Statutory Minimum Price for Cane (SMP): Based upon various parameters like cost of cultivation, yield, etc., the minimum sugarcane price to be paid by any miller to a farmer was announced each year by the Central Government. Considering the relatively long duration of a year of this crop, this step encouraged the farmer to grow sugarcane with the Government backed re-assurance on cane price. The Government went even further to ensure that the farmer was paid a share of any additional profits on sugar sales of the miller, beyond a stipulated level which covered the miller costs and a decent profit, under Section 5A of the Sugarcane (Control) Order, 1966. This is one of the laudable provisions incorporating a mechanism for fair sharing of returns on agriproducts between the grower and the processor. b. Quotas for sale of sugar: A free sale and a levy sale quota have been in vogue. These quotas are announced by the Government every month for each mill taking into account the anticipated demand for sugar in the ensuing months. While the free sale portion could be sold by the mills into the open market at market determined prices, the levy sale could be sold only to agencies managing the public distribution system and at a pre-determined levy price which was intended to cover the cost of production alone. The levy price has generally turned out to be not only much lower than the market price but, sometimes, even lower

than the cost of production itself, as is the case currently. c. Command Area for Cane: In the interest of ensuring guaranteed market access and price recovery for the farmer as also to prevent poaching of cane between warring millers, the Government chose to define an area of about 15 kms radius from each mill as the Command Area. Farmers could choose to register their commitment to supply cane with the mill within whose Command Area their farm fell. The command area concept also served as an assurance of raw material availability to the miller, encouraging investments in mills. The actual area to be declared as Command Area, however, has been a contentious issue. d. Controls on By Products: Many of the sugar mills generate Electricity out of the waste bagasse as also alcohol out of the by product, molasses. While, traditionally, mills had generated power to meet in-house requirements, they are gradually investing in new equipment which is helping them generate a surplus for export into the grid. Molasses and alcohol have been sensitive issues given the fact that their end product, potable liquor, falls under the state subject and accounts for a significant portion of state government revenues. Concerns of illicit brewing have also led to stringent controls on movement and sale of molasses. Electricity generation, too, has traditionally been perceived as a state activity and strictly monitored and controlled. The liberal provisions of the recently
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promulgated Electricity Act have been like a breath of fresh air to the industry but their implementation has been tardy, at best, in most states. e. Exim Controls: Given its strong concern for the food security of the country, the Central Government has also actively used its exportimport policy as a tool to regulate the inflow of imports and exports out of the country with the stated objective of protecting the end consumer. The cyclical nature of Indian sugar production has necessitated frequent Government interventions through changes in the duty structure as also bans on imports / exports of sugar. Sudden changes in the Indian Governments exim policy impact the global scenario dramatically since India is the single largest consumer and second largest producer of sugar in the world. The credibility of the Indian exporter has also been poor owing to the impromptu bans resorted to by the government which have often come in the way of the exporter honouring his commitments. Crop characteristics Sugarcane is a long duration crop (about a year) and farmers would not be enthused to cultivate the crop unless there is reasonable certainty of a decent return on their investment and effort. As mentioned earlier, sugarcane is also highly perishable and needs to be processed within a maximum of 24 hours failing which the process of reversal of the sucrose content sets in. The farmer, therefore, needs the assurance of prompt off-take by a miller; he also needs to be located close to the mill, with minimum transport time for the
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cane. The rationale for a strong bond between the farmer & the miller is thus born. The fact that farmers tend to flood irrigate sugarcane fields is rightly held against the crop, considering the scarcity of good quality water the world over. In countries like India, however, imprudent use of water is a fall-out of irregular availability of power as also the policy of giving free electric power to farmers, both of which induce them to have their electric pumps running day long. Both precious subterranean water as well as costly electric power are squandered away in the process. A good portion of the fertilisers used by farmers are wastefully leached away & salinity risks increase. Some of the crop is also subject to decay owing to the practice of flooding. Studies have clearly proven that sugarcane yields can actually rise with calibrated supply of water and fertigation through modern drip irrigation systems. India can ill afford flood irrigation & needs to shift quickly to more sustainable techniques. Considering the relatively longer duration of this crop, questions are also raised as to its economic viability vis--vis other crops, some of which can be raised in two or even three cycles within a year. Once again studies have proven that the returns to the farmer from sugarcane is far superior to that of other crops, despite its longer annual cycle. SMP Vs SAP Th e C e n t r a l G o v e r n m e n t declares a national SMP for cane

every year deriving it on a very logical basis which includes factors like cost of cultivation, potential earnings from alternative crops, etc. Over the years, however, most of the state governments have indulged in one-upmanship by declaring individually higher State Advised Prices (SAP) for sugarcane, superseding the logically derived uniform SMP across the country. While the powers of the State Government to declare such a populist & irrational SAP has itself been a matter of dispute, the millers &, inevitably, the farmers too have suffered in the process. Given the fact that any such artificial increase in the SAP is not recovered from the end consumer sugar price, the miller ends up being squeezed. Since the bulk of the cost (70%) is the cane price & very little margin is left after accounting for conversion cost, this leads to financial sickness of the mill, setting off the vicious cycle of cane payment arrears, reduced crop acreage, fall in sugar production and, hence, increased sugar prices in the market. Un-wittingly, therefore, the State Governments end up creating the very disease which they are forced to cure subsequently at considerable cost and suffering to the farmers, the millers as also the tax payer. Inflation & WPI Historically, the Government has been sensitive to market prices of sugar, deeming it to be a significant contributor to inflation. This sensitivity has been translated into the relatively steep weightage of 3.60 % for sugar in the Wholesale Price Index (WPI), apart from a weightage for sugarcane. Hence, at
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the first sign of inflationary trends in the economy, sugar prices are one of the first things which the Union Finance Ministry monitors. Intervention happens through modulation of the sugar release quota, thus preventing the market price from rising beyond a point. The Government has failed to realize that, while on the one hand, most of the cane producing states are imposing ever higher SAP for sugarcane, on the other, it is artificially preventing market prices from rising to their natural levels. More importantly, such price control measures have primarily benefited the institutional buyers of sugar rather than the common man on the street ! The recent AC Nielsen study has clearly established that over 70 % of the sugar produced in mills is ultimately destined for institutional customers who use it as an ingredient in various food products like confectionery, soft drinks, sweetmeats, etc. Even for the balance 30 % direct consumers, sugar comprises barely 1 % of the monthly food budget. Thus, increased sugar prices will not really pinch the common man or drive inflationary tendencies. Miller as a producer of Intermediates Unlike other food grains which are most often meant for direct consumption, sugarcane is one crop which is processed by a miller to create products which are themselves intermediates in the manufacture of other products. While the bulk of sugar is consumed by institutions, molasses and alcohol too are intermediates in the manufacture
YOJANA April 2008

of alcohol & downstream products like potable liquor, acetic acid, etc. Electric power, though it can indeed be consumed directly without any further processing, virtually becomes an intermediate by virtue of the extensive grid required for distribution and the State governments continued vice-like grip on generation and distribution capacity. The combination of a large raw material cost component and inability to recover cost increases from end product prices owing to ill conceived Government interventions as well as the intermediate nature of the end products, has left the miller submerged in financial crises and losses for most of the time. The 2007 KPMG report on the industry clearly establishes that even the listed companies in the industry (whose performance is superior to the co-operatives which account for the bulk of the industry) have not been generating economic returns on investments. Such chronic illness, obviously, does not permit investments in long term initiatives like R&D. Molasses, Alcohol, Ethanol Potable alcohol or liquor, is a state subject under the Constitution and under the guise of managing the potable alcohol production and sales, most state governments have set up a plethora of rules and controls which have been strangling the industry. Movement of molasses into or out of some states is so tightly regulated that this valuable by product is virtually sold for a song, sometimes at prices as low as Rs. 100 per MT.

If the sugar mill chooses to value add, by converting the molasses into alcohol, once again, the state government intervenes, placing restrictions on movement of alcohol out of and into the state. Pressure is also exerted on the mills to produce only that grade of alcohol (rectified spirit or extra neutral alcohol) which can be utilized for liquor production. Mills are rarely allowed to produce the chemical grade of alcohol (denatured spirit) which could expand their product range and give them the flexibility to optimize their returns depending upon the relative market prices of different types of alcohol. Since liquor attracts very high state excise duties and taxes, the state governments obsession with the product is understandable. But, once again, the state government ends up driving prices of molasses and alcohol down since the controls effectively eliminate competition for purchase, limiting the sugar mills market to a few powerful liquor units in each State. Needless to state, such a scenario is also the breeding ground for mercenary lobbies which ultimately influence State policies too. In recent years, the Central Government has rightly sought to promote ethanol manufacture for blending with petrol to reduce the import bill while also reducing pollution. This initiative, regrettably, has not taken off at all owing to the State Governments reluctance to permit mills to manufacture anhydrous ethanol. This could be due to a combination of factors including their apprehensions about reduced liquor production and
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consequent loss of revenue as also the impact of the powerful lobbies which have a vested interest in the status quo. Electricity Generation To be fair to the Government, it cannot be said that the cogeneration units of sugar mills are given step motherly treatment. However, considering the severe power shortages the states and the country as a whole are facing, there is an urgent need to pro-actively encourage power generation through such a renewable, environment-friendly source. Many of the proposals of the Union Ministry of Renewable Energy sources as also the revolutionary Electricity Act remain only on paper. Cyclicality The sugar industry, historically, has passed through cycles of 4 to 7 years of growth and depression. While some of this is caused by natural, agro-climatic factors like the failure of the monsoon, pest attack, etc., the bulk of the cycles have been caused by policy interventions for influencing the market price of the end product, sugar. Since the cane price accounts for over 70 % of the sugar price, the impact of any squeeze on the end market price impacts the farmer most. The Governments misplaced efforts to help the consumer ends up not only giving un-intended benefits to the institutions who consume 70 % of the product but also strangling the farmers who are supposed to be on their priority
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list. The depressing stories of mills cane payment arrears and the Governments schemes for bailing them out are inevitable consequences which place the industry in a bad light. As brought out earlier, the profile of the industry has driven the Government into all kinds of regulations aimed at protecting the farmer and the consumer. Sugar and sugarcane are politically sensitive all over the world whether it be India, Brazil or Thailand. The moot question, however, is whether, in India, these controls have benefited the target segments or have stood in the way of progress. THE POSITIVES This is one crop which can be deemed to be a Kalpavriksham. Every part of the stick of sugarcane is valuable and not a portion of it is wasted. While sugarcane juice can be converted into sugar and / or alcohol, the fibre in it can be converted either into valuable electrical energy or as raw material for manufacture of paper and related products as also innumerable other alcoholbased products. Sugarcane is also a robust crop, relatively free from diseases. It requires limited care and nurturing. Socially, in countries like India, a large number of small farmers are dependent upon this crop and many workers benefit from the employment generated at the time of cane harvesting. The crop, thus, is a virtual boon to any tropical country since it addresses food and fuel security with the added advantage of being green, as a source of renewable energy which is environmentally

friendly. India is fortunate that it is one of the few tropical countries which can grow such a multipurpose crop economically. Exit of the European Union The single major factor which is presently influencing the global sugar trade is the decision of the EU to cut down on its subsidies for Beet sugar production. This has effectively reduced the EUs export to the world, primarily South Asia and Africa, to the extent of about 5 million tons of sugar. This development combined with the logistical advantage enjoyed by raw sugar vis--vis refined sugar, give India a distinct advantage in meeting the demand for sugar in South Asia. Spiralling Oil Prices The other aspect which is significantly impacting on the global sugar business is the dwindling crude oil reserves and consequent rise in crude oil prices. In the recent past, crude prices have even touched $ 100 per barrel. Prices of petrol, as a result, have also been on the up-trend and countries are increasingly concerned about the dis-proportionately high costs of fuel. Alternative, renewable sources of energy are being aggressively explored and ethanol produced out of sugarcane has been found to be one of the most viable substitutes for petrol. Brazil, with its large sugarcane crop acreage, has wisely pushed for flex fuel automobiles and about 50 % of its sugarcane juice is now diverted for ethanol production reducing its dependence on imported crude / fuel. Sugar mills in Brazil are building in flexibility to
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switch from sugar production to ethanol production to optimize realizations. The sugarcane crop, thus, is an invaluable asset for India, with its potential for production of ethanol which can be blended with petrol to reduce the countrys dependence on high priced oil imports. Rise of BRIC nations Spurred by large consumption bases, un-tapped resources and relatively lower costs, developing countries like Brazil, Russia, India and China (BRIC) are recording significant growth rates in their GDP which could lead to a shift in the balance of global economic power. The rapid increase in the GDP is also expected to lead to a substantial increase in demand for sugar in these countries. The potential for the Indian sugarcane industry, therefore, is not just for exports to South Asia but also for domestic consumption itself. Investment Avenues Investments in commodities are the flavour of the day. The next boom in value is expected to be in the Commodities market and globally, hedge funds and other investors are shifting more of their funds to the Commodities market. The development of organized futures trading mechanisms for sugar are not only leading to a more liquid futures market for hedgers and speculators but also improving price discovery and raising sugar prices to new levels. Both the Indian farmers and millers will benefit through this development. THE PATH FORWARD The Indian Sugar industry will have a rosy future, if its potential
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is fully developed and it is allowed to bloom. It is one of those rare industries whose products are likely to have continued, sustained & increasing demand into the future whether they be sugar, power, alcohol or other related chemicals. More importantly, since they are based upon a renewable source like sugarcane, the industry is green and will be increasingly valued in the future. Earnings from Carbon credits would be one of the more immediate and visible forms of value. Indias good fortune in being climatically suitable for cultivating sugarcane needs to be exploited for maximum benefit to the country. The Government and the industry need to address certain aspects of the business to create this future and enjoy the benefits thereof. The industry needs to be, literally, given its space under the sun ! World over, the industry is rightly politically sensitive given its impact on a countrys economy as also the number of people it impacts upon. In the past, however, the political arithmetic has led to skewed policies of a short sighted and micro level nature. These policies have actually ended up damaging the very interests of the parties sought to be protected, the farmers. The need is for the government to adopt a visionary approach to utilize this great industry for maximizing value for all stake holders, in the best interests of the country. 1. Industry de-regulation: The above analysis will clearly bring out the fact that the industry has to be freed from its shackles to enable investment and pricing decisions to be taken based upon economic viability. The

