Archive for February 2011
Premlata is one of several successful women PRI (panchayati raj institution) representatives Orissa has produced. The 73rd amendment of 1993, providing reservation for women at the grassroots level, has gone a long way in the empowerment of Indian women. A report on Infochange India, “Orissa’s wonder women’, explains more about this social transformation and the difference it has made in rural Orissa.
Observations from Orissa suggest that the journey involved several phases, starting with awe and fear at the inclusion of women in party politics, characterised by ‘proxy rule’ by male relatives of the female representatives and dominance of male members and senior officials in decision-making, etc. Litali Das, a social activist who works with women’s issues, cites some instances. “In 2009, in Nuapada district, some women sarpanchs in Boden block wanted to convene a gram sabha. But the BDO was not convinced. The ladies then showed him the Orissa panchayati raj manual that stipulates the mandatory holding of gram sabhas at least four times a year. The BDO capitulated.”
In another instance, Sangeeta Nayak, sarpanch of Borda gram panchayat in Kalahandi district, mobilised around 3,000 people to block the collector’s path. They got a doctor appointed in the village primary health centre that had not seen a doctor for years. Similarly, Nayana Patra, a lady ward officer in Baruan gram panchayat in Dhenkanal district, has set an example in improving the education system in her village (the school dropout rate has since declined considerably), and in protecting local forests.
Bangladesh, South Asia’s biggest rice buyer, is in talks with India to buy grains on a regular basis to bolster food security as governments seek to avoid a repeat of the unrest that broke out when prices last soared, reported Bloomberg.
A long-term agreement will protect Bangladesh from possible defaults by private traders, who sometimes fail to meet their commitments if prices gain, Muhammad Abdur Razzaque, the nation’s food minister, said in an interview yesterday. “Rice prices rose this year in our country; people are suffering as they have limited income,” Razzaque said by phone from Dhaka.
Bangladesh’s plan underscores a drive by governments to strengthen their reserves to help manage the impact of food prices that advanced to a record last month, beating the jump in 2008 that spawned riots from Haiti to Egypt. This year’s surge has driven millions into extreme poverty, according to the World Bank, and contributed to unrest in the Middle East and Africa. “When we go for international tenders and prices suddenly rise, private suppliers sometimes fail to fulfill their commitments,” Razzaque said. “They don’t supply us and put us in trouble. It has happened.”
In the Philippines, Sen. Francis Pangilinan, chairman of the Senate committee on agriculture, has called on the country’s Department of Agriculture (DA) and the Department of Trade and Industry (DTI) to start preparing for the worst-case scenario as far as the prices of oil and other basic commodities are concerned in response to the volatile situation in the Middle East.
The Philippine Star quoted Pangilinan as having said that other nations have started preparing for an expected food and oil shortage, not only because of the turmoil in the Middle East but also because of the erratic weather patterns that the world has been experiencing. “Some Asian governments have already started to come up with measures to mitigate rising prices. Erratic weather patterns have started wreaking havoc on our agricultural lands. China and India are stockpiling on grains, which means we need to rely less on importation to secure our buffer. The price of oil continues to soar, it is a matter that requires our serious attention,” he said.
In today’s world of interlinked markets, a problem in one place quickly ripples out to others. Croplands in Russia, one of the world’s leading wheat producers, were devastated by fires during last summer’s record-breaking heat wave. Wheat harvests in Ukraine, also plagued by torrid weather, dropped 15 percent last year, a comment in Radio Free Europe/Radio Liberty reminded readers.
Both countries responded by introducing export bans that have exacerbated global shortages of the commodity. Partly as a result, world wheat prices doubled between June 2010 and January 2011. According to the World Bank, wheat prices have risen in the past six months by 54 percent in Kyrgyzstan, 45 percent in Bangladesh, and 33 percent in Mongolia.
In the oil-rich Caucasus republic of Azerbaijan, high prices have been sending citizens across the border into neighboring Georgia, where they are buying up meat, potatoes, onions, and apples. Nadeem Ilahi, head of an International Monetary Fund (IMF) delegation visiting Baku this week, warned that Azerbaijanis should expect overall prices to rise 10 percent in the course of this year — most of it due to the worldwide rise in the cost of food.
