Agriculture Department facing staff crunch

The Karnataka Agriculture Department is facing a 40 per cent staff crunch.

 Of the total 9,614 seats sanctioned (under group A, B C, D) only 5,935 seats have been filled.

 This shortage is hampering the implementation of various schemes and has increased the workload of the existing officers.

 Even as the state is facing drought situation every third year and despite presenting separate agri-budget, the state has failed to tackle this scenario to help farmers and boost the agriculture sector.

 “Human resource is a part of the infrastructure.

 The officials are responsible for checking spurious seeds and ensuring that farmers get certified seeds.

 Also, they need to ensure that fertilisers are issued on time.

 But with such shortage, the government cannot be of any help to the farmers,” said Dr Abdul Aziz, former member of Karnataka State Finance Commission and consultant to the World Bank, Asian Development Bank and Swedish International.

 To meet the growing demands of the farming community in pursuit of the latest technologies, 747 Raitha Samparka Kendras (RSK) have been established, one in each Hobli.

 The RSKs are headed by an Agricultural Officer supported by Assistant Agricultural Officers and Agricultural Assistants.

 However, it has been noted that 65 per cent of the post of Agriculture Officers and Agriculture Assistants, who are responsible for extending technological benefits to the farmers, are lying vacant.

 And also, 45 per cent of the Assistant Agriculture Officers are lying vacant.

 Interestingly, the department does not have anybody for the sanctioned post of senior programmer (computer) and Sr computerists, which has halted the e-governance in the department.

 The government has even failed to find a replacement for even the retired officials.

 When contacted, Bharat Lal Meena, Principal Secretary of Agriculture Department, failed to explain the reason for not being able to fill the vacant post.

 He said that the government has implemented alternate plans wherein farmers are trained to do the job the these officers.

 “We have selected around 10,000 farmers under the Suvarna Bhoomi scheme and they will do the service.

 So, there is no hindrance as such,” Meena added.

 “Economists are linking the issue to the declining agricultural growth in the state.

 The government cannot keep citing drought as a reason for decline in the agriculture sector,” said Azis and added, “these are the hidden facts which are not highlighted by the government.

 They only highlight the increase in production which actually is because of the increase in area under cultivation.

 So the government cannot take credit.

” In reality, Agriculture growth in Karnataka has remained at a dismal 0.

5 per cent in the past decade.

 Agriculture and allied sectors in Karnataka grew in 2009-10 by 3.

4 per cent and 12.

9 per cent in 2010-11.

 In 2011-12 it was -3.

9 per cent.

 It is expected to further come down this year

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ADB asks Asia to ease rice trade amid food fears

 Asia should cut rice trade barriers and stabilise prices, the Asian Development Bank said Thursday, as concerns grow of a supply crunch similar to one that led to the 2008 global food crisis. Asians, the world's top rice consumers and producers, bore the brunt as prices of the cereal spiked in 2007-2008 due in part to export limits by producers and panic buying by big importers, the Manila-based bank said.

Their governments need to reduce export restrictions, which an ADB study found were to blame for a 149 percent price surge four years ago, said Lourdes Adriano, an agriculture and food security expert at ADB. "To enhance resiliency and ensure that rice prices do not jump beyond the reach of the region's poor, policymakers must think and act regionally," she said in a statement.

Experts blamed the last food crisis on slowing production growth at a time of rising demand, bad weather, and competition from biofuels, triggering hoarding and export restrictions. The bank study was released after the UN's Food and Agriculture Organisation early this month cut its global 2012 rice output forecast due to low monsoon rainfall in India, a major rice producer.

The FAO said global rice production is now expected to reach 724.5 million tonnes, 7.8 million tonnes lower than its original forecast. While this year's output is likely to exceed last year's, the FAO urged countries to ensure enough stockpiles because high volatile prices are expected to remain.

Adriano said that while current rice prices were holding steady, the 10-nation Association of Southeast Asian Nations (ASEAN) needed to play a leading role in ensuring adequate supply to the world's most populous region. ASEAN, which produced 110.5 million tonnes of rice last year, could do this by setting up a rice price index, along with an exchange to trade the grain, she said.

This would help ease global price fluctuations while allowing farmers to cut out the middlemen and sell directly to the market at better prices, she added. ASEAN includes the top exporters Thailand and Vietnam, with fellow members Laos, Cambodia and Myanmar seen by the study as having huge potential to expand their rice exports.

