The Jute bag controversy- A Lobbying "contest"!

The eternal fight between jute lobby and plastic lobby for cornering a greater share of orders for packing bags for sugar and food grains does not seem to be ebbing as reflected by the attempts to dilute the much touted Jute Packaging Material Act of 1987 (JPM ACT) promulgated by Government of India to protect the interests of the jute farmers and jute mills predominantly located in North Eastern India. It was realized early by the government that jute industry is vital for saving employment and sustenance of jute farmers for which policy protection is necessary. There appears to be about 4 lakh workers engage by the jute industry who are not adept in doing any other work and therefore working of these mills is imperative for their livelihood. Besides about 40 lakh families are involved in farming activities to raise jute fiber whose very existence depends on the working of the jute mills. In the light of these compulsions government's move in promulgating the above Act mandating the use of jute bags for packing food grains and sugar has been timely and reassuring.

Advent of cheaper plastic sacks seems to have tempted the food grain and sugar sector to switch over to them though under the Law there is a limit beyond which plastics cannot be used. Offense under the JPM ACT is serious punishable crimes capable of attracting financial penalty and imprisonment. Still this Act is violated frequently while the government is a helpless bystander! The reasons are many for such a peculiar situation vis-a-vis jute bag use. According to JPM Act at least 40% of sugar produced must be packed in jute bags while 100% of grains stored and distributed must be in jute bags. From time to time government dilutes the stringent provision of the Act mainly because of inadequate availability of jute bags when required, based on the recommendations of ministries concerned. In 2012-13 the jute bag demand was about 14 lakh bales while the jute industry could supply only 13 lakh bales calling for increased use of plastic sacks. Similarly in 2013-2014 Government projected a need of 20 lakh bales but jute industry could only "commit" 16 lakh bales. Ultimately how much they can really supply is some thing one has to wait and see.

As a packing material plastic sacks recommend themselves because of their greater functionality, especially with regard to moisture ingression. For a commodity like sugar protection from moisture is absolutely necessary to prevent moisture absorption by this hygroscopic product. Some blame must be borne by the jute industry for its stagnant technological base and lack of innovative spirit. If adequate research and development activities were practiced it could have thrown up modified jute bags with superior functional properties. Still jute use must be encouraged in India because empty bags generate so much down stream business activities providing gainful employment to millions of people. Besides jute is a sustainable commodity unlike plastics which are made from fossil fuels with high polluting capacity.

In a move that smells of a victory for the plastic lobby, recent advocacy by the textile ministry for allowing plastics to be allowed for packing 80% of sugar production in the country, raises many uncomfortable questions. There is nothing wrong if plastic sacks are allowed to be used if there is a genuine shortage of jute bags. But whether there is really a shortage is not clear though there are reports that domestic jute industry is importing jute bags from Bangladesh illegally. Indian situation is some what odd because the government is being asked to micro manage two industries and it can never satisfy both of them. Probably since the government buys more than 40% of the jute bags produced in the country for packing procured grains in different states, it may be inevitable that such a role is played to act equitably for all the stake holders.

If there is a choice between plastics and jute, government is justified in going for the latter considering social, environmental, economic and other advantages inherent in the case of jute. By providing a minimum support price (MSP) to jute farmers government is doing a yeoman service and in the absence of such a mechanism jute would have vanished from India long ago. It is another matter that to day's market price for jute is significantly higher than the MSP but these are good times for jute industry and MSP's USP will be realized only during distress time when market value plunges due to extraneous problems, both domestic and international. The unique strength of India as a top jute producing country must not be forfeited though Bangladesh is almost at the heels of India in matching jute production. As against India's production of 2 million tons (MT) Bangladesh raises 1.5 MT and China 4,400,00 MT. 

A million dollar question that begs for an answer is whether the domestic demand for jute bags will remain same if and when the country goes in for modern storage technology like silos which can considerably reduce jute bag use. Similarly use of paper bags with ultra strength properties may also pose a challenge while new technologies in the plastic front can throw up much superior and cheaper alternatives to jute. Here is where the jute industry must try to diversify jute uses and exploit the "natural" tag attached to their products. Besides its "Green" credentials are high making it the choice for millions of people concerned about global warming and environmental destruction through unsustainable technologies and resources. probably it could take a leaf out of the strong coir industry in Kerala which has diversified the use of coir in a wide variety of modern day products.     

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

FOOD SECURITY ACT-THE OTHER SIDE OF THE COIN!

