Voluntary Report - public distribution

**Date:** 7/16/2004

**GAIN Report Number:** IN4074

IN4074

**India**

**Agricultural Situation**

**Weekly Highlights and Hot Bites, #27**

**2004**

**Approved by:**

![](media/image1.wmf)Michael Riedel

U.S. Embassy, New Delhi

**Prepared by:**

A. Govindan, Santosh Kr. Singh, V. Shunmugam, Sayed Sarwer Hussain

**Report Highlights:**

\*Monsoon lagging in India\*, \*India nears a biotechnology crossroads:
US Ambassador\*, \*New Biotech Policy in 6 months\*, \*Cooperation
between G-99 and G-20 vital\*, \*Indo-Thailand trade pact on course\*,
\*Metro in sourcing deal with Punjab government\*, \*Retailers try to
crack barcode jumble\*, \*BANGLADESH: Subsidized Indian rice dumped into
Bangladesh\*, \*BANGLADESH: Flood situation worsens\*.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

New Delhi \[IN1\]

\[IN\]

Welcome to Hot Bites from India, a weekly summary of issues of interest
to the U.S. agricultural community. The report includes information that
has been garnered during travel within India, reported in the local
media, or offered by host country officials and agricultural analysts.
Press articles are included in this report. Significant issues will be
expanded upon in subsequent reports from this office.

DISCLAIMER: Any press summary contained herein does NOT reflect USDA's,
the U.S. Embassy's, or any other U.S. Government agency's point of view
or official policy.

# MONSOON LAGGING IN INDIA

There has been a significant slowing of monsoon activity during the past
two weeks, coinciding with the peak-planting season for most fall
harvested crops. Unless the monsoon revives soon, crop production may be
in jeopardy. For more details, please see GAIN report IN4071. (Source:
FAS/New Delhi)

**INDIA NEARS A BIOTECHNOLOGY CROSSROADS: US AMBASSADOR**

David Mulford, the US Ambassador to India, published the following
biotech op-ed in the Indian media today:

"India has been a leader in applying science to meet the challenge of
feeding its large and growing population. The dire predictions of the
1960s, when it was feared that India would not be able to produce enough
food for its people, did not come true. Several reasons accounted for
this miraculous turn-around: pro-science policies, investments in water
and fertilizer, and adoption of new seed-based technologies. Instead,
the outcome was that food grain production more than doubled. Clear
public policy commitments, together with a willingness to make new
investments, enabled India to feed hundreds of millions of people.

Once again, India faces momentous choices. Despite past progress, this
country is still home to the largest number of hungry people anywhere in
the world. Some 300 million face food insecurity, more than in all of
Africa. An emerging consensus now exists that the economic well being of
farmers must also be improved. Thanks to continuing advances in science,
here in India and around the world, India has the potential to feed its
hungry and lift its farmers out of poverty. Agricultural biotechnology
is helping researchers understand and design the genetic potential of
crops to produce more food than ever before.

Scientists in India are developing new ways to reduce losses from
devastating pests and diseases. They are moving rapidly to develop
drought resistant, high nutrition crops. New strains of rice, wheat,
maize and mustard will offer a means of designing a nutritional safety
net for the poor. These crops have the potential to reduce the insidious
burden of iron-deficiency anemia or Vitamin A deficiency, which affects
huge numbers of people, especially women and children. They are also
developing foods with built-in, biotechnology-based protection against
insect attack, which can be safer, with far lower levels of dangerous
mycotoxins resulting from fungal infestation after insect damage.

Despite tremendous opportunities, opposition to these technologies
inhibits their delivery to India's farmers and consumers. Unlike medical
biotechnology, where new vaccines and other advances are welcomed, a
most unlikely alliance of environmental groups and pesticide
manufacturers has sought to block what are ultimately life-saving
advances in food production. Ironically, individuals and organizations
committed to protecting the environment have sought to prohibit new
strains of biotech cotton, which require far fewer applications of toxic
pesticide. Less pesticide use can mean more income and better health for
farmers and their families, not to mention a general improvement for the
environment.

