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On Record Contract farming: Joining hands for mutual gains |
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Profile Reflections Diversities — Delhi Letter Kashmir Diary
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On Record
THE textile sector is passing through a critical phase. The quota regime which has helped industry achieve a decent growth over the years will end this December. However, a section of the industry fears that because of political compulsions, the Centre may not push labour reforms though the Indian textile industry would find it difficult to compete with its counterpart in China, Taiwan or Pakistan and Sri Lanka. Union Textiles Minister Shankersinh Vaghela says, in an interview to The Sunday Tribune that besides various incentives and excise exemption in the Budget, the Centre won’t shy away from relaxing labour laws “for ensuring a level playing field to our exporters and manufacturers in the present global environment.” Excerpts: Q: The global era of textile trade without quotas from Jan 1, 2005 poses challenges and brings new opportunities for the Indian textile industry. How will the Centre help the industry to meet these challenges? A: The Textiles Ministry and the industry are fully aware of the implications of the phasing out of quota system. The liberalised trading regime would provide unrestricted access as also result in unrestricted competition in the world market. I am constantly engaged in a dialogue with the industry and the departments concerned. I am attaching top priority to export-related aspects. We will evolve fresh policy initiatives to help industry reap the opportunities of the post-quota regime. Q: Is the government making drastic changes in the textile policies? A: The implementation of the National Textile Policy (2000) is being reviewed periodically and necessary changes made according to the emerging needs of the industry. Q: What will be the Government’s stand on the demands of the textile industry to introduce labour reforms? Will it go slow on this in view of the Common Minimum Programme (CMP)? A: The apparel industry is highly dependent on labour productive norms. The government would consider amendments to labour laws for ensuring a level-playing field for exporters and manufacturers in the present global environment. However, in the spirit of the CMP, the workers’ rights would have an overriding priority. Some states have already relaxed labour laws for units in the special economic zones and apparel parks. Q: The Technology Upgradation Fund Scheme for modernising the industry has not evoked response despite progressive dilution of norms. What is your policy on FDI in this sector? A: When this scheme was launched in 1999, the government hoped that it will attract investment in the textile sector to the tune of Rs 25,000 crore in the next five years. However, the performance of the industry in availing itself of assistance from the scheme during the past 65 months has not been encouraging. To popularise the scheme, the government is now ensuring effective coordination between states, banks and industry associations. The focus is on clearing more loan cases under the scheme. To encourage FDI, the government has already allowed 100 per cent foreign equity participation in the textile sector under the automatic route except the knitting/hosiery sector. Q: While the spinning sector is well developed and competitive, the weaving and processing sectors are weak. Is there any proposal to offer special incentives and support for handloom, powerloom and processing sectors? A: The demand for finished fabrics and processed yarn from the importing countries is meagre owing to the old and moderate processing technology in our country. The exporters, therefore, send out only grey fabrics/yarns which are subsequently processed by the importers. The impact of this kind of supply adversely affects the price in the absence of value addition and results in lower earnings. We will upgrade this sector to take care of both the quality of products and life of the people. To encourage modernisation of the processing industry, the import of a large number of textile processing machinery has been allowed under concessional customs duty of 5 per cent. The import of certain specified textile machinery items has been exempted from countervailing duty. Such indigenous machinery items have been given excise exemption. The government has also set up a network of textile testing laboratories to provide various types of testing facilities at an easy distance to the industry at normal charges. Q: In your drive towards modernisation, will you safeguard the interest of the domestic textile machinery industry? A: The government has been trying to provide a level-playing field to the domestic textile machinery industry while considering liberalisation of import of textile machinery. For instance, the import of many textile machinery items has been allowed concessional customs duty. So also the import of parts for manufacturing and spare parts for the maintenance of such machinery items required by the domestic machinery. Q: Do you think that compared to IT, the textile industry has not been getting adequate support from the government? A: No. In the Union Budget, substantial fiscal duty restructuring has taken place coupled with policy initiatives. These would enable the industry to invest in capacity building in terms of technology, expertise and production facilities so as to cash in on the emerging opportunities in the international market. I will try to seek support whenever necessary from other Departments/ Ministries for the development and growth of this industry. Q: What are the long-term strategies to achieve the ambitious target of $ 50 billion