Monday, 31 December 2018

India agriculture scenario

Agriculture is the primary source of livelihood for about 58 per cent of India’s population. Gross Value Added by agriculture, forestry and fishing is estimated at Rs 17.67 trillion in FY18.

The Indian food industry is poised for huge growth, increasing its contribution to world food trade every year due to its immense potential for value addition, particularly within the food processing industry. The Indian food and grocery market is the world’s sixth largest, with retail contributing 70 per cent of the sales. The Indian food processing industry accounts for 32 per cent of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth. It contributes around 8.80 and 8.39 per cent of Gross Value Added (GVA) in Manufacturing and Agriculture respectively

*Market Size*

During 2017-18* crop year, food grain production is estimated at record 284.83 million tonnes. In 2018-19, Government of India is targeting foodgrain production of 285.2 million tonnes. Milk production was estimated at 165.4 million tonnes during FY17, while meat production was 7.4 million tonnes. As of September 2018, total area sown with kharif crops in India reached 105.78 million hectares.

India is the second largest fruit producer in the world. Production of horticulture crops is estimated at record 306.82 million tonnes (mt) in 2017-18 as per third advance estimates.

*Total agricultural exports from India grew at a CAGR of 16.45 per cent over FY10-18 to reach US$ 38.21 billion* in FY18. Between Apr-Oct 2018 agriculture exports were US$ 21.61 billion. India is also the largest producer, consumer and exporter of spices and spice products. Spice exports from India reached US$ 3.1 billion in 2017-18.

*Investments*

According to the Department of Industrial Policy and Promotion (DIPP), the Indian food processing industry has cumulatively attracted Foreign Direct Investment (FDI) equity inflow of about US$ 8.57 billion between April 2000 and June 2018.

*Some major investments and developments in agriculture are as follows:*

By early 2019, India will start exporting sugar to China.The first mega food park in Rajasthan was inaugurated in March 2018.Agrifood start-ups in India received funding of US$ 1,66 billion between 2013-17 in 558 deals.In 2017, agriculture sector in India witnessed 18 M&A deals worth US$ 251 million.Government Initiatives

Some of the recent major government initiatives in the sector are as follows:

The Agriculture Export Policy, 2018 was approved by Government of India in December 2018. *The new policy aims to increase India’s agricultural exports to US$ 60 billion by 2022 and US$ 100 billion in the next few years* with a stable trade policy regime.In September 2018, the Government of India announced Rs 15,053 crore (US$ 2.25 billion) procurement policy named ‘Pradhan Mantri Annadata Aay SanraksHan Abhiyan' (PM-AASHA), under which states can decide the compensation scheme and can also partner with private agencies to ensure fair prices for farmers in the country.In September 2018, the Cabinet Committee on Economic Affairs (CCEA) approved a Rs 5,500 crore assistance package for the sugar industry in India.The Government of India is going to provide Rs 2,000 crore  for computerisation of Primary Agricultural Credit Society (PACS) to ensure cooperatives are benefitted through digital technology.With an aim to boost innovation and entrepreneurship in agriculture, the Government of India is introducing a new AGRI-UDAAN programme to mentor start-ups and to enable them to connect with potential investors.The Government of India has launched the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) with an investment of Rs 50,000 crore aimed at development of irrigation sources for providing a permanent solution from drought.The Government of India plans to triple the capacity of food processing sector in India from the current 10 per cent of agriculture produce and has also committed Rs 6,000 crore  as investments for mega food parks in the country, as a part of the Scheme for Agro-Marine Processing and Development of Agro-Processing Clusters (SAMPADA).The Government of India has allowed 100 per cent FDI in marketing of food products and in food product e-commerce under the automatic route.Achievements in the sectorThe Electronic National Agriculture Market (eNAM) was launched in April 2016 to create a unified national market for agricultural commodities by networking existing APMCs. Up to May 2018, *9.87 million farmers, 109,725 traders were registered on the e-NAM* platform. 585 mandis in India have been linked while 415 additional mandis will be linked in 2018-19 and 2019-20. *Agriculture storage capacity in India increased at 4 per cent CAGR between 2014-17 to reach 131.8 million metric tonnes* .

Coffee exports reached record 395,000 tonnes in 2017-18.Between 2014-18, 10,000 clusters were approved under the Paramparagat Krishi Vikas Yojana (PKVY).Between *2014-15 and 2017-18 (up to December 2017), capacity of 2.3 million metric tonnes was added in godowns while steel silos with a capacity of 625,000 were also created* during the same *period.Around 100 million Soil Health Cards (SHCs) have been distributed* in the country during 2015-17 and a soil health mobile app has been launched to help Indian farmers.Road Ahead

The agriculture sector in India is expected to generate better momentum in the next few years due to increased investments in agricultural infrastructure such as irrigation facilities, warehousing and cold storage. Furthermore, the growing use of genetically modified crops will likely improve the yield for Indian farmers. India is expected to be self-sufficient in pulses in the coming few years due to concerted efforts of scientists to get early-maturing varieties of pulses and the increase in minimum support price.

The government of India targets to increase the average income of a farmer household at current prices to Rs 219,724  by 2022-23 from Rs 96,703 in 2015-16.This achievement is grossly impossible, keeping in view the last three years income data of the farmers.
However, India's agriculture growth is poised to fly in coming years due to the increase in awareness and also brain storming discussions between various sections of farmers and real agri experts and also a major chunk of pseudo agri experts,but their rumor mongering may also lead to the ground realities and may lead to force the govt to generate agriculture real time data, so that india is bound to be most super agricultural ly productive and highly competitive quality wise and quantity wise in every respect in the international agri market.
Regards
DR N K ARORA

Saturday, 20 October 2018

Food sufficiency but no food security and no nutritional security

Where does India stand today in terms of wheat and rice? While India’s population has grown by more than four times, from 330 million in 1947 to 1.35 billion in 2018, our wheat production increased by over 15 times (from about 6.5 MMT in 1950-51 to 99.7 MMT in 2017-18). India contributes about 13% to the world wheat production, next only to China with about 17% share. Rice production shot up by about 5.5 times (from 20.6 MMT in 1950-51 to 112.9 MMT in 2017-18), accounting for about 23% share in world rice production, next only to China with about 29% share. India is also the largest exporter of rice in the world with about 12.7 MMT (where Basmati is 4.06 MMT and Non-Basmati is 8.65 MMT), valued at $7.7 billion.

Notwithstanding foodgrain surpluses, India faces a complex challenge of nutritional security. FAO’s recent publication, The State of Food Security and Nutrition in the World 2018, estimates that about 15% of the Indian population is undernourished. Further, ironically, 38.4% of Indian children aged below five years are stunted, while 21% suffer from wasting. That is, one in every four children is malnourished. Several factors ranging from poor diets, unsafe drinking water, poor hygiene and sanitation, low levels of immunisation and education, especially that of women, contribute to this dismal situation. But latest innovations in bio-technologies towards bio-fortification of major staples with micro nutrients like vitamin A, zinc, iron, etc. can be game changers.These conjectures are made that india has to give attention towards nutrition security whereas the food security act 2013  has not delivered anything because the hunger gravity is the same which was earlier. I don't know whether the govt will be serious about food security and nutrition security both at the same time for which measures have to ne taken so that the hunger and the nutrition deficiency is wiped out.

Wednesday, 10 October 2018

Warehouse Boom in india

There is Warehouse Boom in india as
Rs 45,000 crore would be invested in creating storage facilities across India between 2018 and 2020. Of this, warehousing is expected to be the chunkiest at more than three quarters of the estimated investment. Cold storage, agri storage, and container storage form rest of the pie. Institutional investors are in business. According to Knight Frank, a property consultancy, warehousing investments accounted for around 26 per cent of the total private equity (PE) investments into real estate between January 2014 and January 2018. Sustainable urban development and business space solutions provider Ascendas-Singbridge, and global PEs such as Warburg Pincus and Brookfield Asset Management among others pumped in $3.4 billion (Rs22,100 crore) of institutional capital during this period.  The property consultancy added in a report that the "actual size of capital movement would be higher, as these numbers only cover the major investments by organised players".
Indian warehouses, particularly, in the unorganised sector, were not really warehouses - they were godowns.

Many of them are in terrible shape. In monsoons, the roof leaks. When temperatures rise in the summers, it can damage electronic items. The floor quality, the heart of the warehouse because the throughput depends on it, is in poor shape as well.

Concrete or low quality steel godowns are now being replaced by steel structures, which are pre-engineered in factories and then assembled at the location. Modern warehouses are water proof, have good ventilation, and insulation to reduce the temperature inside that make it comfortable for those working. Every inch is covered by CCTV camera to avoid theft. Outside, planned wide roads ensure trucks come in and leave without a traffic jam. Embassy, as its name suggests, is building parks. Similar to a business park, its warehousing park would offer business centres, green areas, sewage systems, truck parking, the electrical infrastructure, ATMs, first aid centre, driver rest areas.

The way India stores is changing, particularly, after GST was enforced in 2017.