One of the most populist schemes churned out by the UPA government during its tenure has been the distribution of government stored food grains practically free to almost two thirds of the population. This scheme was started in a haste without studying in depth the consequences of such pampering of the public on the economic, social and life styles of the beneficiaries who number about 700 million. The subsidy outgo was estimated at 1.3 lakh crore annually which has to come from the general kitty, contributed by the honest taxpayers of the country. No thought was ever given whether such large scale diversion of development funds can be sustained year after year by the succeeding governments that may come to power in future.

One of the consequences already being felt during the operation of this scheme has been uncontrollable food inflation that is eating into the budget of every family in the country. While supply of highly subsidized grains does ensure "survival"of many people by keeping hunger away from their door steps, practically cost of every other thing in life has become intolerably high. It is like taking away with one hand what is given with the other hand! The warped thinking of political shenanigans who came out with the doling scheme is that all it requires for a decent life is cereals like rice and wheat! They seem to have ignored the nutrition security of these beneficiaries by not including pulses, fruits, vegetables or milk in the basket of subsidized "foods"! Is the nation heading for a future where people are destined to stunted growth and less than optimum mental health?

What impact the new scheme will have on the labor market in the country also has been ignored. To day the country is suffering from gross shortage of workers to do any chores, be it farming, manufacturing or civil construction. If food is provided practically free, what incentive people will have to go to work? If this is a correct reading of the labor market, the country may be in an unenviable position of negative growth in almost all spheres of economic activity with grave consequences. The ever escalating cost of getting labor is telling on every front. During the last few years labor has been demanding higher wages but this took a dramatic turn during the last one year with labor cost rising as much as 25-30% in states like Kerala. 

Why was there any necessity to ignore the well developed PDS which was working in many states with reasonable efficiency while propagating the present food security scheme? Many believe that this is largely a ploy to garner votes in the coming election for the present ruling dispensation by stealing the credit from a few states which have been operating their PDS with high management efficiency. It is true that in a few states PDS has not been working as expected and pilferage of rains was reported to be high. But proper reforms of the system and application of modern management technology should have been attempted. 

The quality of food grains supplied under the new food security scheme might not be good as in the case of PDS supplies with many recipients not using them for self consumption but diverting the same to flour mills and poultry industry! From where can the government bring good quality grains as the storage conditions in most ware houses are pitiable and not conducive to preserve the quality. There is even some suggestion that good quality food grains can be imported when there is a shortage in government granaries. With foreign exchange being maintained through generous remittances from immigrant Indians abroad, can the country afford the luxury of importing food grains for doling to the voters? Unthinkable indeed!  

Recent reports from Karnataka which is implementing the food security scheme indicate the ground reality as far as working of the scheme is concerned. Faced with shortage of grains in the state granaries, government started buying grains from the open market and it was soon realized that there was an active recycling process involving collusion between the beneficiaries and the grain trade. The beneficiaries who received grains promptly sold their quota to the private trade which in turn sold the same back to the government!      

Most interesting case regarding the adverse consequences of distribution of freebies comes from the state of Chhatisgarh where it was noticed that the alcohol consumption in the state went up dramatically after implementing the subsidized grain distribution scheme. It appears that beneficiaries of the food scheme in the state were selling the grains they received and using the money they got for buying alcoholic beverages! The State seemed to be happy because its liquor revenue jumped by as much as 90% during the last year. In 2013-14, Chhattisgarh is reported to have earned Rs. 1,900 crore from liquor sales, nearly Rs. 500 crore more than the revenue earned in the previous year. Paradoxically  the earning from liquor sales appears to be going to subsidize the food security program of the state! In effect the food security program intended to improve the health of the people inadvertently is driving them to be alcoholics! Probably the same story will be repeated in other states also and the only beneficiary is likely to be alcoholic beverage industry! Mahatma Gandhi must be turning in his grave seeing such things happening in his Motherland for which he sacrificed his life.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

FOOD GRAINS DIVERSION-IS IT MORALLY JUSTIFIED?

With world population surging ahead ruthlessly, the quest for food to meet the food needs of millions of new denizens is becoming a relentless effort in many countries, developed, developing as well as  the impoverished ones. The fact is that condition of most of the populations in poor African, Asian and South American countries is a matter of concern because the very existence of such poverty ridden human beings pricks the conscience of the whole world and can be a source of unrest and violence affecting the lives of every body in this planet. For long it has been realized that unless well to do nations show a spirit of sacrifice in helping those with hungry bellies, eternal peace will continue to elude humanity. It is not that such help is not forthcoming as billions of dollars worth foods are donated each year by the industrialized world to needy people in these poor countries but the pertinent question that begs for an answer is whether this humanitarian help is sufficient to make any meaningful impact on the hunger front. Will this world ever be able to solve this food problem through financial resources, technological means, skill upgrading of local population, land reclamation, water conservation and economic improvement of the people in these unfortunate countries?. 

