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aking on the UPA government rethinking," Pawar said on the sidelines farmer who produces it will not get a over the Food Security Bill, of the inauguration of the office. remunerative price and will end up

"Foodgrains are the need of everyone. Tunion Agriculture Minister cultivating another crop as wheat is not However, we buy wheat for Rs.18 per Sharad Pawar said here that huge fetching him a good price.kg and want to provide it for Rs.2 per "If the farmer starts cultivating another concessions on food grain could lead to kg to nearly 70 percent of the people," crop, wheatproduction will decline, serious problems.

Pawar, who was in Mumbai to he said. thereby making the country's food "What I am trying to say is that giving a inaugurate the renovated Nationalist security problem more serious," Pawar 50 percent or even 75 percent subsidy is Congress Party (NCP) office, said that said.alright. But what we are not considering The inauguration of the NCP's new the quantum of subsidy needs serious here is the situation of the farmer who Mumbai office was attended by several reconsideration.

"Whether giving concession to nearly is producing food grain," Pawar added. central and state ministers, including He said that while 70 percent people 70 percent of the population is Ajit Pawar, R.R. Patil, Tariq Anwar and getting wheat at Rs.2 per kg is good, the necessary is a matter of serious Praful Patel.

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Pawar speaks against concession on food grain

2 everages & Food Processing Times- -2013B Jan-I

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uptick in PE investment in the sector. According to Srivastava, the margins from the PE is the first step, because fter a brief lull, private equity “For a company like Parag, growing at will be better in companies that are the PE funds will make sure the (PE) firms are back to 35 per cent in the past 10-15 years, A offering value-added products. While company's books are clean, he says.investing in India's $70-heavy investment is required to Kunal Bhakta, partner & head of milk production alone will not be billion (about Rs 3.5 lakh crore) dairy maintain this growth and for that, research, Lastaki Advisors Pvt Ltd, profitable, the margins can be increased sector. After Carlyle's $22-million (Rs

agrees.He says that the return on to five-six 119.4 crore) investment in Tirumala capital employed in dairy business is per cent Milk Products in May 2010, no big higher than most traditional businesses. from the deals happened for the rest of 2010 and According to industry sources, the current all of 2011. However, between May return on capital by a dairy firm is level of and November 2012, the sector around 35-40 per cent.three per attracted $67.5 million (Rs 366 crore) Bhakta, however, adds that the sector cent, by from PE funds, according to Venture doesn't have a great track record in increasing Intelligence data.terms of corporate governance and This year's deals include Ambit volumes therefore, investors need to tread Pragma's investment in Neo Anurena and adding cautiously.Tristar Food Products for an more value On the flip side, PE players feel that undisclosed amount, IDFC PE's $29- added while there are more investment million (Rs 157.4 crore) investment in products.opportunities available, some According Parag Milk, the $18.5-million (Rs regulatory issues kept the sector from to Keshav 100.4 crore) investment by Abraaj realising its true potential.Misra, Capital and Rabo Equity in Prabhat Besides, high government intervention partner Dairy, and Cargill Ventures' $20-

outside investment is required. Besides in the sector, especially in pricing and (fast moving consumer goods) at million (Rs 108.5 crore) fund infusion bringing money, these investors are procurement, has also made India seen Baring Private Equity Partners India, in Dodla Dairy. What explains the also helping to attract good talents, in as an unreliable overseas supplier even the dairy sector is consumer-driven, sudden surge in investment flow process and systems,” says Shirish though it is the largest producer of offering good returns. And for funds, towards the dairy sector? The general Upadhyay, senior vice-president milk.the consumption story is a key food and agricultural sectors have been (planning), Parag Milk. attraction, he adds. For a company on the radar of PE players for the past Parag will use the proceeds from IDFC

wanting to go public, raising money four years, says Rajesh Srivastava, fund to build capacities in various

chairman and managing director of product lines, strengthen procurement

Rabo Equity Advisors, a subsidiary of and provide a part-exit to existing

Rabobank.investors, Motilal Oswal Private

PE players have now turned their Equity, which invested in the company

attention to the dairy sector. With the in 2008.

rising incomes of the health-conscious The key differentiation of the

middle class, the demand for both milk companies that raised money from the

and value-added dairy products is on PE funds and those didn't is value-

the rise. Assocham said the domestic added quality products, backed by

dairy sector would grow to Rs 5 lakh strong branding and robust distribution

crore by 2015, with the output systems. Take, for instance, Parag Milk

estimated to rise to 190 million tonnes Foods. It distributes its products under

from the current 123 million tonnes.Gowardhan, GO and Pride of Cows

India is the world's largest producer of brands. Parag generates 60 per cent of

dairy goods, accounting for nearly 20 its revenue coming from value-added

per cent of global milk output.products such as cheese, ghee and According to experts, the country

needs to raise milk output by around yoghurt, growing at 20 per cent per five million tonnes a year to meet the annum.