Farmers and scientists around the world are coming together to stand up
against campaigns of disinformation. Recently, Brazil finally approved
biotech soybeans, after smallholder farmers in that country showed that
they were losing many hundreds of dollars of income per hectare because
activists had used the courts to block the new technology. These farmers
knew that this same technology had been approved as safe elsewhere in
South America, North America, Europe, and Japan. Scientific analysis and
science-based regulatory systems are the foundation of food safety and
also help promote global trade.

Another tactic used by those seeking to block scientific advances in
agriculture is to assert that biotechnology is simply a tool with which
multinational corporations will subjugate unwitting farmers.

Moving beyond this rather demeaning characterization of farmers as
unable to make sound choices for themselves, the arguments advanced in
the name of anti-globalization are not convincing, especially in India.
India has a tremendous scientific capacity that is generating
agricultural biotechnologies. Government is investing wisely through the
work of the Department of Biotechnology, the Indian Council for
Agricultural Research, and others. Many companies, Indian and American,
are also seeking new solutions to the problems facing India's farmers.

India and the United States are launching a series of joint research
efforts aimed at developing crops that resist pests, increase yields,
and improve nutrition. These technologies will link both public and
private sector efforts to develop crops that benefit farmers and
consumers, and in particular to help feed India's poor. A significant
step in this collaborative direction occurred on June 29, 2004, when
Secretary Bhan of the Department of Biotechnology and I signed a Letter
of Intent to enhance cooperation in agricultural biotechnology research
and development.

Continued investment in agricultural biotechnology in India will
ultimately depend on the development and commercialization of products
that serve the needs of India's farmers and consumers. In so doing, it
is critical that India makes scientifically sound choices that reflect
the country's food security, environmental, and economic interests.
Possibly well-meaning, but seriously misguided groups, often with links
to countries where current agricultural productivity and food security
are no longer significant concerns, have spread unfounded fears and
misinformation.

Agricultural biotechnology alone will not of course solve the challenge
of feeding a growing population. The causes of hunger are complex, as
are the solutions to its eradication. There are no panaceas. Sound
technology and policy, natural resource management, investments in new
techniques, efficient markets, and expanding global trade are all
important.

But turning our backs on science will hardly aid the cause of
agricultural development, food security, and rural economic growth in
India. On the contrary, unscientific and emotional opposition to
agricultural biotechnology will slow the development of new means of
combating drought, pests, and crop diseases. The resulting delays may
not be felt by the well-off, but they will do serious harm to the poor.
All of us urgently need the benefits science has to offer."

(Source: Business Standard, 07/16/04)

## NEW BIOTECH POLICY IN 6 MONTHS

Delivering the keynote address at a conference organized on the
sidelines of BIO 2004 in Bangalore, Dr M.K. Bhan, Secretary, Department
of Biotechnology said that the government is expected to frame a new
biotech policy within six months and establish a single-window regulator
for the sector within two years. According to Dr. Bhan, two commissions
would be set up by the government by end-July, one to evolve a national
biotech policy and the other to look into models for ideal
public-private partnerships. Dr. Bhan said that his Ministry is aiming
to have a \"TRIPS compatible Intellectual Property Rights\" policy in
place by 2005, with an appropriate enforcement mechanism. (Source:
Business Line and Tribune, 7/12/04)

**COOPERATION BETWEEN G-90 AND G-20 VITAL**

Mr. Kamal Nath, the Indian Minister of Commerce and Industry, said that
cooperation between the G-90 and G-20 countries is vital in order to
achieve a new global trading order that is supportive of the aspirations
of the developing countries. Addressing the first Ministerial Meeting of
the G-90 at Port Louis in Mauritius, Mr. Kamal Nath said that India and
the G-20 would like to work closely with the cotton producers in the
G-90 to achieve the removal of the present market distortions, and to
win a fair deal for the industrious and cost-efficient African
producers. The Minister said that the G-20 had presented constructive
ideas in market access that adhered to the Doha mandate, while
addressing the different capacities and sensitivities of different
countries in undertaking reduction commitments. \"All of us have a vital
stake in ensuring a pro-development outcome under the Doha Work Program.
A well-coordinated strategy between the G-90 and the G-20, based on the
common good of developing countries, will take us closer to this goal\",
Mr. Kamal Nath said. (Source: Press Information Bureau, GOI, 07/12/04)