What is alarming indeed is the mindless and unethical diversion of human foods to cattle and for non food purpose in most developed countries while almost one third of the global population is literally starving. Two typical examples are enormous diversion of corn to alcohol production and ever increasing use of Palm oil as a sustainable source of fuel for automobiles in the US and Europe. Take the case of corn which is a rich source of starch carbohydrate which is processed into alcohol through hydrolysis into glucose and anaerobic yeast fermentation.  In Brazil where there is a strong alcohol industry based on sugar cane, vast rain forests are being destroyed for expanding sugar cane cultivation to meet the inexhaustible demand for alcohol from the automobile industry. One can understand that sugar is not a staple and therefore Brazil's efforts can at best be condemned from the ecological point of view but "corn-for-alcohol" program defies logic and ethics. Look at the US which is diverting almost a third of its corn production for making alcohol because of the mandate from the government to blend fossil fuel based gasoline with 10-15% alcohol over a period of time. While Brazil can opt for a policy to cut down on sugarcane cultivation and replace with staples like corn, in the US the bumper corn production harvested year after year can save millions of lives, especially in Africa where it is a staple crop. Paradoxically there are amble technological capability to use alternate sources of carbon like green mass materials, other wise wasted, for alcohol production. All it requires is a conscience and the necessary resolve to help fellow denizens in other continents.

Palm oil presents a different case and shows how far a food material can be mindlessly usurped for deriving pleasure and comfort by those who are well to do. Malaysia and Indonesia happen to be the top producers of Palm Oil and India leads the list of importers of this vital commodity. Shortage of edible oils in India is a well known "secret" during the last two decades with the local government having no clue regarding ways and means to overcome this perennial shortage. Imagine the cascading effect of increased diversion of Palm Oil to Europe on a typical family budget in India when the domestic oil prices start shooting up once demand starts climbing from the automobile sector! Paradoxically there is sustained campaign going on among the Western countries against Palm Oil, blaming the producing countries for global warming by reckless deforestation and it is suspected that such insinuations are made by lobbies trying to protect the interests of oils from corn, soy and rapeseed. History is replete with examples of trade manipulation by many countries to export their surplus commodities and protect their farmers. Wheat was once the instrument of influence for countries like the US, Europe and Australia and it is a fact of history as to how many Asian countries have switched over to wheat dominated diets in the aftermath of some of the wars fought in the Asian theater with Americans dominating them

The most recent example of diversion of food materials to non-food purpose comes from India which is the top most country in the world in guar bean production. Guar bean is not a component of the staple diet in the country but the cluster beans constitute a significant vegetable in the diets of people in some areas in the country while the dried beans are consumed in the sate of Rajasthan as a regular food. It may not be totally correct to say that guar bean was used only for food purpose because its viscosity modifying properties made its processed versions a useful component in many food products. More over its nutritional value is limited to the dietary fiber it contains in abundance. A hardy crop, Guar bean is grown in the arid regions of Rajastan which accounts for more than 82% of production in India. High levels of Galactomannan, a polysaccharide component in Guar makes it a valuable additive in dairy products including ice cream, cheese, puddings, cold meat products, besides being an important substance for the paper and textile industry, ore flotation process, explosive materials and fossil fuel extraction. With 85% of the seed made up of dietary fiber, it is considered an important source of pro-biotics that facilitate growth of beneficial gut microorganisms. Partially hydrolyzed guar gum better known as PHGG when ingested causes fermentation in the large intestine generating valuable volatile acids of great significance to good health.    

With the end of fossil fuel gluttony in sight, the fuel industry, looking for expanding the available fuel supply through many alternate options, seems to have struck rich when enormous gas reserves were discovered under hard rocky terrains in countries such as the US. Sheer logistics of extracting this valuable energy source posed problems which have now been overcome by the so called fracking technology involving release of this gas reserve by cracking the rock surface and using guar gum based liquid medium to flush out the gas. The requirement of the fracking industry is gigantic and due to this demand pull the prices of guar bean derived products are sky rocketing literally creating a bonanza for the poor farmers of Rajasthan. While this is a good sign which will see modernization of guar mills that convert the seed into a fine powder, food industry is likely to suffer as high prices are going to be a great barrier in continuing to use this additive in food formulations. A closer inspection of milling facilities will reveal the primitive conditions under which the seed is processed and the health dangers faced by the workers employed by the industry. What is disturbing is the push for explosive expansion of guar cultivation by the organized sector that has the potential to displace many established staple crops, eroding the food supply further in the coming years.    

