Moneycontrol.com: Russia-India's strategic reserve plan for wheat

Moneycontrol.com: Russia-India's strategic reserve plan for wheat

In June, 2009, at the World Grain Forum, organised by the Food and Agriculture Organization (FAO) in St. Petersburg, Russia, Viktor Zubkov, the first Deputy Prime Minister of Russia, made an announcement. He stated that he was in consultations with the governments of India, China and Turkey to build wheat reserve stocks in their respective countries, as a move towards providing food security. He also said that he was keen to promote joint ventures with overseas investors to develop the 20 million hectares (2.47 acres to a hectare) of unused arable land available with Russia. This offer was reiterated in September at the FAO summit.

Russia’s wheat production had crossed 63 million tonnes and it was looking to produce 100 million tonnes in 2010. Ramping up production faced two major challenges. One was: How to increase production? Second: How to prevent a collapse in prices thanks to overproduction? The first challenge was not a big one for Russia to surmount ­­­— it had the largest reserves of land and water compared to any other country in the world. It could ramp up production easily if it could get the right technology, labour and investments in place.

The second was a bit trickier. The last thing any farmer wanted was a collapse in prices. That is where the largest wheat consuming countries — India, China and Turkey — had to be roped in as partners. If this could be done, Russia could not only become the biggest grain producer in the world, but could also blunt the US’ constant use of the wheat diplomacy card with developing nations (Indians are still upset about the PL-480 deals that the US forced on India in the 1960s and ’70s).

India is at a crossroads now. Should it join hands with Russia or should it partner with the US? “Logically, India should opt for the best deal, without being tied down to any one player,” says a former ministry of external affairs diplomat who prefers anonymity on this issue. Russia is making an offer which the US hasn’t. If the terms are right and the long-term price commitments attractive, India should tie up with both countries thus preventing a situation where India would have to import wheat at astronomical prices.

That India will have to import food grains is evident to everyone. The fields of Punjab — the grain basket of India — are getting less fertile with salinity because of the excessive use of fertiliser and rapid depletion of ground water reserves. Rice that should have been grown extensively in the North-East is instead being grown in Punjab and Haryana. Water scarce Maharashtra grows sugarcane — a water intensive crop.

The case is even more critical in the case of pulses, which provide most Indians their protein component in their food. These pulses are consumed almost nowhere in the world except in India, Pakistan, Bangladesh, Nepal and Sri Lanka. Official estimates expect the country’s pulses production to increase from around 14.86 million tonnes in 2009-10 to around 15.73 million tonnes in 2011-2012 (a 6 percent increase). But, demand for pulses is expected to rise faster from 18.29 million tonnes in 2009-10 to around 19.91 million tonnes in 2011-2012 (9 percent). Increasing population and reduction of poverty are both likely to see demand rise faster than official estimates. Today, India imports pulses from Malaysia, Brazil, Argentina and Indonesia.

Unfortunately, when India or China — large consuming markets — decides to purchase anything from spot markets, prices tend to zoom by 25 to 50 percent. In case both decide to purchase anything — be it oil, oilseed, cement, fertilizers, or food grain — at the same time, prices may shoot up by even 100 percent. That is why long-term contracts and buffer stocks are critical to the country’s food situation.

Sadly, the government does not pay attention to this, says an executive from the Central Warehousing Corporation (CWC), which stores much of the grain that the government procures either from domestic markets or from overseas. In July 2009, a leading publication (India Today) secretly filmed how 300,000 tonnes of pulses that “were imported from the international market using taxpayers’ money … are lying [to rot for several months] at Tuticorin port . . . and in the warehouses of CWC.”

“In fact, there is a general destruction of value in all our food grain and vegetables, at multiple levels, and the government isn’t even bothered about it,” says an industrialist engaged in providing refrigeration services to agro-producers.

First there is a destruction of value in perishables not being stored, or being destroyed on the way to the markets. Then comes the procurement process. When support prices are announced for wheat or rice, the procurement is actually done by the state government and stored in state warehouses which are neither temperature- or humidity-controlled, nor protected from insects and rodents. This grain lies with state governments for a few years before being transferred to the central government at a loss because of the destruction (or theft) of the food grain. That is one reason why losses running into thousands of crores of rupees can be seen on the books of almost every state government which procures food grains. The central government too puts this grain in CWC warehouses which are similar to state government warehouses, exposed to rodents, humidity and pests.

