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Subject: Agriculture

  • How to keep inflation under control

    Context

    The economy now seems to be largely out of the shadow of Covid-19, and only a notch better than in 2019-20. But the big question remains: can India rein in the raging inflation that is at 7.8 per cent (CPI for April 2022), with food CPI at 8.4 percent, and WPI at more than 15 per cent?

    Need for bold steps on three fronts to tackle inflation

    • Unless bold and innovative steps are taken at least on three fronts, GDP growth and inflation both are likely to be in the range of 6.5 to 7.5 per cent in 2022-23.
    • 1] Tightening of loose monetary policy: The Reserve Bank of India (RBI) is mandated to keep inflation at 4 per cent, plus-minus 2 per cent.
    • The RBI has already started the process of tightening monetary policy by raising the repo rate, albeit a bit late.
    • It is expected that by the end of 2022-3, the repo rate will be at least 5.5 per cent, if not more.
    • It will still stay below the likely inflation rate and therefore depositors will still lose the real value of their money in banks with negative real interest rates.
    • That only reflects an inbuilt bias in the system — in favour of entrepreneurs in the name of growth and against depositors, which ultimately results in increasing inequality in the system.
    • 2] Prudent fiscal policy: Fiscal policy has been running loose in the wake of Covid-19 that saw the fiscal deficit of the Union government soar to more than 9 per cent in 2020-21 and 6.7 per cent in 2021-22, but now needs to be tightened.
    • Government needs to reduce its fiscal deficit to less than 5 per cent, never mind the FRMB Act’s advice to bring it to 3 per cent of GDP.
    • However, it is difficult to achieve when enhanced food and fertiliser subsidies, and cuts in duties of petrol and diesel will cost the government at least Rs 3 trillion more than what was provisioned in the budget.
    • 3] Rational trade policy: Export restrictions/bans go beyond agri-commodities, even to iron ore and steel, etc. in the name of taming inflation.
    • But abrupt export bans are poor trade policy and reflect only the panic-stricken face of the government.
    • A more mature approach to filter exports would be through a gradual process of minimum export prices and transparent export duties for short periods of time, rather than abrupt bans, if at all these are desperately needed to favour consumers.
    • Liberal import policy: A prudent solution to moderate inflation at home lies in a liberal import policy, reducing tariffs across board.

    Way forward

    • If India wants to be atmanirbhar (self-reliant) in critical commodities where import dependence is unduly high, it must focus on two oils — crude oil and edible oils.
    • In crude oil, India is almost 80 per cent dependent on imports and in edible oils imports constitute 55 to 60 per cent of our domestic consumption.
    • In both cases, agriculture can help.
    • Ethanol production: Massive production of ethanol from sugarcane and maize, especially in eastern Uttar Pradesh and north Bihar, where water is abundant and the water table is replenished every second year or so through light floods, is the way to reduce import dependence in crude oil.
    • Palm plantation: In the case of edible oils, a large programme of palm plantations in coastal areas and the northeast is the right strategy.

    Conclusion

    We need to invest in raising productivity, making agri-markets work more efficiently.

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  • What is Liquid Nano Urea?

    During his visit to Gujarat, Prime Minister inaugurated the country’s first liquid nano urea plant at Kalol.

    Liquid Nano Urea (LNU)

    • Urea is chemical nitrogen fertiliser, white in colour, which artificially provides nitrogen, a major nutrient required by plants.
    • LNU is essentially urea in the form of a nanoparticle.
    • It is sprayed directly on the leaves and gets absorbed by the plant.
    • Fertilisers in nano form provide a targeted supply of nutrients to crops, as they are absorbed by the stomata, pores found on the epidermis of leaves.
    • According to IFFCO, liquid nano urea contains 4 per cent total nitrogen (w/v) evenly dispersed in water.
    • The size of a nano nitrogen particle varies from 20-50 nm. (A nanometre is equal to a billionth of a metre.)

    Significance of LNU

    • This patented product is expected to not only substitute imported urea, but to also produce better results in farms.
    • Apart from reducing the country’s subsidy bill, it is aimed at reducing the unbalanced and indiscriminate use of conventional urea.
    • It will help increase crop productivity, and reduce soil, water, and air pollution.