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

FOOD GRAIN MOUNTAINS-INDIA'S WOES

India continues to be an intriguing country when it comes to food and hunger. On one hand there are millions of its population supposed to be starving because of food shortage. But if the gross production of food grains is taken into consideration, the per capita availability is more than adequate to meet the energy needs of an individual as per international health norms. Unfortunately the skewed storage and distribution realities combined with inadequate purchasing power with a substantial part of the population affects adversely regular access to the foods available in the market. Added to this the market manipulations by the traders and middlemen continuously escalate the food prices as reflected by the inflation presently experienced in the country.

Thanks to the Green Revolution India became one of the largest producers of wheat, a stark contrast to the old PL-480 days, when imported wheat made up a significant portion of wheat availability. If per capita consumption rate is taken into consideration the country produces sufficient food grains for the entire population. As the production is heavily dependent on Monsoon rains there were shortfalls in production periodically necessitating imports to some extent, at prices much higher than the local procurement price, expending precious foreign exchange. The past experience does not seem to have taught any lesson and the present production glut is again posing serious logistical problem to GOI in saving the grains from spoilage. The situation is probably desperate which seems to have provoked the Supreme Court of the country to wonder whether these surplus grains should not be distributed to the poor and hungry in the country in stead of allowing to rot in the open. Probably such an approach may help relieving the food inflation currently hovering around 16% due to insufficient quantity circulating in the market. It appears that, while the learned judges felt that wasting even a single grain is a crime, the insensitive political class probably is not that much concerned about the unfortunate situation prevailing in the country.

A critical look at the present grain scenario brings out the startling fact that the government agencies vested with the responsibility of grain procurement in the country is holding about 59 million tons (mt), mostly wheat and rice, under their custody, a quantity sufficient to meet the needs of more than 15% of the population for a period of 12 months. While the existing grain storage facilities can hardly hold about 42 mt, remaining portion is stored under temporary, improvised storage facilities, commonly known as CAP storage where tarpaulins over the grain sacks provide some protection from the elements. As per the food security norms and the buffer stock policy of the government only 20 mt of food grains are to be held perpetually for meeting unforeseen future contingencies. Ban on exports of food grains in 2007 also contributed to this food surplus situation and any revocation of this ban can have an inflationary effect on world food grain prices. If critics are to be believed about 10 mt of these grains are likely to be lost due to rotting, infestation and other vectors.

The above unenviable situation seems to have put the government in a great dilemma as to what needs to be done. It already has a scheme to distribute rice and wheat at vastly reduced prices to those families branded as Below Poverty Line (BPL) but whether all the deserving beneficiaries are receiving their share is a matter of speculation given the poor management, monitoring and accountability associated with grain distribution. Though the Cricket-obsessed Food Minister has declared his "plans" to introduce RFI tagging system to improve the distribution, when this will happen remains to be seen. Building of storage infrastructure for food grains should have been taken on a priority and present pitiable condition is the result of years of neglect of this infrastructural need. The graphic image of food grains rotting outside a warehouse in Jaipur while liquor was being stored inside is still fresh in the memory of many discerning citizens literally causing revulsion at the situation brought about by the inefficient management of grain storage and distribution in the country.

Probably government may have to go for some sort of a Private-Public Partnership in boosting the storage capacity without further loss of time. Private sector is sure to come to the help of the government provided long term commitment is made to use their storage structures guaranteeing them a minimum return on their investments. The cold storage industry in the private sector has large capacity built over the years for commodities like fresh produce, largely potato, apple, fruits and vegetables, spices and condiments and other perishable items and there does not appear to be any dearth of business for them. Resorting to CAP storage developed years ago for temporary storage of grains in places where vast areas are available with concrete flooring cannot be a long term solution because of many logistical considerations. Not only it requires frequent fumigation to keep away infestation which can destroy the quality in no time, if not properly protected, its vulnerability to pilferage can be a serious handicap.

It was not many years ago that India was in a similar situation with surplus food stocks and one of the options considered then was to use them for converting into alcohol for industrial use but this option was not exercised for some reasons. Another suggestion was to move them to cooler climates near the foot hills of Himalayas, probably an over ambitious scheme considering the lack of infrastructure for the transport and the likely cost involved. As is usual with the government, every thing is forgotten once the crisis passes till yet another arrives. Hopefully the current serious situation may yet spur the government to create additional grain storage facilities like Silos and Concrete ware houses which after all permanent assets of the country.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com