According to Satish Mandhana, growing demand, compared with the managing partner and CIO at IDFC average annual growth of 3.2 million Alternatives, the dairy sector has the tonnes in the past 15 years. This potential to build the rural economy. additional capacity would require huge “We believe that companies like funds. And the entrepreneurs, who are Parag's excitement blend of traditional largely seen as conservative, closely-values and modern outlook, mirror held and unorganised, have realised their brands and have the potential to this, and been exploring avenues for achieve that,” he said in a statement.funds. This is another reason for the

3 Dairy News everages & Food Processing Times- -2013B Jan-I

Dairy sector becomes a sweet spot for PE funds

PE DEALS IN THE DAIRY SPACE SINCE 2010

Date B uye r Targe t Amount (R s c r)

May ’10 C arlyle Tirumal a Milk P roduc ts 22

May ’12 A mbit P ragma Neo Anure na Tristar NA

Sep ’12 IDFC P E Parag Mil k 29

Sep ’12 A braa j Capita l, Ra bo# Pra bhat D airy 18.5

Nov ’12 C argill V entures Dodla Dai ry 20

* Food Product s # Equity Source : Venture Inte lligence

hold on Thasra seat in Kheda district, ll 'dudhwallas' contesting the Rajendrasinh, for whom the Borsad assembly elections in Gujarat A seat was new in Anand district, also

emerged as the winner.Rajendrasinh, as Congress MLA, was earlier representing Bhadran seat which adjoins Borsad. Another Congress leader and director of Amul Dairy Mansinh Chauhan also won Balasinor seat in Kheda district.In the tribal belt of Panchmahal, have won comfortably. This time as

Panchamrut Dairy's chairman Jetha many as 10 dairy co-operative leaders Bharwad of BJP won Shehra assembly including chairmen of two district dairy seat again by a margin of over 28,000 milk unions were fielded by both votes. Bharwad is enjoying a second Congress and BJP in central and north term as the dairy co-operative's Gujarat regions of the state.chairman after he got 18 directors Interestingly, the total number of dairy elected unopposed in his panel when co-operative leaders fielded by both the elections of Panchamrut Dairy were parties this year is almost double when held in October.compared to the last assembly polls in At Banaskantha which is home to 2007.Asia's largest dairy union - Banas Dairy Of the three dairy chairmen who were - three milk co-operative leaders won in fray in 2007, two of them - Baroda the poll battle. If state health minister Dairy's then chairman Madhu Parbat Patel who is director in the Srivastava of the BJP and Amul Dairy dairy's board won on Tharad seat, chairman Ramsinh Parmar of the another BJP leader Shanker Chaudhary Congress had emerged as winners.

The twin districts of Anand and Kheda who was contesting from Vav also district, the cradle of country's white emerged victorious.

Even for Congress fielding a co-revolution, are traditional strongholds operative leader at Dhanera seat helped. of Congress. Ramsinh Parmar, Amul Joita Kasna Patel won the seat with a Dairy's chairman, and Rajendrasinh margin of over 30,000 votes.Parmar, Amul Dairy's vice-chairman In Vadodara district, the BJP had emerged as winners again.fielded Baroda Dairy's director. While Ramsinh Parmar retained his

Rs. 8-9 lakhs, and is a source of ikash Bharali, a progressive inspiration for the educated farmer from Assam's Golaghat B unemployed youth of the state.District, who runs a modern "We have now got a milking machine. dairy farm provides an example of self-We can milk four cows at a time. It's reliance that the youth of the region saving time. My people have taken it in can follow.a very interesting way, and they like it. Thirty-one-year-old Bharali is one of We do cut grasses with the machines the few dairy farmers in Assam who now. That is helping in saving time. has a modern farm with the latest Few months back we used to sell our milking machines.

His childhood dream was to become a grass in the market, from that we got successful farmer and he got a diploma some money and we are putting a 120 in Piggery and Dairy farming from metre fence now," he added.

Four permanent workers and nine daily Wye College in London.He returned to Assam in 2004 and set wagers are employed at the farm.

"We work here, and I get many benefits up a dairy farm in 23 acres on the in returns. I can send my children to outskirts of Bokhakat town.

"The State Bank of India supported me school for education. If things improve to start my farm. Then I grew slowly. further then I hope that I will benefit It's quiet big. We are now thinking to and have a bright future," said Bobby mechanize the whole system, reduce Borah, a woman farmer.

The youth in Assam are now the stress on our people, save on time, channelizing their energy towards and give freedom to the animals," said bringing about a positive change in the Bharali.

Bharali, who owns 23 Jersey Cows and society and improving the socio-six calves, has an annual turnover of economic condition of the people.

4 everages & Food Processing Times- -2013B Jan-I

Bikash Bharali - a progressive dairy farmer from Jorhat

Dudhwallas milk victory in central, north Gujarat

Pune dairy farm opts for musical therapy to boost milk production

"The idea of Similarly, it is also an Indian concept farm near Pune in playing where we believe that just like human Maharashtra has opted for A music in the beings, even cows like music. So we musical therapy to soothe its cowshed play classical music and we sometimes dairycows in order to boost milk comes from also tune the radio," he said.yields.

He added that the yield has increased The farm has bout three thousand cows our about 40 percent.of Holstein and other breeds. mythology Speakers are installed across the shed The managers of the farm believe that in which, and music, mostly classical and soft, is music plays a vital role in the milk Lord played throughout the day.production as it makes the environment Krishna Researches in the West have proven more conducive for the cows. used to play that music acts as a stress reliever and Parag Shah, director of the dairyfarm, flute and bring several health benefits.said that the idea of playing music is cows used to adopted form ancient Hindu get attracted.

mythology.