Fast moving consumer goods (FMCG) companies, consumer durable and other manufacturing firms are consolidating smaller warehouses across multiple states, set up to be tax efficient, into a few strategic but large ones considering India is now a single tax country.

Logistics companies have tight hugged the opportunity. From managing single company warehouses, they are shifting to a multi-client, multi-product model. The French FM Logistic, for instance, runs 83 warehouses in India. Only one of them, in Bhiwandi near Mumbai, is a multi-client one.Post GST, companies decided on multi-client facility. Larger e-commerce players like Amazon prefer to have dedicated warehouses. But the small e-commerce players can take advantage of our multi-customer facilities because you need huge flexibility and there are peaks, like during Diwali.
As companies consolidate operations in large warehouses, they can cut down on cost. Larger warehouses also lend themselves better to automation, which implies a quicker turnaround.

The spurt in demand has led to real estate prices and rentals rising in some regions, like that on Tauru Road and in Bhiwandi. The demand for quality warehouses is far outstripping supply at the moment. While new warehouses are coming online nearly every month, the supply scenario isn't going to change anytime soon. According to industry watchers, it could take nearly two years for the market to be flooded with enough 'Grade A' and 'Grade B' stock, the industry's lingo for better warehouses. 'Grade C' is a godown.
This way india is taking big strides in warehousing activities which will ultimately e a ballistic missiles for the speedier economic growth of india in comparison to any country in the world.So think of the warehousing business and become business tycoons in very small period.

Monday, 10 September 2018

Importance of warehousing in logistics industries in India.

Challenges faced by the recent logistics industry in India
The most essential challenge faced by the industry today is insufficient integration of transport networks, information technology and warehousing & distribution facilities. Regulations exist at a number of different tiers, is imposed by national, regional and local authorities. However, the regulations differ from city to city, hindering the creation of national networks.

Trained Manpower is essential both for the third party logistics sector as well as the manufacturing and retailing sectors, which is very weak at a practical level, i.e., IT, driving and warehouse as well as at a higher strategic level. The disorganized nature of the logistics sector in India, its perception as a manpower-heavy industry and lack of adequate training institutions has led to a shortfall in skilled management and client service personnel. There is a lack of IT standard, equipment and poor systems integration.

Poor facilities and management are the reason for high levels of loss, damage and deterioration of stock, mainly in the perishables sector. Part of the problem is insufficient specialist equipment, i.e. proper refrigerated storage and containers, but it is also partly down to lack of training. The practitioners and the academicians are now aware of the importance of logistics and supply chain; however the field is still under penetrated as far as research is concerned. It is essential to prioritize research and development so that the weaknesses in the industry can be taken care of and improved.
*Infrastructure is the backbone of every country’s growth and prosperity and for the logistics industry to flourish special emphasis has to be on building world-class road networks, integrated rail corridors, modern cargo facilities at airports and creation of logistics parks which need to be given a status equivalent to Special Economic Zones.

It is necessary to realize that the benefits which can bestly be practiced in logistics industry can be brought about by the companies by *establishing training intuitions,* so that there is improvement in the overall service quality of the sector *. Good storage and Warehousing facilities are important for the growth of the logistics industry* .* With the increase in the transportation of perishable products, the *logistics agencies needs to give a lot of importance to enhancing the Warehousing facilities.*

*Warehousing is required to go to the next level taking into account the changing dynamics of JIT manufacturing, global procurement and new models of sales and distribution. Emphasis on research and development is potent mainly because it encourages the use of indigenous technology which can make the industry cost competitive and can also bring about improvement in services  thereby using better, effective and efficient services. Particular focus has to be on research in process excellence which can help to eliminate inefficiencies and bring Indian logistics on par with global practices.*

Monday, 16 July 2018

Difficulties in acieving aims of WDRA Act2007

All across globe, a well-functioning warehouse receipt financing system based on public warehouses has the potential to reduce risks and transaction costs in collateralised financing, which may result in broad-based access to such financing and low costs. However, for this to be achieved, an enabling legal environment and institutional set-up need to be in place to instil trust in the system among financiers and commodity market participants and to safeguard its integrity. Only when the financial community has a high degree of confidence in the system will it lend against warehouse receipts, and interest rates will be reduced. Core elements of a well-developed warehouse receipt system include:

1 an enabling legal and regulatory framework; 2 a regulatory and supervisory agency; 3 licensed and supervised public warehouses; 4 insurance and financial performance guarantees; 5 banks familiar with the use of warehouse receipts.

Despite the differences among countries and legal traditions, an enabling legal framework should clearly define the following issues and related rules and procedures: i) the warehouse receipt’s legal status as a document of title or pledge; ii) rights and obligations of the depositor and the warehouse operator; iii) perfection of security interests (registration of the warehouse receipt or pledge); iv) protection of the warehouse receipt against fraud, and financial performance guarantees; v) priority for the claims of the holder of the warehouse receipt in case of borrower default or bankruptcy; and vi) clear procedures in case of bankruptcy of the warehouse operator and for the administration of financial performance guarantees.

Warehousing development & regulation Act 2007 was also meant to achieve the same objects, but the Act has not been designed to sync the basic and fundamental principles of commodity market financing as the Act has to achieve the basic goal of guarantee and trust of the warehouse receipt because of no powers to authority (WDRA) and hence teeth-less and which has to depend again on juridical proceedings for taking action against the defaulters. Secondly punitive actions are so harsh that no warehouse service provider will like to opt for registration. The punishments shall be for the regulatory lapses in the mechanism and system.But surprisingly the Act directly jumps into conclusive frauds and losses. It is a common sense that if the detailed mechanism for lapses found in different stages are worked out in the rules and the financial punitive powers are given to the Authority, then definitely a sense of regulatory control will lead to the desired level of collateral trusts in the ecosystem of financial performance guarantee.

Sunday, 15 July 2018

Applicability of claw back policy on 10 crore families, a free healthcare policy

Modicare: Government to let market decide NHPS rateTo be rolled out from August 15, the scheme would provide 10 crore families a free healthcare policy of Rs 5 lakh/annum.By: FE Bureau July 3, 2018 5:59 AM

With ref to above news the Centre’s model tender document for empanelment of insurance companies under the NHPS have invited criticisms for not putting in a mechanism to equitably share both the profits as well as the burdens.

The said scheme to be rolled out from August 15,to provide 10 crore families a free healthcare policy of Rs 5 lakh/annum.

The said ambitious Centre’s model tender document for empanelment of insurance companies under the NHPS have invited criticisms for not putting in a mechanism to equitably share both the profits as well as the burdens. The document says that as per clawback policy, insurers would have to refund premiums to the government if claims ratio is less than 100%. However, if the claims ratio exceeds 120%, the excess amount will be equally shared by the insurance company and the state government.
The said claw back policy is nowhere in the insurance Act 1938 of india whereas the said clause is having mentioned in the context of recovery of commission from the insurance agents,in case the insured company or the person is not depositing premium whose business is brought by the agent.But here the Govt is proposing claw back policy in different context which is perhaps not supported by an act or law in commensurate with the insurance Act on the land of india.
It is therefore suggested that  Govt may review the stand taken on claw back policy in the given context so that the possibility of heavy litigation. in the future are ruled out.

India taking big strolls in agriculture

Exports of cereals from India grew by 34.36 per cent to USD 8.1 billion in 2017-18 on account of increasing demand in global markets, according to the commerce ministry.

Iran was the main importer of Indian cereals during the last financial year. India is the largest producer as well as the largest exporter of cereal products in the world, the ministry said in a series of tweets.

Cereals are among the top ten exported items from India. The other products include fabrics, engineering, chemicals and machinery.

This way India is taking big strolls in agriculture and I hope that India will be number one not only in agricultural production but also in the exports of Agricultural produces all over the world and will feed all the people of the world having scarcity the agricultural production and are not self sufficient for feeding their own population. I salute India

Farmers earning shall be economically viable.

60% of farmers in India, who cultivate less than 0.80 hectares of land,continue to be under the poverty line if they do not switch to a non-agricultural occupation. Overall, India’s agricultural output has been increasing on average 3.6% annually since 2011.

The blame goes to the government policies governing the food rather than the agriculture sector. The key problems identified are the trade restrictions specifically designed to keep domestic food inflation low, including frequent ban on exports and MSPs set mismatching the international prices. The Essential Commodities Act and the Agricultural Produce Market Committee Act, are as a few  examples of regulations hampering price discovery for farmers.

Controls imposed by the government on movement of food and exports at the slightest hint of inflation going up prevented farmers from realising higher prices from exports.

The hardest and strictest measures to be taken by the government is to control the marketing of Agricultural produces in the APMC Mandies,which are not regulating the farmers market properly to achieve desired results for which the APMC Act was originally formulated. Rather at present the said act is giving counter productive results by harrassing the farmers by not facilitating them in getting the prices as per the farmers input cost + transportation + his profit so that he may earning shall become economically viable.

Saturday, 16 June 2018

Regenerating soil for photosynthesis and good nutritional values in human life.

