Dwiddly

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Archive for the ‘Policy’ Category

GoI spins a ‘no, I really do love you!’ to Cooperative Banks as a relief to farmers

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The demonetization drive made a whole lot of cash, (80+% of the total cash in circulation actually) flow into the nationalized banks and severely affected the balance sheets of cooperative banks. A friend flagged a Deccan Herald news report asking for my opinion. And I stumbled upon how the GoI spins a ‘no, I really do love you!’ to Cooperative Banks as a relief to farmers.
Apparently, the GoI decided in its cabinet meeting on 24th Jan that interest for the 2 months of Nov-Dec. would be waived on short term crop loans taken by farmers in the Q1 & Q2 of FY16-17 and allocated Rs. 660 Cr. towards that. The original press release from Cabinet Secretariat can be found in item # 5 of Cabinet decisions in Jan 2017.
As stated in the last paragraph of the press release the Rs. 660 cr. is to cover the interest subvention and administrative cost incurred by NABARD on additional short term borrowing of Rs. 20,000 crore for on-lending to Cooperatives Banks in the current financial year. 3% cost of the interest subvention scheme and 1% of that towards administrative costs(which seems reasonable) matches up with this number. This additional Rs. 20,000 Cr. credit made available is communicated through item #1 in of Cabinet decisions in Jan 2017 with the following explanation:
In the light of good monsoon and expectation of increased credit demand and in order to boost agricultural production, the farmers need to be supported through Cooperative Banks, which purvey credit at their doorstep, to enable them to scale up their agricultural operation.
The approval will ensure increased availability of short term crop loans to farmers through Cooperative banks at reduced rate of interest.
BTW, DH news report got the numbers mixed up: of the announced Rs. 1060.5 Cr., the amount left for the waiver of (2 months) interest on the short term crop loans would be 400 Cr. This would be sufficient to cover the cost of the interest waiver (@ the post income subvention scheme rate of 4%) on a sum total of Rs. 6,000 Cr.
PS: I did not search out what was the total short term crop loans disbursed in Q1 & Q2 of FY16-17. The DH news report does note that Rs. 7.56 lakh crore was the total credit disbursed by the banks for this period under the agricultural credit category. But note that this includes not just short term crop loans but other categories of agricultural credit too.
Wow, if we are to trust this number in the DH news report, then all of 0.8% of the total agricultural credit disbursed in Q1 & Q2 of FY16-17 were as short term crop loans? This really needs some digging and verification. I suspected it would be small but this is way too small a slice of the pie !
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Written by Dwiji

Thursday, January 26th, 2017 at 07:56

On planning. executing. responding.

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The idea of removing large value currency due to large scale counterfeiting is a good thing. I also agree that it is important to make it a surprise move. The logistics of the currency exchange in a country with a population and geography as India is a big challenge that almost no one has dared to undertake in the recent past. So irrespective of the merits of the exercise, kudos to the powers that are for taking on a challenge that most would have shied away from.

The first impact of any news among people living on the edge is almost always the same – panic. This is true not just in rural India, it is true even for the most urban communities of the most developed countries (think reactions to news of terrorist attacks, storms, hurricanes, etc.). And when the currency exchange bomb was dropped, the response was no different. People were scampering from pillar to post to convert the few 500 and 1000 rupee notes they have to the new/fresh currency. And they still are, even after a week.

Most day to day needs would cost around 100 to 200 rupees (thankfully!!). So what does one do with the new 2000 rupee notes when nobody is ready to part with the few smaller denomination currencies they have? So now they are scampering around for new currencies of the large denominations AND for smaller denomination older currencies.

A few simple questions about the implementation of the currency exchange policy. Not whether the currency exchange is warranted; Not Whether it will achieve its objectives. Just on Planning. Execution. Responding. :

  1. When you are rolling back 500 and 1000 rupee notes, would you not want to make sure that the smaller value new currency reaches the people first rather than the larger value one?
  2. When you are planning a roll back of the 500 and 1000 rupee notes, could a whole load of 100 rupee notes not have been printed and dispatched to currency exchange centers to service the obviously expected rush for legal currency to transact business with?
  3. What is the number of people estimated to land at a currency exchange center in an hour? Had sufficient currency reached these centers even a few days after the announcement? Were there sufficient people working at these centers to service the rush? Could some other personnel not have been pulled in to do assist in this work?
  4. How are you any different when the people who were already being crushed under the wheels of ‘development’ get crushed further ? (access and ability to use cash is what defines the poor !!)
  5. Could you not have chosen a better time than the planting period for the rabi crop? Ok, you missed it. But when you created exceptions for transport agencies (and later on added) utility companies and other amenities but EVEN in that list you do not include agri input vendors, who are your advisors? what news are you reading? Who does your heart blead for??

Taking on a challenge: brave

Not preparing adequately : unwise, foolhardy.

Not taking the plight of small traders, farmers, labourers :  callous.

Responding to cries of the middle class : playing to the gallery.

Written by Dwiji

Wednesday, November 16th, 2016 at 07:35

Were millets really the staple grains of our ancestors?

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This question comes up very often when taking about millets – were millets really staple grains in our ancestors’ diets?

For the sake of being informed about our history, let us dive into the Q of whether our ancestors ate millets as a staple.

That paddy needs more water, fertile soil and protection from pests is not something that has happened today. It has been historically true. That millets need very little water, grow in harsh conditions, in substandard soils and are pest resistant is also true. 