government needs to restrict its presence to the few areas which cannot do without its intervention. These include the need for a fairly derived SMP for sugarcane to be announced on an annual, all India basis. As in other countries like Brazil, the farmers return on cane should ultimately be linked to the market price for sugar rather than the cost of production. For, a low sugar price will lead to reduced cane cultivation and consequent shortage of sugar production / market availability as also higher sugar and cane prices. Similarly, a high sugar price will lead to increased cane cultivation, surplus sugar production and a drop in sugar / cane prices, reversing the increase in cane cultivation. These measures should be done in tandem with freeing of the industry from the release mechanism and, hence, retail prices of sugar. It should be remembered that higher retail price ultimately translate to higher returns for the farmer. Thus, the Government needs to make a paradigm shift to achieve its objective of protecting the farmer through a natural and realistic market price for sugar rather than through an artificially high cane price combined with an artificially low sugar market price. It should realize that the bulk of the sugar is consumed not by individuals but by institutions which are in no way required to be molly coddled. Even in the case of the direct consumer of sugar, the cost of sugar in his monthly food bill is a negligible 1 per cent (as brought out in the 2007 KPMG report) and a higher sugar price would yield much greater benefits
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to the farming community. The Madras School of Economics has recommended that the weightage of sugar in the WPI should be reassessed and rationalized based upon current actual consumption data. 2. De-risking the business: Farmer and Miller The farmer and the miller need to work jointly towards increasing vertical productivity of sugarcane farms and restricting horizontal growth; the outcome will be of great value to both parties. Both the miller as well as the farmer can sail safely through the cyclicality of the business if an efficient futures trading / hedging mechanism were available. Brazilian millers hedge their produce sometimes one year ahead of the production The miller can reduce his dependence on sugar by converting his plants into integrated complexes comprising sugar, power and alcohol manufacturing units. The scope for making other downstream fermentation / alcohol based products also need to be examined by the millers for optimal results. A long term approach, with a decent investment in R&D, would be essential for the purpose. Central and State Governments As recommended by the KPMG report, while the Government needs to dismantle the elaborate regulatory system built up over the years, it can continue to keep a watchful eye over the industry
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to bail it out in the event of any serious crisis, considering the large number of farmers involved. Its role would continue to be crucial in helping maintain market price equilibrium at times of large scale surpluses or during serious shortages. The buffer stock mechanism in the current or an improved form should continue to be a weapon in the arsenal of the government for tiding over surplus situations. Shortage situations can be adequately handled by the government by tweaking the import duty structure appropriately. In any case, such extreme situations are less likely to happen, once the industry is freed from its shackles and natural forces of demand / supply are allowed to freely operate. Hence, except for exceptional situations, the industry should be left to find its own feet in order to mature and bloom Artific i al res t ri ct i o n s o n manufacture, movement and sale of by products like molasses and alcohol need to be eliminated to help the industry recover market driven value for its products. The Government needs to aggressively support the 10 % ethanol blending programme as also purchase of electricity through cogeneration units and facilitate the conversion of sugar plants into integrated complexes. A critical step here would be that of facilitating free movement of ethanol between various states in the country through measures like that of including ethanol under the Declared Goods list of the CST Act. An efficient and well managed Futures trading mechanism needs to be put in place to facilitate price discovery both for farmers

and millers both in the domestic and global markets. It should also have a stable, relatively long term exim policy supportive of the industry, which helps the industry to establish its credibility in the global market. The government should continue and sustain the initiatives currently in place to encourage R&D and investments in the development of agricultural technology / productivity as also in the plants. Vertical growth in productivity of land should be targeted using technology for optimal use of water. Populist but counter productive incentives like free power to farmers need to be re-examined. Any farmer would gladly relinquish free power for assured quality power supply combined with a better realization on his sugarcane. The nation would benefit too, through conserved electricity. Similarly, it should actively push for development of integrated sugar complexes for maximizing the value of the by products. It should also help the millers improve their on stream days through better capacity utilization of their sugar, power plants and distilleries to enhance value for all stake holders. Last, but not the least, it needs to develop road / rail facilities as also port infrastructure in order to help potential exporters / importers to deal with customers / suppliers overseas on the best of commercial terms. It should be remembered that India is situated at a vantage point to meet the requirements of sugar deficit countries like Pakistan, Bangladesh, Sri Lanka, etc.
(Email : ramababup@parry. murugappa.com) YOJANA April 2008

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ECONOMICS OF SUGAR
Indian Sugar Industry

VIEW POINT

N Sanyal R P Bhagria S C Ray

ugar Industry is the second largest agro-based industry in the country. The Indian Sugar Industry is a key driver of rural development, supporting over about 55 million sugarcane farmers, their dependents and a large mass of agricultural labourers involved in sugarcane cultivation, harvesting, machine manufacturing etc. of almost 607 sugar mills and ancillary activities, constituting some 7.5% of the rural population. Besides, about 0.5 million skilled and semiskilled workers, mostly from the rural areas are engaged in the sugar industry. As such, the sugar industry has been a focal point for socioeconomic development in the rural areas by mobilizing rural resources, generating employment and higher income, besides giving a fillip to transport and communication facilities. The cooperative sector sugar mills in Maharashtra have been instrumental in bringing major

socio-economic changes in rural areas. A number of cooperative sugar factories have also undertaken welfare activities like opening colleges, technical institutions, dispensaries and hospitals etc. in rural areas. It is often said that sugar is produced in the field and extracted in the sugar factory. This is absolutely correct. In fact, sugar recovery mainly depends upon following three factors for its efficiency :(i) Sucrose content in sugarcane (ii) Cane supply arrangement and (iii) Plant and machinery. The sucrose content in sugarcane is very important. However, scientists have found that sucrose rich varieties are more prone to attack by pest and diseases. Therefore, the farmers sometimes try to avoid growing sucrose rich varieties. The second factor, i.e., cane supply arrangement is also important. The

The entrepreneurs who are interested to invest judiciously in the sugar sector should invariably go for integrated agro-complexes

The authors : N. Sanyal is Joint Secretary (Sugar); R.P. Bhagria is Chief Director (Sugar) and Dr. S.C. Ray is Director (Sugar Technical), Ministry of Consumer Affairs, Food & Public Distribution. YOJANA April 2008 13

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cut cane must be crushed within 24 hours, otherwise, the sucrose in cane starts getting converted into fructose and glucose. Quality of plant and machinery is equally important. Whatsoever, sucrose rich varieties may have come to a sugar factory for crushing, if the plant and machinery is outdated, it cannot extract the full sucrose content from sugarcane and recovery rate gets affected adversely. On the other hand, modern sugar plants have been able to extract the sucrose content from sugarcane almost to the fullest extent. Hence the importance of modernization of plant and machinery of sugar factories in the country. We should not forget that the loss in sugar recovery is a national loss and we must avoid it. The problems of sugar industry include, inter-alia, obsolete plant and machinery and large numbers of small sized plants. The High Powered Committee on Sugar Industry (Mahajan Committee) in its report submitted to the Government in April 1998 mentioned that practically half of the sugar factories are more than 25 years old. The physical condition of many of these sugar factories is poor, resulting in high down time and loss of capacity. The other main problem of the sugar industry is the small size of many a sugar plant. Although it is difficult to indicate the optimum size of a sugar plant as the same depends upon a number of factors which may vary from region to region, the Central Government in 1987 declared 2500 TCD as the minimum economic size of a sugar plant. A Technical Committee accordingly prepared specifications of a sugar plant capable of crushing
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2500 TCD with provisions for expansion to 3500 TCD. The trend is now to set up sugar mills of higher capacity. The large capacity plant size cuts the fixed cost per tonne of sugar produced, thus reducing the cost of production of sugar. The Mahajan Committee quoted the study conducted by the World Bank on Indian Sugar Industry - Priorities for Reforms, April 1997 which found that With higher plant size, wages and other overhead cost per tonne of sugar get reduced substantially. It is, to some extent offset bye increase in cane transportation as mills have to obtain cane from longer distance. The lower average size of the sugar mills thus tends to increase the cost of production of sugar in the country. The table gives the size-wise number of sugar factories in India. It can be observed that as many as 229 out of 607 sugar factories are still below the minimum economic size of 2500 TCD. Still only 23.39 % of sugar factories out of total 607 installed sugar factories have crushing capacity more than 2500
Size Range Below 1250 TCD 1250 TCD Above 1250 TCD but below 2500 TCD 2500 TCD Above 2500 TCD but below 5000 TCD 5000 TCD Above 5000 TCD but below 10000 TCD 10000 TCD and above Total

TCD, thus leaving adequate scope for modernization / expansion. In Thailand and Brazil, some of Indias competitors in the world market, the sugar factories have higher capacity plants. Therefore, increasing the size of sugar factory and replacing the old plant and machinery of Indian sugar industry offers a challenging task. India produces plantation white sugar predominantly. The sugar manufacturing process comprises of juice extraction, juice clarification, evaporation and crystallization. Modern and updated machineries are required in every stage of the process of sugar manufacture to ensure improved overall technical efficiency. Modernization is a relative term. In the early forties replacement of steam-driven duplex pump by electric ones was considered modernization. Now-adays the situation has completely changed. In the true sense of the term, modernization now would mean replacement of steam turbine with variable speed DC drives for fuel saving and operational flexibility and control, application of hydraulic drives in milling
Number of Sugar Mills 63 87 79 236 53 31 50 8 607 % 10.38 14.33 13.01 38.89 8.73 5.10 8.24 1.32

Source: Directorate of Sugar, Department of Food and Public Distribution (As on 30.11.2007) YOJANA April 2008

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tandem, modern cane preparatory devices, automatic cane feeding systems, self-setting mills, lotus roll and trash plate with perforated holes to reduce re-absorption of juice and to reduce moisture percentage in bagasse as also to increase mill extraction substantially. Application of high pressure boilers with multifuel, mix burning fluidized bed furnace and matching condensing type turbine, installation of latest technology of bagasse drying system, etc. have increased possibility of surplus power generation with less steam consumption for per unit power production. Application of microprocessor based automatic juice flow stabilization with automatic pH control system, clarification of juice by ion exchange resins, installation of dynamic juice heater, plate type heat exchanger in clarified juice heating, short retention clarifier, vapour recompression system, rising and falling film evaporator, etc. have tremendously increased the possibility of conservation of energy. Installation of Talodura process for thick syrup clarification which involves use of phosphate solution and poly Acrylamide and Flocculant of colloids helps for better removal of colouring matters and other impurities from syrup to get low ICUMSA sugar, is considered superior technology. Application of continuous pan, automatic pan control instruments, vertical continuous crystallizers and high speed continuous centrifugals has opened up a new dimension for the sugar industry to conserve energy on the one hand and to maintain quality of product comparable to international standard on the other hand.
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The Indian Sugar Industry has not made significant attempt to use diffusers for extracting juice from sugarcane bagasse through the process of diffusion. It has been observed that bagasse diffusion or cane diffusion offers good potential of higher juice extraction and lower energy costs for extraction of juice. The diffusers have reportedly found a very successful application in the South African Sugar Industry and their performance has been comparable or even superior to the performance achieved by the Australian Sugar Industry. The Indian Sugar Machinery Manufacturers should also explore the possibility of adoption of such technology to achieve higher extraction. In India only a few factories have adopted such technology and Tanuku sugar factory in Andhra Pradesh is one of them. otwithstanding significant technological development that has taken place in our country, a lot of scope still exists in modernizing the process and equipment design. Some of these can be in indicative areas like: (i) Direct determination of pol in cane: This is one of the most important aspects from the viewpoint of assessment of cane quality and efficiency. Near infra red measurement technique needs to be developed for online estimation of sugar in cane and other house products for correct assessment of plant performance. (ii) Possibility should be explored to develop suitable membrane technology for concentration of juice by reverse osmosis

process which in turn would open up new direction for energy conservation. Besides, a number of new designs, innovations and systems are already being implemented and tried in some of the existing and new sugar units and the transfer of these to other factories would enhance the overall efficiency of the Indian Sugar industry significantly. The Central Government has been alive to this problem of sugar industry and created a Sugar Development Fund (SDF). The two important Acts viz Sugar Development Fund Act, 1982 and Sugar Cess Act,1982 were enacted. The Sugar Development Fund Act, 1982 was enacted to provide for funding of activities for development of sugar industry and for matters connected therewith. The Act authorizes the Central Government to apply funds for making loans for facilitating the rehabilitation and modernization of sugar factory. The Sugar Cess Act, 1982 authorized the Central Government to levy cess for the purpose of the Sugar Development Fund Act, 1982, by imposition of a duty of excise on all sugar produced by any sugar factory in India at such rate not exceeding Rs. 15/- per quintal of sugar. The rate of cess till recently was Rs. 14/- per quintal. Now it has been increased to Rs. 15/- per quintal. The Sugar Development Fund Rules, 1983 were framed prescribing rules for utilization of SDF. The loans advanced for modernization / rehabilitation of sugar factories till 31.10.2007
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are Rs. 1497.93 crores. Further, the Central Government has also set up Sugar Technology Mission (STM) in 1993 to assist the sugar industry in preparing scheme for technology upgradation and trials of new efficient technology. Despite the efforts of the Central Government, many sugar factories, especially in the cooperative sector, have not come forward for modernization/ upgradation of their plant and machinery. Often, they cite lack of cane availability as a limiting factor. However, I am of the view that a separate study may be conducted to determine as to why sugar factories continue to live with small sized sugar plant and are not coming forward to seek assistance from SDF. The All-India recovery has been hovering around 10.30 % for the last 15 years. Among states, Maharashtra is achieving highest sugar recovery of over 11.5% while Bihar depicts the lowest recovery of around 9%. Sugar recovery has remained stagnant during all these years. The better sugar recovery in Maharashtra is partly due to harvesting and transportation of sugarcane by the mills which ensures supply of fresh cane to mills. As an opposite, the cane growers in U.P and other North Indian States cut the cane themselves and wait for their turn to deliver cane at factory gate or purchase centre, often for more than a day. The Bhargava Commission in their report in 1974 while suggesting norms of technical efficiency for sugar industry, had suggested total loss of sugar percentage of cane being restricted
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between 2.3 to 2.7 with the following break up: (i) Sugar loss in Bagasse (ii) Sugar loss in press matter (iii) Sugar loss in molasses (iv) Unknown losses Total 0.9 to 1.1 0.1 1.2 to 1.4 0.1 2.3 to 2.7

ugarcane is considered to be one of the most energyefficient crops for conversion of solar energy into biomass. Expert findings reveal that the input-output ratio is highest for sugarcane in India i.e., 5.6 times as compared to 1.2 to 1.8 times for other crops like wheat, rice, etc. and sugarcane yields maximum quantity of biomass in the form of bagasse, leaves, etc. At present there is potential of producing about 5086 MW power and hardly about 847 MW is being produced. Since fossil fuel reserves are depleting very fast, the renewable resource of biomass energy would play a key role in future. Ministry of Non-Conventional and Renewable Energy is preparing a comprehensive plan under which 10 per cent of the total additional power shall be

However, the Government of India technical norms as set out in 1988 prescribe total sugar loss percentage of cane at a maximum of 2.2% for sugar factory set up prior to 1972 and 2% for new sugar factories. I understand that many sugar factories in India have been able to reduce sugar losses to even less than 2% with the use of modern plant and machinery.

from the renewable sector by 2021. Hence the importance of biomass energy is significant. Earlier soft loans from SDF were available at concessional rate of interest for captive cogeneration of electricity only. Keeping the prospect and potential of co-generation of electricity from bagasse, the Government has amended the Sugar Development Fund Act. Now, the amended statute enables the Government to give loans to sugar factories at concessional rate of interest for undertaking bagasse based co-generation of power for export and for production of anhydrous alcohol or ethanol from alcohol/molasses. The State Governments should take pragmatic view in regard to feeding the power produced by the sugar factories to the state grids. This will not only enhance the financial viability of sugar factories but it would also enhance the cane price paying capacity of the factory which would ultimately benefit the farmers. At present due to installation of high pressure boilers, project costs have gone up in case of bagasse based cogen projects. Accordingly, SDF loan amount has also been increased from 30% to 40%. Another area of concern which significantly impacts the viability of the Indian Sugar Industry is the high cost of cane. A contributory factor for this is the low sugarcane fields in India and relatively low overall recovery rates. These
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inhibiting factors combine to make the per hectare output of sugar in India much below than obtaining in other developing countries like Brazil which is one of our main competitor in sugarcane production. Specially with the dismantling of tariff protection and restrictive trade practices, there is tremendous scope for India to emerge as a significant player in the world sugar trade which so far it has eschewed. But the sine qua non for this is that both agricultural efficiency (per hectare output of sugar and cost of production) as well as conversion efficiency

(milling and overheads) needs significant improvement. If we can make a fair degree of progress on both these counts, India will surely become a major exporter which will stabilize the industry and reduce its cyclicality significantly, as well as open up new vistas of growth for the Indian sugar industry. This is the most opportune time to explore the possibility of establishing multi-product integrated large agrocomplexes. Modernization alone of a bare 2500 TCD and even, to say, a sugar plant

of 5000 TCD may not be helpful in bearing the shock when sugar prices fall due to surplus production. Hence, the entrepreneurs who are interested to invest judiciously in the sugar sector should invariably go for integrated agro-complexes in order to sustain technical and economic viability of their plants. Apart from enhancing the viability of their projects, this would also strengthen the energy security of the country.
(Email: jsssa.fpd@nic.in)

What A Sight!