The TripleCrisis site has an entry on the little-known Food Aid Convention. Negotiators from member countries of the Food Aid Convention (FAC) are meeting to hammer out details of a new agreement. The FAC is an obscure international treaty that dates back to 1967 under which donors pledge a certain amount of food aid. It is the only international agreement where donors pledge to provide a minimum amount of aid.
Last renegotiated in 1999, the FAC is now more than 10 years out of date. It was supposed to have been updated in 2001, but instead has limped from extension to extension on the hopes that the Doha Round of trade talks, which include new rules on food aid, would be completed first. Finally, following a major food crisis in 2007-08 and continued food price volatility, donors have realized that the FAC must be updated to take the new situation into account, even in the absence of a Doha agreement. Read the rest here.
The International Grains Council has released its monthly grain market report, covering the movements in and events of February 2011. Here are the main observations and forecasts.
Outlook for 2011-12: Although forecasts of production and consumption are tentative at this time, global wheat supply and demand is projected to be broadly in balance in 2011-12. Strong prices will boost plantings in a number of countries in 2011, the global area forecast to increase by 3%, to 224m. ha., the largest since 1998. Although there are concerns about crop prospects in some major producers, world production in 2011 is forecast to increase by 24m. tons, to 672m., second only to the 2008 record.
With 2010-11 southern hemisphere maize harvests only just underway and planting intentions for the next crop still uncertain, forecasts for 2011-12 are largely nominal. Given initial planted area assumptions and, assuming trend yields, larger maize harvests are forecast in several key producers, including the US and China. World production is expected to set a new record but, unless yields are exceptionally high, a second consecutive drop in world supplies is projected. Based on underlying strong demand, maize availabilities are projected to remain tight, with closing stocks set to fall for a third successive year.
Commentary: Grain and oilseed prices continued their upward march in early February, with some values nearing the peaks seen in 2008. However, in renewed day-to-day volatility, markets then fell back sharply, partly on concerns about the impact of political turmoil in parts of North Africa and Near East Asia. There was little fundamental change in this year’s overall global supply and demand situation, although there were still uncertainties about the final outcome of ongoing maize and soyabean harvests in the southern hemisphere, as well as prospects for 2011-12 crops.
In wheat markets, tightening milling grade availabilities and heavy international buying, including of feed wheat, spurred further substantial price gains early in the month, while worries about winter wheat crops in the US and China also featured. Several countries announced they would reduce or remove import duties. In the second half of February, nearly all earlier gains were reversed as the political unrest in some countries triggered a wave of selling in commodity futures. While maize (corn) prices also fell back somewhat, they still registered significant net gains. These reflected more fundamental future supply concerns, with evidence of continued heavy industrial and feed demand and speculation about the additional plantings required in the US to prevent a further decline in stocks.
In contrast, oilseed prices registered a sharp fall despite initial strength, with markets also noting the improved crop prospects in South America. Trends in international rice prices were mixed in the past month, export values in Thailand firming somewhat while those in Vietnam falling back as the main harvest gathered pace. Dry bulk ocean freight markets, especially in the non-grain sector, initially declined further due to excess capacity, but then displayed a firmer trend, with higher bunker fuel prices also a factor.
Grains supply and demand in 2010-11: The latest assessment of the global grain situation in 2010-11 shows little overall change from last month. Mainly due to revisions to the southern hemisphere crop estimates there is a 2m. ton increase in the world grain production estimate for 2010-11, to 1,728m. tons (1,793m.). However, this is accompanied by an increase of 3m. tons in the consumption forecast, mostly because of higher than anticipated use of maize for ethanol (in the US) and of wheat for feed. Total consumption of grains is now placed at 1,790m. tons, up from 1,761m. in 2009-10, therefore exceeding output by 62m. tons. This is reflected in a drop in stocks at the end of 2010-11 which, at 341m. tons, will be the smallest since 2007-08.
