SPEECH ON THE OCCATION OF STATE AGRICULTURE AND FOOD MINISTER’S CONFERENCE ON 8TH AND 9TH FEBRUARY, 2012.

I welcome you all to this momentous occasion where we take a step forward to jointly provide for those who need it the most, a guaranteed access to food grains. Trying to provide food security to all may well be one of the most ambitious social security programs launched. India was in a precarious situation in the area of food security in the first two decades after independence. From being import dependent and a recipient of food aid, we are, now self-sufficient in this critical area. From over 90% of the population depending on “Rations”, in the fifties and sixties, today many among the upper and middle classes no longer depend on the public distribution system. These are not small achievements at all, for a country of our size.

But we cannot sit back and rest on these laurels. There is more to be done for those who are still vulnerable economically and socially. There are still large parts of the country that depends on the public machinery to provide them with affordable food. We cannot ignore their needs if we have to build our nation into a global power. The National Food Security Bill outlines the process of bringing in these citizens to a safety net where the most deserving could take comfort in the guaranteed availability of food and nutrition.

Our agenda today is very simple and at the same time a complex one. We need to identify the means by which we will make food grains available to the needy sections of the population. The presence in our midst of two of the most esteemed members of the Union Cabinet, Hon’ble Finance Minister and Hon’ble Agriculture Minister, is an indication of importance as well as the firm resolution on the part of the Government to achieve this goal with a collaborative effort between the Centre and the states. And I thank them for their benign presence. The task ahead of us, which is the complex part of the Agenda, is to mutually agree by the States and the Centre on the roadmap towards this objective. It includes finding ways and means for increasing production, procurement, finding the effective ways of safeguarding and transporting the stock, identifying the right beneficiaries and adopting technology to provide the backbone for an efficient public distribution system.

Over the years, thanks to the Green Revolution, investments in infrastructure, power and water and the hard work and dedication of our farmers, we have reached today a strong position in terms of food grains availability. In the current 2011-12 crop season we hope to see cereal production touch 250 million tonne mark, up from 245 million tonnes last year. With advancement in seed quality, farm technology and their adoption in the field, we could see this rise in production to continue. On the flip side, this increase is being offset by the increase in population and our inability to increase per capita availability. So apart from increasing production by a quantum jump, we need to adopt better methods of storage, transportation and distribution to minimize wastage of precious agriculture produce.

There is also the issue of regional disparities in production and availability. While geographic features of a region have a large bearing on this, we have been able to overcome those successfully in certain places and should be able to do so in other areas also. For example, in the State of Haryana, the production of rice which stood at 1 lakh tonnes in 1960-61 has increased close to 35 lakh tonnes in the current season – no mean achievement by any standards! The incentive for farmers to grow more foodgrains exists in the form of the MSP and access to procurement centers and availability of procurement agencies. Decentralized procurement scheme was initiated to tackle this very problem and the results are definitely positive several states. As the nodal ministry, we stand by you in your efforts to increase procurement. States like UP, Bihar, Orissa, West Bengal and Assam have a large potential to improve procurement so that farmers and the general populace can be helped immensely. The recent success in setting up more procurement centers by the State Governments in MP and Chhattisgarh shows that this can be done. I also complement the State Government of Bihar which had taken a series of measures in this regard during the current Kharif season.

We have taken a decision recently to introduce payment to farmers, whether for levy or direct procurement compulsorily by cheque or account transfer to ensure that full MSP reaches the farmers. All the State Government is requested to implement this important measure in the interest of farmers.

The next important issue in the supply chain is ensuring that all those who depend on public distribution for meeting their food grain requirement are indeed covered and do get their entitlement through an efficient, effective and dynamic PD system. It is indeed a thin line between ensuring access and preventing misuse of the benefits provided. There are a multitude of opinions on how to tackle this problem. In the recent years we have seen a number of successful efforts like use of digitized data, issuing of smart cards and computerization of fair price shops. Elimination of bogus beneficiaries from the system by large numbers allows the real beneficiaries to get their due share. Other experiments like giving bar-coded vouchers, community involvement in monitoring and auditing have also been tried. States like Andhra Pradesh, Kerala, Karnataka, Puducherry, Gujarat and Chhattisgarh have set examples and role models in this area.

My Ministry has been progressing steadily in its computerization program to allow transparent monitoring and reporting on the stocks, movement and delivery schedules. Presentations later in the day will take you through more details. But to make these efforts successful the implementation has to be seamless through the entire country from the sourcing state to the central agencies to the destination locations. We all need to co-operate and meet deadlines on implementation so that leakages in the system are minimized. We should also look at the mechanisms of civil society monitoring of the movements of foodgrains that have been successful in some pockets and see how this can be rolled out nationally to bring complete transparency to the system.