Dairy News

5 everages & Food Processing Times- -2013B Jan-I

6

in less than two decades since Kwality frozen desserts. It is a lookalike terribly wrong about vegetable fat. ately there has been a lot of hues Walls introduced them. International category. Most brands mention frozen After all, edible oil is regularly used and cry about the use of L brands such as HaagenDazs, desserts in small letters and push the in Indian cooking and snacks. But it vegetable oil inice-creams, it has Movenpick (Nestle), Swensen's and category instead of advertising it as could be more harmful than milk fat. been claimed that consumers are Baskin Robbins offer original or dessert. Vegetable fat contained in frozen feeling very embittered and cheated. regular ice-creams. Vadilal sells both. desserts is generally unsaturated and The whole issue has been craved as if

What the opponents need to Frozen desserts, which look and taste hence, healthier, Ice creams and the companies that are using vegetable understand is that the consumers like ice cream but are made out of frozen desserts are two very different oils instead of milk fat in the ice cream make choices based on a number of vegetable fat, have silently grabbed a things.have done a delinquency that is factors including calories, fat 40% share in India's 1,800-crore Ice creams are made of dairy fat which reprehensible.Amusingly the news has content, indulgence and portion organised ice-cream market without contain cholesterol and Trans fats also claimed that the use of vegetable control – but taste preference is most consumers realizing they are not therefore aren't very healthy whereas oil in ice-creams is not health friendly always key and as such and the ice cream. Frozen Desserts are made of fat from and is as well shady to the taste buds.

But food authority officials and companies always strive for superior vegetable oils which contain very less But what ever seen or said, the fact is original ice-cream makers such as tasting products. There is no doubt cholesterol and no Trans fats making that very few consumers can tell the Amul and Mother Dairy that use only dairy is the number one ingredient in them a very healthy snack!difference between an ice cream and dairy fat say frozen dessert makers all ice cream, frozen dairy desserts Talking in aspect regarding the fatty frozen dessert.have been misleading consumers by and frozen desserts. In fact, frozen issue, it is Ideally known that frozen There is actually a very thin line passing them on as ice cream. And they desserts do contain milk, just not the dessert contain no more than 4 grams dividing frozen desserts and ice-claim that Consumers have been eating kind that contains butter fat, which fat and the fat quotient of frozen creams. The Traditional, or “regular,” frozen desserts presuming them to be is the crux of the issue for the rival desserts varies considerably, depending ice cream uses cream or milk ice creams. ice cream makers. on the amount of fat in the cream, milk containing about 10 percent butter-fat, Amul, the category leader in ice creams The genuine fact is that there is no or yogurt used as the primary along with sweeteners, flavorings and with 40% market share, declaresthat health hazard in using either of the ingredient. In general, ice cream thickeners. Regular ice cream is companies are misleading consumers two ingredients. Traditionally, ice- contains between 6 to 16 grams of fat somewhere in the middle of the ice by not mentioning upfront they are creams have been made out of milk per ½-cup serving, with premium ice cream health scale, with light and frozen desserts and pricing them as fat, so it might be considered as creams containing between 17 and 24 reduced fat ice creams containing much as ice cream despite lower costs. cheating by some consumers. But fat grams per serving. Frozen yogurt fewer calories and less fat than regular Consumers are fooled into buying nutritionists say there is nothing ranges from the 0 grams fat contained ice cream, and premium and super

in ½ cup of non-fat yogurt brands, to premium ice creams containing more the 1 to the 3 fat grams in low-fat fat and calories than regular ice cream. frozen yogurt, and the 4 to 9 fat grams A frozen dessert is vegetable oil based in premium frozen yogurt desserts. The product that contains imported palm average frozen yogurt and light ice kernel oil or coconut oil instead of creams take up about 4 percent of your locally produced butter fat. Frozen-daily allotment for cholesterol, while yogurt comes from non-fat or regular regular and premium ice cream yogurt that is mixed with flavorings, represents at least 7 percent of your sweeteners and thickeners, then recommended daily amount of churned and frozen in the manner of cholesterol.regular ice cream. The beneficial So categorically the fat uptake in ice bacteria found in regular yogurt do not creams are much more comparatively survive the freezing process. While real and in today's time of health ice cream is made with milk fat; frozen consciousness many consumer like the dessert is made with vegetable fat, fact that they can consume something which is almost 80% cheaper.that is equivalent to ice cream but However according to the definition of rewardingly not as high in calories as milk and milk products under the an original ice cream.Prevention of Food Adulteration Rules, For example depending on brands and 1955, an ice-cream is a product with flavoring, regular ice cream contain not less than 10 per cent of milk fat, between 130 and 190 calories. whereas in comparison, frozen desserts Factoring in light and premium ice contain vegetable oils, such as palm creams, the caloric range runs from 90 kernel oil and coconut oil, that can be to 340 calories in each ½ cup scoop. brought in tariff-free from anywhere in Regular, or low-fat, frozen yogurt has the world. Vegetable oils are also much between 70 to 140 calories in each ½ cheaper than butter fat and hence cup serving, with the entire range of becoming very cost effective for the ice frozen yogurt running from 90 to 190 cream industry that offer frozen calories per ½ cup scoop. The dessert.carbohydrate count has less to do with Excluding a few companies in the the type of dairy product used than on market such as Amul, Mother Dairy, the sweeteners and flavorings. Regular Hatsun Agro Food Ltd and Havmor, and light chocolate ice cream, as well others – Led by Hindustan Unilever's as chocolate frozen yogurt, all has Kwality Walls, Vadilal, Lazza Ice about 18 to 19 grams of carbs per Creams and Cream Bell all serve serving. frozen desserts - in identical cups, Ice cream and frozen dessert are cones and sticks as ice cream- and have calcium-rich dairy products. The found a strong foothold in the country

Company report

FROZEN DESSERT V everages & Food Processing Times- -2013B Jan-I

Company report 7

average chocolate frozen yogurt and cream market, what more is there to products. Cream Bell, an ice cream the last five years when it has been ice cream products contain between 72 say except that the consumer of today and frozen dessert brand of RJ Corp's growing 50% year-on-year. Frozen and 85 grams calcium according to is health conscious one, who go for Devyani Food Industries, have frozen desserts accounted for 55% of Lazza's USDA figures. Therefore, milk-based things that can give your taste buds a desserts accounting for 50% of its turnover of 150 crore in 2010-11.