**INDO-THAILAND TRADE PACT ON COURSE**

The Free Trade Agreement (FTA) between India and Thailand will go into
effect on September 1, 2004, according to Thailand's Minister for
Science and Technology, Mr. Korn Thapparansi. There are eighty-two items
in the 'early harvest' scheme, on which the custom duty will be reduced
to 50 percent of the current level effective September 1, 2004, with
further reduction to 25 percent in September 2005, and which will become
duty free effective September 2006. The Minister said since Thailand has
FTAs with several countries, Indian companies would have greater market
access if they set up shops in Thailand. The second phase of the free
trade negotiations would begin soon, covering 5,000 items, according to
Thailand's Vice Minister of Commerce. (Business Line, 07/11/04)

*Post Comment*: Agricultural products in the 'early harvest' list
include mangoes, grapes, apples, durians, pomegranates, wheat, and
several fish categories.

## METRO IN SOURCING DEAL WITH PUNJAB GOVERNMENT

Metro Cash & Carry International, the Germany-based retailer, signed an
MOU with Punjab State Agro Industries Corporation to identify and source
food products for their international operations from Punjab. The CEO of
Metro met with the Punjab Chief Minister and discussed setting up Metro
Cash & Carry distribution centers in Punjab. The Chief Minister stated
that Metro will be able to provide forward linkages to markets to make
Punjabi farmers more competitive and profitable. Metro commenced its
Indian operation in Bangalore in October 2003. (Source: Business
Standard 7/13/04)

**RETAILERS TRY TO CRACK BARCODE JUMBLE**

Larger Indian retailers such as Foodworld, Giant, Nilgiri\'s, and
Trinethra may soon stop stocking goods that are not bar coded. The four
supermarket chains have asked domestic fast moving consumer goods (FMCG)
companies to put barcodes on their packages, failing which, either the
products will be rejected or subjected to stiff penalties. The retailers
are insisting on the barcodes as it facilitates billing, inventory
management, and forecasting consumer demand. While larger FMCG companies
like Hindustan Lever Ltd., Nestle, Britannia, Dabur, etc. have started
barcoding their brands, the smaller companies are resisting change. EAN
India, a nonprofit organization set up by various industry associations
and the Ministry of Commerce to promote global standards in the domestic
industry, is also pushing for early adoption of bar coding. (Source:
Economic Times 7/02/04)

**BANGLADESH: SUBSIDIZED INDIAN RICE DUMPED INTO BANGLADESH**

The Bangladeshi Agriculture Minister said the dumping of Indian rice is
one of the major reasons why farmers in Bangladesh are not getting
reasonable prices for their product. Talking at the closing ceremony of
the donor-funded project "Poverty Elimination Through Rice Research
Assistance (PETRRA)", the Minister said that the Indian government buys
rice from farmers at \$257 per ton and exports it rice to Bangladesh at
only \$127 per ton. In many states of India, farmers get free
electricity and seed prices are much lower than in Bangladesh, he added.
Rice production in Bangladesh has reached 26 million tons, enough to
meet domestic requirements. (Source: The Daily Star, 07/14/04)

**BANGLADESH: FLOOD SITUATION WORSENS**

The flood situation in the northern, northeastern, and southern regions
of Bangladesh worsened as torrential rains and raging waters inundated
fresh areas, submerging houses and fields, and disrupting communication.
Food, drinking water, and medicine shortages have added to problems. A
lack of materials to erect make-shift shelters has left thousands living
in the open as the rains continued. Waterborne diseases have broken out
in many of the areas, with little medical aid available to treat them.
(Source: The daily Star, 07/11/04)

# RECENT REPORTS SUBMITTED BY FAS/NEW DELHI

  ----------- --------------------------------------- -------------------
  **REPORT    **SUBJECT**                             **DATE SUBMITTED**
  \#**                                                

  IN4068      Weekly Highlights & Hot Bites, #26      07/09/04

  IN4069      FAIRS Product Specific -- Amendment to  07/13/04
              the GOI order banning imports of all    
              Poultry and Pork Products               

  IN4070      The Indian Budget -- Agricultural       07/13/04
              Highlights                              

  IN4071      Monsoon Progress Report No. 2           07/13/04

  IN4073      FAIRS Product Specific - GOI publishes  07/16/04
              an Amendment to the Prevention of Food  
              Adulteration Rules                      
  ----------- --------------------------------------- -------------------

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