    Using LNU

    • The liquid nano urea produced by Indian Farmers Fertiliser Cooperative (IFFCO) Limited comes in a half-litre bottle priced at Rs 240, and carries no burden of subsidy currently.
    • By contrast, a farmer pays around Rs 300 for a 50-kg bag of heavily subsidised urea.
    • According to IFFCO, a bottle of the nano urea can effectively replace at least one bag of urea.

    How efficient is LNU?

    • While conventional urea has an efficiency of about 25 per cent, the efficiency of liquid nano urea can be as high as 85-90 per cent.
    • Conventional urea fails to have the desired impact on crops as it is often applied incorrectly, and the nitrogen in it is vaporized or lost as a gas.
    • A lot of nitrogen is also washed away during irrigation.
    • Liquid nano urea has a shelf life of a year, and farmers need not be worried about “caking” when it comes in contact with moisture.

     

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  • The message from the government’s wheat export ban

    Context

    The ban on the export of wheat was not unexpected. The rather ambivalent approach to agriculture comes out clearly with this move.

    Understanding how this ban has come about

    • We are not comfortable with market forces operating in agriculture.
    • Nor are we quite sure whether we want the farmer to get a better price or the consumer to pay less.
    • Governments spend a lot of money in the form of subsidies to ensure farmers are enthused to produce more wheat.
    • The Centre keeps increasing the MSP for this purpose and states often pay a bonus for procurement.
    • There are political reasons too as the farmer lobby needs to be placated.
    •  There are political reasons too as the farmer lobby needs to be placated.
    • We have been taking credit for the production of wheat and every year we set a new record.
    • This year, the Ministry announced that wheat production will touch a record of 111 million tonnes, which has recently been revised downwards.
    • With the war, conditions have changed. Russia and Ukraine are large producers of wheat and their supply to world markets has been cut off due to sanctions and supply chain disruptions.
    • With supplies interrupted, there is an opportunity for other surplus nations to step in.
    • But the disruption has caused world prices to rise significantly.

    Opportunity for India

    • The World Bank data indicates that the price of US (soft red winter) wheat has gone up from $328/tonne in December to $672/tonne while US (hard red winter) wheat is up from $377 to $496/tonne.
    • Countries that produce abundant wheat now have a chance to leverage this opportunity to export.
    • However, in case of India it does appear that production will be lower than expected.
    • Low wheat stock: The government has also not been able to procure wheat as farmers are no longer selling at MSP (which is at Rs 2,015/quintal) as they are getting higher prices in mandis.
    • As of May 10, procurement was just 18 million tonnes against 43 million tonnes last year.
    • This is a significant fall.
    • But stocks with the Centre and other state agencies are 30.3 million tonnes, way above the buffer norms of 27.6 million tonnes.
    • The ban on wheat exports is because of this.

    Two constraints on the wheat economy

    • In 2007 and again in 2021, the government banned futures trading in wheat on grounds that it led to speculative pressure on prices even though the quantity traded and the open interest were minuscule.
    • At that time, it was a decline in expected output which triggered this action.
    • It does look like the wheat economy will continue to operate within two constraints that have become barriers to commercialisation.
    • MSP and government procurement: The first is MSP and government procurement, which feeds into the public distribution system.
    • Arhatiya system: The second is the arhatiya system of trading where middlemen have come in the way of any reform.

    Suggestions

    • Abolish MSP and procurement system: The MSP and procurement system needs to be dismantled.
    • Cash transfers: As the government has successfully expanded both the Aadhaar and Jan Dhan programmes, there should be simple cash transfers to beneficiaries.
    • Buffer stocks can be held to ease distress during a crisis, but government involvement should stop there.
    • Procuring unlimited quantities of wheat and keeping huge stocks has distorted the wheat matrix.
    • The mandi system too needs to be revisited and alternatives have to be made available so that farmers can choose the point of sale.

    Conclusion

    We have been talking about being a part of global supply chains to augment value addition and accelerate growth. But when it comes to agriculture it is a blow-hot blow-cold approach. This not only affects our credibility but also sends confusing signals to producers as to what is the best way out for them.

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  • Government lacking a coherent policy of food security

    Context

    The Government of India announced a sudden ban on export of wheat on May 13, 2022, a few days after Prime Minister Narendra Modi had stated that “at a time when the world is facing a shortage of wheat, the farmers of India have stepped forward to feed the world”.