That is why, in 2000, the ministry of agriculture and food floated a global tender for scientifically designed silos and warehouses. Adani Logistics Ltd. (ALL) won the global tender to build as a pilot project silo storage units with a total capacity of 600,000 tonnes at seven centres in India. “We think this is critically important if India has to manage its food security, and are waiting for the pilot project to be converted into a bigger full-fledged storage plan,” adds, Pranav Adani, director, ALL.

Alok Sinha, former chairman, Food Corporation of India, is on record stating that “without such storage facilities, India will continue to lose out on the food front”. Whether India grows its own food, or imports it, if it is not stored properly, there will be degradation in quality and losses as well.
“The urgent need of course is to find countries where India can grow its pulses and its grain because India’s farms may just not be enough,” adds Adani.

By RN Bhaskar/Forbes India

03/02/2010 |

The Moscow News: Regional train fares reviewed

http://www.mn.ru/news/20100203/55408227.html

Evgeniya Chaykovskaya 

The tariffs for electric trains rose sharply on Jan. 1 with the the passengers forced to pay a fare of 16.5 roubles per zone up from 14 roubles. On top of that passengers had to pay 26 roubles for crossing the city borders. As a result,  an eight-minute ride from Lyubertsy, a twon 2 km east of Moscow, to Vykhino metro station inside the city borders rose from 14 to 42.5 roubles.

The move fuelled an outrage among passengers, most of whom travel daily from their suburban homes to work in Moscow and find it hard to affort tripled fairs. The number of passengers fell significantly after the price hike, while the number of free-riders rose.

The Society for the Protection of the Consumer Rights has sued the Russian railways claiming that the hike in tariffs was illegal and affected more than 3 million people.

Moscow authorities, the federal tariff regulator and railway officials gathered on Jan. 29 to discuss the problem..

On Feb. 2 they announced that the the 26 roubles charge for crossing the city border was scrapped. The ticket for travel within one zone will now cost 16.5 roubles, which is 18% more than the previous 14. A train ride incide Moscow will cost 26 roubles. The changes should come into effect by Feb 15.

February 3, 2010

A Rare Show of Unity Amongst the Opposition Parties, the Largest Anti-Government Protest in Years, and a Governor in Trouble – Is There Something Different About Kaliningrad?

The size of the demonstration was unprecedented. While the police estimated the crowd at around 7,000, the organizers cited a figure of anything from 10,000 to 12,000 people. Konstantin Doroshok, the leader of the Kaliningrad branch of Solidarnost, one of the opposition movements which helped to organize the demonstration, said the real number could have been higher, had it not been for hedging by the authorities and the Baltic enclave’s notoriously harsh weather. “When we first applied for the demonstration we estimated that about 15,000 people would attend,” said Doroshok. “But the authorities fenced off the area to restrict numbers. Then there’s the weather – there was snow, frost, wind – lots of people have said they wanted to go but decided not to come because of the weather, especially if they had children.”

United against United Russia

The organizers from the official opposition parties like the KPRF and LDPR that have factions in the State Duma, to the more marginalized Solidarnost, whose leaders include Boris Nemtsov and Gary Kasparov, are all political movements with their own ideological agendas. But the protestors they attracted to the streets were motivated by that perennial and most mundane of grievance of malcontented publics everywhere and in all ages – money.

The straw that broke the camel’s back was a decision by Georgy Boos, the governor of the Kaliningrad Region since 2005, to use powers granted him under an amendment to the tax code to set the base rate of transport tax in his region. Apparently sensing the public mood, he cancelled that plan two days before the protest, but it was too late – and while it was the catalyst, it was far from the only grievance.