An MLA rides a bullock cart loaded with sugarcane to attend the Bihar Assembly session in Patna. He was demonstrating against the conditions of sugarcane farmers and sugar mill. YOJANA April 2008 17

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ECONOMICS OF SUGAR
Sugar : Issues

OPINION

Sharad Joshi

Government is keener on stability of prices for consumers rather than payment of reasonable prices for cane growers

otton and sugar cane are two agricultural commodities that provide raw material for major industries. In cotton textiles, consumer tastes and quality play a very important role. That is, consequently, a highly competitive industry. On the other hand, the sugar market in India has known only a certain standard varieties and there is little by way of market research or consumer promotion that is required. That is the reason why cooperation has generally failed badly in textiles except in ginning and spinning. On the other hand, sugar factories are the favourite field of the cooperative barons and capitalists past their peak as also of the politicians. That is probably the reason why the sugar industry is so closely regulated and controlled by the government. India is supposed to be the home of sugarcane and sugar. Indians knew the art of making sugar since at least the fourth century. The

advent of the modern sugar industry in India dates back only to mid1930s when a few vacuum pan units were established in the sub-tropical states of Uttar Pradesh and Bihar. Until the mid-1950s, the sugar industry was almost wholly confined to these states. It was only after late 1950s/early 60s that the industry dispersed into southern, western and other parts of northern India. India is the largest consumer and the second largest producer of sugar in the world. Over 50 million farmers and their dependants as also a large number of agricultural labourers are involved in sugar cultivation, harvesting and ancillary activities. Even at the height of the pre-1991 licence-permit-quotaInspector Raj, no sector or industry was more closely regulated than the sugar industry. Since the beginning of the planning era, sugar industry operated under the policy of partial control in

The author is Founder, Shetkari Sanghatana and Member of Parliament (Rajya Sabha). 18 YOJANA April 2008

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1950-51 and 1951-52 followed by six years of decontrol between 1952-53 and 1957-58. This policy was followed under the pragmatic leadership of the then Minister of Food, Shri Rafi Ahmed Kidwai. However, with the departure of Shri Kidwai, his vision of the regime of decontrol was lost. After alternating between control and de-control the government finally adopted in 1967-68 the policy of partial decontrol, which has since, been the mainstay of governmental policy except for two short periods of decontrol in the 1970s. Under this policy, the government procures, ostensibly for supplies through the Public Distribution System (PDS), a certain percentage of production of sugar at levy price fixed by itself and the balance is allowed to be sold by the mills in the free market subject to the monthly release mechanism. The levy quota for sugar mills has been brought down from the peak levels of 70% in 1968-69 to the present levels of 10 per cent through a gradual process of deregulation. The number of operating sugar mills in the country has increased from 29 in 1930-31 to 412 by 1996-97 and a little above 475 in 2007-2008. Some 95 factories are non-operational. The extent of control over the industry has been very comprehensive and inhibitive. It is the Central government that decides where and when a sugar factory can be opened. It decides what technology the sugar factory will deploy, what kind of packaging material it will use for bagging the sugar and at what prices the bags
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n the case of the cooperative mills the governmental control is even closer. The government decides on their credit and expansion plans as also diversification into byproducts. The cooperative factories have grown into stereotypes that follow the Open Pan technology and produce only standard varieties of sugar with little attention to byproducts. This is quite contrary to the general pattern in main producer countries of the world under which, sugar invariably was the byproduct and the derivatives the main revenue earners. The government rules were clearly influenced by political considerations and urban consumer interests. For example, it was ordained that the delivery of sugar cane by the members of the cooperative factory will be treated as a transaction of sale and purchase and, consequently, subject to a hefty purchase tax. The licenses for factories were doled out for

can be purchased, what wages it will pay to the factory workers as also to the labour employed for harvesting and transport. It decides, again, the percentage of total sugar production that the factories will deliver as levy sugar and at what price for the Public Distribution System, the Statutory Minimum Price to be paid to the cane growers, the freesale quota and the monthly releases thereof, what quantity could be imported/ exported and at what price and at what tariffs . In fact, it may be said that there was hardly any decision that a management of the sugar factory, whether cooperative or private could take without some kind of intervention by the government.

political considerations. The Levy prices were fixed to favour the northern states. The controls on the sugar industry have caused more harm than benefits. Imposed under the Essential Commodities Act 1955 sugar has always been subjected to various controls as per the provisions of the Act and Rules here under, the Sugar (Control) Order 1966; Sugarcane (Control) Order in 1966; Levy Sugar Supplies Order, 1979, Sugar Packing and Marketing Order, 1977, Sugar Cess Act 1982 etc. Most of these controls have outlived their utility if they ever had any. The Now off-now on sugar export policy has prevented the development of a stable and dependable export market. From the year 1971 to 2007, the Statutory Minimum Price was revised 26 times and the basic percentage was revised from 9.4% to 8.5% in 1972-73 and then to 9% in 2005-2006. The levy percentage was reduced from 70% to 10% in ten steps from 1972. The Government made scores of decisions affecting the control regime in the sugar, shifting between total control, involuntary partial control, and partial control and to complete control some 9 times. The private sector sugar factories have generally been in favour of scrapping the levy sugar system while the dominant school in the cooporative sector clamours for the continuation thereof. The Statutory Minimum Price (SMP) and its derivative the levy
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prices, for the sugar were based on a different concept than the Minimum Support Price (MSP) for other agricultural produce. The minimum support price was based on the cost of cultivation and certain other social economic considerations relating to the economy as a whole. The Statutory Minimum Price for the sugarcane/ Levy price for the sugar follow, even though not expressly so mentioned, a policy of equalization of income per acre of sugarcane amongst different states with different levels of yield and sugar recovery. The consequence has been that the levy price for northern states where the sugar yield and recovery are poor, were much higher than those in the southern states where the sugar recovery is much higher and the quality of sugarcane much better. The sugar recovery in the southern states is generally above 10% while that in the Northern region is generally less than 10%. The duration of the crushing period also varies from a minimum of 63 days in West Bengal to a maximum of 160 days in South Gujarat in the year 2005-2006. For the same year the sugarcane yield per hectare varied from 42.6 tonnes in Bihar to a 110 tonnes in Rajasthan. Consequently, the Levy prices varied in the year 2002-2003 from Rs. 1208 pmt in Gujarat to Rs. 1327 pmt in Uttar Pradesh. In the year 2005-2006, it varied from Rs. 1222 in Gujarat to Rs. 1409 in north Bihar. The sugar policy of the Government of India is clearly influenced by political considerations. On the one hand, the ruling parties have tried to keep the control of the cooperative sector
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Table 1 Cost of Cultivation of Sugarcane per Acre (2006-07) Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Item Casual Labour Permanant Labour Domestic Labour Bullock Labour Machine Labour Seed Chemical fertilisers Manure Insecticides Irrigation charges Interest on Current capital Rent of Land Education Cess Depreciation of plough etc. Interest on fixed capital Total Cost of Cultivation per acre Per Acre production Cost of production Cost of Harvesting and Transporting Profit 10% Expected Rate Cost in Rs. 5,775.00 5,000.00 8,728.00 1,000.00 3,600.00 3,960.00 5,407.00 2.000.00 1,220.00 4,350.00 ---- ---15,000.00 110.00 252.00 5,640.00 62,042.00 35 tonnes 1,722.62/tonne 200.00/tonne 177.00 2,149.62/tonne

in sugar industry where the cane prices have remained generally lower than the statutory minimum price. In the Northern region, in the absence of the cooporative movement, it has taken direct control of a large number of sugar factories and introduced the concept of State Administered Prices (SAP), which are much higher than the statutory minimum price and are paid through the budgets of the state governments. The government is keener on ensuring the stability of prices for the consumers rather than payment of reasonable prices for the cane growers. The crunch between the prices of sugar and the prices of sugar

cane reflects itself in the shape of low prices - often lower than the statutory minimum price, in the southern states and, particularly, in the cooperative sector. On the other hand, in the northern states it reflects itself in the form of huge backlog of payment to farmers. The prices that the cane growers get for their produce have to be viewed from three angles. Under any circumstances, the farmers expect and should get a price that will cover the comprehensive cost of production. The statutory minimum price fixed by the Central government is very often much less than the cost of production calculated by the
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Table 2 Factories with sugar recovery of (%) 10 11 12 13 Statutory Minimum Price Payable (Rs. / Tonne) 811 + 93 - 180 = 728 811 + 2 (93) - 180 = 821 811 + 3 (93) - 180 = 914 811 + 4 (93) - 180 =1007

Table 3 Sugar and Byproducts produced from 1 tonne of Sugarcane Recovery Production in (Kg) of percentage Sugar Molasses 10 100 40 11 110 40 12 120 40 13 130 40

Pressed mud 50 50 50 50

Surplus Bagasse 60 60 60 60

Table 4 Revenue obtained from product and byproducts by sugar factories from 1 tonne of sugarcane crushed Recovery percentage Factorys revenue in Rs. Less extraction cost Rs. 400 Sugar Molasses Pressed Surplus Total @ Rs. @ Rs. mud Bagasse Revenue 12,000 1,500 @ Rs. @ Rs. pmt pmt 100 pmt 800 pmt 10 1200.00 60.00 5.00 48.00 1313.00 913.00 11 1320.00 60.00 5.00 48.00 1433.00 1033.00 12 1440.00 60.00 5.00 48.00 1553.00 1153.00 13 1560.00 60.00 5.00 48.00 1673.00 1273.00

Agricultural Price Committees of different states. It is imperative to calculate the cost of cultivation of sugar cane in a typical nodal farm. The averaging method used by the Central governments CACP often results in very ridiculous computations. Table 1 gives the details of cost of cultivation of sugar cane in any typical holding in southern Maharashtra. Secondly, it is useful to see what would be the Statutory Minimum Price payable in case
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of factories with varying levels of sugar recovery. Table 2 gives the statutory minimum prices payable in a Maharashtra-like situation where the harvesting and transportation is ensured by the factories. The final question is - can a reasonably efficient factory afford to pay at least the statutory minimum price to safeguard the cost of cultivation? The Tables 3 and 4 gives the quantity of various products

and by-products produced from 1 tonne of sugar cane and the incomes obtained from there. It is quite clear that there should be no difficulty for a new factory to pay the farmers the statutory minimum prices prescribed by the Central government. The protest of both the sugar barons in the South about inability to pay the statutory minimum price and that of the mill owners in the North who amass huge backlogs have no justification whatsoever.
(Email: sharadjoshi.mah@gmail.com) 21

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Rural indebtedness
agrarian crisis - in the making for at least two decades and brought about by the neglect of agriculture in the planning process - the expert group has analysed the problems in their entirety. There is an agricultural crisis, characterised by low growth and declining productivity, as well as an agrarian crisis, marked by persistently high agriculture, increasing production and marketing risks, collapse of the extension system and a growing institutional vacuum, and lack of livelihood opportunities are found to be the primary causes. Some of its other interesting findings are :
l

he Central Government constituted an expert group headed by Prof. Radhakrishna has focussed on the present state of agricultural indebtedness in the country in its totality. The recommendations are highly relevant given the enormous interest the subject has evoked and its seemingly intractable nature.

average household borrowings

Highlights of Report
Agricultural indebtedness is not the root cause of the crisis but only a symptom and hence needs to be dealt in its totality. Though immediate credit and non-credit relief measures addressing the farming community are essential, the design and delivery system should be strengthened. Rescheduling of loans and relieving of interst burden upto two years in the case of farmers affected by natural calamities, drought conditions in rainfed areas and farmers in distress due to production crisis resulting from a multitude of risks are essential one time measures. In many parts of the country farmers are burdened with high In his Independence Day speech this year, Prime Minister Manmohan Singh had reiterated his governments commitment to an agriculture. He had announced a special programme for the sector, entailing an investment of Rs.25000 crore, to be launched shortly. Against the backdrop of the
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proportion of indebtedness to high interest bearing informal sources like moneylenders. The expert group recommends the initiation of the process in the distressed districts by creating Moneylenders Debt Redemption Fund. Recommends institutional financial inclusion of the farming community on a mission mode. One of the key recommendations of the expert group is improvement of the rural financial architecture that would improve timely and adequate delivery of credit to farmers by reducing transaction costs and improving the credit absorbtive capacity. dependence of the population on agriculture. On the most obvious and tragic manifestation of the crisis - the large number of suicides by farmers in different parts of the country the expert group has come to the conclusion that the root cause is not indebtedness alone and that suicides are only a symptom. Stagnation in

A major recommendation of the group is improved deployment of Rural Infrastructure Development Fund (RIDF). The Expert Group recommends that based on the model of self held group (SHG) federations of poor in Andhra Pradesh, the state governments should make efforts to facilitate the formation of federations of SHGs for farmers, especially for small and marginal. Expenditure on health is one of the sources of farmers distress and the group recommends farmers health insurance scheme on the lines of the one implemented in states like Karnataka. by themselves have not been excessive.
l

In fact, in the wake of modernisation and expansion, the credit needs of agriculture have expanded enormously. The deficiencies in agricultural credit - on account of banks not meeting
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their targets, poor performance of cooperatives and regional rural banks - have been well documented.
l

In the long term interests of the financial system, a positive repayment culture for bank loans should be encouraged. Those who repay promptly must be rewarded. Suggested measures

Immediate remedial measures recommended by the expert group include :

l

better monitoring and implementation of the existing package of relief measures covering 31 distress affected districts; rescheduling of loans and waiver of interest burden up to two years as well as grant of fresh loans to farmers affected by natural calamities. The Centre and the States should share the burden equally. It is declining earnings that a one time result in the inability to repay relief to debt that triggers farmers farmers decision to commit suicide who are hence indebtedness of farmers paying becomes a key issue. exorbitant interest to money lenders should be provided by banks through long-term loans. A special fund, to be called the Money Lenders Debt Redemption Fund with a corpus of Rs. 100 crore to operationalise the scheme must be created.