Having touched upon production on the one hand and PDS as the underpinning of a strong supply-chain let me now go to the intermediary issue; that is storage. Though storage facilities and warehousing have been increasing and improving, there is still a lot to be done on this front. For example, ideas like vertical silos need the complete chain to be effective. Handling of foodgrains in bulk may well need a change of mindset. We need to see how to have both systems co-exist and how to make a smooth transition. Central Warehousing Corporation has taken up a very ambitious programme of modernizing their godowns and I have asked Food Corporation of India to do the same.

But the priority here is setting up more temporary and permanent storage. There are a number of schemes available to help the States increase capacity at various levels. I know that some States have been leveraging the funds available from Finance Commission etc. to add storage capacity at the FPS level. We also have schemes like Grameen Bhandaran Yojana and RIDF of NABARD which can be similarly used to create storage at intermediate levels. The pitfalls of not having enough CAP capacity also cannot be underestimated either. States like Punjab and Haryana have perfected their systems over the years and those getting into the procurement mode should be able to learn from these States and follow. I would request all the States to prepare a five year prospective plan to create intermediate storage capacity at the district, block, Gram panchayat and fair price shop level by leveraging existing schemes both at the Central and State level.

The need for an efficient system is as important as showing the civil society that we are doing it. In a forum like this we can discuss the steps being taken, that need to be taken and also how to project the changes being planned and being done by us.

Last but not the least, we need to discuss the operational issues of the interfacing between the central agencies, State agencies and the last mile, i.e. consumers at the FPS level. There are issues in allocation, delivery, etc. that need to be mutually resolved. After all, we all have the same objective of supporting our people and in any case Public Distribution System is the joint responsibility of Centre and the States.

I thank each one of you, especially the State representatives for having responded to our request to be present here and I again welcome you all to this Conference and look forward to a fruitful debate to come up with an action plan to help this Bill become a success.

JAI HIND!

PRESIDENTIAL SPEECH OF THE BUREAU INDIAN STANDARDS on 17.1.2012 in New Delhi.

PRESIDENTIAL ADDRESS BY PROF. K. V. THOMAS, HON’BLE MINISTER OF STATE (I/C) CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION, GOVT. OF INDIA AND PRESIDENT OF THE BUREAU INDIAN STANDARDS on 17.1.2012 in New Delhi.
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Members of the BIS and distinguished invitees consisting of Hon’ble Members of Parliament; Ministers of the State Governments and representatives of various stakeholder organizations, Shri Rajiv Agarwal, Secretary, Consumer Affairs; Shri Pankaj Agrawala, Additional Secretary, Consumer Affairs; Shri Sharad Gupta, Director General, BIS; senior officials from the Ministry and the BIS, friends from the media and ladies and gentlemen:


I am happy to be here amidst you to preside over the Twentieth meeting of the Bureau. Today, as you are all aware, India is an important player in the global market and Indian industry is a major contributor to India’s visibility on the international trading scene. However, our country has to play a more prominent role in the present world scenario of greater international competitiveness. For this purpose, it is important that all efforts should be made by manufacturers to adhere to the prescribed standards, i.e., national or international standards, as applicable, so that the consumers of Indian products have confidence in the products they purchase. This will not only help in building our national image overseas but also assure quality goods to consumers.


Keeping this in view, the Bureau of Indian Standards, the national standards body of the country, has taken a number of steps to meet the emerging challenges through its manifold activities in the field of standardization and quality certification of goods and services.


BIS is formulating Indian Standards in line with the national priorities in a time bound manner and has formulated over 18,600 Indian standards on diverse subjects, ranging from food, chemicals, engineering, textiles, to high technological areas of electronics etc. These standards are formulated through a network of technical committees comprising different stakeholders like representatives from industry, research and development organizations, consumers, testing and lab experts, government etc. Standards undergo periodic review and up-gradation, keeping in view consumer needs, health and safety aspects, environmental protection and the latest technological developments.


In the present era of the WTO, the national standards play a vital role. As per WTO-TBT agreement, to which India is also a signatory, the technical regulations are normally required to be based on international standards. Therefore, Indian Standards, where feasible, should be harmonized with International Standards. This requires proactive approach on the part of BIS to actively participate in the technical committees of International Organization for Standardization (ISO) and International Electro-technical Commission (IEC) so that the interests of Indian industry as well as consumers are well protected during the process of standard setting by these organizations. To enhance participation of experts representing technical/scientific organizations and members of BIS technical committees in international standardization Government of India has provided funds through Plan Scheme on National System of Standardization. Such participation by BIS in the development of International Standards helps in promoting and safeguarding the nation’s interests.


