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20.08.2016 Keep a watch on food inflation The latest inflation readings based on the Wholesale Price Index and the Consumer Price Index are a cause for concern. While the annual gain in wholesale prices hit a 23- month high of 3.55 per cent in July, retail inflation quickened past the Centre’s new Monetary Policy Framework’s upper limit for tolerance to 6.07 per cent. Food costs — a key component in both indices — were the main culprit. Inflation in the food category of the CPI accelerated to 8 per cent, and in the case of the WPI surged to a 31-month high of 11.8 per cent. Some economists and the Reserve Bank of India have pointed to the forecast of normal rainfall this year, and the improvement in sowing on the back of the steady progress of the monsoon, as clear indicators that the outlook for supply can only improve going forward. It would, however, be worthwhile to consider some of the risks attached to these assumptions. For one, any beneficial monsoon impact on the predominantly agrarian rural economy is bound to result in an uptick in rural wages, and by extension demand-side consumption pressures. According to a January 2016 International Monetary Fund working paper on ‘Understanding India’s Food Inflation: the Role of Demand and Supply Factors’, rising real rural incomes have had the largest impact on food inflation. This is particularly so as the large weight on food in household expenditure has meant that robust real income growth has tended to translate into substantial demand-side pressures that far outpace the supply-side gains. This stickiness of food costs can undermine the steady gains in the fight against price gains, a battle that must be fought since inflation ultimately ends up being a tax on the poor. If the economy is to maintain the current growth impetus at a time when global demand is still fairly lacklustre, it will be essential that domestic consumption continues to be a key engine of economic momentum. It is precisely this consumption demand that will get a fillip from the increased salary and pension payouts that the government will make as part of the implementation of the Seventh Pay Commission’s recommendations and the One Rank One Pension plan. The Centre will have its task cut out in maintaining fiscal discipline if it is to ensure that increased expenditure from its side doesn’t end up fanning inflation expectations at a time when monetary authorities are already grappling with the challenge of containing the food costs-led price gains. And with Prime Minister Narendra Modi having categorically backed the 4 per cent retail inflation target in his Independence Day speech this week, the political stakes to keep price gains under check couldn’t get higher. Farmers welcome special samba package Chief Minister Jayalalithaa’s surprise announcement on the floor of the Assembly of extending a samba special package has come in for appreciation among the delta farmers. Though the farmers are keeping their fingers crossed on the availability of adequate water for seeing through the samba paddy crop, the mainstay on over eight lakh acres in Thanjavur, Tiruvarur and Nagapattinam district, the State Government’s support is seen as “very encouraging”. Also noticeable is the commendation being extended to farmers to go in for direct sowing, rather than the regular transplantation after raising nurseries, taking into account the ground realities. Sections of farmers see in the samba package a push for a paradigm shift in the cultivating pattern for paddy, and a good sign in that. This is probably the best response under the prevailing situation, points out the general secretary of the Tamil Nadu Cauvery Delta Farmers' Welfare Association Mannargudi S. Ranganathan. He adds that the package thrust on direct sowing is noteworthy as the practice was tried out with reasonable success in the Kottur, Mannargudi blocks of Tiruvarur district over the past several years and could be easily replicated elsewhere. The component on weedicide application support is also a good thought but could be enhanced a little, he says. Importantly, Karnataka could see reason in our genuine demand for water and could release a healthy discharge when the demand peaks and couple with proper precipitation the package could be a real booster for those who take up samba paddy cultivation under difficult circumstances, observes Mr. Ranganathan. “We welcome the samba package and it will be of definite use to those who dare to go in for samba paddy cultivation,” says general secretary of the Federation of Farmers' Associations of Cauvery Delta Arupathy P. Kalyanam. The package is aimed at encouraging direct sowing taking the ground realities into account. However, we would like Chief Minister Jayalalithaa to increase the financial assistance for ploughing from the proposed Rs. 500 per acre to Rs. 2,000 per acre. Also, the State government could consider constituting farmer-inclusive