Soil restoration is the process of improving the structure, microbial life, nutrient density, and overall carbon levels of soil. Many human endeavors – conventional farming chief among them – have depleted the Earth to the extent that nutrient levels in almost every kind of food have fallen by between 10 and 100 percent in the past 70 years. Soil quality can improve dramatically, though, when farmers and gardeners maintain constant ground cover, increase microbe populations, encourage biological diversity, reduce the use of agricultural chemicals, and avoid tillage.

Soil restoration begins with photosynthesis.

Imagine there was a process that could remove carbon dioxide (CO2) from the atmosphere, replace it with life-giving oxygen, support a robust soil microbiome, regenerate topsoil, enhance the nutrient density of food, restore water balance to the landscape, and increase the profitability of agriculture. Fortunately, there is. It’s called photosynthesis.

Without photosynthesis, the Earth’s surface would merely be weathered rocks and minerals.

In the miracle of photosynthesis, which takes place in the chloroplasts of green leaves, CO2 from the air and H2O from the soil are combined to capture light energy and transform it into biochemical energy in the form of simple sugars.

These simple sugars — commonly referred to as photosynthates — are the building blocks of life. Plants transform sugar into a great diversity of other carbon compounds, including starches, proteins, organic acids, cellulose, lignin, waxes, and oils.

Fruits, vegetables, nuts, seeds, and grains are packaged sunlight derived from photosynthesis. The oxygen our cells and the cells of other living things utilize during aerobic respiration is also derived from photosynthesis.

Significantly, many of the carbon compounds derived from the simple sugars formed during photosynthesis are also essential to the creation of well-structured topsoil. Without photosynthesis there would be no soil. Weathered rock minerals, yes… but no fertile topsoil.

The Plant-Microbe Bridge

It comes as a surprise to many that over 95 percent of life on land resides in soil, and that most of the energy for this amazing world beneath our feet is derived from plant carbon. Exudates from living roots are the most energy-rich of these carbon sources. In exchange for ‘liquid carbon,’ microbes in the vicinity of plant roots — and microbes linked to plants via networks of beneficial fungi — increase the availability of the minerals and trace elements required to maintain the health and vitality of their plant hosts (1,2).

Exudates from plants feed microbes that live near plants’ roots. The microbes in turn bring nutrients to the root zone and make them bio-available to the plants.

Microbial activity also drives the process of aggregation, which enhances soil structural stability, aeration, infiltration, and water-holding capacity. All living things — above and below ground — benefit when the plant-microbe bridge is functioning effectively.

Sadly, many of today’s farming methods have severely compromised soil microbial communities, significantly reducing the amount of liquid carbon transferred to and stabilized in soil. This creates negative feedbacks all along the line. Over the last 150 years, many of the world’s prime agricultural soils have lost between 30 and 75 percent of their carbon, adding billions of tons of CO2 to the atmosphere.

The loss of soil carbon significantly reduces the productive potential of the land and the profitability of farming. Soil degradation has intensified in recent decades — around 30 percent of the world’s cropland has been abandoned in the last 40 years due to soil decline (4). With the global population predicted to peak at close to 10 billion by 2050, the need for soil restoration has never been more pressing. Soil dysfunction also impacts human and animal health.

Nutrient Depletion In Our Food

Over the last 70 years, the level of every nutrient in almost every kind of food has fallen between 10 and 100 percent. This is an incredibly sobering fact. An individual today would need to consume twice as much meat, three times as much fruit, and four to five times as many vegetables to obtain the same amount of minerals and trace elements available in those same foods in 1940.

Dr. David Thomas has provided a comprehensive analysis of historical changes in food composition from tables published by the Australian Medical Research Council, the Ministry of Agriculture, the Ministry of Fisheries and Foods, and the Food Standards Agency. By comparing data available in 1940 Thomas demonstrated a substantial loss in mineral and trace element content in every group of food he investigated.

The nutrient depletion summarized in Thomas’ review represents a weighted average of mineral and trace element changes in 27 kinds of vegetables and 10 kinds of meat:

Mineral Depletion in Vegetables ( average of 27 kinds of vegetables):
Copper – declined by 76%
Calcium – declined by 46%
Iron – declined by 27%
Magnesium – declined by 24%
Potassium – declined by 16%

Mineral Depletion in Meat ( average of 10 kinds of meat):
Copper – declined by 24%
Calcium – declined by 41%
Iron – declined by 54%
Magnesium – declined by 10%
Potassium – declined by 16%
Phosphorus – declined by 28%

Significant mineral and trace element depletion was also recorded in the 17 varieties of fruit and two dairy products tested over the same period. The mineral depletion in meat and dairy reflects the fact that animals are consuming plants and/or grains that are themselves minerally depleted.

In addition to the overall decline in nutrient density, Thomas found significant changes in the ratios of minerals to one another. Given that there are critical ratios of minerals and trace elements for optimum physiological function, it is highly likely that these distorted ratios have an impact on human health and well-being (5).

Restoring Nutrient Density to Our Food

It is commonly believed that the significant reduction in the nutrient density of today’s chemically-produced foods is due to the dilution effect. Dilution occurs when yields rise but mineral content falls. Significantly, though, vegetables, crops, and pastures grown in healthy, biologically active soils do not exhibit these compromised nutrient levels.

Most of the ‘deficiencies’ observed in today’s plants, animals, and people are due to soil conditions not being conducive to nutrient uptake.

Only in rare instances are minerals and trace elements completely absent from soil. Most of the ‘deficiencies’ observed in today’s plants, animals, and people are due to soil conditions not being conducive to nutrient uptake. The minerals are present in the soil but are simply not plant-available. Adding inorganic elements to correct these so-called deficiencies is an inefficient practice. Instead we need to address the biological causes of dysfunction.

Around 85 to 90 percent of plant nutrient acquisition is microbially-mediated. The soil’s ability to support nutrient-dense crops, pastures, fruits, and vegetables requires the presence of a diverse array of soil microbes from a range of functional groups.

The majority of microbes involved in nutrient acquisition are plant-dependent. That is, they respond to carbon compounds exuded by the roots of actively growing green plants. Many of these important groups of microbes are negatively impacted by the use of “cides” — herbicides, pesticides, insecticides, and fungicides.

In short, the functioning of the soil ecosystem is determined by the presence, diversity and photosynthetic rate of actively growing green plants — as well as the presence or absence of chemical toxins.

But who manages the plants and the chemicals? You guessed it… we do.

Fortunately, consumers are becoming increasingly aware that food is more than a commodity.It is up to us to restore soil integrity, fertility, structure, and water-holding capacity — not by applying Band-Aids to the symptoms, but by better managing our food production systems.

The Soil Carbon Sink

Soil can function as a carbon source — adding carbon to the atmosphere — or a carbon sink — removing CO2 from the atmosphere. The dynamics of the source/sink equation are largely determined by land management.

Over the millennia a highly effective carbon cycle has evolved, in which the capture, storage, transfer, release, and recapture of biochemical energy in the form of carbon compounds repeats itself over and over. The health of the soil and the vitality of plants, animals, and people depends on the effective functioning of this cycle.

Technological developments since the Industrial Revolution have produced machinery capable of extracting vast quantities of fossil fuels from beneath the Earth’s surface as well as machinery capable of laying bare large tracts of grasslands and forests. This has resulted in the release of increasing quantities of CO2 into the atmosphere while simultaneously destroying the largest natural sink over which we have control.

The decline in natural sink capacity has amplified the effects of anthropogenic emissions. Many agricultural, horticultural, forestry, and garden soils today are a net carbon source. That is, these soils are losing more carbon than they are sequestering.

The potential for reversing the net movement of CO2 to the atmosphere through improved plant and soil management is immense. Managing vegetative cover in ways that enhance the capacity of soil to sequester and store large volumes of atmospheric carbon in a stable form offers a practical and almost immediate solution to some of the most challenging issues currently facing humankind.

The key to successful soil restoration and carbon sequestration is to get the basics right.

Five Principles for Soil RestorationGreen is good — and year-round green is even better

Photosynthesis draws hundreds of billions of tonnes of CO2 from the atmosphere every year. The impact of this reduction was dramatically illustrated in a stunning visualization released by NASA in 2014.The movement of carbon from the atmosphere to soil — via green plants — represents the most powerful tool we have at our disposal for the restoration of soil function and reduction of atmospheric CO2.

While every green plant is a solar-powered carbon pump, it is the photosynthetic capacity and photosynthetic rate of living plants (rather than their biomass) that drive the biosequestration of stable soil carbon. Photosynthetic capacity is the amount of light intercepted by green leaves in a given area (determined by percentage of canopy cover, plant height, leaf area, leaf shape and seasonal growth patterns).

On agricultural land, photosynthetic capacity can be improved through the use of multi-species cover crops, animal integration, multispecies pastures, and strategic grazing. In parks and gardens, plant diversity and mowing height are important factors. Bare soil has no photosynthetic capacity. Bare soil is also a net carbon source and is vulnerable to erosion by wind and water.