I am happy to inform that BIS is an active and prominent member of ISO. BIS, after a span of 47 years, once again hosted the General Assembly of the ISO at New Delhi in September, 2011, which earned international acclaim. 378 delegates from 125 countries and international organizations participated in the General Assembly. BIS, India got elected as one of the Members of ISO Council, the apex body of ISO, for a two year term, i.e., 2012-13.


BIS is also playing an active role in the activities of IEC. It is also a matter of pride for us that BIS will be hosting the Annual IEC General Meeting in October 2013 in New Delhi. It is expected that representatives from a large number of member-countries of IEC will participate in the meetings.


To have an effective voice in various international standardization fora, it is necessary that BIS also actively participates in regional body meetings on Standardization and Conformity Assessment. In this regard, BIS has participated in the meetings of SAARC Standards Coordination Board (SSCB), including the eighth meeting of SSCB organized at Kathmandu, Nepal in August 2011 and the first meeting of the Governing Board of South Asia Regional Standards Organization (SARSO) in Dhaka in December 2011.


Consumers need quality products and services. BIS is conscious of its role in this regard and is operating certification schemes for products as well as management systems. The Product Certification Scheme is basically voluntary and around 25,000 licenses covering about 1,000 products are in operation. However, in public interest, the Central Government has notified 83 articles for mandatory conformance to the relevant Indian Standard. These products normally relate to health and safety of the consumers and include packaged drinking water, LPG cylinders, clinical thermometers, cement, milk powder, etc.


Another important area, where BIS needs to strengthen its activities, is Hallmarking of Gold and Silver Jewellery / artefacts. We know that Gold has always occupied a special place in the Indian households. For ensuring that the consumer gets value for money, and is not cheated by unscrupulous manufacturers, the Hallmarking Scheme was launched by BIS in April 2000. The Scheme provides third party assurance to consumers on the purity of gold jewellery or its fineness. The Scheme for Hallmarking of Silver Jewellery/ artefacts was launched in October 2005. The Hallmarking Scheme is operated through the network of regional and branch offices of BIS all over the country.


I am happy to note that for giving focused publicity on Hallmarking, “Hallmarking Awareness Weeks” have been organized in different regions of the country. “Hallmarking Awareness Week” has been organized in Kerala in July 2011, in the states covered under Western, Eastern and Northern Regional Offices in September 2011, November 2011 and December 2011, respectively. During these weeks, jewellers’ awareness programmes, training programmes for artisans and training programmes for assaying and hallmarking personnel were organized in different parts of the region and wide publicity in regional languages through regional print and electronic media was made.


BIS also operates Management Systems Certification Schemes for Quality, Environment, Food Safety, Occupational Health and Safety of employees in an organization.


Another major challenge consists of sustaining and improving the quality of services. With the advent of strong consumer movement in India and consumers becoming increasingly aware of their rights, greater need is being felt for more transparency and accountability in the delivery of public services. Keeping this in view, Bureau of Indian Standards has formulated an Indian Standard, namely, IS 15700: 2005 “Quality Management Systems – Requirements for Service quality by Public Service Organizations.”


Many Government departments, including Income Tax department, Central Excise and Custom department, Postal department, Central Schools and various departments of State Governments are in the process of implementing this Indian Standard. With this end in view, BIS, under 11th plan scheme on Consumer Education & Training, HRD and Capacity Building, has conducted over forty training programmes on IS 15700, for officials of various government departments like Customs and Central Excise, Income Tax Department, All India Radio, Doordarshan, etc., in which over 1500 officials of these organizations were trained.


I extend my personal welcome to the members of the Bureau and invite them to actively participate in the deliberations of this Twentieth Bureau Meeting. JAI HIND!

52nd Annual Meeting of National Federation of Cooperative Sugar Factories Limited

Inaugural Address of Prof. K.V. Thomas, Union Minister for Consumer Affairs, Food & Public Distribution at the inaugural function of the 52nd Annual Meeting of National Federation of Cooperative Sugar Factories Limited

Shri Jayantilal B. Patel, President, Mr. Shankarrao G. Kolhe, Vice-President, Mr. Vinay Kumar, Managing Director of National Federation of Cooperative Sugar Factories Ltd., distinguished guests, ladies and gentlemen.

I am happy to be here in your midst this afternoon to inaugurate the 52nd Annual Meeting of the General Body of National Federation of Cooperative Sugar Factories Limited, the apex body of cooperative sugar factories in the country.


We are meeting at a time when Indian sugar production is on an upswing from 2010-11 season. The country has produced around 24.30 million tonnes of sugar this sugar year which was more than our annual consumption requirement. In order to ensure that the higher production does not lead to mounting cane price arrears and to keep sugar prices stable, the Government allowed sugar factories to export sugar. The objective was to avoid sugar stock build up and resultant drop in prices leading to cane price arrears and to provide additional liquidity to the sugar factories by capitalizing on the low global sugar balance and the better international prices. Consequently, the domestic retail prices of sugar are currently stable.