    What led to the sudden wheat export ban?

    • Low public procurement: The sudden turnaround in the export policy appears to be on account of fears that low public procurement would affect domestic food security.
    • This summer, procurement of wheat by the Food Corporation of India (FCI) has been very low.
    • Last year, the FCI and other agencies procured 43.34 million tonnes of wheat.
    • For the current season, procurement has only been 17.8 million tonnes, as of May 10, 2022.
    • Given the low levels of procurement, the Government has reduced the procurement target for the current season from 44.4 to 19.5 million tonnes.
    • Low production: While wheat production this year has been lower than estimated on account of high heat and other factors in March, there is not a big shortfall in production relative to previous years.
    • Wheat production was 103.6 million tonnes in 2018-19, 107.8 million tonnes in 2019-20, and 109.5 million tonnes in 2020-21.
    • The most recent estimate of production for 2021-22, revised downwards from the earlier estimate, is 105.

    Public procurement in India

    • The system of public procurement has been in place since the mid-1960s, and has been the backbone of food policy in India.
    • As part of the liberalisation policy, many other economists suggested that food stocks be run down in India and that needs of food security be met through world trade and the Chicago futures market.

    Need for effective PDS

    • Higher than buffer stock norm: Stocks of wheat in the central pool as of April 30, 2022 were 30.3 million tonnes, much lower than the 52.5 million tonnes of last year, but comfortably higher than buffer stock norms.
    • While the Government procurement in this marketing season has been lower than the previous two years, the stock position so far is similar to 2019, when we had 35.8 million tonnes of stock in April.
    • An important role in pandemic: In the two COVID-19 years (2020-21 and 2021-22), the Public Distribution System (PDS) played a stellar role, and, its role showed the wisdom of not dismantling it.
    • Total offtake of rice and wheat was 102.3 million tonnes in 2021-22 when distribution through the PDS and other welfare schemes is combined.
    • It is essential that the PDS and open market operations be used to cool down food price inflation.
    •  While most States have high inflation rates, States with better PDS, such as Kerala and Tamil Nadu, have low inflation rates.

    Way forward

    • Provide remunerative prices: To promote production, a key aspect of food policy in India has been to provide remunerative prices to farmers.
    • As is well known, after the reports of the National Commission on Farmers, the announced minimum support price (MSP) for wheat has often been inadequate to cover costs of cultivation for several regions and classes of farmers, especially if comprehensive costs (or Cost C2) are taken as the base. 
    • Over the last two years, costs of production have risen sharply, one important component being the spiralling price of fuel.

    Conclusion

    India’s flip-flop on the export of wheat is an example of the Government lacking a coherent policy of food security.

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  • Agri-exports

    Context

    In the fiscal year 2021-22 (FY22), agri-exports scaled an all-time high of $50.3 billion, registering a growth of 20 per cent over the preceding year.

    What are the contributing factors?

    • The all time high agri-export was made possible largely by rising global commodity prices, but also by the favourable and aggressive export policy of the Ministry of Commerce and its various export promotion agencies like APEDA, MPEDA, and commodity boards.
    • Sustainability issue: From a strategic point of view, an important question that arises is how sustainable is this growth in agri-exports, given India’s resource endowments and the country’s domestic needs?
    • To answer this question rationally, let us first look at the composition of agri-exports.

    Composition of agri-exports

    • Among the several agri-commodities exported in FY22, rice ranks first with exports of $9.6 billion in value (with 21.2 million metric tonnes (MMT) in quantity).
    • It is followed by marine products worth $7.7 billion (1.4 MMT), sugar worth $4.6 billion (10.4 MMT), spices worth $3.9 billion (1.4 MMT) and bovine (buffalo) meat worth $3.3 billion (1.18 MMT) (see figure).
    • Concerns with Rice and Sugar: Of these, two commodities, rice and sugar, are water guzzlers and serious thought should be given to their global competitiveness and environmental sustainability.