And at any point in time we see, there has been a small proportion of land that was highly fertile, a larger proportion of land that was low on fertility and a much larger proportion of land that was pretty much uncultivable soil. 

Superimposing these conditions and crop facts, it is beyond doubt in my mind that millets were cultivated on much larger swathes of land, and harvested in much larger quantities than paddy until very recently. Yes, I do see that my argument is not based on hard evidences. If you can see some flaw in the logic / suppositions, please do share so that I can correct myself.

The other aspect of this Q, is who were our ancestors. If we are from the privileged upper castes, or ancestors would have controlled the more fertile soils, cultivated the more sophisticated crops (such as paddy) and stored and processed them better.

If we are not so privileged and are born in one of lower castes, a dalit or an adivasi, then our ancestors would, very likely, not have had the resources that a crop such as paddy would require. But we would not have had much problem in growing millets.

We ate what we could grow. Millets were the staple of the masses. Paddy was the staple of the privileged. There are stories of how poor farmers and labourers cultivated paddy (or wheat) and millets along with other grains and produce. They would have to turn in all the paddy or wheat they had harvested to the land lords/zamindars/rich men and were allowed to keep only the millets they grew for their family’s consumption.

Food is aspirational, not just today, not just in India. Paddy has always been the food of those who have; of the privileged.

On a related note, if we are ready to be generous when considering the policy makers’ intentions in the lead up to the green revolution, this last point above is a very strong reason to choose to promote paddy and not millets. More on that in another post.

Do share your thoughts and comments.

Written by Dwiji

Wednesday, September 7th, 2016 at 01:45

Posted in Food, Millets, Policy

Irrigation: the classic pot of gold at the end of the rainbow

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Historically, farming was a rain fed practice. Even today, after spending lakhs of crores (or trillions, if you prefer that system of counting large numbers) of rupees and $s on irrigation systems and destroying almost all river ecosystems across the world, ~20% of cultivated land is irrigated. And ~60% of food production comes from rain fed farms. For more interesting facts and figures on irrigation, please see this comprehensive FAO ready reckoner and explore the website.

If we look at the budgetary outlays in India (and in other countries too) investments in agriculture are invariably dominated by investments in irrigation. Isn’t it high time people call the bluff and realized that if we really want to have a food system that survives the changing climate and tumultuous financial systems, we need to develop our rain fed farms.

Increasing spending on irrigation will of course mean more contracts and constructions. And construction, after all is the best way for people in power to make more money.

“There is a pot of gold at the end of the rainbow !! Oh ho, why do you worry about all the money we are making you spend to get to this pot of gold, or about the wrecked ecosystems we are leaving behind! you are such an ‘anti-national’ !!”

Written by Dwiji

Sunday, March 27th, 2016 at 04:51

Make mutli/mixed-cropping mandatory to avail of any farm incentives or subsidies

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As I mentioned in a post earlier today, repeated extreme weather events (are they increasing in frequency?) such as hail storms, heat and cold waves, unseasonal rains, cyclones, are laying bare the faulty premise of today’s agricultural system, not just in India but across the world. Those farmers who are holding out against the pressures of the market & the agri establishment and are going in for multi-cropping are able to take home something. While most farmers who depend on prescriptions, typically of mono cropping the latest hot thing in the market, are having to migrate to manual labour markets in urban areas.

On most sustainable farming forums, many an agri. scientist and  dept. official have waxed eloquently about the merits of multi-cropping and the need to move towards that. And there have been a few schemes and programs that promote mixed cropping. But these are too few and are no where sufficient in meeting the need of the hour.

I feel its time to take it up a notch – make mutli/mixed-cropping mandatory to avail of any government incentives or subsidies in farming. Stop using public money to push farmers further into the mono cropping trap and deeper into debt. There have been enough farmers ending their lives, almost all of them were practicing mono-cropping, and those surviving getting buried deeper and deeper in debt. Instead of spending ever more amounts of public money on a failed model, let us change course and consciously put our resources behind a form of farming that is economically viable and socio-ecologically sustainable. We should stop the use of tax payer money to fund the destruction of farmers’ soil, their families and their children’s future. All this for supporting a supply chain that even after all this provides empty calories and chemical rich things labeled as ‘food’.

Written by Dwiji

Tuesday, November 17th, 2015 at 17:12

Small projects: they don’t count anymore

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I started reading the water policy documents available online and the Water Data book 2005 seemed like a good starting point.

The irrigation potential created during the different five year plans leading up to the (then) current 10th plan reveals an interesting, and in my opinion disturbing, shift. A snapshot of the relevant section from the Water Sector at a Glance is pasted alongside. A snapshot of the irrigation potential created in different plan periodsThe potential area of land served by minor irrigation projects exceeded the potential area of land that would be served by major and medium irrigation projects during the same plan period. This was true up until the 10th five year plan beginning in 2002. In the 10th plan, a drastic change was made. While the area covered by major and medium projects almost doubled, the land area covered by minor projects was actually decreased!

According to the Central Water Commission, projects with a culturable command area (CCA) of more than 2,000 Ha. would be classified as a medium irrigation project while those with more than 10,000 Ha. would be classified as a major irrigation project. CCA is defined as the area that can be irrigated by a particular scheme and is fit for cultivation.

I think the adverse effects of large dams and canal systems were known long before 2002 … well, the 2006-7 annual report of the Central Water Commission speaks volumes about what the commission thinks of minor irrigation projects – these are just not significant enough in their plans to be compared with the major and medium irrigation projects!

Written by Dwiji

Thursday, July 3rd, 2008 at 18:09

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