Wheat: World wheat production in 2010-11 is placed only marginally higher than before, at 648m. tons, with an increase in the estimate for Argentina balanced by a reduction for Australia. The forecast of consumption is almost unchanged, at 661m. tons (649m.), as a larger feed use estimate is offset by smaller figures for food and industrial use. Feeding of wheat is being boosted by competitive prices relative to maize and by ample lower-grade export availabilities in Australia and Canada. Strong export demand for these supplies contributes to an increased forecast of world trade, up by 0.9m. tons, to 123.6m. The forecast of world wheat stocks at the end of 2010-11 is unchanged from last month, at 185m. tons, down by 13m. from the start of the season.
Maize: World maize production in 2010 is forecast at 811m. tons, 2m. higher than last month but down 2m. from the previous year’s record. Yield prospects improved in Brazil but declined in Argentina and South Africa. The consumption forecast is raised by 3m. tons, to a record 845m., some 30m. higher than last year. Industrial use is up 2m. tons from before, reflecting increased demand from US ethanol and HFCS manufacturers. World closing stocks are forecast to fall by 22%, to a four-year low of 119m. tons. US carryovers are placed at just 17.1m. tons (43.4m.), lowering the stocks-to-use ratio to 5%. Global trade (July-June) is forecast to increase by 8% to 93m. tons.
Rice: At 450m. tons, the forecast of global rice production in 2010-11 is placed slightly lower than in January, but is still 10m. higher than in the previous year, following bigger crops in India and China. Increased use in those countries is expected to result in a 2% rise in consumption, to an all-time high of 447m. tons, while the larger global outturn will also enable an increase in ending stocks, to 96.9m. (93.9m.). At 30.5m. tons, global rice trade in calendar 2011 is forecast to expand by around 1%.
India’s economy planners when discussing agriculture are no closer to farm and field realities. That much is clear from a reading of the ‘Review of The Indian Economy 2010-11’, by the Economic Advisory Council to the Prime Minister, released to the public on 2011 February 22.
The document had, I suspect, been finalised and was waiting for the data from the Second Advance Estimates of agricultural production for the 2010-11 year. A cursory analysis of this forms the ‘Agriculture’ section of the ‘Review’ [read the relevant portions of the Review here].
It is in the ‘Concluding Comments’ section concerning agriculture in India that the intent and direction of the current government are underlined. There are a few strong pointers:
* “As against the target of average 4 per cent growth during the Eleventh Plan period, the actual average growth is likely to be slightly less than 3 per cent.” Which only indicates that ‘growth’ in the agricultural sector will continue to be seen as a primary consideration, outweighing the sustainable use of natural resources management. The growth insistence will also mean the continued support of high-input and financially burdensome agricultural methods.
* “Somewhat in parallel, the per capita availability in grams per day has also not gone up in a context where per capita income has been rising quite strongly.” The Economic Advisory Council has not been honest enough to draw the needed connections – between population growth and therefore foodgrain demand, and the need for urgently revisiting the basis for planning agricultural cultivation at the district level.
* “The international prices for grain have been very volatile and much elevated in recent times and therefore higher levels of domestic output is an even more important factor to consider in the context of domestic food security.” This is spot on. Why doesn’t the rest of the Concluding remarks section build on this?
* “Attention must be focused on building rural infrastructure, developing technologies that are appropriate to the region which have to be disseminated – delivered in an efficient fashion. The institutions that are enjoined with this task have to be activated in a more energetic fashion.” The Concluding Remarks does not build on the above point because of such weak, vague and misguided points as this one. ‘Technologies’ and ‘Infrastructure’ for growth at 4%? Or for food security?
* “The liberalization of the economy has benefited the farm sector and as a result the terms of trade for agriculture are no longer adverse.” This is one of the Big Contradictions of the Review. No, the liberalisation of the economy has NOT benefited the farm sector. Has the Government of India and its economic planners so quickly and so completely forgotten that 200,000 farmers have committed suicide over the last decade?
* “Investment in the farm sector has also picked up substantially and capital formation as a percentage of agricultural GDP has more than doubled in the past decade.” To what end? To achieve the 4% growth target which is denominated in ‘technology’ and ‘infrastructure’ in the agri sector? Has there been even 2% annual growth in the incomes of the cultivating households?
* “There seems to be evidence that better quality seeds and superior cultural practices are available, but the delivery system for translating these to the field are lagging.” This is where the threat in the Review lies. What delivery systems and who owns them?