The group also includes Indonesia and the Philippines, the world's top rice importers, along with Brunei, Malaysia, and Singapore. Thailand and Vietnam could establish domestic commodities exchanges that would help farmers get better prices, the study said. Rice futures and options could be traded in existing exchanges in Hong Kong, China or Singapore based on a regional price index of the most exported grades of rice, the ADB said. 

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Documents show questions raised about failed plant

ATLANTA — 

Government officials who approved financing for a failed south Georgia ethanol fuel plant that cost taxpayers at least $75 million did so despite repeated warnings and strong opposition by some of the federal overseers who reviewed the projected.

The Atlanta Journal-Constitution (http://bit.ly/OIbiRu) reported Sunday that documents obtained under a Freedom of Information Act request show the doubts that were surrounding the Range Fuels plant at Soperton, Ga., before it obtained government backing.

Located about 80 miles west of Savannah, the Range Fuels operation was proposed to transform wood chips into ethanol fuel, but it closed last year without producing any usable ethanol. Taxpayers lost at least $75 million in loan guarantees and grants.

The newspaper reported that Hosein Shapouri, a senior economist with the U.S. Department of Agriculture in Washington, in late 2008 issued a critique that called the proposed Range Fuels plant "a high risk venture" that should raise "a red flag." Three weeks later, top USDA officials approved the guarantee anyway; in all, it received access to some $162 million in government money, including $6.2 million from the state of Georgia.

The documents show that three USDA officials who vetted the project approved it, and three opposed it. Three others who made critical comments about the proposal had their opinions redacted.

Shapouri, now retired, said decision-makers dismissed Range's many, easily detectable faults.

"Nobody ever expected them to produce anything," he said in an interview. "I told them not to finance it. They didn't listen to me. They decided to rush, rush, rush and give them the money."

Federal officials say they learned from the Range Fuels collapse and have established safeguards to prevent recurrences.

"While the Agency is disappointed that this one company did not succeed . it is important to remember that USDA has a long history of successful lending that supports rural homeowners, business owners, utilities and cooperatives," the agency said in a statement to the newspaper. The agency said the delinquency rate on more than 1 million loans is a scant 2.16 percent, although relatively few involve alternative energy.

Government support for alternative energy has become a hot-button political issue, pitting the promise of energy independence against the prudent use of tax dollars. Both the Bush and Obama administrations strongly supported Range Fuels, which was expected to showcase the feasibility of cellulosic ethanol, as did politicians of both parties keen to bring jobs to Georgia.

Washington continues to hand out grants and guarantees for the commercially unproven technology which attempts to turn wood pulp into fuel for cars and trucks. Last month, USDA approved a $99 million loan guarantee for a North Carolina grass-to-fuel factory.

Opponents criticize giving taxpayer dollars to deep-pocketed corporations and entrepreneurs like Vinod Khosla, the billionaire co-founder of computer giant Sun Microsystems and primary financial backer for Range Fuels. They liken the Range fiasco to the failure of Solyndra, the solar energy project that received $535 million in federal guarantees and produced only political heat for the Obama administration.

"Solyndra had a lack of due diligence just as Range Fuels did," said Sam Shelton, founding director of the Strategic Energy Institute at Georgia Tech. "It really hurts me to see Energy and Agriculture department moneys poured down the drain. Government should be involved in a lot of things, but commercialization of technologies isn't one of them."

Another alternative energy company — also backed by Khosla, who declined comment to the newspaper — bought the foreclosed Range Fuels factory for $5.1 million and plans to produce ethanol using a different method. Williamson said the new company - which is using the taxpayer-funded machinery, but not getting additional aid - expects to one day honor the job-creation goals that triggered Georgia's grant to Range Fuels.

The breakdown of taxpayer losses includes $43.6 million from DOE and $32 million from USDA. Georgia's loss is $6.2 million - unless the factory's new owners succeed

USDA now requires more technical and financial information before, and after, approval of a loan guarantee.

"Obviously, hindsight is perfect," said Brian Williamson, deputy commissioner of the Georgia Department of Community Affairs. "If we got the same deal tomorrow, we would use what we experienced from Range and learn from it."

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Anand Agricultural University to help Panchamrut Dairy produce traditional 'khoa' in machines

VADODARA: In a first of its kind MoU between an agriculture university and a co-operative dairy union, Anand Agricultural University (AAU) has joined hands with Panchmahals-based Panchamrut Dairy to provide a standardized mechanism for production of 'khoa' which is used as the base for a variety of Indian sweets.