Photosynthetic rate is the rate at which plants are able to convert light energy to sugars. It is determined by many factors, including light intensity, moisture, temperature, nutrient-availability and the demand placed on plants by microbial symbionts. The presence of mycorrhizal fungi, for example, can significantly increase photosynthetic rate. Plants photosynthesising at an elevated rate have a high sugar and mineral content, are less prone to pests and diseases, and contribute to improved weight gains in livestock.

Photosynthetic rate can be assessed by measuring Brix with a refractometer. An increase of around 5 percent in global photosynthetic capacity and/or photosynthetic rate would be sufficient to counter the CO2 flux from the burning of fossil fuels, provided the extra carbon was sequestered in soil in a stable form. This is feasible. On average, global cropland is bare for around half of every year. If you can see the soil, it is losing carbon!

Both photosynthetic capacity and photosynthetic rate are strongly impacted by management. Leading-edge light farmers are developing innovative and highly productive ways to keep soil covered and alive, while at the same time producing nutrient-dense food and high-quality fiber.

Grazing Management

Growth of both tops and roots is significantly impaired if more than 50 percent of the green leaf is removed in a single grazing event.

This topic requires far more space than is available here, but it is vitally important that less than 50 percent of the available green leaf be grazed . Retaining adequate leaf area reduces the impact of grazing on photosynthetic capacity and enables the rapid restoration of biomass to pre-grazed levels. Over a 12-month period, significantly more forage will be produced — and more carbon sequestered in soil — if pastures are grazed tall rather than short.

In addition to leaf area, pasture height has a significant effect on soil building, moisture retention, nutrient cycling, and water quality. To maintain photosynthetic capacity (and to ensure rapid recovery) it is highly beneficial to remove livestock from a pasture before you can see their feet.

Regenerative grazing can be extremely effective in restoring soil carbon levels deep underground. The deeper the carbon, the more it is protected from oxidative and microbial decomposition. The sequestration of most significance is that which occurs below 30 cm.

Crop Production

Increasingly sophisticated machinery and a plethora of “cides” have provided the means for the planet’s rapidly expanding population to create bare ground over billions of acres, dramatically reducing global photosynthetic capacity. Reduced levels of photosynthesis have in turn resulted in reduced carbon flow to soil, significantly impacting soil and landscape function and farm productivity.

Organic carbon holds between four and 20 times its own weight in water. This means that when carbon levels are depleted, the water-holding capacity of the soil is significantly compromised. Low water-holding capacity results in poor structural stability when soils are wet and reduced plant growth when soils are dry.

One of the most significant findings in recent years has been the improvements to infiltration, water-holding capacity, and drought-resilience when bare fallows have been replaced with multi-species covers. This improvement has been particularly evident in lower rainfall regions and in dry years.

Microbes matter

A healthy agricultural system is one that supports all forms of life. All too often, many of the life-forms in soil have been considered dispensable. Or, more correctly, they have not been considered at all.

The significance of the plant-microbe bridge in transferring and stabilizing carbon in soil is becoming increasingly recognized. The soil microbiome is now heralded as the next frontier in soil restoration research.

One of the most important groups of plant-dependent soil-building microbes are mycorrhizal fungi. These extraordinary ecosystem engineers access water, protect their hosts from pests and diseases, and transport nutrients such as organic nitrogen, phosphorus, sulfur, potassium, calcium, magnesium, iron, and essential trace elements including copper, cobalt, zinc, molybdenum, manganese and boron — all in exchange for liquid carbon. Many of these elements are essential for resistance to pests and diseases and climatic extremes such as drought, water-logging, and frost.

When mycorrhizal symbiosis is functioning effectively, 20-60 percent of the carbon fixed in green leaves can be channelled directly to soil mycelial networks, where a portion is combined with biologically-fixed nitrogen and converted to stable humic compounds. The deeper in the soil profile this occurs the better. Humic polymers formed by soil biota within the soil matrix improve soil structure, porosity, cation exchange capacity, and plant growth.

Soil function is also strongly influenced by its structure. In order for soil to be well-structured, it must be living. Life in the soil provides the glues and gums that enable soil particles to stick together into pea-sized lumps called aggregates. The spaces between the aggregates allow moisture to infiltrate more easily. Moisture absorbed into soil aggregates is protected from evaporation, enabling soil to remain moist for longer after rain or irrigation. This improves farm productivity and profit.

Well-structured soils are also less prone to erosion and compaction, and they function more effectively as bio-filters.

Sadly, many of the microbes important for soil function have gone missing in action. Can we get them back? Some producers have achieved large improvements in soil health in a relatively short time. What are these farmers doing differently? They diversify.

Diversity is indispensable

Every plant exudes its own unique blend of sugars, enzymes, phenols, amino acids, nucleic acids, auxins, gibberellins, and other biological compounds, many of which act as signals to soil microbes. Root exudates vary continuously over time, depending on the plant’s immediate requirements. The greater the diversity of plants, the greater the diversity of microbes, and the more robust the soil ecosystem.

The belief that monocultures and intensively managed systems are more profitable than diverse biologically based systems does not hold up in practice. Monocultures need to be supported by high and often increasing levels of fertilizers, fungicides, insecticides, and other chemicals that inhibit soil biological activity. The result is even greater expenditure on agrochemicals in an attempt to control pests, weeds, diseases, and the fertility issues that ensue.

The natural grasslands that once covered vast tracts of the Australian, North American, South American, and sub-Saharan African continents — plus the ‘meadows’ of Europe — contained several hundred different kinds of grasses and forbs. These diverse grasslands and meadows were extremely productive prior to simplification through overgrazing and/or cultivation.

A monoculture of triticale (left) is suffering severe water stress while triticale sown with other species (right) is healthy. The “cocktail crop” contains oats, tillage radish, sunflower, field peas, faba beans, chickpeas, proso millet, and foxtail millet in addition to triticale.

Innovative farmers are experimenting with up to 70 different plant species to see which combinations perform best for soil restoration. Some grain and vegetable producers are setting aside up to 50 percent of their cash crop area for multi-species diverse soil primers. They believe the benefits far outweigh the costs. It has been reported that two full seasons of a multispecies cover can perform miracles in terms of soil health. Mixtures of peas with canola, clover or lentils with wheat, soybean and/or vetch with corn, and buckwheat and/or peas with potatoes are becoming increasingly common.

The integration of animals into cropland can also be extremely beneficial. This doesn’t need to be complicated, though. Something as simple as including one or two companions with a cash crop can make a world of difference.

As well as improving soil function, companion plants provide habitat and food for insect predators. Recent research has shown that as the diversity of insects in crops and pastures increases, the incidence of insect pests declines, reducing the need for insecticides.

Hence increase in biodiversity including different varieties of crops in the soil as well as different kind of animal species including words and Earth grazing worms and also various kind of microbes reacting with the soil and less use of chemicals and pesticides is the Guru Mantra for creating a soil rich of nutrients and thereby regenerating the soil sustaining good environment and excellent human nutrition.

Thursday, 7 June 2018

National Agricultural Market(eNAM) and it played the role in e marketing of farmers produce in India

DR.N.K. ARORAM.Sc.,Ph.D.,PGDCS., Gold medalist 52nd All India Warehousing,Former Director,WDRA, Delhi& GM/Dy.MD,MSWC,/ SAM,CWC

National Agricultural Market(eNAM) and it played the role in
e marketing of farmers produce in India

As per the Dalwai Committee Report 2017-18 (Volume IV), there are close to 29,547 marketing points. Of these, 22% or 6,615, are regulated markets under the APMC and 22,932 are regional periodical markets (RPMs). On an average, a farmer gets a regulated market in the radius of about 12 km and a RPM in a radius of about 7 kms. Out of these 6,615 markets, the NAM scheme aimed to bring 585 markets (i.e. 9%) on its e-market platform by the end of financial year 2017-18. Quite commendably, as on March 2018, all targeted mandis, i.e., 585 that are in 16 states and 2 UTs, (Chandigarh and Puducherry), have been integrated with the NAM-platform. But, these 585 mandis brought only 90.5 lakh farmers onto the platform, which is less than 7% of the 14 crore Indian farmers. Close to 17 MMTs of quantity worth Rs 42,265 crore (cumulative since platform’s inception), is reported to have been traded on the platform. But, this value is only about 2% of India’s total value of agricultural output. . By including such transactions made at fixed prices (MSP) by a fixed buyer (procurement agency) onto the e-NAM platform, the true spirit of e-NAM, i.e. of free and competitive market fades.

Good information, Dr. Arora. 7% farms covered by 9% mandies is good enough as all farms do not sell at mandies. You have raised the issue of competitiveness - one of the reasons is lack of transparency on the quality of produce seen through standardised parameters. Small quantities brought in by small farmers compound the problem further. The solution will emerge by giving attention to this aspect right from the sowing stage, and not when the produce is brought to the mandi. This is what we wanted to attempt when we conceptualised the FPOs. The last Budget aims in that direction.