Finally, the committee finds that more than one half of the farm households do not borrow either from institutional or non-institutional sources. Institutional agencies should be placed on a mission mode to extend coverage. The group has made some valuable suggestions to improve credit delivery in rural areas and enhance the quality of financial architecture.
(From the Report of the Expert Group on Agricultural Indebtedness)
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ECONOMICS OF SUGAR
Sugar : Politics and Economics

OPINION

S L JAIN

ith involvement of large human factor in the sugar sector, on the one hand, 50 million sugarcane farmers and on the other teeming million of sugar consumers, economics and politics have coexisted over the long history of the Indian sugar sector. Evidently, all important policy measures weaved by the Indian Government governing the sugar sector evolve around the aforesaid consideration. The interest of sugarcane farmers is protected by a statutory minimum price payable to the sugarcane farmers notified by the Government of India based on farmers-centric considerations. On top of this, the various State Governments also announce/notify much higher sugarcane prices payable by sugar factories on an ad hoc basis, purely on political consideration. Notwithstanding the steep decline in sugar prices and the inability of the sugar factories

to pay such sugarcane prices on time, industry is unfairly dubbed as a defaulter. Factories in the government sector face similar situation, but in this case, the payments to the sugarcane farmers are met from the State Treasury. In contrast, in other major sugar producing countries such as Brazil, Australia, South Africa, Thailand etc., the number of sugarcane farmers are limited in the range of few thousand growers. Therefore, the political influence on the economics of sugar is much less and a simple method of sugar price sharing between the sugarcane farmers and the industry is prevalent; growerss varying between 59% to 70% thereof in different countries. These Governments too have their own vision about a more reasonable price for the farmers. In situations when sugar prices dip and the industry is unable to meet with the Governments aspiration of sugarcane price following the established formula,

the Governments intervene, paying the differential amount directly to the sugarcane farmers. In this manner, not only the farmers interest is protected, the sugar economy does not suffer from a jolt like in India. The Government of India would do well to look into this important aspect and mend the sugarcane pricing policy. This would also be in consonance of the Governments accepted policy to support agriculturists in general. Unfortunately, the sugarcane farmers are currently outside this umbrella and they continue to suffer from arrears of sugarcane price due to reasons beyond control of the industry. Besides this, Indian sugar economy suffers due to sharp variations in sugar production in the range of about 20% to 22% in a span of 4 to 5 years as against normal variations in other countries in the range of 3% to 4% based on climatic conditions alone.
(Email : isma@vsnl.com)

The author is Director General, Indian Sugar Mills Association. 24 YOJANA April 2008

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ECONOMICS OF SUGAR
Insulin to Indias Diabetes Beat the cycle

PERSPECTIVE

V Shunmugam

It is high time we looked at sugar as energy and not in terms of its traditional function as a sweetener

nlike in the past, problems of global warming, increasing alternative demand for water, lack of breakthrough in research and technology, and shrinking arable land are putting pressure on Indian agriculture for quite some time recently, and sugarcane cultivation is no exception to it. Added to it are the cyclical swings in sugar prices more related to the domestic fundamentals, which have recently started to vibe along with the global fundamentals due to the partial opening up of the economy and indirect impacts being passed on through the input costs increasing the cost-side pressures on the prices. These go to prove that whether we would want external factors to influence our agricultural economy or not, they are here to influence agricultural prices indirectly and, in the process, make their impact invisible which on many occasions might lead to wrong remedial measures on the part of policymakers. Problems in Indias sugar economy stem from the

cyclical sway in sugar prices, long time gap for the processing industry between buying the raw material and selling their end-products, market intervention measures of the government, protecting one side of the market with support measures and leaving the other side to the vagaries of the market, lack of transparent markets for sugarcane and its derivatives including press mud, molasses, bagasse, sugar, etc. Operation of the cyclical trend in the sugar economy partially shows that the markets are opaque and hence, cane growers do not take planting decisions appropriate to the markets. On the other hand, it is inherent in the production process of sugarcane itself due to the long time lag between planting and harvest which varies anywhere between 10 and 12 months, and there are no better price indicators so well in advance to guide their production decisions effectively. This apart, sugarcane, unlike other agricultural crops, has only industrial use and many endproducts whose prices are determined

The author is Chief Economist, Multi Commodity Exchange of India Limited, Mumbai. YOJANA April 2008 25

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by factors other than their own raw material supply or its cost. This clearly shows that while crushers, on the one hand, would have to depend on a market that cannot control its supplies for their returns and their costs remain constant in the wake of a statutory minimum price that they would have to pay to the growers. While this often leads to payment hurdles for the crushers, the growers still complain that they have not received remunerative prices. Why is it that in sugar it has always been a loss-loss game? It is partly due to the fact that while the output of crushers gets into a cycle, there is no mechanism by which farmers would get to know that. Even if they get to know of low sugar prices, cane growers would be least bothered as they would be protected by the Statutory Minimum Prices (SMP) announced by the central government and the State Advised Prices (SAP) as announced by some of the state governments. While the centre fixes the SMP based on the average cost of cultivation of cane, the states fix the SAP based on their own calculations and get it capped on the SMP and also make it obligatory for the crushers to pay to the cane growers. Cane cultivation becomes a high-cost affair coupled with low recovery when it comes to growing it under the sub-tropical conditions as it would remain in western Uttar Pradesh, Haryana, and Punjab. Hence, averaging the costs makes it a better bargain for the farmers of tropics, but it may not be so for their sub-tropical peers. While this would be compensated by the SAPs announced by the sub-tropical states, paying such prices facing poor recovery in the northern states becomes a burden on the mills if they are already facing lower prices for their end products leading to piling up of huge payment arrears.
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Indo-Gangetic plains have remained a sugarcane growing belt due to the plentiful water supply and the growth of the crushing industry which developed to harness the potential. However, over a period of time, with the increasing costs of cultivation and declining productivity, the IndoGangetic plains of Uttar Pradesh, Haryana, and Punjab remain the costliest place to grow sugarcane. It is high time policy makers thought of alternative crops which can offer a better option to provide a gradual way out for cane growing in this area and move the crushing industry southwards. Alternatively, the farmers can grow crops other than sugarcane for which there may be markets, which in this modern era is quite possible. Water, an important resource in cultivation of sugarcane, is gradually becoming scarcer putting extra pressure on the overall agricultural production scenario of the country. Sugarcane diluted to its biochemical compounds is grown for sugar whos main function is to provide energy to users. As an energy source, it is one of the costliest compared with its alternatives, at least in India. Moreover, despite the likely rise in population, per capita sugar

consumption is expected to decrease over a period of time due to lifestyle related problems caused by over eating of sugar in the modern days compared with the past. Hence, the government should have a fresh look at it during times of glut, may be having a trigger price to divert sugar for ethanol production, depending on the crude oil prices, would ease the tightness of the bottom lines of the crushers. Sugar credits In order to decrease the burden on the public health exchequer, the government shall fix a sugar cap on consumption on families taking into consideration their energy needs, alternative sources of energy, and inevitability of sugar and provide sugar credits or sugar allowances for eating sugar below the cap. It would be initially purchased by the government exchequer which may experience savings in terms of reduction of sugar-related problems on the health expenditure. Further, the excess of sugar which may be saved due to reduced consumption shall be converted into ethanol for blending with gasoline (petrol) depending on the crude oil prices and the sugar credits can be offset by the buyers of ethanol (blenders) who would be obligated to purchase

Irrigation water for production of bio-fuel from different crops in various countries S.No. Crop Country Product Production of Litres of bio-fuel/ irrigation hectare water (in litres) withdrawals per litre of bio-fuel 1 Sugarcane Brazil Ethanol 6200 820 2 Sugarcane India Ethanol 4000 3500 3 Maize China Ethanol -- 2400 4 Maize US Ethanol 3300 400 Source: IWMI Study 2007 YOJANA April 2008

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certain amounts of sugar credits per litre of ethanol being blended as fixed by the government to add value to this cap and trade scheme. These sugar credits would be sold by the families which have accumulated the same by having consumed sugar less than their caps. The buyers of blended ethanol could finally add it to the cost of the fuel which they would be selling. This would be a more viable proposition as the crude prices which currently prevail at $90 a barrel would in no way are likely to come down to make ethanol even a less viable proposition unless other cost-effective and environmentfriendly sources of energy are found out for the transportation sector. Beating the global sugar cycle A look at the Liffe near-month prices and the Mumbai spot prices for sugar for the last seven years (please see graph) reveals that world prices and the Indian sugar prices more or less moved in tandem despite it being a closed sector in terms of external sector. Probably, partial opening and closing of the sector would have created the synergistic relationship between the two. However, the partial opening and closing of the external trade in sugar does not follow a pattern that would beat the sugar price cycle which, the analysts believe, the world also follows. Having a trigger price to beat the cycle would help our sugar economy to benefit from the price movements in the global sugar sector. Further, reducing market intervention operations would allow health growth of futures, which could provide the farmers with future price directions to take efficient sowing decisions depending on their own constraints. An effective futures market with
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prices disseminated across the major cane-growing areas would help the triggers work efficiently as the futures prices would be available to all the players in the economy. The way forward Neglecting other byproducts and taking ethanol from molasses into consideration we would have enough to meet about 10 per cent blending which could have been made possible if the government could divert ethanol from the potable alcohol industry through a slew of fiscal and policy measures and the industry had made sufficient investments in motor-grade ethanol production. Moreover, pending clear strictures outlining a blending policy and obligations of the petroleum marketing agencies would keep

energy source which is of course environment-friendly as well. Finally, to bring in vibrancy into Indias sagging sugar economy, a slow but steady deregulation of each of the players in the value chain would go a long way. Added to it, for the healthy consumption of sugar, introduction of the aforesaid cap and eat mechanism would not only prevent inefficient consumption but also promote production of a costeffective and environment-friendly alternative fuel source to make our economy competitive in the fast globalizing world. Trigger prices to beat the global market with partial opening and closing of the markets to external trade would also help us price sugar in line with the global prices and benefit from it. Further, it is high time we looked at sugar

Source: Trade and Bloomberg

further investments in motor-grade ethanol effectively under check. With more than 90 per cent of the petroleum marketing done by the public sector entities, its time the government makes blending obligatory on its own agencies first and ask others to follow it. It is high time we looked at it as rising crude oil prices and lower sugar prices would have made economy competitive with a cost-effective

as energy and not in terms of its traditional function as a sweetener. A combination of boosting ethanol production, opening and closing of trade based on pre-fixed trigger prices, and reducing individual consumption, at least in the metros, would go a long way in promoting a healthy growth in the political economy of sugar in the country.
(Email : v.shunmugam@mcxindia.com)

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SUGAR AND HEALTH

FACTS
not known, genetic factors play a major part in the development of this disease. Once a person develops diabetes the intake of sugar and other simple carbohydrates is usually restricted. However there is little actual evidence to support this practice research now indicates that not all starches and sugars are alike in their effect on blood sugar. For example carrots can produce a higher blood sugar than a candy bar and honey has a greater effect than sucrose. Eating modest amounts of sucrose as a part of regular meals does not lead to higher amount of blood sugar as has been commonly supposed. The dietary recommendations of the American dietary association (ADA) are in most respect the same as nondiabetic person and are based on sound principal of nutrition. Eating a modest amount of sugar is acceptable says (ADA) council of nutrition as long as metabolic control is maintained. Chemical Sweeteners From time to time a number of chemical sweeteners have been produced and used. With passage of time and further research, some of these had to be banned as being harmful to health. Some of the recently introduced chemical sweeteners such as cyclamatic, saccharin etc may subsequently prove to be a health hazard since scientific research is a continuous process. Consumption of such products may thus be beset with unknown risk which may become known later. On the other hand, sugar, whether expressed in terms of sucrose or fructose is a natural product and is a wonderful gift of nature to mankind. It has many virtues and cannot cause health hazard unless misused. Therefore, the risk evaluation between sugar consumption and that of chemical sweeteners must take this important factor into account. 29

magine the desserts like ice-creams, kulfi, jalebis, halwas, rasmalai and rosogollas before you, how hard it would be to resist the temptation. And later feel guilty counting calories. To set our basics right on these sugary delights here are some attributes we need to know about sugar and health. Sugars are a major form of carbohydrates and are found probably in all green plants. They occur in significant amounts in most fruits and vegetables. There are three main simple sugars sucrose, fructose, glucose. Sucrose in fact is a combination of fructose and glucose and the body quickly breaks it down into simpler substances. A balanced diet can (and should) come from a variety of different foods, calculated to give the desired level of carbohydrates, proteins, fats, vitamins, and minerals. Nutritional scientists advocate that carbohydrates should provide at least 50% of energy requirements. Apart from sugar being the cheapest instant source of energy, it has several medical and therapeutical values some of them are as elaborated below : l S ugar for O ral Rehydration: Sugar is extremely valuable in treatment of severe infantile diarrhoea, a serious problem that kills around 3.5 million children in a year in underdeveloped countries. l Sugar Heals Wounds: Sugar helps in wiping out infections in all types of wounds and speed up the healing time as well. Sugar fills up open wounds and it dissolves in tissue where micro organisms cannot survive. l Sugar is Best Carrier of vitamin a and minerals: Vitamin A deficiency in South American population is being combated successfully with the use of fortified sugar. Encouraged by the results, fortification of sugar with vitamin A is YOJANA April 2008

being attempted to combat vitamin A as well as mineral (iron) deficiencies a major area of concern in some of the developing countries. l Empty Nutrition Myth : The complaint about sugar is that it contributes only calories but no nutrients to the diet. Empty calorie myth is really an empty complaint. As sugar is never eaten alone. It is almost always consumed as an essential or enhancing ingredient in a wide variety of other nutritious foods. Sugar is 100% utilizable carbohydrate. Sugar and Diabetes Diabetes mellitus is a disorder of the bodys metabolism. The carbohydrates which a normal person eats are converted into glucose which is absorbed into the blood stream and is used by the body for energy.
Calorie counter Sugar (Serving size) Table Sugar, 1 level teaspoon Besan Laddu Carrot Halwa Coconut Barfi Kaju Rolls Kheer Rice Kulfi Malai Kulfi Mango Malpua Naan Katai Rasgulla Sandesh Shrikhand Til Laddu in gms. Calories 4g 40 135 30 14 150 75 70 40 45 40 7 105 20 15 315 460 157 83 345 210 147 342 150 194 30 465 55

The diabetic person cannot utilize carbohydrates efficiently as a result blood has higher than normal amount of glucose and it is often present in urine. Though all the causes of diabetes are

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The History of Sugar Over 2000 years ago in the Pacific Islands, the stalks of a plant were found to contain a sweet liquid. The plant is now known as sugarcane. In the 17th century, another plant was found to contain sugar. It is called sugar beet. Some interesting benefits derived from sugar:

A spoonful of sugar added to a vase prolongs the lives of freshly cut flowers; A pinch of sugar on the tongue is a traditional remedy for hiccups; and A teaspoon of sugar after a hot curry dulls the heat in your mouth.