exports by 2010? How will the government deal with the non-tariff barriers and protectionist policies of the developed countries in the post-quota regime? A: Under the export promotion schemes, benefits such as Duty Entitlement Pass Book (DEPB), Duty Drawback, Export Promotion Capital Goods (EPGC), Advance Licence have been extended to the industry. In the Recent Foreign Trade Policy (FTP), a target plus scheme has been announced to incentivise the efforts of exporters to encourage exports. The government has a well-equipped machinery to deal with unfair practices in accordance with the WTO agreement. If any such case comes to our notice, action under anti-dumping countervailing measures of the WTO could be taken. Besides, the government is trying to create capacities within the domestic industry for making them knowledgeable about domestic and international laws on various trade defence measures like anti-dumping and
anti-subsidy. |
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Contract farming: Joining hands for mutual gains Globalisation has brought enormous opportunities for Indian agrarian economy. Besieged with problems like fragmented landholdings, the lack of infrastructure, particularly agro-processing facilities and the long process for marketing the produce, farmers and the agro-business industry can work together as partners towards prosperity. Though states like Haryana offer incentives to agro-processing industries, a proper mechanism is required for helping the farmers and the industry. Skills and facilities are needed in the area of value addition to primary produce in villages. The public and private sectors can lend a helping hand by promoting contract farming instead of buying land from small and marginal farmers, which renders them landless. Over the years, assured procurement of some crops at minimum support price has increased their production. However, this has created imbalances in the supply and demand of produce, putting strain on natural resources. The present marketing system has failed to provide a conducive environment to commodities having no government procurement/minimum support price like vegetables, fruits, medicinal plants, floriculture, pulses, oilseeds and minor crops. A slight increase in their production leads to price crash in the absence of proper storage and processing facilities. The existing agricultural marketing system is lacking in forward and backward linkages. The entry of private sector under set marketing rules and regulations may help overcome these bottlenecks. Small and fragmentation of land holdings, marketing intermediaries, the lack of capital, distress sale and consequent heavy losses are major problems faced by farmers. The lack of conditioned storage, transportation and agro-processing facilities along with wide price fluctuation are other impediments. As a result, the average annual post harvest losses in the case of vegetables and fruits are in the range of 9 to 40 per cent. In such a scenario, contract farming is emerging as a viable global model of farming wherein the industry and farmers can join hands for mutual gains. Contract farming provides an established market for the product to the farmers at assured price often negotiated in advance. Project sponsors usually organise transport for their crops, normally from the farm gate. Farmers’ price risk and post-harvest losses are thus significantly reduced. Small farmers are normally reluctant to adopt new technologies because of the possible risks and costs involved. They are more likely to accept new practices when they can rely on external resources for material and technological inputs. The farmer gets exposure to world-class agro-technology in the form of planting material and technical advice free at his doorstep. Having insulated from market risk, the focus of farmers shifts from prices to returns per acre i.e. an attitude driven by productivity increases with long-term planning and investments. Contract farming can be particularly beneficial for perishable commodities, where the farmers incur heavy losses. It encourages farmers to diversify their strategy towards perishable commodities that are needed by the food processing industry or the exporters. With a buyer in sight, the reliance of farmers on middlemen is almost eliminated. Also the farmers acquires new skills, technical and managerial, through contract farming. More important, contract farming reduces the transaction cost, especially the search cost and information cost about the availability of raw material. It ensures regular supply of requisite quality of produce regularly at predetermined prices. Industry gets access to crop production from land that would not otherwise be available to a company, with the additional advantage that it does not have to purchase it. Regular supply of quality produce allows companies to plan their long-term strategies. Also companies get ensured the availability of uniform produce for better price realisation. Contract farming with small farmers, particularly when the framer is not a tenant of the sponsor, is much more acceptable. The government has been trying to promote private sector participation in providing extension services by involving the corporate sector either through contract or cooperative farming. It will help the government in solving problems of food sufficiency, increasing disposable income of farmers to use better farm inputs and will lead to adoption of the latest agricultural technologies because of effective percolation due to extension services provided by the private sector. This will lead to overall growth and development of farming community. There is greater scope for contract farming in Haryana. The increasing income has created quality and health consciousness among consumers who demand