Thursday, 3 May 2018

History of Commodity derivatives market in India 

Commodity derivatives market in India seems like old wine in new bottle. In reality, forward trading in commodities existed in India from ancient times (period of Kautilya’s Arthashastra) and the first modern futures market was established in 1875 for cotton contracts by the Bombay Cotton Trade Association, just a decade after CBOT entered the focus and traded its first future. The separate association Bombay Cotton Exchange Ltd was established over widespread discontent amongst leading cotton mill owners and merchants over the functioning of the Bombay Cotton Trade Association. The movement continued by setting up “Gujarath Vyapar Mandali” in 1900 for futures trading in oil seeds, ground nut, castor seed and cotton seeds etc. The chamber of commerce at Harpur established the futures exchange for wheat trading in 1913, the first futures exchange for bullion futures in Mumbai in 1920 and similar exchanges come up in Rajkot, Jamnagar, Kanpur, Delhi and Calcutta. In Calcutta Hessain Exchange Ltd in 1919 and East Indian Jute Association Ltd in 1927 were established further and these two exchanges merged in 1945 as East India Jute and Hessin Ltd to conduct the organized trading of futures contracts in raw jute and related goods, meanwhile, many other exchanges started in country to trade in diversified commodities.

After independence, Government of India commissioned a committee headed by A D Shroff in 1950 to introduce Forward Contract bill in Parliament, under the regulation of Ministry of Consumer Affairs and Public Distribution. The FMC was powered to regulate, licensing and control of trading of forward and option contracts all over India. The smooth functioning of market continued till 1966, but due to various regulations, the market lost its vivacious and finally the forward trading was completely banned. The Government of India reintroduced forward trading in select commodities like Cotton, Jute, Potato, etc., as per the recommendation of Khusro committee in 1980. Subsequently, the liberalization of Indian economy in 1991 gave a new lease of life for commodity trading. The Government setup a new committee under the chairmanship of Prof. K. N. Kabra in 1993, the committee recommended to start the futures trading in agriculture commodities in basmati rice, cotton seed, oilseeds, etc. Further in 1996, the World Bank in association with United Nations Conference on Trade andDevelopment (UNTCAD) conducted a feasibility study and found that there is tremendous scope in revitalizing futures trading. In 2000, National Agricultural policy envisioned the reforms in agricultural commodities trading, that has brought a new wave in trading of commodity futures and paved the path for hedging and risk management by removal of control and regulation in agricultural market. In the aftermath of the second generation reforms, based on the recommendations of Kabra committee, World Bank Report and Guru Committee (2001) brought a dimension futures trading in Indian commodity market.

Indian commodity derivatives market has been rationalized in 2003 and futures contracts trading has seen upturn in terms of volume and value surge with very swift growth during that decade. It raised itself to compete in the global market with international giants, such as NYMEX, CBOT, LME, etc., and became the top fifth exchange in terms of number of contracts in gold, second in silver, copper and natural gas. It is found that the trading in commodity derivatives is about three times more than in physical market, whereas, it is more than ten times in advanced economies. In spite of reaching global standards, the market is facing the challenges due to lack of infrastructure, warehousing, inadequate risk mitigating instruments, etc. If the regulators take cognizance of these issues, Indian commodity derivatives market will become definitely an icon among the world commodity derivatives market.At present 21 commodity futures exchanges are working in the country, out of which, six are at national level and fifteen at regional level. All these exchanges are under the regulatory system of Forward Market Commission (FMC), Government of India but now merged under SEBI. By and large, the market has staged a spectacular growth of trading in terms of volume and value of commodity trading. It is very clear through the statistics that 53 commodities notified and permitted for futures trading in 2003 by forward market commission that moved to 113 in agricultural, and non-agricultural commodities futures contracts. On the other hand, the market has registered a significant growth in terms of value, which was Rs.12.9364 billion in 2003-04 and augmented to Rs. 1812.6104, 1704.6840 and 1014.4795 billion during the last three years, i.e., 2010-11, 2012-2013 and 2013-14 respectively.

Review of Literature

There is plethora of studies in the field since the existence of trading took place on commodities at India and the world. The important studies are reviewed and presented in a chronological order and examined the performance of trading, growth, role of price discovery, hedging, regulation future prospects to assess the performance of Indian commodity derivatives market specifically. 

Shroff (1950) referred the Government of India draft bill on introduction of forward trading in India and recommended the introduction of forward trading helps in hedging, price stabilization, reducing the speculation. The study further advised to establish the trading rules and regulations, approved and managed byGovernment. Kamara (1982) analyzed the impact of introduction of commodity futures by comparing the spot market volatility before and after introduction of commodity futures and found no significant change. Kabra Committee Report (1993) advised to strengthen the Forward Market Commission (FMC) and Forward Contract Act, 1952 by means of improving infrastructure, telecommunication, functioning of the exchanges, adequate norms, automation of trading in exchanges, regulation to designing and trading of futures contracts, and establishing strong vigilance committee. 

UNCTAD and World Bank Joint Mission Report (1996) highlighted the role of futures markets as market based instruments for managing risks and suggested the strengthening of institutional capacity of the regulator and the exchanges for efficient performance of these markets. Further noted that Government intervention was pervasive in some sensitive major commodities like wheat, rice and sugar and was of the view that future markets in these commodities were unlikely to be viable.The National Agricultural Policy , (2000) recommended to liberalize the agriculture and allied sector, enhance the infrastructure and information technology, the commodity exchanges has to launch futures contract on liquid commodities in the market. Singh (2000) analyzed efficiency of Indian commodity futures, advised optimizing the futures markets to discover the prices and minimise risk. According to him, exchanges should be self-regulated to curb speculation. The Government should minimize the intervention in pricing mechanism and should initiate private participation. Sahadevan (2002) surveyed the recognized exchanges and their organizational, trading and the regulatory set up for futures trading in commodities and revealed that many of the commodity futures exchanges fail to provide an efficient hedge against the risk emerging from volatile prices of many farm products in which they carry out futures trading. Habibullah Committee (2003) advised the Government of India that the development of commodity derivatives market must be upheld by removal of obstruction on convergence between securities and commodity derivatives market on account of policies relating to cash market, which will impact demand and supply forces. The Government follows common policy applicable to all over India. It further advised on removal of restrictions on participation of banking institutions at least for hedging purpose. The new policy framework should permit the introduction of the commodity futures indices contracts, spreads, weather, electricity and freight. It also recommended modifying the SEBI regulation to permit participation of mutual funds, Foreign Institutional Investor.Chen and Firth (2004) analyzed the relationship between return and trading volume of four commodity futures in China, by using correlation and Granger causality test. They found no correlation between return and volume, but signify the causality from trading volume and return, vice versa. They, however, found a correlation between absolute return and trading volume. Bir (2004) investigated hedging performance of agricultural commodity futures market in terms of price discovery and risk management. The factors responsible for inefficient hedging in commodities were found as low volume, low participation, inadequate warehouse facility and deficient information system of commodity exchanges. Wang and Ke (2005) analyzed the efficiency of the futures market for agricultural commodities in China found that long term equilibrium exists between futures and cash prices for Soybean. On the other hand, the comparison of wheat and soya bean futures reveals short term efficiency of Soybean futures market. Zapata (2005) analyzed the unidirectional Granger causality from futures prices for world sugar on the New York Exchange and world spot price of sugar and found the futures market helps in price discovery in spot, and the flow of information is from futures to spot market but not vice versa. Gorton and Rouwenhorst (2004, 2005) analyzed the long term characteristics of investment in collateralized commodity futures contracts by creating a commodity futures weighted index covering period of July 1959 to December 2004. The results showed that there was higher historical index and spot market return during the sample period. Further the study was found that the commodity futures risk premium was higher than debt market return and equal to equity market return. Ahuja (2006) analyzed the commodity derivatives market in India. And found that the commodity futures market in India has recorded spectacular growth to reach a one trillion mark in 2006. However, several challenges have to be overcome for further stability and persistent growth and development of the market. Karande (2007) studied the castor seed futures traded in with Mumbai and Ahmadabad and evaluated three features of commodity futures market in India, viz, basis risk, price discovery and spot price volatility. The result found that the price discovery was achieved and beneficial in spot price volatility market. Liu and Zhang (2006) analyzed the Price discovery of Spot and Futures price in Chinese Copper, Aluminium, Rubber, Soybean and Wheat markets and found that lead lags relationship between spot and futures market is quite limited. Abhijit Sen (2007) revealed that there is no significant proof for price acceleration of agricultural commodity prices in post futures period, the period of study being very short to discriminateenough between the futures trading and the cyclical adjustments. Lokare (2007) revealed significant co integration between futures and spot prices of selected commodities and had shown the slower operational efficiency. On the other hand, there was inefficient exploitation of available information to capture in the prices of futures contract. 

Ram and Ashis (2007) concluded that agricultural commodity derivatives provide an efficient protection against the price volatility risk in terms of commodity prices, commodity exchanges offer a broad based platform for trading of agricultural and non-agricultural commodities over time and space so the commodity exchanges need to be developed at national level. IIM Bangalore (2008) study found post futures period volatility increased, in spite of negative results of futures market, suggested to integrate the geographical separated markets, remove the incompetence is arising among the futures prices and futures spot prices, which was due to immature nature of the market, there are many obstruction in nature of the institutional and policy level constraints. 

