Resources Research

Making local sense of food, urban growth, population and energy

Posts Tagged ‘Sugarcane

Why our kisans must make sustainable crop choices

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The 2015-16 fourth advance estimates for commercial crops, when compared with the annual averages for five year and ten year periods, visibly displays the need for more rational crop choices to be made at the level of district (and below), in agro-ecological regions and river sub-basins.

RG_2016_cashcrops4_201608For this rapid overview of the output of commercial crops for 2015-16 I have compared the Fourth Advance Estimates of agricultural production, which have just been released by the Ministry of Agriculture, with two other kinds of production figures. One is the five-year average until 2014-15 and the second is the ten-year average until 2014-15.

While a yearwise comparison is often used to show the variation in produced crops (which are affected by price changes, policies, adequacy of the monsoon and climatic conditions), it is important to compare a current year’s nearly final crop production estimate with longer term averages. Doing so allows us to smooth the effects of variations in individual years and so gauge the performance in the current year against a wider recent historical pattern. (See ‘How our kisans bested drought to give 252.2 mt’.)

The output of the nine oilseeds taken together is less than both the five-year and ten-year averages. Significant drops are seen in the production of soyabean, groundnut and mustard and rape – these three account for 88% of the quantity of the nine oilseeds (castorseed, sesamum, nigerseed, linseed, safflower and sunflower are the others). Between the fibre crops – cotton, and jute and mesta – the output of cotton is considerably under the five-year average, while that of jute and mesta is under both the five and ten year averages.

It is in the figures for sugarcane that the message lies. The 2015-16 output of sugarcane is marginally above the five-year average and handily above the ten-year average. This needs to be considered against the background of two drought years (2014 and 2015) and the drought-like conditions that were experienced in many parts of the country during March to May 2016.

As these are near-final estimates, this only means that the allocation of water for such a large crop quantity – 352 million tons of sugarcane is about 100 mt more than the foodgrains output of 252 mt – was assured even during times of severe shortage of water.

This is a comparison that needs urgent and serious study, not with a view to change overall policy but to decentralise how crop – and therefore inputs and water – choices are determined locally so that self-sufficiency in food staples and the sustainability of cash crops can be achieved. These are quantities only and do not tell us the burdens of inputs (chemical fertiliser, hazardous pesticides, malignant credit terms) or the risks (as cotton cultivators have experienced this year) but where these are known from past experience their effects can well be gauged.

Written by makanaka

August 13, 2016 at 12:47

India’s crop quotas for a rain-troubled year

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In this graphic, the size of the crop squares are relative to each other. The numbers are in million tons. Rice, wheat, pulses, coarse cereals, sugarcane. oilseeds and the fibre crops are the major categories for the 2014-15 crop production targets. What is always left out from the 'foodgrain'-based projections are vegetables and fruit, and these I have included based on the 2013-14 advance estimates for horticultural crops.

In this graphic, the size of the crop squares are relative to each other. The numbers are in million tons. Rice, wheat, pulses, coarse cereals, sugarcane. oilseeds and the fibre crops are the major categories for the 2014-15 crop production targets. What is always left out from the ‘foodgrain’-based projections are vegetables and fruit, and these I have included based on the 2013-14 advance estimates for horticultural crops.

Your allocation for the year could be 136 kilograms of vegetables, provided the monsoon holds good, which at this point in its annual career does not look likely. We need the veggies (not just potato, onion, cabbage and tomato) as much as fruit. But the central government is more traditionally concerned with ‘foodgrain’, by which is meant rice, wheat, pulses and coarse cereals.

That is what is meant by the ‘foodgrain production targets’, which have been issued by the Ministry of Agriculture for 2014-15 – as usual with scant sign of whether the Ministries of Earth Sciences and Water Resources were invited to a little chat over tea and samosas. I would have expected at least a “what do you think dear colleagues, is 94 million tons of wheat wildly optimistic given the clear blue skies that o’ertop us from Lutyens’ Delhi to Indore?” and at least some assenting murmurings from those foregathered.

But no, such niceties are not practiced by our bureaucrats. So the Ministry of Agriculture gruffly rings up the state agriculture departments, bullies them to send in the projections that make the Big Picture add up nicely, sends the tea-stained sheaf to the senior day clerk (Grade IV), and the annual hocus-pocus is readied once more. What the departments in the states say they are confident about is represented in the chart panel below, which shows you for rice, wheat, coarse cereals and pulses the produce expected from the major states. The question is: will monsoon 2014 co-operate?