Indian mind-sets have changed towards desserts like ice cream and frozen tingle but with the stipulation that it sales. The company entered the frozen desserts and the consumer is yogurt deliver between 7 to 9 percent does not play with their health. category in 2006. There is no dearth of

Frozen dessert makers are, meanwhile, comfortable in consuming them. of the calcium you need each day. Thus takers for frozen desserts in the Indian upbeat about the prospects of this Frozen desserts have taste as par it is not difficult to assess that frozen market now. For cream bell, both category.Hindustan Unilever's Kwality excellence and that is the reason the desert have nutrition value better than categories are growing at 25-30%. Walls, which makes only frozen few consumer can differentiate. Those ice cream with an added importance of South Indian ice cream player Lazza desserts and does not use milk fat, who can distinguish go for frozen lesser calories and cholesterol Ice Creams, which introduced frozen

As a matter of fact you'll get many of pronounces the category to be growing dessert or yogurt for both-health and desserts a decade ago, has seen the the vitamins and minerals offered by on the strength of a series of exciting taste.vegetable stuff overtaking ice cream in milk in frozen yogurt and ice cream. Varieties featuring real fruit may provide additional nutrients. According to USDA figures, the average ½ cup serving of chocolate frozen yogurt or chocolate ice cream provides at least 5 percent of the protein you need each day. The dairy desserts also deliver 2 percent of the recommended daily values of iron, magnesium, phosphorous, potassium and vitamin A, as well as several B-complex vitamins, including folate. The ice cream varieties were slightly higher in these nutrients than the average frozen yogurt. Some frozen dessert makers add extra vitamin C to preserve flavor and color, meaning that your vitamin C content may vary from 1 percent to 10 percent.The Price factor is another major point that cannot be eluded. Using of vegetable oil becomes pocket friendly not only for the industry but also for the consumers. Like One kg of vegetable fat (vanaspati) is about Rs 50-55 a kg, while one kg of milk fat (ghee) is Rs 245-350 a kg. On a litre of ice-cream, cost of a milk fat mix is Rs 60/litre and the cost of vegetable oil mix is Rs 30/litre.Vadilal manufactures both ice-creams and frozen desserts in a 50:50 ratio to cater to all segments of customers and according to them, while it is cheaper to produce frozen desserts, the margins for both turn out to be the same. Further the vadilal folksround aboutthat consumer are well aware of the difference. In Europe, both are called ice-cream, while in the US, the differentiation is maintained. The Rs 2,500-crore frozen dessert market in India is growing at an average of 15 per cent and is still dominated by regional players. The per capita consumption of ice-creams in India is very low and considering the hot weather, there is space for factory made ice-creams along with matkakulfi, asharfi, koti ice-cream and Rs 5 candies to survive and grow.Frozen desserts by Kwality Walls, Vadilal, Lazza, and Cream Bell have already grabbed 40% share in ice-

ERSUS ICE CREAM everages & Food Processing Times- -2013B Jan-I

8

choice for hypertensive individuals. flour is very high. Jowar is also a India and the lighter one is consumed enefits of whole grains are This flour has a higher content of relatively inexpensive cereal. The in other parts of the world, particularly usually limited to wheat. We B protein as compared to wheat. nutrient profile is such that it is ideal inRussia and France.The ground form hear constant mention of whole Moreover, the starch content is of the for diabetics and for those who have of the dark variety is grey-brown in bread bread, whole muffins, whole resistant variety, making it suitable for elevated cholesterol levels. colour and has a slight bitter earthy wheat rotis and other dishes made with diabetics. taste. whole wheat grainand how they are

You ought to know: Jowar prevents good for us. You ought to know: Barley is great for hunger due to high fiber content, which Whole Grains: Ramdana But what about the other whole grains a healthy diet. Barley includes both in turn is good for weight loss. (Amaranth) found in Indian kitchens? Even though soluble and insoluble fiber in This is a very versatile variety of crop wheat is the primary component in abundance. It can be added to soups, Whole Grains: Ragi (Finger Millet) and is quite nutritious too. Amaranth rotis and chappatis, Indians also have a cereal and salads. The flour of this grain is high on can be ground into flour, flaked like wide variety of whole grains that are

protein and low in fat. In the South of chidwa or oatmeal, or popped like used in traditional cooking. Today we Whole Grains: Bajra (Spiked /Pearl India, this millet is ground and cooked popcorn. Being high in fibre, it eases look at atta or flour made from Millet) with milk/buttermilk /water and served constipation and contributes to alternative whole grains that is gluten Within India, the dry regions of as the first food to babies. lowering cholesterol. As it is high on free, healthy and has several health Rajasthan produce and consume this protein (15%), it serves as a good benefits - in some cases much more cereal, bajra with gusto. Bajra rotis Whole Grains: Kuttu (Buckwheat) source of vegetable protein. In the US, than wheat. We bring out a list of (flatbread) look like small tortillas. The Kuttu is extremely popular during the there is an increasing interest in this whole grains easily

crop which is grown available in India both as a grain and but rarely used in as a leafy vegetable. increasingly

modernised, urban Whole Grains: kitchens. These are Makki (Corn) the whole grains and This is a good their benefits. source of the B-complex vitamins Benefits of Whole and also of fibre. Grains as flour The flour that is Nutritionist generally consumed Neelanjana Singh by us is made from with the Heinz Nutri the white or the Life Clinic spells yellow corn variety. out the benefit of The rotis (flatbread flour, something we that is unleavened) may over look while made from this flour eating, she says, have a mild sweet "Breads (both flavour that goes leavened and well with a slightly unleavened) can be

roti is made with many flavour- Navratra season. Popularly known as pungent variety of leafy vegetable. made from these different flours. enhancing ingredients such as onions, vrat ka atta, buckwheat varieties