Kedarnath and Mukharjee (2008) investigated the impact of futures trading on agricultural commodity market and found there is nosignificant change in spot prices post futures period in essential commodities, but a comparative advantage found through causality analysis proves that bidirectional relation exists between futures and spot market through flow of information. Bose (2008) found that information flow between the market helps in price determination. In spite of lesser degree of association in spot and futures indices, the agriculture commodity indices shows weak performance in price dissemination for predicting the futures prices than non-agriculture commodity futures indices. Nath and Lingareddy (2008) concluded that futures trading in the selected commodities escort to increase volatile in case of urad, in case of gram and wheat prices moderately rise in post futures period not proved statistically significant. Bhawna et al. (2009) found the removal ban on commodities achieved the spectacular growth achieved its objective as price risk management and price discovery and high untapped potential market growth in agriculture commodities. IIT Bombay (2009) conducted a research study on behalf of Forward Market Commission (FMC) of India and found that seventy percent of population depends on agriculture commodities, and there is a need to liberalize the to manage the price risk through commodity futures. Sabnavis and Gurbandani (2010) analyzed global commodity markets. These markets have proved to be efficient price discovery mechanism in India and worldwide. Further, Gurbandani (2010) found that both spot and future prices for selected agricultural commodities are efficient in weak form. Future prices are independent and past prices have no role in the contribution of future price prediction.

Basu and Gavin (2010) concluded that the investors are searching for the alternatives like high risky mortgage debt and financial derivatives market to mitigate the risk. The study also found that there is negative correlation between equity market to commodity futures return and it gives scope of bringing the arbitrage to exit hedging profits. Shanmugam and Dey (2011) showed that the commodity market have performed better for all the stakeholders. There is an urgent need for new instruments in the commodity markets. In addition, the regulator has to develop stringent policies that can allow financial intermediaries like institutional investors, banks and mutual funds to benefit at gross root level. Swati and Shukla (2011) concluded there is a need to convergence of all types of market like equity, commodity, forex and debt, which should be developed and regulated properly to provide wide-ranging risk management solutions to Indian stakeholders. Gupta and Ravi (2012) investigated the relationship in price discovery which proved that futures markets are more responsive in dissemination information and price discovery to correct spot market. Mahanta (2012) analyzed price trends in the international market and concluded that gold price movements in international market is positively correlated with Indian gold price movements, so proper considerations to international markets should be given while designing policies of derivatives market in India. Barua and Mahanta (2012) investigated the high inflationary pressure due to commodity derivatives. Few futures contracts like red gram, black gram, chickpeas, wheat, rice, potato, refined soybean oil and rubber have been canceled, but analysis proved that the ban on these commodity futures contract didn’t bring price stability Popli and Singh (2012) revealed that commodity futures market was volatile in USA, U.K. and India. The comparison between US, U.K and Indian futures markets reveals the policy makers have to follow the clue from U.S and U.K regulation to promote and encourage investments in commodity derivatives market. Kaur and Anjum (2013) carried out the study on agricultural commodity futures in India and found that in spite of development of commodity futures market, farmers could not gain leverage from the market, as there is no integration between spot and futures market. They further found that due to lack of infrastructure and warehousing, regional exchanges could not penetrate to rural India

Research Gap and Contribution of the StudyThe systematic review of literature revealed that the majority of studies covered the feasibility of futures trading, institutional and policy level constraints, strengthening of regulations, liberalizing the exchanges, institutional building, need for new instruments in the market and International market linkages. In the aftermath of reintroduction, most of the studies conducted by many researchers focused on impact of futures on volatility, risk management, price discovery, hedging, and market efficiency, relation between return and trading volume, lead-lag relationship between trading activity and cash price volatility before and after introduction of futures market, but no study was found with regard to assessing the growth, development and future prospects on long term performance of the market. Hence, the present paper is undertaken as a modest attempt to dwell on such untapped aspects. 


References

Abhijit Sen Committee Report (2007). Impact of Future Trading on Agricultural Commodity prices, Ministry of Consumer Affairs, Food & Public Distribution, Government of India.

Ahuja. (2006). Commodity derivatives market in India: development, regulation and future prospective. 

International Research Journal of Finance and Economics, 1, 153-162.

Barua, N., & Mahanta, D. (2012). Indian commodity derivatives market and price inflation. IOSR Journal of Business and Management, 1(6), 45-59.

Basu, P., & Gavin, W. (2011). What explains the growth in commodity derivatives? Federal Reserve Bank of St. Louis Review, 93(1), 37-48.

Bose, S. (2008). Commodity futures market in India: a study of trends in the notional multi- commodity indices. Money & Finance, 3(3), 125-158.

Chen, G., Firth, M., & Xin, Y. (2004). The price-volume relationship in China’s commodity futures markets. The Chinese Economy, 37(3), 87–122.

Economic Survey (2009-10). Commodity Futures markets, Government of India. Retrieved from http://www.fmc.gov.in/writereaddata/Links/Final-AR-2009-10-dt-01-02-201114426625029079276660.pdf. 

Gorton, G., & Rouwenhorst, K. G. (2004). Facts and fantasies about commodity futures. ICF Working Paper No. 04-20, Yale.

IIMB (2008). Study on impact of futures trading in wheat, sugar, pulses (such as urad, tur and chana) and guar seeds on farmers. Retrieved from http://www.sebi.gov.in/cms/sebi_data/commodities/Report9.pdf.

Kamara, A. (1982). Issues in Futures Markets: A Survey. Journal of Futures Markets, 2, 261–94.

Karande, K. D. (2007). A study of caster seed futures market in India. Available on http://dx.doi.org/10.2139/ssrn.983342.

Kaur, H., & Anjum, B. (2013). Agricultural commodity futures in India- A literature review. Galaxy International Interdisciplinary Research Journal, 1(1), 35-43. 

Kedarnath, M. (2008). Impact of future trading on Indian agricultural commodity market. Available on http://ssrn.com/abstract=1763910 (accessed 30 September 2012).

 Lokare, S. M. (2007). Commodity derivatives and price risk management: an empirical anecdote from India. Reserve Bank of India Occasional Papers, 28(2), 27-77. 

Mahanta, D. (2012). Indian commodity derivative market: a study of price trends in the international market. Indian Journal of Applied Research, 2(1), 73-75.

Nath , G. C., & Lingareddy, T. (2008). Commodity derivatives contributing for rise or fall in risk, paper presented at Money and Finance Conference, 18-19 January 2008, Indira Gandhi Institute of Development Research, Mumbai.

Popli, G. S., & Singh, S. (2012). Commodity markets challenges and arbitrage opportunities – an insight into commodity trading business in India. Available at: http://ssrn.com/abstract=2084082. 

Sabnavis, M. (2010). Working of commodity markets in India. Published by S. S. Bhandare for the Forum of Free Enterprise, Peninsula House, 2nd Floor, 235, Dr. D. N. Road, Mumbai 400001, 4/July/2010.

Shroff. (1950). Control on Forward Trading, Draft bill, the Economic Weekly, August 12, 1950, Page No 770-71.

Shunmugam, V., & Dey, D. (2011). Taking stock of commodity derivatives and their impact on the Indian 

economy. International Journal of Economics and Management Science, 1(1), 8-16.Srivastava, S. P., & Saini, B. (2009). Commodity futures markets and its role in Indian economy. Indian Journal of Agricultural Economics, 64(3), 398.

Swati, & Shukla, M. B. (2011). Commodity derivative in India challenging tasks ahead, ICSI Charted Secretary, November, 1581-1587.

Wang, H. H., & Ke, B. (2005). Efficiency tests of agricultural commodity futures in China. Australian Journal of Agricultural and Resources Economics, 49(2), 125-141.

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DR.N.K. ARORAM.Sc.,Ph.D.,PGDCS., Gold medalist 52nd All India Warehousing,Former Director,WDRA, Delhi& GM/Dy.MD,MSWC,/ SAM,CWC

India’s warehousing requirement

Investment # warehousing # manufacturing # GST#
India’s warehousing requirement is expected to grow at an annual average rate of 9% to 1,439 million sq. ft in 2019 from 919 million sq. ft in 2014,The government’s renewed focus on incentivizing the manufacturing sector in view of GST, is key to the growth of warehousing, adding that the logistics market will reap the benefits of this growth in coming years.

The additional demand for warehousing space per year will be around 104 million sq ft and will entail investments of about Rs.15,000-16,000 crore every year, it is estimated. The investments will go towards land acquisition and cost of construction.

Investment in warehouse can provide an opportunity of realizing returns in the range of 12%-20% per annum to investors willing to explore this sector.

Monday, 23 April 2018

Always have a mentor who is GURU in the particular field of busines

When running a business, may be agri or finance or of commodity markets,you can feel like you are doing it all alone, you feel frustrated because there is no one to bounce ideas off. The buck stops with you, and you’re working long hours. You have challenges that are keeping you awake at night; you can stop ‘wondering’ about what to do. Once you make a decision, you spend too much time second guessing if you’ve made the right decision. A mentor will help you reprogram fearful thinking toward powerful thoughts, faith and belief. You’ll be able to focus on achieving your goals without distractions.      