Some Key Facts

Sugar is produced in more than 100 countries around the world; Over 25 nations produce sugar from sugar beets, around 80 from sugarcane, and another eight from both sugarcane and sugar beet; World sugar production for 2006-07 was 164 million tonnes; As many as 150 countries are engaged in sugar trade mostly as importers; World sugar trade accounts for 45-50 million tonnes; The closing stock of 41.5 million tonnes sugar for 200607 has been the highest in the recorded sugar history; Sugar is used as the primary feedstock in as much as 60 per cent of world ethanol production; In Brazil, half the total sugarcane output is diverted to ethanol production; India's per capita sugar consumption for 2005 stood at 19.6 kg. Swaziland's per capita sugar consumption of 97.4 kg in 2005 is the world's highest, closely followed by Switzerland and Israel at 70.3 kg and 65.7 kg respectively; and Sugar consumption in Rwanda and Congo in 2005, at 1.5 kg and 1.6 kg respectively, is the lowest in the world. The Indian Sugar industry accounted for around 1% of GDP of the country during FY2005. The sugar industry employs 0.5 million workers and also provides substantial indirect employment through various ancillary activities. For the year 2006-07, India produced 30.6 million tonnes of sugar; Its average sugar output over the last five years stood at 20.6 million tonnes; and The country's sugar consumption is estimated to be more than 20 million tonnes.
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J&K WINDOW
ooperative credit institutions in Jammu and Kashmir are all set to get a boost now with the State Government agreeing to implement the Vaidyanathan Committee report on revival of such institutions in the country. The State would shortly sign a memorandum of understanding with the Centre to push forward a package of Rs 248 crore for the purpose. Maintaining that this package would go a long way in revitalising the cooperative credit institutions in J&K, Agriculture and Cooperatives Minister Abdul Aziz Zargar has said that the State Cabinet had already approved the Vaidyanathan Committee report and now the

Cooperative credit institutions to get a major boost in J&K

modalities were being finalised. Stating that the Government was concerned about the falling health of these institutions and he as a minister had worked hard to revive them in the past five years, he added, Our efforts have yielded good results in their revival but by implementing this package these institutions will get a boost. He clarified that the package was only for revival of the institutions and not for individual borrowers who were bound to pay the loan back to these banks. Out of Rs. 248 crore, 68 per cent is to be given by the Centre and 28 per cent by the State Government while these institutions will bear 4 per cent. The package, he said, would cover the losses up to March 2004. Terming it as a historic decision, Mr Zargar said that under the package deal all the cooperative banks would be eligible for lowcost refinance from NABARD for further loaning in the agriculture and allied sectors. Our cooperative banks will become strong enough to compete with other public sector and commercial banks, he said. NABARD would audit all these institutions to cross-check the facts and implementation would start. For banks it will come in one go while for other institutions the time limit is three years.

Microsoft selects Kashmir village for case study

Evidence category of its website to prove efficiency of its software. It is nowadays filming the functioning of the society in the village. The Primary Agriculture Credit Society (PACS) in Breng Payeen having 700 members was registered in 1956 with the objective of extending credit facilities of its members. The society faced many problems and consumed lot of time in calculation of interest, maintaining accounts. Earlier this year, Jammu and Kashmir Co-operative Ltd provided computers powered with Microsoft Software to the Society for its operations. The society members were given exhaustive training to use the software for feeding data, customer information like loans, deposits and maintaining digital ledgers. The new solution by using state-of-the-art computer technology has resulted in operational efficiency in business of this village. The micro-credit business of the society which was just Rs 35 lakh last year, touched Rs 50.20 lakhs till September this year. This is the record business of this institution in the state during past 50 years.

icrosoft, the global computer giant has selected a village in south Kashmirs Islamabad district for a case study. Owned by multi-billionaire software magnate Bill Gates, Microsoft was prompted to select Breng Payeen, a village near famed tourism destination Kokernag, after a Primary Agriculture Credit Society improved its business operations after using a software of Microsoft for accessing and maintaining its critical business data. Microsoft has already put Breng Payeens success story in Customer

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The good thing is that the villagers who are members of the society use the computers and new IT tools in their traditional settings. The use of Microsoft technologies has facilitated access to updated, accurate information in appropriate format on real time basis. The members have digital passbooks and they can access their accounts through a simple SMS. It is amazing to see them work in a paperless world. After Microsoft learnt about success to the society, they sent a team to shoot its functioning.

Microsoft has already put Breng Payeen as a success story on its website. The success of the society will act as a role model. It is a big achievement for the state. On its website, the Microsoft states that Breng Payeen society faced various problems like reporting to various statutory authorities as the data had to be presented in different formations and combinations. There was a need to implement a solution that would address all these problems along with computations needs of the PACS. Breng Payeen considered

various technologies, including Oracle, Java and Fox Pro, however the cooperative society decided to go with solution provided by Nelito Systems Ltd, a Microsoft Gold Certified Partner. The Nelito Systems offered Mfin-a banking application software-with a specific tuning to the PACS operations and the solutions met all the immediate objectives of Breng Payeen.
(Courtesy - Greater Kashmir)

Kashmiri youth to adopt village

main message is clear. We are also Indians, he said. This concept of adopting villagers was pushed ahead after talks about Kashmiri migrants-who make an annual trip to Kalewadi-came to fore. We want They are with us completely, says 22-year-old engineering student Fahim Shah, who adds that work in the villages is currently in the initial stages. In the first six months, the group will hold camps and put up cultural shows. The idea is to have a cultural exchange between Kashmiris and Punekars, says Shah. The students are sure all this extra work in between lectures would in no way affect their academic pursuits. It doesnt take an hour everyday. If the response is good, we can go ahead and think about building hospitals and schools as well, Shah adds.

Group of 100 Kashmiri youngsters has come forward through a citybased NGO Sarhad-to adopt a 500-strong village called Perne, about 25 km from Pune. The group will hold medical camps and tree plantation drives besides taking a look at the situation of employment, roads and electrification of the village. They are even taking a group of women to Vaishnodevi early next year, all this to bring about a change in public opinion. People perceive us to be a bunch of rich children who have come here to study but lead a better social life, 25-year-old Shahid Khan, a member of the group who is pursuing an MBA in a city college, says. During this years rave party, our image took a hit. People said mahol kharaab kar dete hain (they are a nuisance). People even question our patriotism during cricket matches. Feroz Hussain, a 23-year-old student of journalism, says their

Feroz Hussain, Fahim Shah and Shahid Khan are among the 100 Kashmiri students with a vision to empower the village.

to bridge the divide and contribute to the city and its people, Hussain says. This movement should sustain even after we return to Kashmir after finishing studies. As part of this venture, the students scouted the city fringes, identified the village and spoke to the panchayat about the issues plaguing the area. The response from the villagers has been encouraging.

While initial financial funding is expected from Sarhad, the group is expecting to raise more through contributions for the work carried out thereafter. The initial expenditure in the first two months is expected to be around Rs three to four lakhs, which will come from Sarhad, says Sanjay Nahar, founder president of Sarhad.
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UNDP REPORT
Value-based Societies
Subodh Dhawan
ccording to United where people can live meaningful Nations Development lives. A meaningful life is not just a P r o g r a m m e ( U N D P ) long one. It must be a life with some Report, development of a purpose. This means that people must nation is defined in terms be healthy, be able to develop their of material things. The talents, participate in society and be development is defined in terms of free to achieve their goals. per capita income. This holds true Leading a long and healthy life, for nations where development being able to gain knowledge and is measured through materialistic having enough means to be able to live well-being. But this concept does not a decent life are the most important apply to the nations where values of aspects of human development. the society are given priority over material development. The nations Therefore, access to resources, health which have glorious past, which and education are the key areas take pride in their past, which try in human development. Suitable to evaluate their society on values, indicators have been developed which want their future generations to measure each of these aspects. should follow their heritage, are Very often, people do not have the not covered by this concept of capability and freedom to make UNDP Report. This is true for most even basic choices. This may be of the Asian Societies. To make due to their inability to acquire UNDP Report more realistic human knowledge, their material poverty, values were included by the Nobel social discrimination, inefficiency of Laureates belonging to Asia. The institutions and other reasons. This concept of human development prevents them from leading healthy was introduced by Dr Mahbub-ul lives, being able to get educated or to Haq who is an eminent economist have the means to live a decent life. of Pakistan. Dr Haq has described The capability approach is developed human development as development by another eminent economist, Prof that enlarges peoples choices and Amartya Sen from India. Building improves their lives. People are central to all development under this peoples capabilities in the areas concept. These choices are not fixed of health, education and access to but keep on changing. The basic goal resources is therefore, important in of development is to create conditions enlarging their choices, if people The author is Reader, Deptt of Applied and Regional Economics, M.J.P Rohilkhand University, Bareilly, U.P

The opportunities available to people must be equal irrespective of their gender, race, income and caste

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do not have capabilities in these areas, their choices also get limited. For example, an uneducated child cannot make the choice to be a doctor because her choice has got limited by her lack of education. Similarly, very often poor people cannot choose to take medical treatment for disease because their choice is limited by their lack of resources. Just as any building is supported by pillars, the idea of human development is supported by the concepts of equity, sustainability, productivity and empowerment. Equity refers to making equal access to opportunities available to everybody. The opportunities available to people must be equal irrespective of their gender, race, income and caste. Yet this is very often not the case and happens in almost every society. For example, in India, a large number of women and persons belonging to socially and economically backward groups drop out of school. This shows how the choices of these groups get limited by not having access to knowledge. There are many ways of looking at the problem of human development. Some of the important approaches are-a) The income approach; b) the welfare approach; c) Minimum needs approach d) Capabilities approach. The human development index measures attainments in human development. It reflects what has been achieved in the key areas of human development. Yet it is not the most reliable measure. This is because it does not say anything about the distribution. It also does not consider the sacrifice which society is doing to preserve their culture, values and heritage. While HDI measures average achievement, the Gender Development Index (GDI) adjusts the average achievement to reflect the inequalities between men and women. The three components used for the purpose are: (i) female life
34

expectancy, (ii) female adult literacy and gross enrolement ratio and (iii) female per capita income. If gender inequality were not penalised, the value of GDI and HDI would be the same, but if gender inequality exists, the value of GDI would be lower than that of HDI. The greater the difference between HDI and GDI, the greater is the gender inequality. t may be noted that near gender inequality exists in United States, United Kingdom, Russia, Sri Lanka, and Mexico. However, the gender inequality exists in Saudi Arabia, Pakistan, Iran, Egypt and Nigeria. There is a greater awareness in the world about gender inequality and efforts are being made to reduce gender inequality by promoting the education of females and giving them a better status in the family. Some countries have lagged behind due to cultural biases against the females. However, in them also, women movements are promoting the cause of bringing about gender inequality. It appears that the Gender Development Index (GDI) is biased towards western societies. Here gender equality is measured only in terms of material things. Like, same payment should be made for same type of jobs irrespective of male and female. At present in western societies women have got equality with men folk, but after a long struggle for their rights. Their approach is more individualistic in nature. It appears men and women are two separate individuals. They are independent of each other; they are only concerned with the present they dont have the past and they also dont wish to care for the future. In Asian Societies, duty of women in the society and in the family is of more conscientiousness compared to that of their counterparts in the western

societies. Women are fulcrum of the society; around them life and activities revolve. They are an important bond between past and future. They conserve, preserve and then pass values, ethics, heritage,culture and traditions from previous generation to next generation. Many civilizations in Asia have a glorious past. They take pride in them. So, to see the contribution of women in Asian Society: One must not take an individualistic approach; instead, one should take a holistic approach. In other words,instead of taking an individual as an unit; a family may be taken as an unit. People, particularly women, are emotionally attached to their families, traditions and culture of the society. They dont take decision only in terms of money. There are numerous instances of women not taking jobs, as they give high priority to their husband, to their old parents and to their children. Unlike in the western society, their status is not determined on the basis of their earnings. Women are held in high esteem, as society acknowledges their contribution in the family. In providing jobs, special care is taken to the suitability on the basis of gender. For example, women are preferred in nursing, teaching, and other indoor tasks which suits their temperament. Each of us will have our own ways of expressing love and care for the family. However, unless that is a high priority, we will find that we may gain the whole world and lose our own children.

(Email : subodhdhawan1960@yahoo.com)

In the Advt on Pg 41 published in March 08 Issue of Yojana, the error carried inadvertently is regretted. YOJANA April 2008

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BEST PRACTICES
Uttarakhand Foothills
S D Sharma

The GRRC has done commendable work worth emulating in the field of environment protection
YOJANA April 2008

ansdowne , a beautiful hill station in Pauri district of Garhwal in Uttarakhand, has been endowed with bountiful nature and pristine surroundings. Attracted by its salubrious climate and natural beauty, the Britishers established a cantonment here and named the place after Lord Lansdowne in 1890. The famous Garhwal Rifles of the Indian Army established its command office known as the Garhwal Rifles Regimental Centre (GRRC) at Lansdowne in the year 1921. However, increasing urbanization, population growth, deforestation and vehicular traffic started taking its toll on this hill station over the past few decades. This became visible from the reduced forest cover, water scarcity during summer months and increased air pollution. A map survey of Lansdowne carried out in 1931 showed 35

natural springs in the area. A physical verification of these 35 locations in 1999 revealed that only 8 of them yielded water while the rest had dried up. This alarming revelation was an eye opener for the authorities at the Regimental Centre. Accordingly, a multi-pronged strategy was formulated and various initiatives taken in 1999 itself for implementation in subsequent years. GRRC took up the task of augmenting the water resources and conceived a project for water harvesting with construction of 12 earthen check dams. These check dams were constructed 2 to 3 meter high and 10 to 15 meter wide with a capacity to hold water for 45 to 60 days after rains. This resulted in developing the area around the earthen check dams into thick vegetative cover. Success of these earthen check dams led

The author was with PIB, Dehradun when he wrote this piece. 35

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to experimental construction of a concretized check dam. This successful experiment later led to construction of two other similar check dams in the year 2002 and 2003 respectively, with the combined holding capacity of about 45 lakh gallons of water. Approximate expenditure incurred on these check dams was to the tune of Rs. 13 lakh. A fishery project has also been started at one of these dams. To augment the water availability in the spring, 55 water trenches/pits of an average size of 5m 2m 1m were dug on the hill slopes above the water springs. Besides, eight buildings were identified for roof top water harvesting project with total capacity of 3.5 lakh litres. Looking at the success of these endeavours, efforts are now on to expand this project. The visitors staying at the Garhwali Mess are using the rooftapped water. Rejuvenating Water Resources As a result of rainwater harvesting project undertaken at

Lansdowne, six dried up springs have been activated. There has been an increase in flora along the nalas. The water availability in springs had increased. Eight hand pumps have been installed for providing water to the Army and the civilian population. The water yield in the hand pumps around the area of check dams has increased. Also there has been augmentation of water to sustain tree plantation. The dependence on water tankers has been considerably reduced during summer months. The water flowing out of the check dams at Lansdowne and reaching down the hills has increased the water of river Kho whose existence had been threatened due to slow depletion of water bodies up hills. The river Kho has been the lifeline of Kotdwar town located at the foothills of Shivalik ranges. The treated water from the concretized check dams is being supplied through pipelines. The area around the lakes formed by the dams has been beautified to attract

tourists. For checking soil erosion and reducing silt in the lakes, 22 stonewalls have been erected. The GRRC has undertaken massive plantation of oak, deodar and rhododendrons in the areas devoid of vegetation. Thousands of oak saplings developed at the nurseries of GRRC were planted in an area of 40 acres amidst the pine and oak jungles. In a conference on Environment and Ecological Work in the Command Zone held at GRRC in June 2004, senior Army officers and prominent environmentalists Sunder Lal Bahuguna and Chandi Prasad Bhatt had been involved in discussions on issues concerning environmental and ecological work done in the Command Zone. The persistent efforts of the officers and men of GRRC have helped in conservation of natural resources. addressing the problem of water shortage in the area and restored the old grandeur and pristine surroundings of Lansdowne. The GRRC has done commendable work worth emulating in the field of environment protection.