Breads are the staple food in most spices and herbs. provide between 17g to 23 g dietary Whole Grains: Singhara (Chestnut) diets. Thus, it is essential that the flour You ought to know: Bajra is rich is fibre per cup. The impressive fibre The flour is made from the nuts of the used to make the breads be wholesome proteins and amino acids. It is also a content of this flour helps to lower the water chestnut and has a slightly higher and nutritious. Flours or attas form the good ingredient for anemic as it levels of bad cholesterol (LDL) in the fat content than wheat. However, this staple food, contributes significantly to contains high amounts of iron. It blood and thus lower the risk of heart fat is free from cholesterol and the fibre, mineral, starch and supplies vitamin B12 to your nervous disease. According to the 2010 Dietary transfats. The flour is commonly used antioxidant content of the diet." system. Guidelines from the U.S. Department by those sensitive to wheat. The flour is

of Health and Human Services, one rich in B vitamins, starch and minerals Whole Grains: Jau (Barley) Whole Grains: Jowar (Great should aim to get at least 14g of dietary such as potassium. However, the Jau is a cereal whose flour is rich in Millet/SorGhum) fibre for every 1000 calories slightly high starch content keeps the many minerals including calcium, zinc, The flour made from this kind of millet consumed. There are two varieties of weight-watchers away from this flour!magnesium and potassium. This profile is superior to wheat in many ways. buckwheat: dark and light. It is the

of minerals makes it an appropriate Firstly, the antioxidant content of the dark variety that is largely consumed in

lagging the food security issue, years. If in that period, our kids remain of ground needs to be covered to "Most leakages in our Public NHRC Chairperson Justice K G malnourished, our future generation ensure Right to Food for all, he said. Distribution System are caused because FBalakrishnan Friday said though will be devoid of intellect. We need to "There is improvement in foodgrain the retailer gets the products at

there is improvement in foodgrain address this problem at the earliest." production but its stocking and subsidized rates way below market production, its stocking and He said malnourished children and distribution among the needy is a point price. With Direct Cash Transfer distribution among the needy is an area falling levels of calorie consumption of concern," he said. coming into play, retailer will get the of concern. are some other areas which require Batting strongly for direct cash transfer product at market price while the Addressing a conference on 'Right to attention. scheme, Sudhir Kumar, Secretary of subsidy will be directly credited into Food', Balakrishnan said "food Despite, Integrated Child Development Department of Food & Public the bank account of the beneficiary," availability is a major concern, Services (ICDS), mid-day meal Distribution, said that via cash subsidy, said Kumar. especially for our children. A child's scheme, Targeted Public Distribution government will be able to plug brain develops during the age of 0-7 System and other such measures, a lot largescale leakages in our PDS system.

everages & Food Processing Times- -2013B Jan-I

Benefits of whole grains used in Indian food

Stocking, distribution of foodgrains a concern: NHRC

Food Grain News

9

If the Government is worried about today. stocks, rising fiscal deficit, and high transit and handling shortages of 2-2.5 Generally wheat prices retreat by June-excessive gold imports, it should be degree of wastages. per cent, will be on the private trade, July every year, when Northern The world is not waiting for India to equally concerned about the rising rather than that of FCI. Simultaneously, hemisphere crop (the US, EU, Black sell wheat at its own speed — but stockpile of wheat, which will cross domestic traders can blend old/new Sea, Canada) is harvested. Tenders surely awaiting and anticipating a fall more than 60 million tonnes (economic grains at the port and price them formalised during December in prices. Recall that in July 2012, cost of about $21 billion or Rs intelligently for greater penetration in 2012–early January 2013 through three highest bids for Indian wheat were 1,15,000 crore) by June 2013, or 300 the markets directly or in formal PSUs point to a declining pattern. received at $228 fob and other bids per cent of the mandated reserves. association with PSUs.

Foreign exchange requirements of Egypt, the world's biggest wheat buyer, ranged $200-$225. Should that FCI disposes old/damaged wheat rising gold imports and increased is staying on the sidelines both due to situation re-emerge internationally, through domestic tenders in three types dollar realisations from wheat exports its internal compulsions and expects Indian wheat will have to be traded of feed categories in price range of Rs can substantially offset each other. 5,000-7,000/tonne and for industrial Liquidating stocks of golden grain will use (distillery) at Rs 3,850/tonne. also save on fiscal deficit, as it will cut Export realisation can be much better the food subsidy bill. than these values even for older wheat.WRONG STRATEGY The Government should have no In case policy makers increase the hesitation in acknowledging lower efficiency of wheat export and target it prices for old wheat as a pragmatic to 10 million tonnes, as recently solution to create much-needed storage recommended by the Commission of space.Agricultural Costs and Prices (CACP) There could be a question in the in its meeting with the Finance coming years on prioritising shipments Minister, this will generate export of of the best quality wheat of Madhya approximately $3 billion (Rs 16,500 Pradesh and Punjab, while burdening crore), equivalent to a 7.5 per cent the exchequer with old wheat, which reduction on provisional gold imports bears a carrying cost of Rs 5,000 per of $40 billion anticipated this year. tonne for two years. There is a great There is always apprehension that demand for general purpose/feed higher duties on gold imports may wheat, where shipments of old crops create a parallel 'hawala' market that will be appropriate.