    Competitiveness and environmental sustainability concerns with Sugar and Rice cultivation

    • India’s exports of 21 MMT constituted 41 per cent of a global rice market of 51.3 MMT.
    • Low export price: When most of the other commodity prices were surging in global markets, the price of rice (Thailand supplies 25 per cent) collapsed by about 13 per cent from $484/tonne in April 2021 to $429/tonne in April 2022, largely due to India’s massive exports.
    • This means that India had to export a greater quantity of rice to get the same amount of dollars.
    • In trade theory, it is a classic case for levying the optimal export tax of 5 to 10 per cent.
    • Optimal export: India should optimally not go beyond 12 to 15 MMT of rice exports, else the marginal revenue from exports will keep falling.
    • Subsidised water: Taking an average of about 4,000 litres of water per kg of rice, and assuming that half of this percolates into groundwater, exporting 21MMT of rice would mean the virtual export of 42 billion cubic meters (m3) of water.
    • Sugar is another water guzzler, whose exports touched 10.4 MMT in FY22.
    • Subsidies crossing WTO limits: It was backed partly by subsidies (including export subsidy) that crossed the 10 per cent limit mandated by the World Trade Organisation, bringing India into a dispute with other sugar exporting countries at the WTO.
    • However, from a sustainability point of view, we must note that exporting one kg of sugar amounts to roughly exporting 2,000 litres of virtual water.
    • That means in FY22, India exported at least 20 billion m3 of water through sugar exports.
    • So, by exporting 21 MMT of rice and 10 MMT of sugar in FY22, India exported at least 62 billion cubic meters of virtual water.
    • Much of this water is extracted from groundwater — as is being done in much of the Punjab and Haryana belt (for rice), where the water table is receding by 9.2 metres and 7 metres over the last two decades (2000-19), and in Maharashtra and Uttar Pradesh for sugar.
    • This can lead to a water disaster. 
    • Anthropogenic methane emission: Rice production systems are among the most important sources of anthropogenic methane emissions, contributing to 17.5 per cent of GHG emissions generated from agriculture (2021).
    •  This is all because of the distortionary policies of free power and highly-subsidised fertilisers, especially urea.

    Way forward: Support farmers smartly

    • AWD and DSR: Innovative farming practices such as alternate wetting drying (AWD), direct seeded rice (DSR) that can save up to 25-30 per cent water and micro-irrigation that can save up to 50 per cent irrigation water, could be game-changing technologies in reducing the crop’s carbon footprint.
    • Switching to other crops: The real solution lies in incentivising the farmers to switch some of the area under rice and sugar cultivation to other, less water-guzzling crops.
    • Haryana has come up with two schemes, Mera Pani, Meri Virasat and Kheti Khaali, Fir Bhi Khushali.
    • A closer evaluation of non-basmati rice exports brings out another interesting fact.
    • The unit value of these exports was just $354/tonne, which is below the MSP of rice ($390/tonne).
    • One possibility is that a substantial part of the supplies through the PDS and PM Garib Kalyan Anna Yojana (PMGKAY) are leaking out and swelling rice exports.
    • Introduce the option of direct cash transfer: From a policy angle, it may be high time to introduce the option of direct cash transfers in lieu of almost free grains under the PDS and PMGKAY.
    • This will help plug leakages as well as save costs.

    Conclusion

    The best way to tackle this upcoming environmental disaster would be to support farmers smartly, by giving them aggregate input subsidy support on a per hectare basis and freeing up the input prices of fertilisers and power to be determined by market forces and their costs of production.

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  • What is ‘Storage Gain’ in Wheat?

    Punjab’s state procurement agencies (SPAs) are seeking a waiver of ‘storage gain’.

    What is ‘storage gain’ in wheat?

    • Wheat, considered a ‘living grain’, tends to gain some weight during storage.
    • This is known as ‘storage gain’ and it mostly happens due to absorption of moisture.
    • There are three parts of the grain — bran (outer layer rich in fibre), germ (inner layer rich in nutrients) and endosperm (bulk of the kernel which contains minerals and vitamins).
    • The moisture is mostly absorbed by the endosperm.

    Who compensates whom for ‘storage gain’?

    • State procurement agencies, which purchase and store wheat at their facilities, are required to give one kg wheat extra per quintal to the Food Corporation of India (FCI).
    • While 20% of wheat, procured by the FCI and the SPAs, is moved immediately after procurement.
    • It is usually on the remaining 80%, which is moved out after July 1 every year that storage gain has to be accounted for due to longer storage duration.