Essay Competition

Yojana, in collaboration with Ministry of Consumer Affairs, Food and Public Distribution, Department of Consumer Affairs, will organize an essay competition shortly on Consumer Awareness. With many attractive prizes, the topic and other details will be announced in the forthcoming issue.
36 YOJANA April 2008

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DO YOU kNOW ?
what is opec?
What is Opec and how are global oil prices determined? The Organisation of Petroleum Exporting Countries, or Opec, is an association formed by Iran, Iraq, Saudi Arabia, Kuwait and Venezuela in Baghdad in 1960. The organisation controls nearly 40 per cent of the international crude oil trade. The organisations objective is to co-ordinate and unify petroleum policies among its member countries in order to secure fair and stable prices for petroleum producers. It also ensures a regular and economic supply of petroleum to consuming nations. Besides, the organisation has to ensure a fair return on capital to those investing in the industry. Over the years, the Opec has grown to include six full-time members - Qatar (joined in 1961), Indonesia (1962), Libya (1962), Abu Dhabi (1967), Algeria (1969) and Nigeria (1971) - apart from the five founding-members. Equador joined the organisation in 1973 and left it in 1991, while Gabon, which joined the group in 1975, dissociated with it in 1995. At present, the organisation has a total strength of 11 members. How does Opec attempt to control global oil prices? production is kept at 24 mbpd from a high of about 29 mbpd now. If all the members comply with such guidelines - that is a big if - prices will rise to the desired levels. What is the Opec basket price? The Opec basket of crude oil is widely known in the world market for reference pricing. The basket consists of Algerias Saharan crude, Indonesias Minas, Saudi Arabias Arab light, Nigerias Bonny light, Mexicos Isthmus, Venezuelas Tia Juana and the United Arab Emirates (UAE) Dubai blend. Basket price is the average price of these grades on the date of reference. How is the selling price decided? The basket prices are just references, an average of price of each of the components within the basket. They are largely theoretical and are used as a barometer to measure how the industry is faring. Actual selling prices are generally the weeks average price of each nations free-on-board (fob) prices for the date of reference. For instance, for any loading day the selling price will be the average price for the two working days before and after that particular day. As a rule, the pricing mechanism is generally decided by the buyer and not the seller. For a buyer like India, the reference price is the Platts weekly and monthly average for spot or contract cargoes. Platts is an agency which reports international prices. Pricing invariably depends upon the sale-purchase agreement between the buyer and seller. For India, the delivery period ranges between four and six days on both the east and the west coast. Besides, no secure hedging mechanism is available in the country and provisional prices are more or less the final prices - the Platts CIF prices in Arab Gulf for reference loading dates and the Platts Singapore prices for the same for deliveries from the Far East. Generally, each country within the Opec also has its own official selling price (OSP), which is the reference price for both spot and contract deliveries for its crude exports. Different grades within a particular countrys production programme will attract different premiums or discounts depending upon market conditions and other factors. Finally, crude pricing is slightly complex arithmetic which requires simulation by the central agency of that country incorporating several factors such as market conditions and the buyers interest.

The provisional prices are always set for the buyers reference at the time of loading. The final This is done by agreeing to prices, however, will be decided reduce production. For instance, by the buyer and seller as per Saudi Arabia, the biggest producer, terms and conditions in the salehas asked nine other Opec purchase agreement (SPA) based members to reduce production on CIF (cost, insurance and freight) prices. by author 4.3 mbpd such that the total Bangalore. The is Editor, Yojana (Kannada),
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DISASTER MANAGEMENT
Role of Armed Forces

RESPONSE

D C Bakshi

he developing countries are the breeding ground for disaster-related deaths, the worldover. India is prone to such calamities due to its sub-continental dimensions and erratic behaviour of monsoons. We have periodic droughts, floods, cyclones and earthquakes. The corresponding devastation in terms of loss of human-lives, property and livestocks is enormous. In addition to fury of nature, there are technological disasters like the infamous Bhopal tragedy and the Uphaar Cinema incident. According to a survey; despite the development in science and technology, the frequency of disasters is increasing exponentially. Since 1960, the people affected due to disasters are growing at the rate of 6%.

With specific reference to our country; the civilian administrative machinery is unable to meet the challenges of these disasters. Every time nature strikes a blow; an alert is sounded to Armed Forces. Aid to civil power clause had been added appropriately in our charter for that purpose. It is thus obligatory for defence forces to come to the help of civilian population in times of calamities. Armed forces may be called upon to provide the following types of assistance:

Disasters can be prevented through sustained developmental work and protection of environment
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Providing infrastructure for Command and Control Organisation dealing with relief operations. This would involve provision of communications and making available technical specialist manpower. Medical care at the site of incident. of casualties.

Evacuation

The author is Gp. Capt, VSM IAF (Retd). YOJANA April 2008

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 Logistics support for transportation

of relief materials.
Setting

up running of relief

and dignity, keeping the age-old motto of Service before self in the forefront. We also remember the efforts of army during relief and rescue operations in Malpa landslides, Gujarat cyclone, Bhuj earthquake and floods in U.P. and the NorthEast. Supply dropping missions undertaken by the Indian Air Force in inaccessible areas have drawn accolades from public. Prevention is better than cure. A proactive approach is advisable to check natures wrath. Disasters can be prevented through sustained developmental work and protection of environment. Long term surveillance and regular monitoring of disaster prone areas by trained

specialists will certainly mitigate their occurrences. As a part of good governance; ideally each state should train a specialist cadre of officials for disaster-management. For this, the dedicated services of ex-servicemen settled in that region will be an ideal source. The twin objectives of gaining proficiency in responsemechanism and relief delivery should be the hallmark of Centre and state governments. Ex-servicemen are ready for this endeavour. Is the civil administration interested?
(Email: journal@aerospaceindia.org)

camps.
Construction and repair of roads

and bridges to enable relief teams/material to reach affected areas.

Repairs,

maintenance and running of essential services, specially in the intial stages of disaster relief.

We have seen that, in organisational and infrastructural terms, the armed forces have always provided a speedy and efficient response in dealing with a disaster solution. They have conducted themselves with honour

Yojana
Next Issue on Child Labour
Throwing light on the topic are eminent contributors : Lord Meghnad Desai, Professor Emeritus, London School of Economics, Kailash Satyarathi of Bachpan Bachao Aandolan, Interview with Shantha Sinha, Magsaysay awardee and Chairperson National Commission on Protection of Child Rights, among others.
YOJANA April 2008 39

May 08

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1857

1947

2007

Growth in Agriculture
he birth o f o u r independence on August 15,1947 was preceded by the great Bengal famine and severe food shortages. This prompted Jawaharlal Nehru to mention, Everything else can wait; but not agriculture. During the last sixty years, we have made great progress in every field of social and economic development. The average life span of an Indian has been more than doubled, from about 30 years in 1947 to over 65 now. Annual milk production has gone up from 20 to 100 million tonnes. Food production has also gone up and our farmers have disproved the belief held abroad that they are incapable of enhancing productivity substantially. During the first twenty years (1947-67) of independent India, the major concern was the creation of the necessary infrastructure for scientific agriculture. The second thirty years (1967-97) saw the benefits of synergy between technology, public policy and farmers enthusiasm in the form of green revolution in wheat, rice and other crops. We withnessed during

M S Swaminathan
this period, the origin of a green revolution symphony characterized by a beneficial fusion of professional skill, political will and farmers enthusiasm. Unfortunately, the third phase starting in 1997 has been witnessing a stagnation in production and productivity and a fatigue in the green revolution. The other major problem has been the persistence of hunger and malnutrition. 2007-08 marks the mid-way point in the time-frame set for achieving the UN Millennium Development Goals. The first among these goals is the reduction of hunger and poverty by half by 2015. Today, hunger and deprivation affect about 260 million people in the country. India is the home for 40 per cent of the worlds underweight children. Iron deficiency anaemia is estimated to affect 75% of children under five, and 57% suffer from Vitamin A deficiency. Undernutrition in women of reproductive age contributes significantly to child hunger. Consequently 30 per cent of newborn babies weigh less than 2.5 kg at birth leading to multiple handicaps in later life including cognitive ability.No wonder India ranks 126 out of 177 countries in the UNDP Human Development Index Soon after the United Progressive Alliance (UPA) Government came to power in 2004, a National Commission on Farmers (NCF) was set up with terms of reference drawn from the UPAs Common Minimum Programme. In its work, NCF, adopted the approach, before advising farmers, listen to them, since they know both the problems and solutions better than others. Because of the serious situation in the area of nutrition security, one of the terms of reference to NCF was, work out a comprehensive medium-term strategy for food and nutrition security in the country in order to move towards the goal of universal food security over time. NCF has dealt with this issue in detail in its reports and proposed the following six point action plan.

Restructure the delivery of nutrition support programmes on a life cycle basis-from birth to death.

The author is Chairman ms Swaminathan Research Foundation and President Pugwash Conferences on Science and World Affairs. 40 YOJANA April 2008

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 U n i v e r s a l i s e

the Public Distribution System and enlarge the food basket by including nutritious cereals like ragi, bajra, maize, jowar and millets; promote community food security systems through a decentralized network of community managed grain banks. a concerted attack on hidden hunger caused by micronutrient deficiencies through an integrated food cum fortification approach, with special emphasis on horticultural remedies for nutritional maladies. to sanitation and the safety of the drinking water and strengthen facilities for primary healthcare and primary education. and pay concurrent attention to on-farm and non-farm employment; bring about a paradigm shift from unskilled to skilled work, thereby adding value to the time and labour of the poor, particularly women. According to NSS data (2003) the average total income of farm households with upto 2 ha. land was less than 80% of their consumption expenditure. and introduce as soon as feasible a Food Guarantee Act, combining the features of the food for work and National Rural Employment Guarantee programmes. Food as currency confers multiple benefits; it strengthens household food security and helps to raise production through increased consumption.

The six point programme, if implemented holistically, would help to save our country from the unenviable and inexcusable reputation of being the home of the largest number of the hungry in the world. Twin Challenges The twin challenges facing Indian agriculture are; improving the productivity of small farms (Less than two hectares) which constitute over 86% of the operational holdings, and the launching of an agro-processing and agri-business revolution. Small farm productivity enhancement can be achieved through an integrated 5-point action plan proposed by NCF in 2005, when it recommended that the agricultural year of 2006-07 be observed as the Year of the Farmer. The components of the renewal strategy are: soil health enhancement with particular reference to soil organic matter and micronutrients and the issue of Soil Health Cards to farmers, rain water harvesting, conservation and efficient and conjunctive use, insurance and credit reform, technology and inputs for conservation farming, and producer oriented marketing. This programme was titled, Pancha Sutra for agricultural renewal by the Government of Karnataka. In the area of agri-business revolution, a major initiative was announced by Dr Manmohan Singh in his budget speech in February 1992. Special attention needs to be paid to supporting innovative ideas for generating income and employment in rural areas through support to various types of agribusiness. As an

Launch

Attend

experimental measure, Government proposes to set up a Small Farmers Agribusiness Consortium (SFAC) as an autonomous corporate entity funded by the Reserve Bank of India, NABARD and IDBI. The Consortium will include representation from Development Boards dealing with individual crops and public sector Corporations dealing with agriculture and agro-industries, private sector companies,banks, scientific organizations and farmers associations. The Consortium will function on the principles of economic efficiency, environmental soundness and social equity. We must begin a new chapter in our agricultural history where farm enterprises yield not only more food, but more productive jobs and higher income in rural areas. Unfortunately, SFAC became a bureaucratic organization and did not fulfill the original purpose for which Dr Manmohan Singh created it. In the first UPA Budget in 2004, the Finance Minister announced that SFAC will be revitalized, but this is yet to happen. NCF recommended in 2005 that during 2007-08, 60,000 lab to land demonstrations on agro-processing and agri-business may be organized in collaboration with Agricultural Universities, ICAR institutes, the Central Food Technological Research Institute and Private Sector Food Processing Companies to commemorate the 60th anniversary of our Independence. This is also an idea whose time is yet to come. Thus, systematic and synergetic steps for improving the productivity and profitability of small farms and for generating more income
41

Improve small farm productivity

Develop

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and employment opportunities through improved post-harvest technology are yet to be initiated. We are not able to achieve the UN Millennium Development Goal in relation to hunger and poverty elimination largely because the majority of consumers are marginal farmers possessing less than one hectare, and assetless labour. Their income is not sufficient for balanced nutrition. A Small Farm Management Revolution can be achieved only by providing relevant centralised services to support decentralised production. Without such support, it will be difficult to achieve a technological upgrading of small scale agriculture and confer on small producers the power and economy of scale in the production and post-harvest phases of farming. NCF recommended for this purpose the organization of Small Farmers, Cotton and Horticulture Estates. Unfortunately, schemes like agri-clinics and agri-business centers are yet to take off. In the case of rainfed areas constituting over 60% of our cultivated area, there is need for group endeavour among small farmers in the areas of water harvesting and effective and equitable use. The yield of pulses and oil seeds can be doubled in such rainfed areas through concurrent attention to conservation, cultivation, consumption and commerce. This is why I have been pleading for the establishment of Special Agricultural Zones (SAZ) both in irrigated and rainfed areas in order to provide integrated services to small scale cultivators. Special Agricultural Zones can also be organized for the production of health foods, medicinal plants and for organic farming as well as areas
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like the Indira Gandhi Canal area of Rajasthan and Kuttanad area of Kerala. In this context, it would be useful to study the Farm Bill 2007 of United States.The number of farming families in USA was less than one million in 2005. Much of the support of the US Government goes to areas like conservation farming, Market Support, Credit and Insurance and support for attracting young people to take to farming. An amount of 618 billion dollars will be provided to farm families during the next 7-8 years. All this is considered as essential support and not as subsidy. Our packages should be similarly designed for launching an ever-green revolution leading to the enhancement of productivity in perpetuity without associated ecological harm. The small and marginal farmers of our country, who constitute 25% of the global farming population, have to lead this revolution. NCF has submitted a draft National Policy for Farmers summarizing what needs to be done to revive farmers interest in farming by making agriculture economically rewarding and intellectually satisfying. If adopted, this will be the first time either in the history of colonial or independent India that the human dimension will guide agricultural policies and strategies. Technology and Public Policy Our Academy since its inception in 1990 has been preparing papers for policy makers on different aspects of agriculture since it is only interaction between technology and public policy that can drive

sustainable development. I am glad we have been able to put together all these papers with the help of the Academic Foundation under the title, Agriculture Cannot Wait : New Horizons. I hope this publication will help to spread widely the scientific view point in different areas of public policy related to agriculture. Our Academy has an important role in spreading both public and political understanding of science. During this year, we have also undertaken on behalf of the Ministry of External Affairs a Mission to help Afghanistan to establish a National Academy of Agricultural Sciences of Afghanistan. This is in response to a request made by HE Hamid Karzai, President of Afghanistan, when he addressed the Academy on November 19,2006. The Afghan Academy will have the important features of both our Academy as well as the Chinese and Russian Academies of Sciences, which, unlike us, manage research institutions. The NAAS expert team has made the following suggestions:
Establishment of an Afghanistan

Academy of Agricultural Sciences (AAAS) with mandate to serve as the think tank for agriculture, effectively organize educational needs at post graduate level, formulate and supervise the undergraduate curriculum through taking responsibility for agricultural education and to develop a research agenda. of such an Academy as an independent statutory body with reponsibility for research and education under
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the Ministry of Agriculture and Irrigation. Restructuring of the research and education set up in Afghanistan into a compact, smooth flowing, accountable system capable of responding to the urgent short and long term needs of the country. Assigning a central role for AAAS for innovating, initiating, monitoring, evaluating and directing national agricultural research schemes, seeking and receiving need-based national and international collaboration
Bringing

the existing National Institutes of Agriculture, Animal Husbandry/ Veterinary science, research stations and sub-stations and all farm research and education programmes under one umbrella of a unified overall administrative setup and function. a roadmap with milestones, activities and financial costing for such a demand driven, futuristic requirement of the people of the Islamic Republic of Afghanistan.