Coming to ensuing 2011-12 sugar season, I am aware that there is some difference on preliminary estimates of sugar production and efforts are on to reconcile the figures. In any case, it is projected that sugar production in the next season will be more than our consumption needs. The excess production can depress prices. Therefore, I can understand your concern. We are also equally concerned. Keeping in view the estimated opening sugar stocks and the estimated domestic production and consumption in 2011-12 season, the Government will take appropriate steps to maintain price stability so as to ensure that sugar factories make fair realization and pay remunerative cane price to sugarcane farmers and sugar prices remain at reasonable levels.


I would like to remind you that the Central Government has already taken certain long term policy measures with a view to reduce fluctuations in production of sugar. The concept of Statutory Minimum Price (SMP) has been replaced by the Fair and Remunerative Price (FRP) of sugarcane with effect from 2009-10 season. The FRP provides for upfront payment of margins on account of profit and risk to sugarcane farmers, which was not available under SMP. Further, the Government has allowed sugar factories to produce ethanol directly from sugarcane juice. I am hopeful that these measures should help in reducing the cyclicality in sugar production in coming years.


Mr. Patel had mentioned in his speech that the issue of de-control of sugar has been hanging fire since long and that this is the opportune time to decontrol. You know that decontrol of sugar involves doing away with levy obligation on sugar mills and abolition of release mechanism. As regards levy obligation, I would like to say that it was as high as 65% in seventies which has been reduced to 10% in phases. Further, supply of levy sugar has been restricted to BPL families in the country except in north-eastern states, hill states and island territories where universal coverage has been allowed on account of difficult terrain and other logistics constrains. The Government is committed to supply sugar to poor sections of the society at concessional rate. As such, there has to be some alternate mechanism of supplying sugar to poor families if levy obligation is to be done away with. It needs consultation with State Governments in order to evolve consensus in the matter. With regard to release mechanism, I would say that this system has been continuing to ensure availability of sugar throughout the year at reasonable prices. It has to be remembered that 5 – 6 months sugar production has to be utilized for the entire year. There has to be some alternate mechanism to ensure availability of sugar throughout the year at reasonable prices if the present system is to be dispensed with. I request apex bodies of sugar industry to give suitable suggestions to the Government in this regard. The Government is not averse to decontrol of sugar provided the alternate system is acceptable to all stakeholders. I have requested the Prime Minister to request Dr. C. Rangarajan to look at the issues relating to de-regulation of the sugar sector so that the long standing demand of the industry is examined in a non-partisan manner.

In respect of stockholding limit on sugar traders, I would like to inform you that stockholding and turnover limits have been imposed to check unscrupulous traders to hoard sugar and increase sugar prices by creating artificial scarcity in the market. These limits have recently been reviewed by the Empowered Group of Ministers and it has been decided to extend it up to November, 2011 in view of the ensuing festival and .marriage season when the demand for sugar will be at peak. I hope that sugar prices will remain at reasonable level during these months and there may not be any need to extend the limits beyond November. The stock limits on bulk consumers already stands abolished from 14th August, 2011.

Regarding increasing the radial distance between an existing and new sugar factories, the State Governments have already been authorized to increase it beyond 15 kms with approval of the Central Government. The State Governments of Punjab & Haryana have already been permitted to increase the minimum radial distance to 25 kms in their respective states. If we receive requests from other states, we will consider them also.

My attention has been drawn to the so called ‘injustice’ meted out to negative networth sugar factories with regard to SDF loans. You would appreciate that defaults against loans from the Sugar Development Fund is over Rs. 400 crores in respect of cooperative sugar factories alone. It would be difficult for the Government to put more money unless some concrete steps are taken to improve the management of these mills such that the lenders’ money is made more secure.
I would like to take this opportunity to appreciate the Federation for the promotional work they are doing for the sugarcane farmers. My congratulations to their consultancy team for bagging projects abroad.


I am also very glad that NFCSF is making all efforts to improve the productivity of sugarcane and sugar recovery. At present the yield of sugarcane per hectare varies quite substantially from region to region. There is enormous scope of increasing productivity of sugarcane per hectare. What is required is to make varietal changes looking at agro-climatic factors of each region.

In the end, I would like to congratulate all the factories which are getting efficiency awards this year. I hope that this will motivate the recipient of the awards to improve further their performance and other factories to make all out efforts to get the awards in the coming year. With these words, I inaugurate the 52nd annual meeting of the National Federation of Cooperative Sugar Factories.


