News Wrap


Recent study reports indicate that the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has propelled rural wages outstripping urban wages, but productivity has not increased. The MGNREGA has created a shortage of farm labour in India. Schemes such as the MGNREGA have affected farm labour adversely, and can have a negative impact on productivity and prices. The profitability of the farmer is adversely affected, by the reduction in supply of farm labour, leading to an escalation in farm wages. Rural wages have grown by 17% average, since 2006-07, and outstripped urban wages, while productivity has not increased. Between 2004-05 and 2011-12, farm labour declined by around 30.57 million, while the total size of the work force kept rising. During the same period, the share of agriculture declined from 56.7% to 48.8%. Mechanisation and at the state level land policies and customised hiring involve lengthy time spans. Again, unlike USA, China and the European Union, there is no need for India to grow more grain, for feeding the meat industry. Sustained afforestation efforts, better transport and communication facilities would help farmers better.

Rain showers in February and March across the country have damaged significant amounts of the Rabi crop, and are also likely to impact farm labour and wages, and retail food prices for consumers. Unseasonal rain and crop damage, reduce labour demand and wages, though temporarily. 15% to 50% of the crops have been damaged. Across Uttar Pradesh, Haryana, Punjab, Maharashtra, Gujarat and Madhya Pradesh, wheat, mustard, potato and a range of vegetables and fruit are believed to have been damaged.

Potatoes and grapes
Potato production in West Bengal is expected to touch 110 lac tons (lt), a 15% to 20% increase over last year’s production of 90-95 lt. A bumper crop, with a weak demand from other states, has led to a free fall in potato prices in West Bengal, which is the second largest potato producer after Uttar Pradesh. About 40% of the total production is exported to other states. The ‘Jyoti’ variety is now fetching Rs 210-260 for a 50 kg pack, which is Rs 4.20-5.20 a kg, at the farm end. The price is 30%-40% lower, compared with the same period a year ago. A bumper crop along with lower winter sales to Andhra Pradesh, Odisha and Assam, have caused potato stocks piling and potato prices crashing. The rise in potato prices in the local market during 2014, led the West Bengal government to impose a ban on inter-state potato trade. Neighbouring Odisha and Assam encouraged potato cultivation in a big manner, to reduce dependence on West Bengal. The West Bengal state government has offered subsidy to help promote inter-state sale of potatoes, upto 2 lac tons. A Rs 10 crore fund subsidises transport cost to other markets.

The Sahyadri Farmer Producer Cooperative is Nashik (Maharashtra) has around 6000 hectares of farm land, where around 1500 farmers cultivate grapes, at this time of the year. Unseasonal rains in February have destroyed several acres of grape vines in the region. ‘A’ grade grape crops are normally exported to Europe, Gulf and other Asian countries. Around 10%-15% of Maharashtra’s grape crop is exported. Till date only 250-300 containers have been exported, when normally it is around 900-1000 containers. Rains have damaged grape crops in Satana, Nampur, Bhuyane, Nashik, Dindori, Sinnar, Malegaon and Pholpatta in Maharashtra. From Rs 80 a kg for fresh grapes meant for exports, farmers are sifting the damaged crops and selling at Rs 10-15 a kg to the fruit processing and dried raisins industries. In the 2013-14 season, from April 2013 to October 2013, Maharashtra exported 1,56,872.29 tons of grapes, valued at Rs 1570.08 crore ($263.35 million). Comparatively in the 2014-15 grape season till date, the state exported just 37,181.43 tons of fresh grapes, valued at Rs 393.17 crore ($65.21 million) only.

Ukraine Peace Deal
Under the peace deal hammered out between Russia, Ukraine, France and Germany on 11 February 2015 in Minsk, guns would have fallen silent, heavy weapons pulling back from the front, and Ukraine trading a broad autonomy for the east to get back control of Russian border by the end of 2015. Russia and Ukraine differed over what exactly they had agreed to in the marathon 16-hour talks, including the status of Debaltseve, a key town now under rebel siege. The Ukrainian parliament is to give wide powers to the eastern regions, as a condition for restoring Ukraine’s full control over its border with Russia. More than 5300 people have died since April 2014 in eastern Ukraine amid fighting between the Russian backed separatists and government troops. Battles still raged as the four leaders held peace talks. A 50 to 140 kilometre wide buffer zone is to be set up, as both parties were expected to pull back heavy artillery and rocket systems from the front line, depending on their calibre. The rebel regions are to hold a new local vote under the Ukrainian law. Ukraine’s constitutional reforms would grant wide powers to the eastern regions, including the right to form their own police, and to trade freely with Russia.

Shortly after the start of the ceasefire, in east Ukraine two civilians were killed by rebel rocket fire. The firing allegedly came from an area under the command of renegade group of Cossack fighters, who insist they will not obey rebel leaders’ command to stop firing. Rebels ignored the truce to storm a strategic town they had surrounded, Debaltseve, forcing thousands of government troops to flee. President Petro Poroshenko of Ukraine has won approval from Ukraine’s National Security and Defence Council to invite UN-mandated peace keepers into the country, to monitor the front-line. The plea for international peace keepers to enforce a shattered ceasefire in the east, has run into strident opposition from pro-Russian rebels and Moscow. Russia has been covertly deploying soldiers and military backing to the pro-Moscow separatists. To counter the threat from Moscow, Lithuania, one of the Baltic states on the front-line of the new cold war with Russia has announced the return of conscription. Compulsory military service will apply to between 3000 and 35000 men each year, between the ages of 19 and 26. Lithuania, like Ukraine, borders Russia, and contains significant Russian minority populations. USA is supplying defensive systems to Ukraine, to counter advanced Russian weaponry, flowing to the separatist rebel forces. Britain has despatched a 75-strong training team to Ukraine. The United Arab Emirates is transferring weapons, worth an initial $110 million to Ukraine.

Vol. 47, No. 40, Apr 12 - 18, 2015