As per the arrangement, the state agriculture university will provide a standard prescription to mechanically produce different varieties of 'khoa' (also known as khoya). For this, the university will conduct research and development trials at the process section of its Business Planning and Development (BPD) unit of Integrated Plant for Traditional Indian Dairy Products (TIDPs) at the Dairy Science College.

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Agriculture federation fears loss of property

Antigonish site includes barns, fenced areas and canteen

ANTIGONISH — Dustin Swinkels shook his head in frustration Friday as he explained that his organization has run out of op­tions.

“It never should of come to this," the president of the Anti­gonish-Guysborough Federation of Agriculture said, referring to a tax dispute between the Town of Antigonish and Antigonish County over a piece of property the federation rents.

“We’ve been trying for the past nine years to get this resolved.

This is a property that benefits both the residents of the town and county, and should never have been listed as taxable."

On Tuesday, the federation will appear before a judge in Anti­gonish seeking a judicial review of a decision by Antigonish town council to sell the property, which is owned by the county, at a tax sale on Oct. 3 unless the county pays $330,000 in back taxes by then.

The county rents the property, located within town boundaries, to the federation for $1 a year.

The rental agreement is a 30-year, renewable lease.

The site includes barns, a fenced area and canteen and is used for the annual exhibition, a weekly farmers market, livestock shows, 4-H activities and horse­manship events.

It is the only exhibition prop­erty in the province that is listed by as being taxable.

Mayor Carl Chisholm said Friday that town council’s hands are tied. He said it had to proceed with a tax sale because Municipal Affairs Minister John MacDonell sent them a letter in February directing them to sell any property on which property taxes hadn’t been for three years. In addition, Chisholm said the Municipal Government Act does­n’t allow the town to write off taxes unless it is determined they can’t be collected.

Meanwhile, Owen McCarron, Antigonish County’s deputy warden, said the county would have paid a tax bill if it had prop­erly reflected the town’s costs associated with the property.

That cost would have been much lower than the $330,000 the town is seeking, McCarron said.

The mayor and deputy warden referred to the situation as “un­fortunate" and said the dispute is throwing a wrench into efforts to build a constructive relationship between the two municipalities.

So what created the impasse?

In 2003, the Property Valuation Services Corp. ruled that the exhibition grounds property was taxable at a commercial rate because the property was being rented by a third party.

However, it noted that if the property had been used for municipal purposes or if it had been owned by the federation, it would have been listed as non­taxable.

To have that ruling overturned, the county would have had to appeal it to the Nova Scotia Su­preme Court at that time, said Lloyd MacLeod, senior commer­cial manager for the non-profit corporation tasked with assess­ing taxes in the province.

Or the two municipalities could have agreed to have the local MLA present a private member’s bill that would have exempted the property from municipal taxes.

While past and present MLAs have been willing to table such a bill, that didn’t happen back then because there was the possibility the two municipalities would amalgamate, McCarron said.

The amalgamation became contentious and the Nova Scotia Utility and Review Board threw the issue out, leaving the two municipalities in place.

Meanwhile, because the prop­erty was listed as commercial taxable, the town levied an annu­al tax bill, and the county refused to pay taxes on a property it didn’t consider taxable.

In April, the county offered to pay about $56,000 to cover the tax bill, but that offer was rejec­ted by the town. On Tuesday, McCarron said the county would have been willing to pay more if the town hadn’t proceeded with the tax sale.

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Collinson: Feeding the growth in agriculture

Patrick Collinson

America’s searing summer, which has seen temperatures hit 43C (110F) day after day, has left the once-rich cornfields of the Midwest brown and shrivelled.

It is estimated that, in total, 45 per cent of the corn and 35 per cent of the soya bean crop has been destroyed.

But some investors have been able to feast on the famine. So far this year the ETF for soya beans is up 44 per cent, wheat is ahead 34 per cent and corn is up 25 per cent.

But despite the rise in global food prices, the agricultural funds have had surprisingly weak performance. Allianz RCM Global Agricultural Trends is up just 3.6 per cent over the past year, Baring Global Agriculture is up 4.6 per cent, First State Global Agribusiness is ahead 6.2 per cent while Sarasin Agrisar leads the pack with a gain of 9.7 per cent. Eclectica Agriculture is actually down 2 per cent.

Few agricultural stocks have re-rated to reflect the way that the price of underlying commodities have risen – and therein may lie an opportunity. The ‘super-cycle’ of agricultural investing, unlike the hard commodity trade, is not yet long in the tooth.