Inaugural Address of Prof. K.V. Thomas, Union Minister for Consumer Affairs, Food & Public Distribution at the inaugural function of the 52nd Annual Meeting of National Federation of Cooperative Sugar Factories Limited on 27th September, 20011 at New Delhi.

Shri Jayantilal B. Patel, President, Mr. Shankarrao G. Kolhe, Vice-President, Mr. Vinay Kumar, Managing Director of National Federation of Cooperative Sugar Factories Ltd., distinguished guests, ladies and gentlemen.

I am happy to be here in your midst this afternoon to inaugurate the 52nd Annual Meeting of the General Body of National Federation of Cooperative Sugar Factories Limited, the apex body of cooperative sugar factories in the country.


We are meeting at a time when Indian sugar production is on an upswing from 2010-11 season. The country has produced around 24.30 million tonnes of sugar this sugar year which was more than our annual consumption requirement. In order to ensure that the higher production does not lead to mounting cane price arrears and to keep sugar prices stable, the Government allowed sugar factories to export sugar. The objective was to avoid sugar stock build up and resultant drop in prices leading to cane price arrears and to provide additional liquidity to the sugar factories by capitalizing on the low global sugar balance and the better international prices. Consequently, the domestic retail prices of sugar are currently stable.


Coming to ensuing 2011-12 sugar season, I am aware that there is some difference on preliminary estimates of sugar production and efforts are on to reconcile the figures. In any case, it is projected that sugar production in the next season will be more than our consumption needs. The excess production can depress prices. Therefore, I can understand your concern. We are also equally concerned. Keeping in view the estimated opening sugar stocks and the estimated domestic production and consumption in 2011-12 season, the Government will take appropriate steps to maintain price stability so as to ensure that sugar factories make fair realization and pay remunerative cane price to sugarcane farmers and sugar prices remain at reasonable levels.


I would like to remind you that the Central Government has already taken certain long term policy measures with a view to reduce fluctuations in production of sugar. The concept of Statutory Minimum Price (SMP) has been replaced by the Fair and Remunerative Price (FRP) of sugarcane with effect from 2009-10 season. The FRP provides for upfront payment of margins on account of profit and risk to sugarcane farmers, which was not available under SMP. Further, the Government has allowed sugar factories to produce ethanol directly from sugarcane juice. I am hopeful that these measures should help in reducing the cyclicality in sugar production in coming years
Mr. Patel had mentioned in his speech that the issue of de-control of sugar has been hanging fire since long and that this is the opportune time to decontrol. You know that decontrol of sugar involves doing away with levy obligation on sugar mills and abolition of release mechanism. As regards levy obligation, I would like to say that it was as high as 65% in seventies which has been reduced to 10% in phases. Further, supply of levy sugar has been restricted to BPL families in the country except in north-eastern states, hill states and island territories where universal coverage has been allowed on account of difficult terrain and other logistics constrains. The Government is committed to supply sugar to poor sections of the society at concessional rate. As such, there has to be some alternate mechanism of supplying sugar to poor families if levy obligation is to be done away with. It needs consultation with State Governments in order to evolve consensus in the matter. With regard to release mechanism, I would say that this system has been continuing to ensure availability of sugar throughout the year at reasonable prices. It has to be remembered that 5 – 6 months sugar production has to be utilized for the entire year. There has to be some alternate mechanism to ensure availability of sugar throughout the year at reasonable prices if the present system is to be dispensed with. I request apex bodies of sugar industry to give suitable suggestions to the Government in this regard. The Government is not averse to decontrol of sugar provided the alternate system is acceptable to all stakeholders. I have requested the Prime Minister to request Dr. C. Rangarajan to look at the issues relating to de-regulation of the sugar sector so that the long standing demand of the industry is examined in a non-partisan manner.

In respect of stockholding limit on sugar traders, I would like to inform you that stockholding and turnover limits have been imposed to check unscrupulous traders to hoard sugar and increase sugar prices by creating artificial scarcity in the market. These limits have recently been reviewed by the Empowered Group of Ministers and it has been decided to extend it up to November, 2011 in view of the ensuing festival and .marriage season when the demand for sugar will be at peak. I hope that sugar prices will remain at reasonable level during these months and there may not be any need to extend the limits beyond November. The stock limits on bulk consumers already stands abolished from 14th August, 2011.

Regarding increasing the radial distance between an existing and new sugar factories, the State Governments have already been authorized to increase it beyond 15 kms with approval of the Central Government. The State Governments of Punjab & Haryana have already been permitted to increase the minimum radial distance to 25 kms in their respective states. If we receive requests from other states, we will consider them also.