* “A major hurdle in agricultural development is the inefficiency of the delivery systems. There is a plethora of institutions in research, extension, credit and marketing. However, efficacy of these institutions to deliver goods and services to the country’s vast small and marginal farms section is quite limited. This is a serious cause for concern.” True. How to support this point and rescue it from the overall contradictions of the Concluding Remarks?
* “There is need therefore, to attune these various institutions to the emerging agrarian structure, which is progressively identified with the small and marginal farmers.” True.
* “A two-fold strategy is indicated for this purpose. One, to encourage farmer’s collaborative efforts as in cooperatives, or more recently in producers companies, and vertical integration of production and marketing by suitable models of contract farming.” Emphatically NO. This is not the answer.
* “Two, at the institutional level, the organizational changes to cut down the cost of transactions (e.g. through a flexible and inclusive business correspondent model) and the use of information technology for the same purpose needs to be encouraged.” True with reservations. Infotech is a means and not an end.
* “In addition both for purposes of ensuring remunerative prices for farmers as well as an anti-inflationary measure, the strengthening of organized retail, as well as use of these outlets for public distribution along with the strengthening of the existing public distribution networks, are measures that need to be tried out seriously.” This is dreadfully ill-advised and apparently motivated by the FDI-seeking stand of the central government. This point of view must be stopped immediately. Dozens of farmers’ cooperatives and small traders have clearly and vociferously rejected FDI-driven organised retail in India. This point holds the back door open for the entry of corporate retail and will be used to legitimise retail control over access to food to vulnerable rural populations.
* “Local procurement by State Government agencies provides an incentive for farmers to grow grain. Coarse cereals are a varied commodity and tastes differ across States. There is also a problem in handling coarse grains.” Yes, yes and no. This point must be supported and rescued from the other corporate-oriented directions of the Review.
The Farm and Ranch Freedom Alliance has reported that one of the USA’s s senior soil scientists has alerted the national government to a newly discovered organism that may have the potential to cause infertility and spontaneous abortion in farm animals, raising significant concerns about human health.
Dr Don Huber, professor emeritus at Purdue University, believes the appearance and prevalence of the unnamed organism may be related to the weed killer known as Roundup (made by Monsanto) and/or to something about the genetically engineered Roundup-Ready crops. In a letter to US Secretary of Agriculture Tom Vilsack, the professor called on the US national government to immediately stop deregulation of Roundup Ready crops. His letter begins:
Dear Secretary Vilsack: A team of senior plant and animal scientists have recently brought to my attention the discovery of an electron microscopic pathogen that appears to significantly impact the health of plants, animals, and probably human beings. Based on a review of the data, it is widespread, very serious, and is in much higher concentrations in Roundup Ready (RR) soybeans and corn—suggesting a link with the RR gene or more likely the presence of Roundup. This organism appears NEW to science!
This is highly sensitive information that could result in a collapse of US soy and corn export markets and significant disruption of domestic food and feed supplies. On the other hand, this new organism may already be responsible for significant harm My colleagues and I are therefore moving our investigation forward with speed and discretion, and seek assistance from the USDA and other entities to identify the pathogen’s source, prevalence, implications, and remedies.
We are informing the USDA of our findings at this early stage, specifically due to your pending decision regarding approval of RR alfalfa. Naturally, if either the RR gene or Roundup itself is a promoter or co-factor of this pathogen, then such approval could be a calamity. Based on the current evidence, the only reasonable action at this time would be to delay deregulation at least until sufficient data has exonerated the RR system, if it does.
For the past 40 years, I have been a scientist in the professional and military agencies that evaluate and prepare for natural and manmade biological threats, including germ warfare and disease outbreaks. Based on this experience, I believe the threat we are facing from this pathogen is unique and of a high risk status. In layman’s terms, it should be treated as an emergency.
The updated estimates for foodgrain and commercial crops have been released by India’s Ministry of Agriculture. This is the first revision for 2011.
There are updated estimates for rice, wheat, coarse cereals and pulses, and also for oilseeds, cotton, jute and sugarcane.
I have updated my running spreadsheet with the new data. From the 2008-09 year the spreadsheet contains the advance estimates (1st, 2nd, 3rd, 4th/final estimates).