food products of certain specifications. As the economy grows, the number of such discerning consumers is set to increase. Further, developed countries prescribe exacting standards of quality for imports of agricultural commodities and processed food from developing countries. We need to incorporate this food quality system in our food processing units. Otherwise, the Sanitary and Phytosanitary (SPS) agreement can act as a non-tariff barrier for our exports. It enables firms to have control over the production of agricultural commodities in various states, thus making it possible to meet such standards of food safety. Contract farming and the establishment of private markets in the notified area will help strengthen the exiting marketing system as also infrastructure facilities like processing, conditioned storage, packaging, quality control, transportation, market intelligence, export promotion etc. This will help farmers reap the benefits of technological development and globalisation of agricultural trade. International trade requires quality and value-added products. It will usher in a new vista to the small and marginal farmers through the provision of quality inputs at their doorsteps and the sale of farm produce from the production centre itself. Similarly, the establishment of private market in the notified market areas along with existing marketing system on public account will increase competition, thereby providing incentive prices to the primary and secondary agro-based industries, enlarging non-farm employment opportunities to the rural unemployed youth. The writer is Professor & Head, Department of Agricultural Economics, Chaudhary Charan Singh Haryana Agricultural University, Hisar |
Profile
Ashwani is a product of the prestigious St Stephen’s College of New Delhi. The late President of Pakistan General Zia-ul-Haq, External Affairs Minister K. Natwar Singh and Union Petroleum Minister Mani Shankar Aiyer were all Stephenians. Ashwani was neither Natwar nor Aiyer but his record as Stephenian has been impressive. His teachers had forecast that he would go high in life. He took legal profession as his career after completing his education. But he did not know at that time that he was destined to take a plunge in the weird world of politics. He made a mark in the Supreme Court as he crossed 30th year of his life. He joined politics as it was in his blood. Ashwani began his political career in Gurdaspur district in 1976. After a decade, his potential was recognised and was appointed Organising Secretary of the Punjab Pradesh Congress Committee in 1986. Those days militancy was at its peak in Punjab and Gurdaspur was the hotbed of terrorism. He kept constant touch with the district unit, organised mass campaign against militancy. Ashwani recalls that after 7 pm those days, a grave-like silence descended on the town and people lived in constant fear. Sometimes, he stayed alone in his sprawling house in Gurdaspur and often received threats from militants that he would be bumped off if he did not desist from his anti-militant activities. Ashwani belongs to a distinguished family of freedom fighters. His ancestors hailed from Lahore. His family had a traumatic experience of Partition days. They had to leave Lahore at night with only two trunks when a neighbouring Muslim family told them that their house would be attacked late that night. The train journey was dreadful till they crossed the borders. His grandfather was a journalist and owned a hotel in Lahore which was an abode of freedom fighters. Sheikh Abdullah too stayed there. Ashwani’s father, the late Prabodh Chandra, a veteran Congress leader of Punjab, led the rival group not favourably desposed to the one led by Chief Minister Pratap Singh Kairon. Known to Netaji Subash Chandra Bose, Prabodh Chandra was close to the Nehru family and was elected to the Provincial Assembly of Punjab in 1946. He had two terms in Lok Sabha in the seventies. Ashwani says that his father was personal friend of Feroze Gandhi. Feroze and Indira Gandhi had stayed at the family cottage in Pahalgam after their marriage. When Ashwani was married in 1975, Indira Gandhi attended the wedding more as a family friend than as the Prime Minister. As a parliamentarian, Ashwani has made a mark in the Rajya Sabha and various party fora. There is no single important debate in the Upper House in which he has not figured, making valuable contribution. He firmly believes that Parliament presents the single most important forum for informed debate on critical issues that confront the nation and says such issues need to be addressed beyond partisan consideration. He feels the decline of Parliament in recent years as a forum of debate is
indeed a cause for concern and serious introspection. Disruption of Parliament proceedings, session after session, will have to be
stopped. |
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Reflections AS I was planning to write for this fortnight, I received an e-mail from an American friend of mine whom I have known for a couple of years. I felt it was worth sharing. Here it is: “Fam trip you might ask. Well it was not only a fam trip (familiarisation trip for Thai travel agents) but a fab trip. I joined 20 ecotourism travel agents in Bangkok for a flight to Delhi. And away we went on Indian Airlines. No paper in the toilets but never mind the smell of Dettol indicated a sanitised spot. Off the plane in Delhi in a heavy heat of about 105 (42 degrees C?). On to a clean coach. Fresh and cool it seemed till we got going and found that we were in a fridge. And the request to turn down the cool was met with this response. You can have it two ways — hot or cold. We took cold. I noted the sign on the road said 180 kms. I did my math and figured 2-3 hours. But then there are the