There are many benefits to having an accomplished, experienced mentor and advisor on your team, and ultimately their role is to help you achieve your goal. Once you have an accomplished executive mentor as a resource, you can be sure that they are focused and conscious of the need to deliver tangible and measurable outcomes for your business.

There is absolutely no doubt that if you find the right mentor, someone, you connect with, and your prepared to do the work, you and your business will grow, prosper and thrive.
So always have a mentor who is GURU in the particular field of business and see the difference.
Regards
DR N K ARORA

India's Storage capacity grossly inadequate

For a country with an agricultural sector as large as India’s, its warehousing capacity is woefully inadequate. India produces around 260 million tonnes of foodgrains every year, but has a total storage capacity of just 115 million metric tonnes (MMT). While state-run Food Corporation of India (FCI), the Central Warehousing Corporation (CWC), and State Warehousing Corporations (SWC) together account for around 85 MMT of warehousing capacity, the private sector chips in with about 30 MMT.

However, small and marginal farmers rarely use any of these modern warehousing facilities. They either sell marketable surplus immediately after harvest or use more traditional storage facilities by covering heaps of grain with husks, clay, or other materials. Such storage methods are subject to rodent attack and infestation leading to high wastage and quality deterioration.

Looking at this and several other reasons, 37-year-old Kishor Jha started Ergos, an agri-supply chain firm based in Bengaluru. He says that there were several reasons that turned his attention to the agri space.

While working at an MNC bank, Kishor was handling portfolios of high-net-worth individuals (HNI), which comprises a mix of financial products including some commodity derivatives. One of the products was commodity arbitrage and it basically had three entities: investors, millers/processing company, and traders.

Kishor noticed that millers/processing companies are keen on fixing the price of raw materials for about one to two months, but they don’t have enough supporting cash flow or appetite to take delivery. Traders have risk-taking ability to leverage the underline opportunity, and investors want fix return on securitised assets. Kishor says,

“If you see, grower/farmers are nowhere in the picture. The questions start from here: Why are they not involved in this arrangement? How to bring them into the mainstream? What are the support system required? How to build an ecosystem around that? The basic principle is if the farmers are not participating in the whole arrangement, my personal opinion says, sustainability will be questioned always.”

With this idea in mind, Kishor met 39-year-old Praveen Kumar, who hails from Akhtiyarpur, a village in Samastipur district in Bihar, and has been working in HR recruitment across MNCs. Being an owner of more than 70 acres of land in Bihar, he has significant on-ground understanding and experience in farming.

Kishor explained the gaps that he felt were there in the agri space. In 2012, the duo decided to meet a couple of farmer in Praveen’s village. Looking at the crop and the produce, Kishor with his banking background immediately started capturing data on the total produce coming from each field.

It was then he noticed that everyone was struggling due to poor post-harvest management. And due to lack of storage facilities, most farmers would end up selling their crops at distress sale prices. Kishor says they found their solution in that very village.

Another guy named Sambhu Jha who is also a farmer and had built some 200 tonne capacity warehouse in his village. Due to social issues, no one uses that warehouse including him. We convinced him after many rounds of discussion and hired that warehouse for three years. We then called a farmer meeting at that warehouse and explained them the process and the operations.

The ride wasn’t easy in the first year and there were only four or five farmers who participated.

“The answer to everything was only demonstrating and validating. We took two years to reach the level where the farmer started booking the space for warehousing at least two to three months in advance,” says Kishor.

 Several challenges were faced linked to financing, marketing, and distribution. Some of the major financial challenges include maintenance of cash flow and operational expenses, especially for small-size warehouses.

This is due to the gap in the meticulous calculations required while managing the consumables, safety, and security of the warehouses.

The marketing and distribution challenges were related to customer engagement, awareness, and trust building, and the need for behaviour change amongst smallholder farmers to adopt warehousing practices.

it was very difficult to attract, train, and retain suitable talent, as the concept is new and people with desired skill-sets are rarely available. The enterprise needs to recruit the right talent, and train them professionally, to obtain the required business outputs.

Choosing the right warehouses

“Ergos only engages those set of warehouses which is scientifically constructed and plans are approved by NABARD, WDRA, or state agriculture department,”

Due diligence of the warehouse and a survey report covering titleship of warehouse ownership, location, approach road, flood history, height from the ground, distance from police station, fire station, theft history, number of gates, security arrangement, flooring, ceiling condition, number of pillars, and wall conditioning among others.

Ergos then finalises the terms of long-term lease of no less than five years with the landlords and executes the agreement on an appropriate revenue stamp with all KYC documents, obtains notary declaration from the owners, and registers the agreement in local registrar office.

The farmers/PG account set up with Ergos basis their KYC document–ID, LPC, and address proof (ration card, PAN card, Aadhaar card, driving license, bank passbook, voter card)–with originals seen and verified by Ergos executive. Basis all the basic documentation, Ergos creates UID (Unique Identification Number) for the farmer in SAP.

Work after the choices are made

What Ergos actually does is offer scientific warehousing solutions and collateral management facilities to smallholder farmers in rural Bihar. It operates a chain of efficient and hygienic warehousing facilities situated within a range of three to four kilometres from the farmers’ locations.

It provides 24/7 access to farmers to transact, sell, or hold the commodities. Farmers can thus track market movements and sell when they can realise better prices with the help of portfolio adviser; Village Champ (VC) who is a one-point contact for them to assist on the transaction.

The team runs a network of micro-warehouse-based ‘farmer offices’ that works in tandem with the retail partners of Ergos to build capacities of smallholder farmers, and to expand the existing user base. At present, there are nearly 28 farmer offices, and the enterprise plans to increase this number to 500 in the next couple of years.

The micro-warehouse runs as a low-cost format that operates at the village level and helps the enterprise to directly bond with the farmers. The enterprise signs agreements with several smallholder farmers who store their agricultural produce in the warehouse.

Once farmers deposit stock in the warehouses, Ergos checks the quality and quantity of the items and issues a warehouse receipt to the farmers certifying the weight, grade, and quality.

Bringing in awareness

After six to eight months, the enterprise is able to negotiate better prices on behalf of the farmers, based on this data. The micro-warehouse network helps Ergos accomplish business development as well as transaction execution. This arrangement also ensures optimum capacity utilisation of the warehouse, and low wastage and higher price realisation for the farmers.

“Ergos is able to achieve higher turnover with limited capital. It has also achieved greater price efficiency in certain crops such as maize, wheat, and paddy, as these are the major crops cultivated in the region,” says Kishor.

The team has also introduced a unique concept of ‘farmers’ portfolio management’, wherein a software application captures basic information about all associated farmers. The agri-tech company also creates general awareness among smallholder farmers regarding the importance of storage solutions.

It showcases the significance of storage solutions through videos, roadshows, and midnight cafes. Ergos also works with local farmer leaders to mobilise interest, and has tied up with Dr Rajendra Prasad Central Agriculture University in Pusa, Bihar, to conduct awareness programmes in its different markets.

Initially, the team set up the warehouse facility with the help of National Collateral Management Service Limited (NCML), which helped the enterprise to understand warehousing and credit access, and also provided access to finance to Ergos-associated smallholder farmers.

Collaborations

Ergos collaborated with National Commodity and Derivatives Exchange e-Markets Limited (NeML) for forward linkage to access the national platform. It also partnered with LTC Commercial to adopt better warehousing practices.

The agri-tech startup received an investment from Aavishkaar, an early-stage investor, in March 2015. It works with the government banks such as Industrial Development Bank of India (IDBI), IndusInd Bank, and State Bank of India (SBI), and World Bank (WB) programmes to facilitate Warehouse Receipt Financing.

The team charges Rs 6–Rs 10 per quintal per month as against Rs 15–Rs 20 per quintal per month (with lock-in of four to six months) charged by others. The enterprise also offers various packages that customers can choose according to their requirements. These packages include warehousing, bank linkage for eWHR financing, forward linkages, processors, etc.

Future plans

Ergos’ micro-warehouse network helps to achieve procurement and transaction execution and ensures maximum capacity utilisation of the warehouse. The major revenue streams of the enterprise include warehousing services, value-added warehousing services, bank linkage, and forward linkage with processing companies.

By next year, Ergos intends to rent over 30–35 additional warehouses, and expand its operations to other low-income states by replicating the Bihar model. The team also plans to scale its warehousing capacity to 2-3 lakh metric tonnes to connect with over two to three lakh farmers by 2019. And over half a million farmers after that.

By 2020, Ergos aims to reach 5,00,000 farmers and 5,000,00 tonne rural warehousing capacity. It plans to establish a unique procurement process in India that can be replicated globally for processing companies which redefine the existing supply chain process.

The idea, Kishor adds, is to secure storage at farm gate and improve the resilience of an entire farm enterprise by allowing farmers to be price makers than price takers.