     

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  • Inflation in India

    Context

    Recently, the RBI raised the repo rate by 40 basis points (bps) and the cash reserve ratio (CRR) by 50 bps with a view to tame inflation.

    How effective would be the rate hike in taming the inflation?

    • High inflation is always an implicit tax on the poor and those who keep their savings in banks.
    • Will the increases in the repo rate and CRR control inflation, especially food inflation?
    • The RBI has been behind the curve by at least by 4-to 5 months, and its optimism in controlling inflation in the earlier meetings of the Monetary Policy Committee was somewhat misplaced.
    • The reason for this is that food prices globally are scaling new peaks as per the FAO’s food price index.
    • The disruptions caused by the pandemic and now the Russia-Ukraine war are contributing to this escalation in food prices.
    • India cannot remain insulated from this phenomenon.

    Opportunities and challenges for India

    • Record wheat export: For the first time in the history of Indian agriculture, cereal exports have already crossed a record high of 31 million metric tonnes (MMT) at $13 billion (FY22), and the same cereal wonder may be repeated this fiscal (FY23).
    • Among cereals, wheat exports have witnessed an unprecedented growth of more than 273 per cent, jumping nearly fourfold from $0.56 billion (or 2 MMT) in FY21 to $2.1 billion (or 7.8 MMT) in FY22.
    • Rice exports have crossed 20 MMT in FY22 in a global market of 50 MMT.
    • Some of the concerns on the wheat front are genuine, and we need to realise that climate change is already knocking on our doors.
    • With every one degree Celsius rise in temperatures, wheat yields are likely to suffer by about 5 MMT, as per earlier IPCC reports.
    • This calls for massive investments in agri-R&D to find heat-resistant varieties of wheat and also create models for “climate-smart” agriculture. We are way behind the curve on this.

    Need for rationalising food subsidy

    • India distribute free food to 800 million Indians, with a food subsidy bill that is likely to cross Rs 2.8 lakh crore this fiscal out of the Centre’s net tax revenue of about Rs 20 lakh crore in FY23.
    • Reducing coverage: What needs to be done targeting only those below the poverty line for free or subsidised food and charging a reasonable price, say 90 per cent of MSP, from those who are above the poverty line.
    • Giving an option to beneficiaries to receive cash in their Jan Dhan accounts (equivalent to MSP plus 20 per cent) in lieu of grains can be considered.
    • This is permitted under NFSA and by doing so, he can save on the burgeoning food subsidy bill.

    Conclusion

    Indian farmers need access to global markets to augment their incomes, and the government must facilitate Indian farmers to develop more efficient export value chains by minimising marketing costs and investing in efficient logistics for exports.

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  • What are India’s plans to avert a Wheat Crisis?

    On May 4, the government lowered its wheat production estimates by 5.7% to 105 million tonnes (MT) from the projected 111.32 MT for the crop year ending June.

    Decline in wheat production

    • India is the second largest producer of wheat in the world, with China being the top producer and Russia the third largest — Ukraine is the world’s eighth largest producer of wheat.
    • After five straight years of a bumper wheat output, India has had to revise downwards its estimated production.
    • Unprecedented heatwaves across the north, west and central parts of the country, and March and April being the hottest in over 100 years, have caused substantial loss to the yield.
    • Researchers attributed the lower estimates to “early summer” affecting the crop yields in States, especially Punjab, Haryana and Uttar Pradesh.

    Why is there a decline in govt procurement?

    • Ukrainian war: Private traders have been prompted to buy more wheat from farmers as the price of wheat at the international level has shot up due to Ukrainian war.
    • Higher prices: A large quantity of wheat was being bought by traders at a higher rate than the minimum support price (MSP).
    • Hoarding by farmers and traders: Also, farmers are holding on to some quantity of wheat, expecting higher prices for their produce in the near future.

    How will this impact the public distribution of grain?

    • Wheat procurement is undertaken by the state-owned Food Corporation of India (FCI) and other agencies at MSP to meet the requirements under the Public Distribution System (PDS).
    • Other running welfare schemes is the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) introduced during the pandemic.
    • The government has revised the grain allocation under PMGKAY for May to September 2022.
    • According to the new guidelines, the FCI will fill the gap left by wheat with an increased allocation of rice.
    • Pointing out that from next year, fortified rice will be distributed to the entire Public Distribution System (PDS).