roads. Everything on them in spite of seeming like a four lane highway. Cows, bicycles, huge trucks, oxcarts, people, cars tuk tuks. In Delhi the buses and tuk tuks are all Green, running on LPG. Five and half hours later in Agra at midnight for a huge buffet and we went to bed with full and heavy stomachs. The next morning we were up and away to see the Taj Mahal. I hadn’t been in many years. I was struck at how orderly and well kept the grounds were. It still dazzles in spite of some wear and tear on the marble from pollution. But cars are not allowed near it. You are offloaded on to little electric buses. Makes for less noise which is at a premium everywhere else in India. With the Taj and Agra Fort behind us back to Delhi and a stop for dinner. By then dark and the traffic was thick and slow getting to our hotel. Never mind the best is about to happen in the morning. We flew to Srinagar the next morning with great views of the snows of the Himalayas. On arrival at the airport it looked like we had arrived at the wrong airport. More like a military base. Which it was as well as being the civil airport. Kashmir has been through some very bad times in the past years with the never ending dispute with Pakistan. We drove in our convoy of jeeps through a congested town that seemed to have no centre, no beginning and no end. We arrived at the edge of Dal Lake to be ferried across in the traditional shikaras (handsome tented boats with cushions to lounge on). And here no motors; just the sound of the oarsman dipping and paddling across the lake. The houseboat was elaborately carved and the interiors fitted out with furnishing from the 20’s. Three bedrooms. It was my luck to be in the Maharaja suite. Why not? The two ladies were then designated my Maharanis. We settled for 5 days there with many meals of good old British Raj food. Terribly boiled vegetables, lots of lamb. Read: mutton. Thais who eat all sorts of things are generally not too keen on lamb. But they travel well. Everyone produced a little jar of this and that to get the right taste out of otherwise neutral food. Porridge and cornflakes for breakfast. We took trips in the day to the Mughal Gardens, to the mountains where in the winter there are ski slopes. And finally up the road towards Ladakh to the high meadows near the glaciers and very near the Pakistani border. We were stopped often by large herds of sheep and Kashmiri goats heading to the lower valleys away from the coming snows. And while we did not have a military escort we did not need one. Everywhere without fail there were soldiers. Behind trees, in rice paddies, on hilltops among flower gardens, from the roofs! Of buildings they peered down. Handy machine guns ever at the ready. Our final day we took a quiet ride in a shikara and saw plenty of bird life. The trees around the lake and the mountains were turning. Poplar a shimmering yellow and willows turning silver blown in the winds. On the lake it is very quiet. Our departure day took us through what must be the middle of town. More soldiers, more guns and the expectation, it seems, that things were safe. Entry back to the airport was a maze of security checks and double checks and running my bags through the machine thrice. Inside more machines and no hand luggage allowed on board. I think they could train a few airports I have been through recently on detailed checks. So guns and cosmos behind us I have already plotted my return. But next time I would not fly in but go by road from Jammu and continue all the way to Ladakh. Kashmir wants tourists back and from my limited time it was certainly safe and very inviting. So if you are ready for a two- or three-week adventure next Fall, join us for all or part of a trip to a very special place in the world.” The writer is a Vipassana meditator and perhaps that is the reason why he perceives ‘the glass as half full and not half empty’. Strongly indicative of an attitude of how we perceive
things! |
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Diversities — Delhi Letter DAYS and evenings and nights lie packed here. Together with that roads lie super-packed. I must off load this one. Last weekend whilst in Connaught Place, I felt almost ill, zigzagging and then not finding a single vacant slot to park. Parking the car 2 km away, I had to hop into a three-wheeler, reaching the destination an hour late and in one of that hapless, exhausted looking condition. Wondered why there are more and more nursing homes and mini hospitals sprouting all along roads, inroads and highways. Anyway, to get moving. Good that the oldest German living in our country, 93-year-old former diplomat Alfred Wuerfel, has kept his autobiography short. Only till about 1951. He continues to live in Connaught Place (on the main Barakhamba Road). His autobiography “India: My Karma” (Allied) hits the stands this week. The following week there would be an elaborate do at the German Embassy here where Wuerfel had once headed the cultural wing. This German has had a passionate relationship with India. Coming here in 1935, heading straight towards Benaras to teach German and to learn Sanskrit till World War II. And with that the British kept him along with other Germans and Austrians and Italians in confinement for seven long years at Dehradun. Even after those years of confinement, he was packed back to Germany but he returned in 1947. In 1951, he joined the German Consulate in Mumbai and then in 1953 the German Embassy in New Delhi. He settled down here in a home which resembles a museum. A bachelor, he takes pains to outline the various relationships he had and even points to some photographs of women displayed in the drawing room. Surviving with the help of memories and a band of friends even now he has no desire to get back to the place of his roots.