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DR.N.K. ARORAM.Sc.,Ph.D.,PGDCS., Gold medalist 52nd All India Warehousing,Former Director,WDRA, Delhi& GM/Dy.MD,MSWC,/ SAM,CWC

Types of warehouses

Types of warehouses one cant imagine are
1 Conventional Warehouses
2 Bonded warehouses
3 Container freight stations(CFS)
4 Inland container depot(ICD)
5 Free Trade Warehousing Zone (FTWZ)
6 Special Economic Zone Warehouses(SEZ  Warehouses)
7 Underground Warehouses
8 Multistory Warehouses
9 Cooperative Warehouses
10 Industrial Warehouses
11 Mandi Warehouses
12 Logistic Parks
13 Railway Premises Warehouses
14 Rail Side Warehouses
15 Port Warehouses
16 Transit Warehouses
17 Silos Storage
18 Liquid Storage Warehouses
19 Bulk Storage Warehouses
20 Air Cargo Warehouses
21 Auto Vehicle Warehouses
22 Special Commodity Warehouses.
23 Cold Storages or Refrigerated Warehouses.
24 Temp. Controlled Warehouses
25 Controlled Climate Condition Warehouse
26 Institutional  Warehouses.
27 E-Commerce Warehouses
28.Dedicated Warehouses

Friday, 16 February 2018

संविदा कृषि भारतीय किसानों के लिए संजीवनी

कृषि की तीन मुख्य समस्याओं का समाधान है ठेके पर खेती
भारत में एक मुद्‌दा बहुत महत्वपूर्ण है कि कृषि को कैसे पुनर्जीवित किया जाए? प्रतिदिन औसतन 2000 किसानों द्वारा कृषि कार्य को त्यागना एवं कर्ज में डूबे किसानों का आत्महत्या करना भारतीय कृषि का काला अध्याय है। भारत में किसानों के पिछड़ेपन की मुख्य तीन वजह हैं । एक, जोत का आकार काफी छोटा होना अर्थात देश के 88 प्रतिशत किसान छोटे या सीमांत किसान हैं। उनके पास एक एकड़ से कम जमीन के छोटे-छोटे टुकड़े हैं। जोत का आकार छोटा होने के कारण न तो व्यापक स्तर पर किसी फसल का उत्पादन हो पाता है और न ही अत्याधुनिक तकनीकों का लाभ मिल पाता है। दो, उनके द्वारा उपजाई गई फसलों की वास्तविक कीमत उनके बजाय बिचौलियों को मिलना। तीन, भारतीय कृषि मानसून आधारित होने के कारण जलवायु परिवर्तन का प्रभाव।
ऐसे में नीति आयोग द्वारा प्रस्तावित संविदा कृषि भारतीय किसानों के लिए संजीवनी साबित हो सकती है। संविदा कृषि के अंतर्गत किसान एक समझौते के अंतर्गत किसी कृषि विपणन या आपूर्ति कंपनी के लिए उत्पादन का कार्य करता है। *भारत के कुछ राज्यों ने आंशिक तौर पर संविदा कृषि को अपनाया भी है,जिसके बेहतर परिणाम मिल रहे है। कितंु इसे अपनाने से पहले एक देशव्यापी आदर्श कानून की जरूरत है।* संविदा कृषि के अनेक फायदें हो सकते हैं, जैसे जोत का आकार बढ़ जाने से आधारभूत संरचना का विकास और इसका सबसे बड़ा फायदा यह होता कि कोई किसान चाहे कितना भी छोटा क्यों न हो, उसे भूमिहीन नहीं होना पड़ता, क्योंकि कर्ज में डूबने के कारण ही किसान ज़मीन बेचते है। संविदा कृषि से फसल की कीमत पहले ही सुनिश्चित हो जाती है, जिससे उनके कर्ज में डूबने की आशंका न्यूनतम हो जाती है। किसानों को बीज, उर्वरक, मशीनरी और तकनीकी सलाह सुलभ कराई जा सकती है। यदि ठेके पर खेती वास्तव में किसानों के लिए इस हद तक न्यायसंगत और बढ़िया विकल्प है तो इस पर कोई आपत्ति नहीं होनी चाहिए। चीन सहित कई देशों ने संविदा खेती को सफलता पूर्वक अपनाया है। ऐसे में बड़े पैमाने पर इसे अपनाने पर विचार क्यों नहीं किया जाना चाहिए?

Farmer suicides, debt, drought and heavy rains with ice balls of big sizes

Of the over 17 crores rural households in India, approx. 9 crores households are engaged in farming. The average farming family has five members, thereby near 45 crores people directly dependent on farming. However this farming community has been struggling in recent times, with farmer suicides, debt, drought and very recently heavy rains with ice balls of big sizez and also a lack of development a regular cause for debate and discussion.

Positive action in agriculture is therefore the need of the hour, with a pressing urgency to help curb issues that have devastated this essential sector and consequentially led to scant development in rural India.Nothing is happening to protect farmers from climatological vageries,as no research or no innovative idea/ discussions took place and most of the govt budget is for plant breeding,hybrid seeds,and other areas of research done in the laboratories but no efforts for these real pain causing and penniless making factors are done. Are we agricultural professionals so weak?

Get the markets right by strengthening and resorting to eNAM

Farmers of urad in Madhya Pradesh get Rs 25-26 for their produce, whereas farmers in  UP are getting over Rs 45 per kg.
Farmers in Punjab dump their potatoes on the streets in the absence of a reasonable price for them, prices in the neighbouring Delhi are in the region of Rs 15-20 per kg.  Such differences are the norm, not the exception, and creating the Indian farm crisis.

Above examples are falsifying stories,about claim of  the government telling us from time to time, that e NAM is a big success , but there is little evidence of it working.

The Government should have created several mandis for fruits & vegetables,in different parts of a city and ensured that these were not cartelised like Vashi and Azadpur. This, however, never happened, inspite of APMC-delisting of fruits & vegetables,there was no difference in the lives of farmers.

Here setting up of new mandis for fruits and vegetables was required to be done by providing free land, for creating new infrastructure.

Therefore, If agriculture has to do well, the government has to get the markets right  by  strengthening and resorting to eNAM and also by creating new infrastructure and payment system of mandis and terminal markets—deficiency payments are no substitute.

Wednesday, 31 January 2018

Population explosion in india

Govt shall levy tax of Rs.1 lakh per annum for per child if the children are more than two.This will save India from many evils and  problems.

Every day there are 4 lakhs birth in India and 1.5 lakhs are death and hence the population is increasing by 2.5 lakh per day and with this rate, a total of 9.2 crore mouths are adding to India every year.This explosion is going to happen within 3-5 years and the day is not far away.
China has developed more than India only because of one child policy.There was punishment for the violation of that child policy.Now after 15 years of completion of one child policy they have started two child policy.If India continues without any population policy then there will be heavy congestion of traffic and jams will be continued for hours and the person will reach home at 2am in the night.Murders due to competition in the business and rivalries will not be possible to be controlled.Demand will be more because everyday population increasing then this population bomb will explode to a limit when supplies will not be able to fulfill demands of huge population with the result for every small demand there will be a man trouncing another man. Man will stand on man to move ahead and the water will be finished in the reservoirs and lakes even in the month of Oct nov .Then what you will do for the coming months from DEC to June when the next monsoon starts for filling the reservoirs and dams. Neighborhood country will trounce India if there is infighting and unhealthy blood taking competition.
It is the intellectuals, who have  to get up and take cudgels against population explosion,otherwise the day is not far away when this population explosion itself will work as the war in India.
That is why this idea is proposed because when you can't feed two children then why you are producing more than two  children. if you see the growth of india,particularly the rural population then you will observe that poverty in rural areas is mainly due to illiteracy and uncontrolled population. When rural population don't have the capacity to feed the more mouths then they should be given liberty to produce more unwanted mouths.If you calculate the economics of consumption of all the produces then you will find that if the population is controlled and restricted then you will be surprised to know that India will be the country with no poverty, no illetracity and no have nots.There will be affluence all over.

Saturday, 13 January 2018

How Israel is bringing new technology for the Indian farmer


India and Israel are set to jointly develop new crop varieties and share post harvest technologies following the success of the 10-year-old Indo-Israeli Agriculture Project (IIAP).

For a country like Israel where 60% of the area is desert, exporting high-value farm produce like mangoes and avocados is a matter of pride, whereas for India, among the largest food producers globally, the challenge is to counter the effects of erratic rainfall, raise productivity and use water efficiently.

Out of 160 million hectares of cultivable land in India, only about 65 million hectares or 41% is covered under irrigation. Also, just 8.6 million hectares are currently covered under micro-irrigation compared to a potential 69.5 million hectares.

Let us hope India grows more than 10 times than now with the advanced technology, micro irrigation, soil conservation, fertigation,hybrid seeds,improved methods for removal of weeds,desalination of water,use of waste water of urban utilities, use of drones,crop insurance,multi cropping,establishment of farmers training and advisory centres along with small warehouses and cold chain facilities at every 10 kms,and many more.

Regards,
DR N K ARORA
https://lnkd.in/fbXvF57