prices to plunge. around Rs 12540/tonne — below MSP The net effect of reframing the export will defeat the purpose of duty.EXCESS STOCKS of Rs 12,850/tonne of 2012-13 and Are wheat exports of 10 million tonnes guidelines would be (a) exchange Indian wheat export needs to attain almost Rs 7,000 below economic cost, in 2013-14 logistically feasible? Yes earnings can reduce pressure on maximum momentum in the next six with massive subsidisation.they are, provided the private sector is restricting gold imports which may months — January to June 2013. And Wheat of 2010-11, 11-12, 12-13 — that also allowed to partake in FCI stocks, create a parallel market; (b) higher from April 2013, wheat will start is old grains and new grains — be in addition to the existing canalised volume of wheat export can be attained flooding Indian mandis, creating a offered at differential pricing both to route of three PSUs. Exclusion of by the immediate involvement of crisis of plenty with no safe storage private and public sector. Private sector private trade from exporting private sector for warehousing bumper space. can make upfront pre-shipment Government's glut of grain is a highly wheat crop of 2013-14 (c) money The monsoon in July-September can payments at district HQs of FCI v/s restrictive policy framework, acting as blocked in old inventories can be damage poorly stored grains in post shipment payments remitted by a deterrent in swift evacuation of encashed and fiscal and current account kuchcha CAP arrangements. If PSUs with a lag of two-three months.grains. deficits reduced and (d) will save the Government agencies don't move The entire performance risk, including During August-December 2012, PSUs Government from adverse criticism of quickly, they will be saddled with huge contracted two million tonnes and

shipped 1.2 million tonnes (or an average of 400,000 tonnes per month) with proactive back-up operations of FCI. PSUs can achieve the limited objective of exporting a maximum of five million tonnes annually through a staggered tender-centric mechanism. This leaves the effort required to ship additional five million tonnes by private players to achieve 10 million tonnes of export.The timing of export is critical for better value realisation. As of now, average realisation of two million tonnes is $315/tonne fob while the minimum and maximum range has varied between $296 and $328.If port handling and fobbing expenses of $25/tonne are excluded, net realisation to FCI is $(315-25) = $290/mt, which is close to today's CBOT (Chicago Board of Trade) March futures. All transit/port handling shortages and demurrages are to the account of FCI — which may work out to a minimum of 2 per cent — reducing the net accrual to FCI by another $6/tonne or $284/tonne as of

everages & Food Processing Times- -2013B Jan-I

Wheat exports can offset gold imports Food Grain News

10

In India's top banana producing zone, ndia may take the top spot for Tamil Nadu, about 30% of production world banana production but poor I goes to waste, said R. Dinesh, chairman postharvest practices are cutting the of the Confederation of Indian Asian nation short on a global level.

Indian National Agriculture Council Industries (CII) Tamil Nadu State co-chairman Salil Singhal recently Council in The Hindu.

Losses are attributed to lack of farmer explained the importance of quality-control training, inadequate establishing better practices at the facilities for cold storage and Tamil Nadu Banana Festival.

“The demand for fruits and vegetables transportation, and poor marketing.Making a planin the country and abroad is growing at In December, CII released a feasibility a phenomenal rate. But here, the post-report to set up a cold supply chain for harvest handling of produce is poor,” Indian bananas.Singhal was quoted as saying in The “It is imperative that a cold chain for Hindu.banana supply chain be started in the “The cold chain has to be an integral state of Tamil Nadu. A pilot project part of the supply chain to ensure good should be undertaken in one of the quality, and it is essential for us to set high-density immediately, and up state-of-the-art cold chain Tiruchirappalli (Trichy) should be infrastructure in the country.”considered a pilot location for this In 2010, India produced 29.8 million initiative,” the report stated.MT of bananas, according to the Food The BBC reported that CII's plan has its and Agriculture Organization (FAO) of eye on improving exports to China, the United Nations (UN). The nation East Asia, the Middle East and Europe.comfortably outranked the next top CII estimated annual trade could be producer, China at 9.8 million MT.worth US$1.2 billion and is confident Despite quantity, India suffers when it that within 18 month, its banana plan comes to controlled handling.would succeed.The Hindu reported that only 2% of Organization chairman of the National Indian produce goes through controlled Cold Chain Task Force, B. Thiagarajan, handling, in contrast to 85% in Europe said in the BBC, if postharvest losses and the United States.were avoided, India could export 28 Postharvest losses for fruits and million MT of its 29.8 million MT vegetables in India add up to an output.estimated US$16.8 billion, the BBC

reported.

price or market-based and profitable ndia was the world's largest exports. The latter is obviously the exporter of rice this past calendar I better option. In addition, food prices year. It exported 9.5 million tonnes in India are increasingly determined by of rice, well above traditional market global benchmarks. When India leader Thailand. India was also the exports rice or sugar, it helps depress world's largest exporter of buffalo-the world price which, in turn, keeps cum-beef. It was a significant exporter down domestic food inflation.of sugar, cotton and lesser known farmPerhaps most important is that the products like guargum and oilseed

meal. These figures do not include the billions of dollars of agricultural material that is smuggled across borders. In the last fiscal year, India shipped out $20 billion more agricultural products than it shipped in.