    Will domestic wheat prices be hit?

    • As government wheat procurement has dipped, concerns are being raised about the stability of prices in the country.
    • The availability of grain for internal consumption, many agri-experts argue should be a priority.
    • The government has dismissed concerns about both prices and stocks, asserting that India is in a comfortable situation with the overall availability of grains.
    • India has enough stocks to meet the minimum requirement for next one year for meeting the requirement of welfare schemes.

    How is the global supply situation shaping up?

    • In order to meet the gap created by reduced Russian and Ukrainian exports, importers are turning to alternative markets.
    • Wheat-producing countries like India are looking to increase exports.

    Will farmers benefit?

    • Farmers will certainly benefit from the scenario as they are being offered a price above the MSP.
    • Amid the Russia-Ukraine crisis, new markets in countries like Israel, Egypt, Tanzania and Mozambique have opened up for India.
    • However, if private traders continue to buy above MSP, eventually that could stoke inflation.
    • More private buying of wheat will help India expand the agri-export basket to new countries, riding the current crisis situation.
    • This trade relationship will stay even when the global crisis is over, which means farmers will get about 10%-15% extra price as market prices are ruling above MSP.

    What about export plans?

    • After Egypt, Turkey has also given approval for the import of Indian wheat.
    • India has been eyeing deals with new export markets in European Union countries too.
    • Despite the crop loss and revision of the output estimate, the Centre maintained that no curbs would be placed on wheat exports and that it was facilitating traders.

     

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  • What is Direct Seeding of Rice (DSR)?

    The Punjab government recently announced Rs 1,500 incentive per acre for farmers opting for Direct Seeding of Rice (DSR), which is known for saving water.

    What is DSR technique?

    • In transplanting, farmers prepare nurseries where the paddy seeds are first sown and raised into young plants.
    • These seedlings are then uprooted and replanted 25-35 days later in the main field.
    • Paddy seedlings are transplanted on fields that are “puddled” or tilled in standing water using tractor-drawn disc harrows.
    • In DSR, there is no nursery preparation or transplantation. The seeds are instead directly drilled into the field by a tractor-powered machine.

    How much water is required to grow one kg rice?

    • Paddy is non-shelled rice that farmers grow and sell in mandis and then after milling paddy rice is prepared.
    • According to the studies, around 3,600 litres to 4,125 litres of water is required to grow one kg rice depending upon the paddy variety.
    • Long duration varieties consume more water.
    • In Punjab, 32% area is under the long duration (around 158 days) paddy varieties, and the rest comes under paddy varieties that take 120 to 140 days to grow.
    • So, on an average 3,900 to 4,000 litres water is required to grow one kg rice in the state.

    How much water is used in Punjab every year to grow rice?

    • In 2020-21, Centre procured 203 lakh tonnes of paddy from Punjab.
    • After milling, this procured paddy resulted in 135.98 lakh tonnes of rice.
    • Since studies put average water required to produce one kg rice at 4,000 litres, so in one year – based on last year’s estimate – Punjab needed 5,400 billion litres of water to produce 135 lakh tonnes rice.

    How much water can DSR help save?

    • DSR technique can help save 15% to 20% water.
    • In some cases, water saving can reach 22% to 23%.
    • With DSR, 15-18 irrigation rounds are required against 25 to 27 irrigation rounds in traditional method.
    • Since area under rice in Punjab is almost stagnant, DSR can save 810 to 1,080 billion litres water every year if entire rice crop is brought under the technique.

    Are there any other benefits of DSR tech?

    • DSR can solve labour shortage problem because as like the traditional method it does not require a paddy nursery and transplantation of 30 days old paddy nursery into the main puddled field.
    • With DSR, paddy seeds are sown directly with machine.
    • DSR offers avenues for ground water recharge as it prevent the development of hard crust just beneath the plough layer due to puddled transplanting.
    • It matures 7-10 days earlier than puddle transplanted crop, therefore giving more time for management of paddy straw.
    • Research trials indicated that yield, after DSR, are one to two quintals per acre higher than puddled transplanted rice.