My attention has been drawn to the so called ‘injustice’ meted out to negative networth sugar factories with regard to SDF loans. You would appreciate that defaults against loans from the Sugar Development Fund is over Rs. 400 crores in respect of cooperative sugar factories alone. It would be difficult for the Government to put more money unless some concrete steps are taken to improve the management of these mills such that the lenders’ money is made more secure.
I would like to take this opportunity to appreciate the Federation for the promotional work they are doing for the sugarcane farmers. My congratulations to their consultancy team for bagging projects abroad.


I am also very glad that NFCSF is making all efforts to improve the productivity of sugarcane and sugar recovery. At present the yield of sugarcane per hectare varies quite substantially from region to region. There is enormous scope of increasing productivity of sugarcane per hectare. What is required is to make varietal changes looking at agro-climatic factors of each region.

In the end, I would like to congratulate all the factories which are getting efficiency awards this year. I hope that this will motivate the recipient of the awards to improve further their performance and other factories to make all out efforts to get the awards in the coming year. With these words, I inaugurate the 52nd annual meeting of the National Federation of Cooperative Sugar Factories.

****

SPEECH AT THE RASHTRAPATI BHAWAN ON “PUBLIC-PRIVATE PARTNERSHIPS FOR RURAL INFRASTRUCTURE IN MARKETING AND VALUE ADDITION”:

SPEECH OF PROF. K.V. THOMAS, MINISTER OF STATE (I/C) CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION AT THE WORKSHOP HOSTED BY HON’BLE PRESIDENT OF INDIA ON WEDNESDAY, THE 15TH FEBRUARY, 2012 AT THE RASHTRAPATI BHAWAN ON “PUBLIC-PRIVATE PARTNERSHIPS FOR RURAL INFRASTRUCTURE IN MARKETING AND VALUE ADDITION”:


Hon’ble President of India, Hon’ble Governors, my esteemed colleagues in the Government, Shri Bhupinder Singh Hooda, Hon’ble Chief Minister of Haryana, senior officials, Agricultural scientists and experts, Vice- Chancellors of Agricultural Universities, industrial representatives in the field of agriculture, friends from the media, ladies and gentlemen:

First of all, I would like to convey my sincere thanks to the Hon’ble President of India for hosting an important workshop with its focus on resurgence of agriculture through a holistic approach, and also for having invited me to express my v iews on a topic that has utmost relevance and significance to our collective effort to ensure a hunger-free India.

If ensuring food security for citizens of the country is our vision, our mission consists of (i) management of the food economy of the country through efficient procurement, storage and distribution of foodgrains (cereals); (ii) ensuring availability of food-grains, sugar and edible oils through appropriate policy instruments; and (iii) making foodgrains accessible at reasonable prices, especially to the weaker and vulnerable sections of the society. With the introduction of the Food Security Bill, 2011 in the Lok Sabha recently, our responsibility grows manifold. As we strive for an effective and all-encompassing infrastructure, the most important challenges that we come across are in areas concerning an ideal warehousing, proper cold storage facilities, safe transportation of food-grains, smooth and fast road and rail links, and efficient material handling.
Agriculture sector needs well functioning markets to drive growth, employment and economic prosperity in rural areas of the country. In order to provide dynamism and efficiency to the marketing system, large investments are required for the development of post harvest and cold chain infrastructure nearer to the farmer’s field. Market infrastructure is important not only for the performance of various marketing functions and expansion of the size of the market but also for transmission of appropriate price signals leading to more efficient markets. A marketing system backed by strong, adequate infrastructure is at the core of agricultural marketing. It must be accepted that our marketing infrastructure is not strong enough to be an effective link to provide the life-supporting system to the scheme of things under our responsibility. Innovation that focuses on improving existing processes, procedures, products or services is the need of the hour.
High investment and entrepreneurial skills are required for creation and management of modern markets. Much as the Government would like to contribute to meet the enormous task at hand, the private industry’s intervention will help in setting up the infrastructure facility. In pursuance of this goal, the Government envisages a substantive role for Public Private Partnerships (PPP’s) as a means for harnessing private sector investment and operational efficiencies in the provision of public assets and services. The PPP can not only fill-in the gaps, it can help the Public and Private organizations to come together, complement and strengthen each other in as varied areas as infrastructure, Research & Development, management techniques, knowledge management and in finding ways and means of optimum utilization of resources through collective strength. Insofar as agriculture is concerned, the PPP can play an effective role in product diversification, processing, value addition and efficient marketing infrastructure.

This assumes significance when we know that agriculture sector contributes around 15% of the GDP and employs about 52% of the workforce in the country. The agriculture production of foodgrains which was 51 million tonnes in 1950-51 is expected to touch a record 250 million tonnes in 2011-12. The total output of oilseeds in 2009-10 went up to 28 million tonnes. The production of fruit and vegetables increased to more than 202.52 million tonnes during 2008-09. The increasing productivity demands that the farming community is provided with better marketing facilities with suitable infrastructure which will help them get remunerative prices for their produce. Here, there is a need for the private industry and the farmer to come together to understand strengths and weaknesses for their mutual benefits and the economic development of the country.