Swaraj Paul
in the City
Yes, lords and ladies have a tendency to descend here in the season. But the reason why Swaraj Paul is here is to host a reception for his son Angad, who got married recently at London’s zoo. All the best for the marriage. And best wishes for the book that Angad had been planning to do on his father. |
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Kashmir Diary HOW
times change. Many of Kashmir’s young boys are all agog about the Ranji Trophy match between Orissa and Jammu and Kashmir that is to be played in Srinagar on November 16. It will be the first time in 15 years that a national match will be played here. The excitement among young cricket enthusiasts is palpable. Nor does anyone seem to fear that the match will become an opportunity for demonstrations of anti-India sentiment of the sort that erupted during the match India played against the West Indies at the same stadium in 1984. That October, Kapil Dev’s boys were treated to a hail of tomatoes, eggs and abuse. As in the rest of the subcontinent, cricket is the lifeblood of many young Kashmiris. But their hopes and aspirations to shine on the pitch have been frustrated for most of the last two decades of instability and violence. Over the past couple of years, however, things have changed for them. For example, three new practice wickets have been built and the three main pitches refurbished over the past few months at the Sher-e-Kashmir Stadium — reputed to be the fastest turf in the country. More important, perhaps, cricket clubs — comprising mainly school and college boys — have received a tremendous boost. A number of Kashmir’s businessmen have become patrons of such clubs and fund them generously. So, young boys who used to have a tough time maintaining bats of Kashmiri willow for their rare big games suddenly find themselves wielding bats of English willow worth twenty times the price of the local ones. And as their businessmen patrons vie with one another to promote the best team, some have handed out a dozen expensive bats — plus of course the entire cricket kit for each club member. So much popularity stems from such patronage that even Mirwaiz Umer Farooq, who heads the All Parties Hurriyat Conference, became president of a cricket club last spring. Of course, mainstream politicians can do much more and former Chief Minister Farooq Abdullah, who continues to be president of the Jammu and Kashmir Cricket Association, has done his bit. Indeed, encouraging cricket is one area in which the arch political rivals, Abdullah and Chief Minister Mufti Mohammed Sayeed, have batted for the same side over the past year. The new pitches and other recent improvements at the Sher-e-Kashmir stadium speak of the seriousness with which they have taken the responsibility over the past year or so. Not only that, several coaching camps have been organised since last year. And young cricket enthusiasts speak of the improved selection process for the teams that the Association fields on behalf of the state That surely is one of the reasons why the match that was played last year at the Sher-e-Kashmir stadium between the Under-19 teams of Punjab and Jammu and Kashmir was a huge success. And matches held here during the course of the C.K. Naidu National School Games drew large and enthusiastic crowds both last year and this. Young players say they are delighted about the way things are going but that much more could be done. As things stand, they point out, the cricket season does not last for more than three months in Kashmir. Playing is virtually ruled out during the winter months, when the ground is covered by frost and snow. And by the time the association gets the pitches ready, generally using migrant labour from Bihar, early summer is over. Since it often gets too cold by October, they only really get to play on good pitches from July to September. This is one reason, they point out, why Kashmir’s large pool of talent does not yield players that make it to the national teams. Of course, there is also the disadvantage that unlike Mumbai, Delhi and now Baroda, Srinagar has no senior players from the place to push talent from Kashmir with the members of national selection committees. Nevertheless, the boost that local cricket has been given over the past few months will perhaps result in a star cricketer or two emerging from the valley over the next few years. There is certainly no dearth of enthusiasm or
aspiration.
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Beware, O man, lest (in the midst of wordly comforts and merry-making) you forget the Beneficent God and remember not His gracious Name! — Guru Nanak Sacred books only point out the way to God. Once you have known the way, what is the use of books? Then comes the time for the culture of the soul in solitary communion with God. — Sri Ramakrishna Love your enemies, bless them that curse you, do good to them that hate you. — Saint Matthew Men are not made religious by performing certain actions which are externally good, but they must first have righteous principles, and then they will not fail to perform virtuous actions. — Luther |
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