Preparing

It is our hope that the Afghanistan Academy of Agricultural Sciences will come into existence soon and that it will help to rejuvenate and revitalize the agriculture of this great and ancient country. International Cooperation : New Avenues Among the other areas where our Academy can take the initiative in the coming years, I would like to refer to a few. Africas Green Revolution Green Revolution in Africa is an idea whose time has come. The
YOJANA April 2008

growth rate in African Agriculture was 3.9% during 2004, as against the global average of less than 2%. The work done by FAO, the Earth Institute of Colombia University in Malawi and in numerous Millennium Villages in Africa has shown that a doubling in maize production is possible, if fertilizers, seeds and treadle pumps can be made available to small farmers at affordable prices. The support given to resource poor farmers for adopting yield enhancing and environmentally benign technologies should be referred as, technology adoption support and not as subsidy. In areas affected by HIV/AIDS, support for nutrition should be given, in addition to making available relevant drugs. Finally, opportunities for assured and remunerative marketing are essential for sustaining farmers interest in productivity improvement. The numerous agencies working in Africa like FAO, Bill and Melinda Gates Foundation, the Rockefeller Foundation and the Earth Institute could join together to form an African Green Revolution Symphony, in order to sustain and enlarge the Africas green revolution. Our Academy can be a part of this symphony, sharing the experience gained in India. Energy and Food Security It would be useful to organize a Scientific Consultation on Land Use Policies for Bio-fuel production in order to develop approaches which will lead to the steps taken for food and fuel security becoming mutually reinforcing. The current steep rise in the price of maize in the global market as a result of the increasing use of maize for

ethanol production, has serious implications for the food security of the poor in Africa and Latin America. Biofuels are currently being derived from corn, soyabean, rapeseed and groundnut, as well as from non-grain food crops like cassava, sugarcane and oilpalm. Other plants like Jatropha and Pongania are now attracting attention. It is important to accord priority to biotechnological approaches to energy production. Also, biomass utilization for energy generation (eg, pyrolysis and gassification of biomass) deserves greater attention. Land use policies in every country should be based on a careful consideration of the needs for food and energy security in a holistic manner. Market forces in the area of using grains for energy generation should take into consideration the overriding importance of food security of the nearly one billion members of the human family who are currently undernourished. Transboundary Pandemics African breeds of cattle like Boran and NDama have trypanotolerance traits. Similarly, it is likely that some indigenous breeds of poultry may have resistance to the Avian influenza virus. The dreaded H5N1 strain of the Avian Influenza virus is leading to the indiscriminate killing of native breeds of poultry. The time has come for a scientifically designed international effort to conserve and evaluate the native breeds of livestock for resistance to important transboundary disease causing organisms like the H5NI strain of the Avian Influenza virus.
43

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The Svalbard International Seed Vault established by Scandinavian countries under perma-frost conditions near the North Pole with a holding capacity for three million seed samples for preserving for posterity plant genetic resources is a good example of valuable international collaboration. A similar initiative both for conserving and evaluating genetic variability in livestock is needed urgently. Priority in international effort can be given to diseases of transboundary importance. Capacity Building Investment in capacity building confers multiple benefits- on individuals, organizations and the envioronment in capacity building efforts should cover both grassroot workers and national and international Policy makers. An Action Education model of capacity building which integrates academic course work with field experience will be essential for developing a cadre of professionals well versed in the art and science of sustainable development and in bridging the growing gap between scientific know-how and field level do-how. The Earth University in Costa Rica is a good example of designing institutions for breeding transformational agents who combine scientific humanism and humanistic science in a symbiotic manner. A hub and spokes model of organization will help such institutions to spread their pedagogic methods for sustainable development speedily around the world. The Indira Gandhi National Open University (IGNOU) is initiating
44

a programme of education for sustainable development. Bridging the Divide The world is witnessing many divides, such as economic, technological, digital, genetic and gender divides. How can we bridge such divides and ensure social inclusion in access to technologies of importance to human food and health security? Patents and intellectual property rights (IPR) should not come in the way of all members of the human family deriving benefit from the products of the buman brain, particularly in areas relevant to achieving the UN Millennium Development Goals. UN MDGs represent a global common minimum programme for sustainable human security and well being. For achieving the goal of social inclusion in access to relevant technologies, it will be useful if the Inter-Academy Council, International Council for Science (ICSU) and the Academy of Sciences for the Developing World (TWAS) would jointly sponsor the establishment of an International Patents Bank for Sustainable Human Security , to which scientists can assign their patents which are relevant to safeguarding food security and human and animal health and mitigating the adverse impact of global warming and sea level rise. The Science Academies can then help to ensure that access to relevant technologies is not denied to those who are unable to pay for them. At the national level, NAAS could take the lead in establishing such a Patents Bank for Public Good with reference to agriculture. Global and Regional Action

Research Networks which can help to develop location-specific methodologies for conserving the basic life support systems will be useful for purchasing time in technology development and dissemination.Many such Networks already exist, particularly under the auspices of CGIAR, ICSU, TWAS and other organizations. It would be useful if interdisciplinary networks are organized for developing field level action plans for the sustainable management of tropical rainforests and coral reefs. These habitats are rich sources of biodiversity and a well planned global effort for saving them will be valuable. Threats Among other areas we should deal with threats to sustainable food security. These may arise from ecological, technological, economic and equity factors. Some of the areas which require consideration are the following:
Safeguard

and strengthen the ecological foundations essential for sustainable agricultural progress land, water, forests, biodiversity the adaptation and coping mechanisms against climate change

Strengthen

Strengthen

capacity in the field of biosecurity, H5N1 strain of avian influenza, Ug 99 strain of wheat stem rust, etc and assist all nations to develop a Biosecurity strategy Bio-fuels: Land use policies should strike a balance between food and fuel security depending on local conditions. Bread and Biotechnology: The role of biotechnology in food
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security should be carefully assessed based on potential risks and benefits. S m a l l f a r m M a n a g e m e n t Revolution - productivity and power and economy of scale Income Security - Non-farm employment. Bridge the Human Capital Divide. Gender equity - skill and technological empowerment women Climate Change Climate change poses the single most important threat to the future of food production and security. Irrespective of who is responsible for climate change, the poor nations and poor in all nations will suffer most. The changes needing attention from the point of farmers and farming are
Temperature Precipitation Sea

farming systems of the country. The aim should be to minimize climate related risks and maximizing the benefits of the available moisture. Computer simulation models can help farmers to adopt alternative cropping strategies depending on likely changes in temperature and precipitation. Knowledge dissemination should involve concurrently the supply of the inputs needed to adopt the knowledge.
Conservation

to improve productivity and profitability of small farms on an environmentally and economically sustainable basis.
Bridging

the large yield gap prevailing today in most cropping systems. Mission which will help to enhance the availability of wheat, rice, pulses and oil seeds, so that prices can be kept under check and there is adequate supply of these essential commodities to the common man.

Organisation of a Food Security

level rise Atmospheric CO2 Pest epidemics and disease pandemics Methods of adaptation will have to be area specific. Organic agriculture and traditional farming practices will not alone be able to provide food to seven billion people. Issues like carbon trading, Clean Development Mechanisms and the provisions of the Kyoto protocol need understanding at the level of farm, fisher and rural populations. A massive awareness campaign is essential. It would be useful if our Academy could help in designing a Special Programme for Adaptation to Climate Change in the major
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farming, dying wisdom in relation to water storage and other coping mechanisms, and vanishing crops all need attention. A cadre of grassroot level Climate Managers will have to be trained (atleast one woman and one man in every village). NAAS could promote the establishment of National Research and Training Centre for the management of the impact of climate change on local level agricultural production. Livestock need particular attention with reference to feed, fodder and water. Ground Water Sanctuaries will have to be established in the form of concealed aquifers, which may be utilized only when absolutily essential for saving livestock and human lives. Cattle camps can be established near such sanctuaries.

The above are urgent tasks and can be achieved only through bringing about synergy between technology, services, public policies and farmers, enthusiasm. The Academy can particularly help in the development of a second fertile crescent in our country covering Bihar and Eastern India. Traditionally the PunjabHaryana-Western U.P. Region has been serving the role of a fertile crescent in India. This Region is the heartland of the green revolution. However, there are other parts of the country waiting to become fertile crescents. A very eligible candidate for such a role is the Bihar, Eastern UP, West Bengal and Assam Region. This Region is characterized by good soils and adequate rainfall and irrigation facilities. What is needed is a holistic approach to enhancing productivity and profitability on an environmentally sustainable basis. We are currently in the process of setting up a study team which will prepare a detailed road map for converting this region is to a fertile crescent. This Region is known
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Agriculture : Way Forward At recent meeting of the National Development Council held on 29 May 2007, the Prime Minister has drawn attention to the following urgent needs.
Overcoming

the technology fatigue which seems to have developed in major farming systems, so that we can continue

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for its vast untapped production reservoir with reference to crop and animal husbandry, fisheries, agroforestry and agroprocessing. Unless we develop this region into an agriculturally prosperous area, our country may have to revert to a ship-to-mouth existence once again after 40 years. There is a vast untapped production reservoir available in UP, Madhya Pradesh, Bihar and Rajasthan. The ICAR Wheat Directorate in Karnal has calculated that we can produce an additional quantity of about 24 million t of wheat immediately by bridging the gap between potential and actual yields, with technologies and varieties now on the shelf. It will be prudent to launch a well designed farmer-centric production programme in Bihar, Rajasthan, MP and UP, with priority attention to soil health enhancement, varietal choice and assured and remunerative marketing. Similarly, there is vast scope for increasing rice production

in West Bengal, Assam, Orissa, Andhra Pradesh, Tamil Nadu, Karnataka and even Kerala during the rabi season. The yield of boro rice is high in Assam and West Bengal. Over 27 high yielding rice hybrids are now available to suit different agro-climatic and growing conditions, as well as grain quality requirements. They are from both the public and private sectors. Pusa RH-10 is a superfine, aromatic grain hybrid suitable for cultivation in North-West India. KRH2 is a high yielding and widely adapted hybrid, while DRRH2 is an early hybrid with a good yield potential. States with an unutilized yield reserve in their Agricultural Production Bank should be enocouraged immediately to initiate action with the guidance of experienced farmers and scientists to utilize the yield reserve wisely to improve production and productivity. The precise agronomic package will have to be developed on a location specific basis with the help of Agricultural Universities. Rabi and boro rice production can be enhanced considerably

by giving attention to balanced fertilization, particularly to the supply of the needed micronutrients like zinc, boron and sulphur. Together with plant protection, the enhancement of soil health will help to improve productivity atleast by an additional tonne per hectare. There are nearly five million ha under Rabi and boro rice in the country and improved varieties are available for all the States where rice is cultivated between November and May. Striking progress in improving the yield of rainfed maize, soyabean, sorghum, green gram, blackgram, pigeon pea, chickpea, finger millet (ragi), pearl millet (bajra), castor etc., can be achieved through balanced fertilization (NPK and the needed micronutrients). Seeds of improved varieties should be maintained in Village Seed Banks in rainfed areas, so that alternative cropping strategies can be introduced depending upon monsoon behaviour. Improved cultivars alone can enhance productivity by 10 to 50% Varietal choice should be based on the likely moisture

Achievable Targets by Bridging Yield Gaps through available Technologies under irrigated conditions (based on National Demonstrations) State Current Area Current yield Additional production 2003-04 (,000 ha) gap t/ha possible (000t) U.P 8418.0 1.346 11330.5 M.P 2831.8 2.071 5864.7 Rajasthan 2103.1 1.646 3461.7 Bihar 1483.0 1.196 1773.6 Haryana 2303.0 0.581 1338.0 Gujarat 660.7 0.714 471.7 Maharashtra 581.1 0.656 380.0 Karnataka 97.0 0.998 96.8 Punjab 3444.0 0.241 82.9 24800.0
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availability. The short duration chickpea variety Shwetha (ICCV2) has revolutionized chickpea production in Andhra Pradesh. The productivity increased from 470 kg per ha in 1993 to 1084 kg per ha in 2004. Area also increased seven fold. There are nearly 12 million ha of rice fallows in MP, Orissa, Jharkhand, Chattisgarh and West Bengal. In such rice fallow areas, chickpea can be grown by using residual soil moisture. Simple seed priming technologies like soaking seeds in water and micronutrient solution for six hours and drying in shade will help in establishing a good chickpea crop in rice fallows. In Madhya Pradesh two million ha remain fallow during the kharif season. Using broad bed and furrow, balanced nutrient management and short duration soyabean cultivars like Samrat, farmers in the Visisha district were able to take a crop of chickpea or wheat during rabi and thereby double their income. Many such simple steps in soilwater-crop management can lead to major advances in both crop output and farmers income. This is the pathway to making farming economically viable. Eastern India (eastern UP, Bihar, Chattisgarh, Orissa, West Bengal, Assam and NE States) have a large untapped production reservoir even with the technologies now available. In these areas, poor water management, rather than water availability, is the major constraint. The Indo-gangetic plains offer scope for becoming the major bread basket of India through an appropriate mix of technology, services and public policies. In many of these areas, the aquifer
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should be enriched during the South-West Monsoon period, and extensive ground water use should be promoted during the OctoberApril period. Given the right strategy, the Ganges Water Machine could become the main anchor for our food security system. Bihar in particular is a sleeping giant in the field of agriculture. The work of IARI in the Darbhanga district and Sone Command area has shown that the wheat yield can be increased substantially with good seeds and improved agronomic practices. The major bottleneck is however the absence of a Grain Purchasing Machinery which will provide the MSP to farmers. Action to extend the gains of higher productivity and profitability should cover all rainfed areas. This should be a priority task of the National Rainfed Area Authority. The recommendations of the Swaminathan Committee on More income per drop of water (2006) should be converted into action plans on a location and farming systems basis. The country can enter into an era of ever-green revolution if the proposed additional central grant of Rs. 25,000 crores during the 11th plan period is used mainly for bridging the prevailing yield gap by converting scientific know-how and field level do-how. Food Security Mission Finally, the proposed Food Security Mission prepared by the Prime Minister will be successful only if the following basic principles enunciated by Prime Minister Rajiv Gandhi over 20 years ago is adhered to. Prime Minister Rajiv Gandhi started the Oilseeds and Pulses