returns from exports, and the All this may baffle many Indians. concomitant corporatisation of There is a mindset that assumes this is farming, have helped put an end to the a nation of perpetual food scarcity, chronic shortages that afflicted the incapable of generating surpluses. industry. And nothing drives up prices There will also be surprise that India is or causes social pain as much as simple exporting anything when food inflation lack of supply. Cotton, for example, is is running at double digits. And India a farm sector transformed by Bt remains deficit in many areas. It technology, capital investments and imports nearly half of its cooking oil exports. Production has boomed and requirements and scours the globe prices have fallen - last year they every year for legumes and pulses to dropped 17%. The same could happen give its people their daily dal. It is with sugar or dairy if state among the world's five largest governments were prepared to free producers of poultry, eggs and dairy them from nonsensical market products but consumes everything it restrictions and allow the private sector makes and more. What India has learnt more leeway. The other side of modern in the past decade is that agricultural food security is to guarantee overseas exports are an essential part of its food supplies for foodstuffs India is unlikely security. Food prices are largely driven to ever produce enough of. Thus pulses by the cost of farm inputs like oil, gas are probably best left to vast, machine and land. For farmers to make the harvested drylands in Canada and the necessary investments to keep United States. Food security today is increasing their yields, they need to not about self-sufficiency, it is about sell at profitable prices. India has two recognising that food is a global ways to ensure that farmers get that commodity and being a major force in price - a politically determined and that market.fiscally unsound minimum support

News

ashington: The US has proposed products from causing foodborne illness. costs, and avoid the costly disruptions of families," she said.stringent food safety measures on It would also require them to have plans the food system caused by illness The FDA is proposing that larger farms be Wboth domestic and imported foods for correcting any problems that arise. outbreaks and large-scale recalls, FDA in compliance with most of the produce

to prevent contamination of processed America`s Federal Drug Administration said. safety requirements 26 months after the food, which has been a cause of illness of also proposed enforceable safety final rule is published in the Federal tens of thousands of Americans in recent standards for the production and The proposed rules are part of the effort Register.years. harvesting of products on farms. to implement the landmark, bipartisan Small and very small farms would have The new rules, when enforced, is This rule proposes science- and risk- FDA Food Safety Modernization Act. additional time to comply, and all farms expected to have considerable impact on based standards for the safe production "The FDA Food Safety Modernization would have additional time to comply import of processed foods in particular to and harvesting of fruits and vegetables. Act is a common sense law that shifts the with certain requirements related to water that of countries like India, which The burden of foodborne illness in the food safety focus from reactive to quality.officials feel, are lacking in the high- United States is substantial, federal preventive," said Health and Human "The FDA knows that food safety, from standards of food processing in the US. officials said. One in six Americans suffer Services Secretary Kathleen Sebelius. farm to fork, requires partnership with The first proposed rule would require from a foodborne illness every year. Of "With the support of industry, consumer industry, consumers, local, state and tribal makers of food to be sold in the US, those, nearly 130,000 are hospitalized and groups, and the bipartisan leadership in governments, and our international whether produced at a foreign- or 3,000 die from their illness. Congress, we are establishing a science- trading partners," said FDA domestic-based facility, to develop a Preventing foodborne illnesses will based, flexible system to better prevent Commissioner Margaret A Hamburg. formal plan for preventing their food improve public health, reduce medical foodborne illness and protect American

everages & Food Processing Times- -2013B Jan-I

World's top banana producer aims for higher export presence

Think beyond self-sufficiency

US tightens food safety rules to prevent foodborne illness

he food ministry's economic September) and this will lead to a rise cost of wheat — the amount in the food subsidy Bill,” the official Tincurred in procuring and added.

The food ministry has already sought storing the grain — is set to rise by five an additional Rs 14,300 crore during per cent to Rs 19,147 a tonne, with the this financial year for rice procurement increase in the minimum support price in the 2012-13 marketing season.(MSP) of the grain, an official said. Another food ministry official said with Last month, the government had raised the rise in MSP and other incidental wheat MSP by Rs 65 to Rs 1,350 a costs involved in procurement, the quintal for the 2013-14 marketing year economic cost of wheat and rice (April-March).procured by public agencies had been “The hike in wheat MSP will also lead increasing.to a rise in the economic cost of “As the central issue price ( CIP) procuring and storing the grain. It will remains unchanged, the gap between now rise to Rs 19,147 a tonne in 2013-the economic cost and CIP, which is 14 marketing year from Rs 18,225 a borne by the Centre, as food subsidy tonne in the 2012-13 marketing year,” has been rising,” the official added.a ministry official said. The Centre had CIP is the rate at which the central procured 38.15 million tonnes of wheat government issues foodgrains for the in 2012-13 rabi marketing year — 10 Public Distribution System (PDS) to million tonnes more than the states and union territories.procurement made in the 2011-12 The Centre incurred an expenditure of marketing year.Rs 72,370 crore on food subsidy in “With a higher MSP, conducive 2011-12 and in the current financial weather and progress in sowing, the year, out of the total allocation of Rs procurement of wheat is expected to 74,552 crore it has spent Rs 61,259 rise. Already rice procurement is crore till December 15, 2012.expected to touch 40.13 million tonnes