Rice, wheat, coarse cereals and pulses, and the states which grow them the most, targets for 2014-15, using data from the Ministry of Agriculture

Rice, wheat, coarse cereals and pulses, and the states which grow them the most, targets for 2014-15, using data from the Ministry of Agriculture

Written by makanaka

July 12, 2014 at 18:25

Updated crop estimates for India 2011

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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.

Written by makanaka

February 19, 2011 at 11:36

The luxury auto madness of Aurangabad and Kolhapur

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Aurangabad city's Shahganj area: the wide and clear avenues, spacious squares, well-regulated traffic and absence of pesky pedestrians and vendors make it a pleasurable drive for the privileged BMW/Mercedes owner.

Aurangabad and Kolhapur, both cities in the state of Maharashtra, western India, have begun an alarming new trend in conspicuous consumption which is extraordinary even by the profligate standards of India’s new urban rich. Groups of residents in both cities have banded together to set records for the number of luxury cars – BMW and Mercedes Benz – ordered in a single day!

In October 2010, a group of wealthy Aurangabad residents took delivery of 150 Mercedes Benz saloons, in a deal worth an estimated 650 million rupees for the auto brand and its regional dealer (based in the city of Pune, Maharashtra). Also in October 2010, a group of wealthy Kolhapur residents decided that if there is to be a mass purchase of luxury cars, their city should be second to none. In early December 2010, according to news reports, the group had swelled to 180 and they were aiming for 200, each of whom would place an order for a Mercedes Benz. Meanwhile, the wealthy residents of Aurangabad decided now to make a mass order of 101 BMW saloons (a deal worth an estimated 400 million rupees), which they expect to take delivery of in January 2011.

Aurangabad is a city of around 900,000 residents (2001 Census) while Kolhapur is home to around 500,000 residents (2001 Census). Until 15 years ago, both cities were centres of trade in agricultural produce, cotton and sugarcane being the respective dominant crops. The economic ‘liberalisation’ in India has clearly brought about the transformation whose effect we are seeing in the mass booking of luxury saloons. Why do these residents think their action is important?

Kolhapur city's Kasba Gate area: the wide and clear avenues, spacious squares, well-regulated traffic and absence of pesky pedestrians and vendors make it a pleasurable drive for the privileged BMW/Mercedes owner.

Sacheen Mulay is the president of the Aurangabad Chamber of Commerce and Industry and a Mercedes Benz owner. He is reported as saying that the group of car buyers wanted to change the image of Aurangabad as a backward, sleepy destination. “Buying a 150 Mercedes is not a joke,” Mulay insisted. “We wanted recognition in the world. Aurangabad is not a small place. We are potential buyers and there are very upcoming entrepreneurs in Aurangabad.” Reportage on the Aurangabad mass buyers also mentioned that a huge shopping mall that opened last month has quickly become popular with residents, who are asking for more luxury brands, a bowling alley, and a nightclub.

Anand Mane, president of the Kolhapur Chamber of Commerce, is the point person for his city’s group of mass luxury saloon buyers. “More than 180 people have already registered their names with us. After the models are displayed in the city, we expect more than 200 people to buy the car. This car is a status symbol and hence, the demand for the vehicle is higher compared to other cars,” said Mane. Kolhapur district has a number of sugar mills and industrial estates. The estimate is that the city already has a population of over 1o0 Mercedes Benz cars, but their owners have to send the vehicles to Pune to get them vehicles serviced. With the big order, Mercedes Benz has started building its first service station in Kolhapur.

If the wealthy Kolhapur residents reach their target of 200 for the Mercedes Benz mass purchase, that deal will be worth about 870 million rupees and together, the luxury auto-obsessed groups in Aurangabad and Kolhapur will have given the Pune-based dealers of Mercedes Benz and BMW business worth 1,920 million rupees. Who are the people who have made these purchase decisions in the name of collective status? Businessmen, young entrepreneurs, politicians, lawyers, doctors and other professionals, say the news reports. [That there is a powerful ‘status’ logic at work in these two cities has been touched upon in an earlier post on the subject of automobiles in India.]

The car-buying groups are using their business skills to pressure the dealers and banks to giving them concessional terms for their record-breaking purchases. “We are negotiating with the dealers to find out what incentives they can give us,” Kolhapur businessman Yogesh Kulkarni told news media. “An insurance company has promised to insure the car at 50% of the normal rate. Some banks are also ready to give loans at discounted interest rates.”