A very significant step has been taken by Government of India to facilitate agri-reforms by enacting the Warehousing Development and Regulation Act. The Act makes warehouse receipts negotiable and thereby empowers farmers to hedge their produce against market volatility and depressed prices during harvesting time by keeping their produce in warehouses registered under the Act and obtain a Negotiable Warehouse Receipt (NWR). The NWR can also be used to raise credit from banks at favorable terms. A Warehousing Development and Regulatory Authority (WDRA) has already been set up to register warehouses and facilitate issue of NWRs. A large number of warehouses in private sector have got themselves registered under the Warehousing Development & Regulatory Act.

India has already witnessed considerable growth in PPPs in the last one and half decade. Further, to tackle the situation arising out of sudden spurt in procurement levels which was a result of increase in MSP during last three years, Government had formulated a scheme for Construction of Godowns through private entrepreneurs under PPP mode in 2008. A capacity of about 150 lakh tonnes is to be created under the scheme through private entrepreneurs and Central and State Warehousing Corporations. The PEG scheme is one of the most successful examples of Public-Private Partnership wherein such a huge infrastructure is being created by the Private Sector for government use in the form of storage facilities. Under a similar PPP model, in the National Policy on Handling, Storage and Transportation of Foodgrains, creation of integrated bulk handling, storage and transportation facilities to the tune of 5.5 lakh MTs at identified locations in producing and consuming areas was completed through private sector participation on Build-Own-Operate (BOO) basis.

The Government proposes to initiate a special purpose vehicle for a dedicated freight corridor to link railways with road and port services for smooth transportation of foodgrains. There is also a proposal to re-distribute the storage centres from producing States to the consuming States. The country will have an additional storage capacity of 10 million tonnes by March 2013. Of this storage capacity, 3 million tonnes will be ready for utilization by March this year. The Department of Food & Public Distribution would welcome every initiative that would prove to be worthy of contributing towards operational efficiencies guaranteeing outputs, and on terms agreeable to all stakeholders. We are open to flexibility in the context of all-round “inclusive growth.”

A vibrant economy is the secret of success of any nation. A nation that cannot take along its each and every citizen to welfare cannot succeed in its efforts of becoming a powerful nation. A successful partnership based on mutual trust and understanding can make wonders as they result in the overall development of the country. To quote Hendry Ford, “Coming together is the beginning; staying together is the progress; and working together is the success.” I am sure the day is not far when India on the threshold of becoming an economic super power will do everything in its hold, in accordance with the democratic principles governing the country, to reach its ultimate aim of providing a welfare State to all its citizens. I hope the discussions that are going to follow now in all related issues will prove to be quite useful to all of us in understanding the critical issues at hand.

I once again thank the Hon’ble President of India for giving me an opportunity to share my views on an important subject concerning development of agriculture infrastructure, and all of you for your valuable time.
JAI HIND!

Syro Malabar Major Arch Bishop Mar.George Allencherry alongwith Prof. K.V.Thomas met Congress President Sonia Gandhi in New Delhi on 29.10.11

Prof. K.V.Thomas discussing about implimentation of Kochi Metro with Shri E.Sreedharan, Delhi Metro Chief in New Delhi on 16.11.2011

International Seminar on Economic Slumps: organised by Fatima Mata National College, Kollam, KERALA

Speech of Prof K V Thomas, Hon’ble MOS (I/c) for CA, F&PD during the International Seminar on Economic Slumps : Challenges to Indian Economy – organized by Fatima Mata National College, Kollam.


Father Principal, Distinguished guests, experts from various organizations, dear students, ladies and gentlemen…

I am indeed happy to be with you all at the international seminar on the challenges of economic slumps to Indian economy. I am pleasantly taken back in time to my days a teacher, facing a gathering of young and vibrant minds, eager to learn, question, find out and imbibe from their teacher: as also, sometime, to ‘teach’ a couple of lessons to those lecturing to them.

I should appreciate the initiative taken by the Fatima Mata National College for organizing such a brainstorming session on a crucial topic as part of their diamond jubilee celebration. I am sure that the deliberations that you are going to have today and tomorrow will touch upon a host of pertinent issues concerning the world economy with particular reference to that of our own country.

Till a few years ago the world had taken for granted the benefits of globalization and global interdependence. Today we are being called upon to cope with the negative dimensions of those very phenomena. Economic, social and political events in different parts of the world have coalesced together and their adverse impact is now being felt across countries and continents.