A resolution drawn up at the end of the demonstration centered on the cancellation of the transport tax hike and called for the law (clause 2, article 31 of the tax code) that allows regional governments to set the base tax rate to be repealed. But it also included demands that the transport tax be included in the price of petrol; that fuel costs be reduced (and the dependency of domestic prices on the oil price in foreign exchanges be ended); that customs barriers on importing used cars should be dropped (like Vladivostok in the Far East, Kaliningrad does a brisk trade in importing second-hand cars from abroad); that taxes be frozen until the end of the economic crisis; that Kaliningraders’ pensions be increased; and, of course, that Georgy Boos resign.

The Kaliningrad region is small by Russian standards – with a population of around one million, about half of whom live in the city of Kaliningrad – it is a fraction the size of the Moscow or Leningrad Regions. The fact that it produced the largest demonstration for the best part of a decade is above all “indicative of the level of discontent with the activities of the authorities,” said Doroshok.

Kaliningrad, of course, is not quite Russia. Sandwiched as it is between Poland and Lithuania, regional political parties receive “about half the attention from the federal authorities” as their counterparts do in the rest of the country, reckons Doroshok. And like Vladivostok, which has also seen anti-government demonstrations in the past couple of years, its proximity to other countries allows its citizens to see that another life is possible. “We can see that groceries are half the price and wages are twice as high over the border,” he added.

But those factors were helped along by an unusual level of unity displayed by the usually fractious opposition groups. According to Doroshok, the cooperation was born of a common understanding that United Russia is exploiting their divisions. The parties agreed to put their political differences aside to back a non-political movement called Spravedlivost (“Justice”) that took on the organization of the meeting. In this sense, focusing on near-universal concerns about taxes, rather than ideology, paid off. Banners with slogans like “United Russia – United against Russians!” left little doubt as to who the demonstrators blamed for their troubles.

But despite openly anti-government sentiment, including placards calling on President Dmitry Medvedev to fire Prime Minister Vladimir Putin, the crowd’s real ire was reserved for its governor.

Its not just ordinary citizens who have an axe to grind. “He came from Moscow, and was pretty aggressive with regard to regional political and business elites,” said Nikolai Petrov, an expert on regional affairs at the Carnegie Moscow Center. The size and timing of the protest – not long before Boos’ first term as governor ends in September 2010 – may indicate that the organizers had powerful backers, suggested Petrov. “A massive demonstration of this scale would only be possible if some members of the regional political elite are participating in or at least backing it,” he said.

Petrov did not elaborate on what form such “inspiration” from members of the political elite might have taken, but it is a charge Doroshok denies. “There might be political clans in United Russia, but we had no contact with them. We just raised economic questions, and people came to protest. It was entirely about social and economic policies,” he said.

Either way, the obvious antipathy toward Boos on behalf of a large portion of the Kaliningrad public and his failure to prevent the largest anti-government demonstration has raised questions about his political future. The president’s envoy to the North Western Federal District flew to the region on Sunday, swiftly followed by a high-ranking delegation from United Russia. An apparent attempt by Boos to assuage the protestors by suggesting to put an “against all” option on electoral ballots, released in a statement on Monday, was quickly stamped on by the party leadership. Boos’ office retracted it and the Untied Russia denied such a suggestion had even been made (“it’s expensive and leads nowhere,” wrote Boos in a retraction posted on the United Russia Web site).

All that may make him political toast. But his future is in the hands of President Dmitry Medvedev, rather than the voters of Kaliningrad (the abolition of gubernatorial elections in 2004 was another of the grievances voiced on Saturday), and Boos has so far been a rising star in the United Russia fold. “He’s strongly supported by United Russia, and there were rumors that there might be a job for him in Moscow if Mayor Yuri Luzhkov is replaced,” said Petrov. “The question is whether and how he can reach an agreement with the protestors and avoid a repetition, and above all, avoid creating a precedent for taking to the streets against unpopular governors.”

February 3, 2010
Russia profile: Outdated Paperwork

http://www.russiaprofile.org/page.php?pageid=Politics&articleid=a1265223859


Comment by Alexander Arkhangelsky
Special to RIA Novosti

With the Arrival of the Apple iPad and Other Electronic Readers, Re-Opening the Baikal Cellulose Paper Mill Seems Absurd

In the days of my literary youth, when writers were at war with each other, there were two key points that everyone agreed on, both the Westernizers and the Slavophiles, the anti-Semites and the sons (and daughters) of Zion, the successful and those who have been pushed to the sidelines, the Soviets and the anti-Soviets. There was the diversion of the northern rivers away from Siberia to Uzbekistan and beyond. And there was the threat posed to Lake Baikal by the paper producing mill.