A recent note from Fidelity entitled “Food: from crisis to crisis”, highlighted World Bank estimates that demand will rise by 50 per cent by 2030. Much of that will be driven by population growth and a big shift in Asian diets to more meat and dairy products. This has a significant knock-on effect on grain demand as it takes 7 kilos to produce 1 kilo of meat. 

Fidelity reckons there could be a “second green revolution” as increased fertiliser usage improves yields in Africa and Asia. It tips fertiliser companies such as Potash Corp, Uralkali and Mosaic as potentially star stock (but more about them later).  

James Govan, manager of the £132m Baring Global Agriculture fund, is thinking along the same lines. “The things we are investing in are about expanding food supply, such as fertilisers, drought-resistant seed, irrigation equipment and so on.”

Although farm output volumes are down in the US, farm incomes are up because of rising prices, which is likely to spark an investment boom in machinery and fertiliser.

Govan also likes Potash Corp (his largest single holding), Agrium and Mosaic in the fertiliser space.

Potash Corp controls 20 per cent of the world’s potash supply, is the world’s largest fertiliser producer as well as being the third largest phosphate and nitrogen producer on the planet. It’s why it’s nearly always at the heart of every agricultural fund. It may also explain why so many of the funds are showing poor performance figures.

Potash Corp makes up 8.8 per cent of the Baring fund (and is a large part of the Allianz RCM and First State funds). It had a fabulous run until the first quarter of 2011, but was hit hard by the euro crisis and fears of a China slowdown. Over the past year it has fallen from C$60 to C$40.

But Govan’s other major fertiliser stock, Agrium, which is 4.4 per cent of the fund, has had a rather better time. It’s at $96 after trading as low as $65 earlier this year. Agrium is a marketer and distributor as much as producer of fertiliser, and it’s closeness to the farmers has helped.

But it would be wrong to characterise an agricultural fund as just about fertiliser and machinery. Govan describes his fund as having three major components – upstream, midstream and downstream.

Upstream comprises of the obvious fertiliser, feed and machinery companies. Midstream is processing and distribution, where volumes are key, while downstream is customer-facing, such as Nestle and Kraft, or even Tesco.

“We have sold a lot of our downstream names this year – we used to hold Nestle and Kraft – because they were looking like they were reaching full value. We consider the upstream sector as more attractive,” says Govan.

“We wouldn’t say the fertiliser companies are at full value. A lot of them have had strong earnings, but have not re-rated.”

The collapse in energy prices in the US following the success of fracking is a massive boost to agro-chemical and fertiliser companies as they are such large users of energy. Fertiliser companies elsewhere will find it tough to compete.

In the machinery space, Govan likes Deere & Co, which at 7.7 per cent of the fund is his third largest holding.

At the company’s Illinois HQ Govan was earlier this year happily test driving Deere’s latest models – not realising he was a fund manager rather than a farmer.

Deere’s share price has more than doubled over the past three years, as it’s a direct play on rising farm incomes. “There is a very strong correlation between farm incomes, which are a function of output+price, and machinery spending. Agricultural volumes in the US will be down this year, but the price is higher, so demand for equipment will remain strong.”

After the drought in the midwest, one of the most in-demand companies has been irrigation systems manufacturer Lindsay Manufacturing, based in Nebraska. It shot up as the drought hit, jumping from about $55 to $75 in a matter of weeks, and although it has edged back a bit since, Govan remains a fan.

Govan is completely sold on the long-term outlook for agricultural investment, even if over the last year returns have been surprisingly weak. “These drivers – population, diet change and so on – are strong and irreversible and will not change even if there are bumper harvests.” Yet overall valuations on agricultural stocks remain low – the Dax Agricultural index is on a price/earnings of 11.9, largely in line with the general market. “I think the outlook is robust,” he adds.

But there are some interesting short-term figures coming out of the ETF market. After the exceptional rises this year in the likes of soya beans, wheat and corn, speculators are getting nervous. According to ETF Securities, there has been an outflow of $622m from agricultural ETFs in the past year, much of it in recent months. Where there are inflows, it is into funds shorting agricultural products.

Maybe agricultural funds are in a super-cycle. Maybe Potash Corp is now a great buy. But if you are going to invest, expect a lot of volatility along the way. And don’t tell your ethical friends. As Friends of the Earth says, the hunger of people should always come before the hunger for profit.

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