As you know, the contemporary global economic scenario can not be examined in isolation. The traditional engines of the global economy – countries such as the United States, Europe and Japan, which are also the sources of global economic and financial stability, are today faced with continued economic slowdown. Recessionary trends in these countries are affecting confidence in world financial and capital markets.

If you recall, the 2008 financial crisis was due to the asset bubble in the US housing market and complex interplay of valuation and liquidity problems in the US banking system. Economies worldwide slowed during this period, as credit tightened and international trade declined. Governments and central banks responded with unprecedented fiscal stimulus, monetary policy expansion and institutional bailouts.

Even though the US economy is still recovering from the that crisis and its job creation has not yet improved to the desired level, six months ago, everyone thought that the 2008 financial crisis had been brought under control. In the last three months the situation has changed dramatically, primarily because of the Eurozone debt crisis. The recent developments in the United States, the Euro zone and even China held out the depressing prospects that the global economy may be heading towards an even more serious economic crisis than that of 2008.

Europe is under severe debt. What began as a crisis in Greece has led to a contagious effect as the other major European countries like Spain, Italy and even France have severely strained the European banking system. The Eurozone debt crisis is believed to be more serious because the governments across the world are exhausted with the armory of fiscal and monetary tools as most of these tools were already used to combat the previous crisis and are now left with nothing.

What are the implications for India and What are the ways in which the European debt crisis could affect Indian economy?

It is an agreed fact that we can have satisfaction because our economy has demonstrated lot of strength and resilience after 2008 crisis and our economic growth as well as stock markets recovered very fast.
This much is also clear that the Euro zone crisis will not have any direct impact on our banks because our banks are not exposed to European debt. However, our trade flows could affect if the European banks stop giving trade credit. Many economists think that India is mostly a domestic demand driven economy, so we cannot hit by a global downturn. But this is not true. Our foreign trade in goods and services is already over 50 percent of the GDP. Our stock markets and currency markets are very sensitive to global cues. We are not as insulated from global markets as we think.
In an increasingly interdependent world, we must have contingency planning to guard ourselves from the effects of such global crisis as these developments are bound to have a negative impact on developing countries which also have to bear the additional burden of inflationary pressures.

Inflation as measured by Wholesale Price Index (WPI) has remained around 9 per cent during the first half of current financial year. The inflationary pressure in recent times have emanated from multiple sources, the most important being the global rise in commodity prices and liquidity enhancing policies adopted by central banks in industrialized nations. Food inflation has significantly dropped from a peak of 20 per cent in February 2010 to about 8 per cent June-July 2011. However, the sources of inflation have now switched to non-food; much of it was due to imported global commodity inflation. As per the first advance estimates released by Ministry of Agriculture on 14.09.2011, production of kharif food grains during 2011 -12 is estimated at 123.88 million tonnes compared to about 120 million tones in 2010-11. In the kharif season 2011-12, the country is likely to achieve production of 87.10 million tones of rice, 20.89 million tones oilseeds and 36.10 million bales (170kg. each) of cotton. This augurs will for supply side response to arrest inflation in food items.

I also feel that the current crisis gives us an opportunity to strengthen the sectoral initiatives and specific schemes to reduce the percentage of poverty.
We need to accelerate reforms in agriculture to increase production, encourage industrial growth and promote small and medium enterprises to ensure job creation that will pull people out of poverty. Many of these policies are not specifically targeted at the poor, but I believe that they will create conditions in which poverty will come down.
We also have specific schemes to alleviate poverty. While NREGA is one, Food security is another. Both the Centre and the state governments operate jointly the Targeted Public Distribution System to ensure food security to the poor and the vulnerable sections of the society. I understand there is much to be done to strengthen the system, but progressive reforms are being taken to reduce leakage of foodgrains, bogus ration cards and make PDS more transparent.

I am very much hopeful that the state governments including that of Kerala will take all possible initiatives to reform PDS because the UPA government is committed to come up with the National Food Security Law.

The consultation process on the draft Food Bill has already been completed. We are incorporating some changes in the draft bill and take it for the Cabinet approval before November 20. Our aim is to introduce the draft bill in the forthcoming winter session of Parliament.

Once the bill is passed in Parliament, ration card holders will have legal right over subsidized foodgrains. If any fair price shops fail to provide foodgrains, the card holders can pull that shop owner to the court.

With these remarks, I wish organizers success of the seminar. The suggestions of the experts would help us in our endeavour to fight poverty in the midst of weakening global economic environment.

Thank You.

JAI HIND

Prof. K.V.Thomas releasing the first Operational Report of the FCI in New Delhi on
21.10.2011. FCI Chairman Shri Siraj Hussain, IAS is also seen.