No matter how much the authorities tried to convince the public that, once reversed, the northern rivers would unite the country with their irrigative force without any harm being done to the inhabitants of Siberia, nobody believed them. And no matter how hard they tried to convince the intelligentsia that cellulose production is completely safe, nobody listened. But everyone listened to the writer Valentin Rasputin who defended Baikal, and the writer Sergey Zalygin who was irreconcilably opposed to the turning of the rivers.

Back then, nobody thought that the battle over the Siberian rivers and the great Baikal had anything to do with politics – that just seemed too preposterous. But this fight over nature was merely a rehearsal for the orchestra; it was a mild expression of the people’s brewing discontent with everything from the omnipotence of the Communist Party of the Soviet Union to the distributive economy. The fact that the system shuddered and recoiled, and the Soviet ministers were forced to hear out the environmental activists and conjure up excuses, look for compromises, pull back and give up, pointed to an inner weakness that would soon lead to the system’s speedy demise. 

Thankfully, today nobody brings up the Siberian rivers anymore, except for Mayor Yuri Luzhkov who some time ago called for the old project to be brought back, and for a rejection of dissident stereotypes. But who listens to Luzhkov beyond Moscow’s ring road, except maybe Ukraine? Now the cellulose mill is making headlines once again, and the arguments in favor of putting it back in operation are all too familiar. The first claim is that Baikal is clean. Nobody is polluting it anymore, many years have passed; nowadays waste is filtered and does little harm. The second claim is that people need to work somewhere. We cannot take potential jobs away from the local inhabitants. The ecology is important, but salaries are salaries.

And here we have to leap from the past to the future. The moment that computer network technology appeared, large companies started foregoing paperwork. Economy, convenience, hygiene. And with the appearance of magnetic ink, which erased the fundamental difference between a paper book and an e-reader, a reverse and expedited countdown of historic time began for the print industry. It is completely obvious that in the next few years these appliances will become thinner, softer and more pleasant, that the size of the screen will be increased from today’s six inches to a new standard of nine, that bookstores will turn into mass exhibitions of sample print editions meant to help us decide what text we want to purchase and download on to our electronic book. Only expensive, custom-made editions will be sold on paper, and as a rule these will be printed not on cellulose, but on flaxseed and other sophisticated paper.

As for newspapers, their print runs have long since stopped growing. More and more often, respected publications are replacing their usual paper editions with online issues: the former are becoming just an addition, a supplement, a complimentary service at a café. But in two or three months, the Apple tablet computing device, the iPad, will hit the world markets. This appliance is not very useful as a computer, but it is perfect as a “newspaper carrier.” In reality, it is a prototype of the future “newspaper e-reader, the swallower of voids,” as the poet Marina Tsvetaeva would have put it. It too will become thinner, softer and more convenient; as for the price, even today it is supposed to cost less than an iPhone, and that means that the day after tomorrow it will be even cheaper.

So the question is, who predicted a growth in mass demand for celluloid products? What market conjuncture will the Baikal mill fit into when it reopens? What will happen to its workplaces? Maybe it is better to turn the situation around and face it? To use Russia’s long-term advantages and not manufactured, quick projects? Maybe money should be spent not on re-launching a doomed project, but on developing tourism? And employ people in this area? Obviously there is no need for administrative resource for this, but for political will; you can’t make guests come over with an order from the Council of Ministers, they should be lured by the country’s extraordinary image. This country should be open to the world and smiling. It should rebuild itself and develop for others.

Mikhail Chekhov once came up with a brilliant formula for development: there is a need for a big aim, big hurdles and a big example. We already have one of these elements. We will probably have to look for a big example beyond the borders of our beloved motherland – we are neither the first nor the last to have to learn to present our country in a new light.

But we have an enormous problem with a big aim. Instead of this, we have momentary thinking, short-term solutions, forgetfulness for the lessons of the past and an inability to think about the future.