    Getting optimum results

    • Experts said that with DSR technique, which is called ‘tar-wattar DSR’ (good soil moisture), farmers must sow paddy only after pre-sowing (rauni) irrigation and not in dry fields.
    • Further, the field should be laser levelled.
    • They said that spraying of herbicide must be done simultaneously along with sowing, and the first irrigation, which is done at 21 days after sowing.

    Limitations of the DSR

    • Suitability of soil is the most important factor as farmers must not sow it in the light-textured soil.
    • This technique is suitable for medium to heavy textured soils including sandy loam, loam, clay loam, and silt loam which accounts for around 80% area of the state.
    • It should not be cultivated in sandy and loamy sand as these soils suffer from severe iron deficiency, and there is higher weed problem in it.
    • Also, avoid direct seeding of rice in fields which are under crops others than rice (like cotton, maize, sugarcane) in previous years as DSR in these soils is likely to suffer more from iron deficiency and weed problems.

     

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  • India must seize the trade opportunity opening now

    Context

    Slower global growth, an adverse geopolitical environment, the shadow of recurring waves of the pandemic and prolonged supply chain issues are likely to weigh on export growth this year.

    Trade growth in 2021 and uncertainties in 2022

    • The year 2021 was a record one for trade despite the pandemic.
    • In terms of volumes, merchandise trade rose 9.8 per cent, while in dollar terms, it grew 26 per cent.
    • The value of commercial services trade was also up 15 per cent.
    • India has had a good export run in line with global trends, witnessing record goods exports of $419 billion, while touching $250 billion in services exports.
    • However, global growth forecasts have now been pared down.
    • Slower global growth, an adverse geopolitical environment, the shadow of recurring waves of the pandemic and prolonged supply chain issues are likely to weigh on export growth this year.

    Taping into opportunities

    • Ukraine and Sri Lanka are major exporters of agricultural products and the vacuum created by their limited presence in global trade will open up agricultural export opportunities for India.
    • This will not only spur overall exports but will also help to support the recovery of the agrarian economy through higher realisations.
    • Tea and wheat: As many as 25 African countries import more than one-third of their wheat from Russia and Ukraine and for 15 of them, the share exceeds 50 per cent.
    • Sri Lanka is also a major player in the global tea market and produces around 300 million kg annually.
    • Almost 98 per cent of its annual production is exported.
    • India, the second-largest producer of tea with an annual production of 900 million kg, is in a good position to exploit the opportunity and fill the gap.
    • Textile: Apart from tea and wheat, newer export opportunities have arisen for textiles.
    • Sri Lanka exports $5.42 billion worth of garments and prolonged power cuts in the island nation will hurt its production and export capacity.

    Suggestions

    • 1] Work on non-tariff barriers: One, work on non-tariff barriers for agricultural trade with a special focus on harmonising the sanitary and phytosanitary (SPS) requirements.
    • 2] Autonomy in tea sector: To support tea exports, traditional tea boards are seeking a greater role and autonomy for optimising the development, promotion, and research in the sector.
    • Quicker implementation of the proposed Tea Promotion and Development Act is of utmost importance.
    • 3] Integration with global supply chains: India must double down on its integration with global supply chains.The commerce ministry has negotiated a slew of trade deals.
    • 4] Reduce tariff rates for intermediate inputs: Tariff rates for intermediate inputs should be reduced to either zero or should be negligible for India to become an attractive location for assembly activities.
    • 5] Realignment of specialisation patterns: India must persist with the creation of an enabling ecosystem that realigns its specialisation patterns towards labour-intensive processes and product lines.
    • The labour market reforms must be taken to their logical conclusion.
    • 6] Pro-active FDI policy: A continuous and pro-active FDI policy is also critical as foreign capital and technology are key enablers for entry into global production networks even as local firms play a role as subcontractors and suppliers of intermediate inputs to MNEs.
    • 7]Power supply and logistical bottlenecks: Lastly, exports could suffer if basic issues such as availability of power and logistical bottlenecks keep rearing their ugly heads.
    • The Economic Survey 2019 had recommended that low levels of service link costs (costs related to transportation, communication, and other tasks involved in coordinating the activity etc) are prerequisites to strengthen their participation in GVCs.
    • This should not be neglected.

    Conclusion

    If India were to tap export opportunities in developed markets, it must act on the suggestions above.

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