Missions to give holistic attention to all links in the productionconsumption chain. The Missions led by eminent scientists like Dr M V Rao had a striking impact in their early years. Subsequent policy changes and leadership vacuum unfortunately led to the stagnation in the productivity of these life enriching crops. The country can produce as much pulses and oilseeds we need through synergy between technology and public policy, since there is a stockpile of improved varieties of dryland crops. The new hybrid arhar strains (Pigeon pea) can trigger a pulses revolution. The largest section of consumers in India is the farming population. By helping farmer-consumers to have greater marketable surplus because of higher productivity, we can eliminate substantially poverty induced hunger and malnutrition in the country. Technology Mission as a technique or a method to achieve specific development goals was initiated by the late Shri Rajiv Gandhi in 1986. Five Technology Missions were initiated, out of which was Technology Mission on Oilseeds. In his Convocation Address at the IARI, New Delhi in February, 1986, late Rajiv Gandhi said, One of our biggest problems today in the agricultural sector is the oilseeds. We are setting a thrust Mission for oilseed production. When we talk of a Mission, we mean an exercise starting from engineering of the seeds and finishing with the finished products of the vegetable oil, which could be delivered to consumer. We
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would like to put one person incharge of such a mission with the full funding with no restriction on him whether bureaucratic or otherwise. The only limits will be certain achievements, which must come within a certain time frame. Rajiv Gandhi envisaged that a

Technology Mission should have well defined objectives, an end-toend approach in implementation, and inspiring professional leadership. The Food Security Mission will be successful if these principles are followed. It is the duty of our Academy, as the collective voice of the

agricultural, scientific community of India to give our best in helping the country to make farmers and farming the pride of the nation. This is a pledge we should take on the eve of the 60th anniversary of our tryst with destiny.
(Email: msswami@vsnl.net)

Form IV (See Rule) Statement About Ownership and Other Particulars About Yojana (English)
1. Place of Publication 2. Periodicity of Publication - New Delhi - Monthly

3. Printers Name - Chandu Press Citizenship and Indian Address D-97, Shakarpur, Delhi-110 092. 4. Publishers Name - Citizenship and Address 5. Editors Name - Citizenship and Address Smt. Veena Jain Indian Publications Division, Soochna Bhawan, New Delhi-110001. Dr. Sapna N. Singh Indian Yojana, Publications Division, R.No. 507, Yojana Bhawan, Parliament Street, New Delhi-110001.

6. Name and address - Wholly owned by of owners Ministry of Information & Broadcasting Government of India, New Delhi-110001. I, Veena Jain, hereby declare that the particulars given above are true to the best of my knowledge and belief. Sd/(Veena Jain) Publisher
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Poverty l Percentage of population below poverty line is the highest in Orissa, followed by Bihar, Chattisgarh, Jharkhand and Madhya Pradesh, Punjab followed by Himachal Pradesh, Haryana, Kerala and Andhra Pradesh have low poverty. Consumption l During 2004-05, compared to 30 per cent at the all-India level, 57 per cent of rural population in Orissa followed by Chhattisgarh (55 per cent), Madhya Pradesh (47 per cent), Bihar and Jharkhand (46 per cent each) was living below the monthly per capita expenditure (MPCE) level of Rs. 365 or about Rs. 12 per day. As against this, 57 per cent of rural population in Kerala and 51 per cent of Punjab and 47 per cent in Haryana had MPCE of at least Rs. 690. At the all-india level this corresponds to the top 20 percentile of MPCE distribution. l During 2004-05, as compared to 30 per cent at the all-India level, 55 per cent of Bihar and 50 per cent of Orissas urban population was below the MPCE level of Rs. 580 or Rs 19 per day. As against the top 20 per cent at the allIndia level, 28 per cent of Keralas and 27 per cent of Punjabs urban population were having an MPCE level of at least Rs 1,380. Inequality l In urban areas, inequality in consumption, as measured by Lorenz Ratio is the highest in Chhattisgarh followed by Kerala, Madhya Pradesh, Punjab and West Bengal. Inequality is low in urban Gujarat followed by Assam and Himachal Pradesh. Inequality in rural India is lower than urban India in all major States. In rural India, inequality is the highest in Kerala, followed by Haryana, Tamil Nadu and Maharashtra. Assam has the lowest inequality followed by Bihar, Jharkhand and Rajasthan in rural India. Employment l Regular employment is the major engagement of working urban households in most of the major States. About (48 per cent) of urban households in Maharashtra followed by Haryana (47 per cent), Chhattisgarh (46 per cent), Gujarat (45 per cent) and Punjab and Assam (44 per cent each), depend on regular employment. Percentage of self-employed households in urban areas is higher in U.P. (49 per cent) and Bihar (47 per cent). The proportion of casual labour households was higher in urban areas for Kerala (25 per cent) and Himachal Pradesh (24 per cent) than in other major States. l In rural areas, self-employment was more important in many of the major States. The proportion was high in UP (68 per cent) followed by Rajasthan and Assam (66 per cent each), Himachal Pradesh (57 per cent) and MP (56 per cent). Health l Life expectancy is highest in Kerala followed by Punjab, Maharashtra, Himachal Pradesh and Tamil Nadu. It was least in Madhya Pradesh followed by Assam, Orissa, UP and Bihar. l As on March 2006, 100 per cent of Primary Health Centres (PHCs) had labour room in Andhra Pradesh, Karnataka and Tamil Nadu while it was low in UP, Bihar, Kerala and MP. l As on March 2006, proportion of PHCs with operation theatres was 87 per cent in Andhra Pradesh followed by Rajasthan (83 per cent), Maharashtra (74 per cent), Haryana (71 per cent) and Gujarat (67 per cent). It was low in UP, West Bengal, Chhattisgarh, Kerala and Bihar. Hunger and Inadequate Food l Prevalence of hunger as measured in months in which any member of the household had inadequate food is unusually high in West Bengal. It is also high in Orissa, Assam and Bihar, but lower in Himachal Pradesh, Rajasthan, Haryana, Gujarat, Karnataka and Tamil Nadu. Education l In 2004-05, Gross Enrolment Ratios (GER) for elementary education, i.e., I-VIII Class (6-14 years) was highest in Madhya Pradesh (114.1 per cent), followed by Tamil Nadu (114 per cent) and Chhattisgarh (112.6 per cent). It was lowest in Bihar (65.2 per cent) followed by Punjab(72.6 per cent) and Jharkhand (75.8 per cent). l GER for secondary education (IX-X Class) was high in Himachal Pradesh (134.9 per cent) followed by Kerala (93 per cent), and Tamil Nadu (80.7 per cent). It was lowest in Bihar (22.5 per cent), Jharkhand (26.5 per cent) and West Bengal (41.5 per cent). For Senior Secondary level (XI-XII Class), GER was least at 2.5 per cent in Jharkhand followed by 9.8 per cent in Bihar and highest at 127.7 per cent for Himachal Pradesh followed by 43.9 per cent in Tamil Nadu. Basic Amenities l Himachal Pradesh, Punjab, Haryana, Kerala, Karnataka, Gujarat, Tamil Nadu and Andhra Pradesh have much larger percentage of households having electricity than is the case in Bihar, Assam, Jharkhand, U.P. and Orissa. l Households having access to toilet facilities are high in Kerala, Assam and Punjab and low in Chhattisgarh, Jharkhand, Bihar and Madhya Pradesh. Source : Economic Survey 2007 YOJANA April 2008 49

Socio-economic profile of States

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NEWS

NEWS NEWS

NEWS

in the news
6 per cent hike in DA
=

Centre has approved a six per cent hike in dearness allowance to Central government employees and an identical rate of dearness relief to pensioners with retrospective effect from January 1, 08.

Due provision will be made for waiver

he Prime Minister Manmohan Singh has said the UPA governments unprecedented initiative to waive farmers loans was to meet the unpaid distress bill. Replying to the discussion in the Lok Sabha on the motion of thanks to the Presidents address, he said: We have done nothing more than pick up the unpaid distress bill, which the NDA government had left behind. It was the distress of the peasantry that brought the United Progressive Alliance to power, while the NDA was talking of Shining India. In his hour-long speech he said those who were outside the

Compensation to banks being worked out : Manmohan

institutional credit system could avail themselves of the scheme initiated in 2004 that would allow them to swap their debt by going to public sector banks. Details of compensating the banks were being worked out, he said and expressed the hope that their dues would materialise over three-four years. The Prime Minister said adequate provisions from tax and non-tax revenues would be made over this period to fund the package. Let there be no doubt that the banking system will not be constrained in any manner and there will be no contraction in liquidity. Rejecting the Opposition charge that the UPA government was appeasing the minority communities, he said all efforts were being made to reduce inequality in opportunities. It was a process of empowerment of all disadvantaged sections of the population. I take pride in saying that our government has the courage to recognise that our minorities have not benefited adequately from the growth process. We are trying to reduce inequalities of opportunities, gaps that exist between regions, between classes, between urban and rural areas. This is part of the process of inclusive growth. The motion of thanks to the Presidents address was passed without amendment by both houses.

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bOOk REVIEW
for the people
he book under review authored by Ajit Menon et al is undoubtedly like a breath of fresh air. The authors enquired in detail into the NGO-driven Community-based Natural Resource Management (CBNRM) in south Asia keeping in mind the substantive critiques of both the concept and practice of CBNRM, in particular, and the NGO-driven development in general. Since 1990s,the CBNRM, particularly in south Asian countries is being favoured as a goal to achieve rural development for the people, by the people and of the people. Following an initial set of successful experiments in terms of benefits and the feasibility of a community approach, the concept of CBNRM got mainstreamed to various degrees in governmental and donor policy in South Asian countries, leading to the coexistence of multiple approaches. These ranged from a replication of the individual experiments by civil society groups to state-led sectoral decentralization programmes to attempts at political devolution of

tITLE

Community-based Natural Resource Management-Issues and Cases from South Asia

Authors : Ajit Menon et al Pages : 362 Price : Rs. 450/Publisher : Sage Publications, New Delhi.

resource control to lower levels of government. NGOs have come to play a prominent role in not only the civil society replications, but also the decentralization programmes. Therefore, the evolution of CBNRM in South Asia is intertwined with the changes in the NGO sector. In fact, in South Asia and other parts of the world, the latter had emerged a growing force in the 1970s and were seen by many as a possible force advocating an alternative vision of development that would also pressurize the state to democratize. After the initial hype about both the concepts of CBNRM and NGO-driven development, several critiques have emerged. The authors have examined with dexterity the theory and practice of NGO-driven CBNRM keeping in mind existing critiques of dominant discourses of development, the micropolitics of decentralization and the projectization of community development. The book thus breaks a new ground by contextualizing these critiques using detailed case studies of CBNRM initiatives and delves into the extent to which
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CBNRM offers a vision and role for the future. It is not the first time that the rural communitys involvement is discovered by the state. But what is new about the trend in the 1990s, as authors said, is the fact that the sectors that were traditionally state-controlled individual sectors like forests, water, irrigation, wildlife management or multisectoral programmes such as watershed development or rural livelihood development, with or without donor support, with varying emphasis on conservation or local livelihoods either with statutory backing or in an adhoc manner, were endeavoured through NGOs or directly through state agencies and so on. These sectors were gradually opened up to community particlpation suported by procommunity policy pronouncements and financial backing by the state and/or even from international donor agencies. Thus the states faith in CBNRM is now seen as a wider shift away from the past policy of statedriven development towards a more communitarian and civil societydriven development alternatives. As said, the authors have chosen six different innovative CBNRM initiatives as case studies to understand in more details not only the nature of different NGO--driven CBNRM experiements with a vision, but also to assess the achievements in community development and to further widening the process of democratic empowerment. The authors contended that though most CBNRM initiatives under
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study do envisage different forms of development with emphasis on four main issues such as livelihood enhancement, sustainability, equity and democratic decentralization. It may be noted that while all these concerns do not have the same meaning, but have multiple meanings, as different experiments place varied emphasis on these four normative concerns which basically aim to improve the overall quality of life of people within a given specific historical context and cultural boundaries. The authors tried to explore and capture how the various NGOs grapple with these main concerns, set visions and meanings attached to its objectives. In other words, the four main issues or concerns need to be intrinsically juxtaposed to benefit every constituent of the community. For example, as authors said, the livelihood enhancement needs to be ecologically sustainable in the sense that CBNRM initiatives must aim to generate resources as well as to ensure that the resources are not over-exploited. It is equally important that the livelihood enhancement should be cognizant of distributive or equity concerns. Often many programmes or experiments do assume that the interventions would help the poor and they leave it at that without directly targeting the marginalized and/or removing the structural forms of inequality. What is needed is the democratice decentralization and livelihood enhancement which should help achieve in getting the marginalized community to participate increasingly in the

decision-making processes and help benefit them. The authors used sound scientific methodology that combines secondary analysis of a vast literature in this area with extensive primary data collected through field work to contextualize the study. In fact, the outcome of the CBNRM initiative was understood with reference to the strategies and approaches adopted by six NGOs and these were compared, evaluated and interpreted in the light of actions, expectations and choices made by various sections of rural people. In the last chapter the authors tried to draw comparative conclusions across case studies and locate them in a wider analysis of NGO-driven CBNRM. They highlighted the fact that the issues need further probe through rigorous research to understand the complexities of social dynamics of development issues in the context of south Asian countries. Despite limitations, the authors succeeded in making some broad generalizations which would be a great help in mainstreaming the NGO-driven CBNRM in the realm of broader social and political movements that address the concerns of democratization and equitable development. Lucidly written, the book is an important contribution in the areas of development alternatives for many reasons and it reads well in terms of its presentation of consistent arguments. The book is a must be read especially for those who are concerned about peoplecentred rural development and natural resources management.

M C Paul
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