panels at the district level to monitor the disbursal of package benefits to the beneficiaries. Many farmers were yet to receive the kuruvai package benefits and stumbling blocks remain in smooth disbursal of funds to the farmers, Mr. Kalyanam observes. The samba package embodies a positive thought and planning to prepare the farming community in the delta to go in for direct sowing, feels general secretary of the Consortium of Cauvery Delta Farmers V. Sathyanarayanan. When delta farmers were feeling depressed on samba prospects the package has come as a motivation and we thank the Chief Minister for that, he adds. Industry calls for steps to boost cotton sector Stakeholders of the cotton sector called for efforts that will give a boost to cotton production and will benefit the farmers and the industry. Speaking here on Friday at the inaugural of the two-day conference on “Indian Cotton Scenario in the Current Context 2016-2017” organised by the Indian Cotton Federation (ICF) jointly with the Indian Cotton Association (ICAL), Rakesh Rathi, president of ICAL, said India needs better real time data on cotton. All cotton bales pressed in the country should have a digital mark and should be registered. India has the largest area under cotton but its yield is lower. Regional cotton associations should focus on extension services to educate farmers and should also take up programmes that will help collect real time data, he said. According to M. Senthil Kumar, chairman of Southern India Mills’ Association, India is losing on cotton acreage, productivity, and quality in the last two seasons. Textile mills in the south are apprehensive that the country might become a net importer of cotton and the mills might not get cotton at the right time even at high price. “We need united efforts to make the Government work on the white gold,” he said. Dhiren N. Sheth, president of Cotton Association of India, said the cotton sector needs a system such as direct transfer of benefits for farmers. In the case of GM technology, the country is in cross roads. “All segments of the cotton sector should sit with the Government and the seed industry to thrash out issues,” he said. The industry also needs to address problems related to irrigation, storage in peak season, infrastructure at ports, etc. President of South Indian Spinners Association K. Thirunavukkarasu said cotton farmers, ginners and spinners are not happy though the country had a good crop for the last two years. “Efforts are needed to save the cotton sector,” he said. B.K. Krishnaraj Vanavarayar, chairman of Bharatiya Vidya Bhavan, pointed out that economic growth should be inclusive. The aim of the country should be holistic human development. Be it those in the industry, trade, or agriculture, the focus should be making the country strong. Kuruvai cultivation underway Farmers of Thuraiyur and Uppliyapuram blocks are busy taking up kuruvai paddy cultivation with optimum utilisation of available water. Farmers of a number of villages including Erakudi, Pachaperumalpatti, Puliyancholai, Koppampati have started raising the ‘kuruvai’ crop this season. M. Chandrasekaran (48) of Maruthai village said that he had raised the ‘kuruvai’ utilising the water available in the tank. He was confident of harvesting a good yield from his land. Most of the farmers have raised Co-51 variety. According to Agriculture Department sources, about 968 hectares had been brought under ‘kuruvai’ crop in Uppilliyapuram and Thuraiyur blocks. Many of the farmers in the area have also raised ‘navarai’ crop. Most farmers preferred Co-51 as the yield was about ten per cent over the ADT-43 variety, a usual crop raised by them. Another advantage of Co-51 was it was a non-lodging variety. Agriculture Department officials said that about 4,880 hectares had been brought under kuruvai cultivation crop this season in the district, including 968 hectares in the Uppilliyapuram and Thuraiyur blocks. The Agriculture Department was keeping a close monitoring of the cultivation practices being adopted by farmers in the district and guiding them properly for registering good yield, an official told The Hindu on Friday. Solar power harnessed for value addition The Thottiyam Banana Growers’ Group has started using its solar dryer for producing value-added products of vegetables, horticultural crops and greens. The company had installed the solar dryer originally for producing value-added banana products, particularly banana chocolates and banana powder. The company now supplies dried tomato, coriander and bitter gourd and even exports some quantity. The process of drying helps lengthen the shelf life of the vegetables. “There has been a growing demand for the quality and value-added horticultural crops and we have been marketing the same to a number of foreign countries particularly Dubai and Gulf countries,” says Manikutti Subramanian, Managing Director of the Group.

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