The spreadsheet also has the final crop production data back until 1997-98. You’ll find more on the agriculture page.
Higher global wheat prices have fed into sharp increases in domestic wheat prices in many countries, the February 2011 Food Price Watch of The World Bank has said. The transmission rate of global wheat price increases to the domestic price of wheat-related products has been high in many countries, according to the report. “For instance, between June 2010 and December 2010, the price of wheat increased by large amounts in Kyrgyzstan (54%), Bangladesh (45%), Tajikistan (37%), Mongolia (33%), Sri Lanka (31%), Azerbaijan (24%), Afghanistan (19%), Sudan (16%), and Pakistan (16%). Several of these countries have a large share of calories consumed from wheat-based products, particularly for the poor. Global food prices continue to rise, though not uniformly for all grains.”
The World Bank’s Food Price Watch is produced by the Bank’s Poverty Reduction And Equity Group, Poverty Reduction And Economic Management Network. The World Bank’s food price index rose by 15% between October 2010 and January 2011, is 29% above its level a year earlier, and only 3% below its June 2008 peak. A breakdown of the index shows that the grain price index remains 16% below its peak mainly due to relatively stable rice prices, which are significantly lower than in 2008. The increase over the last quarter is driven largely by increases in the price of sugar (20%), fats and oils (22%), wheat (20%), and maize (12%).
Maize prices have increased sharply and are affected by complex linkages with other markets. In January 2011, maize prices were about 73% higher than June 2010. These increases are due to a series of downward revisions of crop forecasts, low stocks (U.S. stocks-to-use ratio for 2010-11 is projected to be 5%, the lowest since 1995), the positive relationship between maize and wheat prices, and the use of corn for biofuels.
Ethanol production demand for corn increases as oil prices go up, with sugar-based ethanol less competitive at current sugar prices. Recent United States Department of Agriculture (USDA) estimates show the share of ethanol for fuel rising from 31% of U.S. corn output in 2008-9 to a projected 40% in 2010-11. Increased demand for high fructose corn syrup from countries such as Mexico, as they substitute away from higher priced sugar, also contributes to higher demand for corn. Prospects of easing in this market depend partly on the size of the crops in Latin America, particularly Argentina, which has been affected by unusually dry weather due to the La Nina effect, and the extent of import demand from China in 2011 as well as oil and sugar price trajectories.
Domestic rice prices have risen sharply in some countries and remained steady in others. The domestic price of rice was significantly higher in Vietnam (46%) and Burundi (41%) between June–December 2010. Indonesia (19%), Bangladesh (19%), and Pakistan (19%) have increased in line with global prices. These Asian countries are large rice consumers, especially among the poor. Rice prices have increased in Vietnam despite good domestic harvests. This is primarily due to the depreciation of the currency, which has fuelled overall inflation and expectations of higher demand from large importers and led to the minimum rice export price being raised by the Vietnamese government. Rice price increases in Sri Lanka (12%) and China (9%) have been relatively moderate in the second half of 2010, while in Cambodia and the Philippines the retail price of rice remained largely unchanged during this period.
Largest Movers in Domestic Prices, June to December 2010
Kyrgyzstan (retail, Bishkek) 54%
Bangladesh (retail, national average) 45%
Tajikistan (retail, national average) 37%
Mongolia (retail, Ulaanbaatar) 33%
Sri Lanka (retail, Colombo) 31%
Azerbaijan (retail, national average) 24%
Afghanistan (retail, Kabul) 19%
Sudan (wholesale, Khartoum) 16%
Pakistan (retail, Lahore) 16%
Vietnam (retail, Dong Thap) 46%
Burundi (retail, Bujumbura) 41%
Bangladesh (retail, Dhaka) 19%
Pakistan (retail, Lahore) 19%
Indonesia (retail, national average) 19%
Mozambique (retail, Maputo) 14%
Burundi (retail, Bujumbura) 48%
Cameroon (retail, Yaounde) 43%
Uganda (wholesale, Kampala) 38%
Kenya (wholesale, Nairobi) 22%
Brazil (wholesale São Paulo) 56%
Argentina (wholesale, Rosario) 40%
Rwanda (wholesale, Kigali) 19%