Mercedes Benz and BMW dealers are being asked for discounts of 10-20%, the groups are negotiating with the State Bank of India (a nationalised scheduled commercial bank) to get a loan for seven years (against the normal five years) at 7% interest (well under the 10-11% effective rural rate of inflation), and an insurance company is said to be offering motor insurance at a 50% discount.

“We want to show the world that Aurangabad is no more backward but ahead of metropolitan cities,” said Pankaj Agrawal, an Aurangabad businessman and one of the mass purchase group. What do Agrawal, Mulay and Mane consider as being “backward”? The news reports don’t tell us. We also don’t know how the expense of 1.9 billion rupees on 450 luxury automobiles is seen as a step out of “backwardness” and a step ahead of the metropolitan cities.

How do these purchases compare with living conditions in Maharashtra? Annual median household income in rural Maharashtra is 24,700 rupees (2005 data from the India Human Development Survey – this will have not in my view changed substantially given the debt shocks, agricultural stagnation and overall conditions of employment and from 2007 onwards) while in urban Maharashtra it is 64,600 rupees. Thus the total amount spent in this period of 2010-11 by the wealthy luxury auto-obsessed groups in Aurangabad and Kolhapur is equivalent to the combined annual incomes of 29,721 households in urban Maharashtra and to the combined annual incomes of 77,732 households in rural Maharashtra.

The how and why of sugar’s 30-year high

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Raw sugar prices have been rising in the world’s commodity exchanges following speculation that India, the world’s second-largest producer of sugar, is considering restricting exports to rebuild its inventory. The international financial press is reporting that the price of raw sugar in the commodity markets surged to a high as dry weather constrained output in Brazil, the world’s biggest producer, and on news that India may cap exports to boost domestic supplies. The last time sugar was as high was in January 1981. It has in recent days gained $16.10 to $751.10 per ton on the NYSE Liffe in Britain, a 2.2% increase.

“India is really the big question overhanging the market,” London-based trader Jake Wetherall of Rabobank International told Bloomberg. “It looks like India’s going to have a fairly good crop this year – it should be over 25 million tons for the first time in a few years – but the question is how much the government decides is going to be made available for export.”

Bloomberg reports, quoting industry association Unica on 28 October 2010, that output in Brazil’s Center South, the country’s biggest producing-region, dropped 30% in the first half of October from a year earlier. Stockpiles in India, the second-largest grower, are about 4 million metric tons, compared with the nation’s preferred level of 10 million tons, according to Rabobank International.

Raw sugar for March delivery rose to 30.12 cents/pound on ICE Futures U.S. in New York. Earlier, the price reached 30.64 cents, the highest level for a most-active contract since 15 January 1981. Sugar has more than doubled since touching a 13-month low on 7 May 2010 on concern that adverse weather will reduce output in Brazil, Russia, China and Pakistan.

Societe Generale SA raised price forecasts for raw and refined sugar, citing lower crop forecasts. Raw sugar in the fourth quarter will be 29.2 cents, up from a 17 September 2010 estimate of 17 cents, Emmanuel Jayet, an analyst in Paris, said in a report. The estimate for white sugar was raised to $744 a ton from $515.

Many sugar buyers have been relying on India, the world’s second-biggest producer of sugar, to keep export supplies running early next year, with the cane crushing season in top-ranked Brazil winding down this month. India has yet to make an announcement on its export policy, and government sources on Thursday said that the country, recovering from two seasons of sugar deficit, would not permit wholesale shipments for now. The comments added to fears of a supply squeeze as traders believe that Brazil’s sugar production may fall in 2011-12, affected both by dry weather as well as the credit crunch, which slowed investment in new mills and cane plantings.

On 4 November 2010 however Reuters reported that India will allow an additional 930,000 tonnes of sugar exports after 15 November 2010. The news agency quoted an unnamed government source. “So far we have allowed less than 600,000 tonnes. After 15 November 2010 we will allow more but after that we will go slow. Exports will only be allowed in a calibrated manner,” the senior government official told Reuters.

On 26 October 2010 Agrimoney had reported that world sugar prices are set to remain at elevated levels for years, to ensure producing countries – and notably Brazil – ramp up output to meet demand growth of more than 50% over the next two decades. Agrimoney quoted leading sugar industry trader Czarnikow. The briefing did not name a figure for sugar prices. However, Czarnikow’s head of analysis Toby Cohen told Agrimoney a figure of 22 cents/pound may be necessary to ensure sufficient supplies.