in 2012-13 marketing season (October-

food grain production is less than one agaland has been selected by million tonne).the ministry of agriculture and "I would like to congratulate you, your Nfood processing industries, agriculture minister and the officials of government of India, for the Krishi the state agriculture department for Karman Awards 2011-12.their dedicated efforts in supporting Nagaland will be presented the award farmers with technologies and services for the Best Performing State in overall that has enabled your state to achieve food grain production among this milestone."Category-III states. Union minister for Sharad Pawar informed that the awards agriculture & food processing

industries Sharad Pawar conveyed this message in a letter to Nagaland CM Neiphiu Rio.Category III is a status mainly for states whose annual food grain production is less than one million tonne. The award includes a trophy and cash amount of Rs 2 crores.The letter read: "I am

would be presented by the President of pleased to inform you that the Krishi India on January 15 at New Delhi, and Karman Awards for 2011-12 have been requested the CM to make it finalized and Nagaland has been convenient to attend the function and selected as the Best Performing State receive the award along with the state in overall food grain production among agriculture minister.Category-III states (whose annual total

on our premises which can be utilized food processing centre for for making pickles and jams. Earlier female patients with a view to A the inmates made three quintals of make them self-reliant was mango pickles which made us hopeful launched in early December at Ranchi that they can also be given professional Institute of Neuro Psychiatry and training. This time, they will learn Applied Sciences (RINPAS).

RINPAS director Amul Ranjan said, packaging after which they will receive "We have launched this programme in a training certificate. All this is part of early December so that female patients the rehabilitation programme for the are able to earn a livelihood for patients," said Ranjan.

On some future plans, the director said themselves when they leave the they were in institute. By talks with this, the the perception government of the to coordinate society will in supplying also change the products towards such made by the patients. female Earlier we patients. had "We would launched like to this negotiate programme with the at a small

government on the products being scale but this time we have planned it supplied initially at the Sadar hospital more professionally."

A few days ago, the female patients got and the Rajendra Institute of Medical training in food processing at Birsa Sceinces. Later it can be supplied Agricultural University. "We have lots elsewhere with the help of the of trees like mango, tamarind and litchi government," he said.

Chattisgarh 23,41,456 tonne , Andhra he Government agencies have pardesh 17,18,052, Odisha 9,55,763 procured 177,18,657 lakh tonne T and Madhya pardesh 4,55,659 also rice during ongoing Kharif made significant procurement.Marketing Season (KMS), 2012-13. As

per data made available to the Ministry of Consumer Affairs, Food and Public Distribution, total rice procured till 04.1.2013, during current KMS, is 212762 tonnes more than the rice procured during the corresponding period of previous season.Highest procurement has been made in Punjab, i.e. 85,56,984 tonne followed by Haryana 25,83,216 tonne,

trade for 30 years, Thailand, lost its ndia has emerged as the world's status as the world's top rice exporter in largest exporter of rice this year. I 2012 as a controversial scheme to boost The country that has dominated the

farmer incomes saw it overtaken by India and Vietnam, an industry group said.Thailand exported 6.9 million tonnes of rice last year, falling behind India which shipped 9.5 million tonnes and Vietnam which sold 7.8 million tonnes overseas, according to the Thai Rice Exporters Association.Thai exports slumped 35% from the 2011 level of about 10.6 million tonnes, based on the group's figures. “We had been the champion since 1980, for 31 years, but we lost the top spot in 2012,” the group's honorary president said.

News 11 everages & Food Processing Times- -2013B Jan-I

Nagaland chosen for Krishi Karman Award

Food processing centre for RINPAS female patients

Rise in wheat MSP increases food ministry's cost by 5%

More than 177 Lakh Tonne Rice Procured

India is world's biggest rice exporter

Back Page 12

government. wheat since 1996 due to quality issues. fructified.mid reports that Iran has "Iran has not communicated to us about Early this year, the sanction-hit West Asked whether entry of Australian some quality problem in A quality specification so far. Once they Asian country had shown interest to wheat in the global market would hit importing wheat from India, do it, we will take a call," the secretary buy Indian wheat and had also sent its country's export realisation, Kumar the government said there is no

said: "There is shortage internationally. concern over the quality of Indian Anyway, our main objective is to wheat and the country is exporting the manage foodgrains stock and not grain at a good price.maximise price realisation"."There is no issue on quality of Indian Wheat production of India, the world's wheat which is being reflected from second largest producer, touched a the price we are getting in exports," record 93.9 million tonnes in the 2011-Food Secretary Sudhir Kumar told 12 crop year (July-June) leading to a reporters when asked about the bumper procurement.progress made in discussion with Iran The Food Corporation of India's for wheat exports.godowns are overflowing with In the first tender, the government has foodgrains stocks, prompting the got a price of USD 296 per tonne and government to lift ban on exports in in the last tender, the price has reached September, 2011.USD 328 per tonne, he said, adding From July this year, it even permitted that about 11-12 foreign firms are exports of 2 million tonnes from FCI participating in the global tenders.godowns and the allocated quantity is In July this year, the Centre had on the verge of getting exhausted. Now, allowed exports of two million tonnes the government is in the process of of wheat from its godowns to offload allowing an additional 2.5 million surplus stock and ease storage crunch. tonnes of exports. The tenders are being floated by the informed. team to check quality of the grain.

state-owned trading firms PEC, STC Iran has not been importing Indian However, the negotiations have not yet and MMTC on behalf of the

everages & Food Processing Times- -2013B Jan-I

There is no quality concern about Indian wheat: Food Secy