The group forecast that world sugar consumption will rise to 257m tonnes in 2030, boosted by growth in China and India, where rising wealth and population growth will foster doubling in demand. “Asia will become the largest sugar-consuming region, reflecting the rising economic status of India and China,” Czarnikow said in a report published to coincide with the annual sugar industry gathering in London. China, where urbanisation would give sugar demand an extra spurt, taking the country’s consumption above the European Union’s by 2014, was “clearly set to demonstrate significant demand growth”.

However, prospects for production growth were more uncertain, with land in many large producing countries, such as India and Thailand in short supply. In China, cane area “will come under increasing pressure” from rice which, as a staple food, is “likely to take priority. The US, there are plans to reincorporate some cane land in Florida into the Everglades national park. This leaves Brazil, which has a “comparatively unconstrained” ability to expand cane area, as likely to increase further its dominance over world production, of which it currently provides 23%, and exports, of which it is responsible for about 60%.

Importers and consumers are set “to become ever more dependent upon Brazilian supply”, the briefing said. “However, as with any investment, it will have to be paid for by higher returns and, as the market evolves, we believe sugar consumers will need to adjust to higher prices.” Brazilian investment will be needed in infrastructure as well as directly in sugar production, Czarnikow added, stressing the country’s logistical bottlenecks, which were evident in a struggle this year to keep up with demand. The report also highlighted the potential for the European Union and Russia to return to sugar exports.

What does Czarnikow say in detail about sugar? (1) We have revised our growth forecast for 2010-11 down from 17.4m mtrv to 14.8 m mtrv. (2) During 2010/11, we project cane sugar production to rise to 137.9m mtrv from 123.1m mtrv last year, while beet sugar production is unchanged on last year’s at 34.3m mtrv. (3) We are estimating global consumption in 2010 at 167.9m mtrv rising to 171.3m mtrv in 2011.

“Although it is still very early in the cycle, the idea that next year’s sugar balance will be resolved through an increase in global production now seems less certain. Extreme weather conditions in Russia and Pakistan have crushed hopes of an increase in production in the 10/11 season, while growth in many other areas of the world is not likely to be as strong as first expected.”

Here is a country breakdown provided by Czarnikow: Brazil – The mid-August total of 338 million tonnes of cane crushed represents round 60% of the CS Brazil cane total and we are expecting total production to reach 41.7m mtrv. India – Indian crop prospects for 2010/11 continue to look promising; we expect sugar production to increase by around 30% to reach 27.1m mtrv. Pakistan – Although serious floods have displaced up to 20% of Pakistan’s population, we are holding our figure unchanged at 3.75m mtrv. EU – Our projection has been revised down by 0.4m mtrv to 16.2m mtrv. Russia & FSU – Russian beet crop prospects in Central and Volga regions have been damaged by a heatwave, so we have reduced our production estimates from 4.1m mtrv to 3.3m mtrv. China – We expect 13.2m mtrv during 2010/2011, but with consumption at 16.1m mtrv, the country will be in deficit. Thailand – The forthcoming crop is now expected to reach a similar level to last year at around 7.6m mtrv, down from our initial estimate of 8.4m mtrv.

Who is Czarnikow? “Czarnikow operates from a head office in London and a network of 10 regional offices to service clients and customers globally. Commercial involvement in physical sugar transactions in excess of 8 million tons of sugar each year assures that we have a first hand presence in all major sugar markets of the world. Czarnikow has been in the sugar business since 1861 and is the premier provider of world sugar market services.”

India foodgrain and commercial crops data

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Here in one convenient Excel file is the annual data from the release of Advance Estimates of crop production for India. This is from the Ministry of Agriculture, Government of India, and is usually posted on the website of the Department of Agriculture and Cooperation.

The file contains the annual estimates for 1997-98 to 2006-07, two advance estimates for 2007-08 and the full four advance estimates for 2008-09 and 2009-10. The Ministry, just to make things more interesting for the toiling masses, posts the data as a grubby two-sheeter pdf image. I’ve been careful about the numbers.

These estimates are for all major crops covered by the Ministry and in rabi and kharif where applicable: rice, wheat, jowar, bajra, maize, ragi, small millets, barley, coarse cereals, cereals, tur, gram, urad, moong, pulses, kharif, rabi, groundnut, castorseed, sesamum, nigerseed, rapeseed, mustard, linseed, safflower, sunflower, soyabean, oilseeds, cotton, jute, mesta and sugarcane.

How many onions in this mandi?

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Wordcloud credit: www.wordle.net

Wordcloud created at wordle.net from names of major crops and states

Who finds and collects the numbers – the enormous diverse sets of numbers – that help describe India’s agriculture? How these are found and used is an absorbing story. In their most encapsulated form, they are given to us as micro-tables by the Ministry of Agriculture in weekly briefings in New Delhi. Depending on the time of the year, these ar titled “rabi sowing progressing well” or “kharif sowing progressing well” (that didn’t happen in 2009, with the failed monsoon, but these habits are hard to break).

Our agri-bureaucracy is large and deep. It’s big enough to rival other countries’ entire administrations. Who in all that byzantine maze is responsible for keeping track of the dozens of foodgrain crops, dozens of commercial crops, the land use in 35 states and union territories, the vast network of departments, research institutes, agricultural extension offices, state agricultural universities, livestock, fisheries, boards and finally the tens of thousands of farmers’ cooperatives?

Here’s a short attempt at describing this universe. The Ministry of Agriculture consists of three departments: Department of Agriculture and Cooperation; Department of Animal Husbandry, Dairying and Fisheries; and Department of Agricultural Research and Education. Each department has its own statistical organisation and system, and I have my doubts about whether they exchange data and methods on subjects that matter.

There’s an Agriculture Census Division which is responsible for organising the quinquennial agricultural census and input surveys in the country in collaboration with the State Agricultural Census units. There are two main statistical activities of the Division: the Agriculture Census and the Input Survey. The Agriculture Census collects quantitative information about the structure of agriculture in India. So far, seven Agriculture Censuses from 1970-71 and six Input Surveys since 1976-77 have been completed.

Ploughing a field in Satara district, Maharashtra

Ploughing a field in Satara district, Maharashtra

The Directorate of Economics and Statistics (DES) is responsible for “collection, collation, dissemination and publication of statistical data on diverse facets of agriculture and allied sectors, required for planning and policy formulation by the Government”. The Agricultural Statistics Division maintains state-wise estimates of area, production and yield of 44 principal crops (27 major and 17 minor) under the two broad seasons of kharif and rabi. The estimates are updated annually in February or March after the release of final estimates of area, production and yield of the preceding agricultural year. This Division also estimates and measures demand and supply projections of foodgrains, oilseeds and other commercial crops. Agricultural wages constitute a major item towards cost of production. Data on agricultural wages in 17 states is collected by DES every month, the wage data relate to the agricultural year (July to June).

Then there is a ‘Timely Reporting Scheme’ which assesses the area sown under principal crops on the basis of what it calls “complete enumeration of 20% villages selected randomly”, which in country with 600,000 villages is a lot. This scheme is put to work in 16 land record states – Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, Tamil Nadu, Uttar Pradesh, Uttarakhand, Jharkhand and Chattisgarh – and 2 Union Territories – Delhi and Puducherry.

The Cost Study Division implements the “Comprehensive Scheme for Studying the Cost of Cultivation of Principal Crops in India”. This division compiles cost data on principal agricultural crops grown in India: barley, gram, jute, lentils, peas, rapeseed and mustard, safflower, sugarcane, wheat, arhar (tur), bajra, coconut, cotton, groundnut, jowar, maize, moong, nigerseed, onion, paddy, potato, ragi, sesamum, soyabean, sunflower, tapioca, urad and tobacco. This division supplies cost estimates to the all-important Commission for Agricultural Costs and Prices (CACP) which then makes “suitable recommendations” on the Minimum Support Prices of 24 agricultural commodities, which it is then the responsibility of the state governments to ensure that each state’s farmers are paid (at least) those prices for the major crops they bring to the procurement yards.

Finally, there’s the Prices and Markets Division, which collects data on wholesale prices, retail prices, farm harvest prices and market arrivals of selected agricultural commodities from all over India. The bulk of the daily and weekly commercial data is gathered by this division and the scale and scope is staggering: weekly wholesale prices of 154 agricultural commodities are collected from around 600 selected markets and centres; weekly retail prices of 45 food items and monthly retail prices of 43 non-food items from 87 selected markets and centres covering 32 states and union territories. The prices are collected every Friday. It also collects annual farm harvest prices for 26 principal crops from all major states and union territories.

That, in a nutshell, is the story of the numbers that (we hope) help describe India’s agriculture.