Keeping MSP Paddy ,Soybean and cotton unchanged is unjust with distressed Farmers

Nagpur -27th October 2011

The recent decision of union Govt. to keep Minimum Support Price MSP fro ruby season 2011-12 unchanged ignoring the demand of urgent upward revision from Maharashtra, Gujarat, Punjab and Andhra Govt. is grave unjust to more than 2 billion debt trapped Indian farmers who are under severe economic crisis due sudden crop failure and hike in the cost of cultivation and farmers are demanding urgent intervention of Indian Govt. to save dying agrarian community , Vidarbha Jan Andolan Samiti president Kishor Tiwari informed today.

Paddy ,soybean and cotton cultivators have come down heavily upon the government for its failure to rescue them from agrarian crisis. These farmers have alleged that government’s failure to provide realistic minimum support price (MSP) for paddy soyabean and cotton has made its production impossible.Despite the cultivation cost going up by 40%, the MSP for paddy soyabean and cotton has been hiked only by 11.5%, the aggrieved farmers pointed out “The skyrocketing production cost has made lives miserable for farmers, Farmers are agitated over government’s failure to address the problem . For the past two years commodity market has witnessed huge slump making rice cultivation a loss making business. Tiwari said..

CACP has failed to provide justice to it’s own calculation of MSP and union Govt. has failed to start procurements centers fro paddy ,soybean and cotton which is allowing private traders exploitation, Tiwari said

In Maharashtra alone cotton is cultivated over 52 lakh hectare and the lion’s share of it is in the rain fed region of Vidarbha and Marathwada where Bt.cotton crop has been failed due to long dry spell in September severely effecting the net yield of cotton by 50% resulting another Black Diwali for Bt.cotton growers who are in rip of agrarian crisis and committing suicides since June 2005 .The rain sensitive Bt.cotton seed which has increased almost triple the cultivation cost and drop down the net average cotton production per hector coupled with international market volatility and Indian Govt. export restrictions are the main reasons of prevailing distress and despair in region forcing the cotton farmers to kill themselves which is matter of national shame but complete apathy of Govt. at the centre and state are adding fuel to this on going farmers genocide, Tiwari said.

Looking at prevailing situation internationally wheren cotton prices are likely to soar to Rs 7,000 a quintal this year too riding on the global scarcity on account of poor crops in the US, China and Pakistan, Indian cotton farmers can hedge these prices only if central Govt. manages to raise the minimum support price to Rs 6,000 level but The government has not responded favorably disappointing cotton farmer hence we urge for urgent intervention to save dying cotton farmers, Tiwari said.

“As the reports from allover the are showing world shortage of cotton production , the Indian farmer gets advantage this time as cotton is now placed under open general license (OGL) for exports. But the OGL status should be continued. Last year, the Centre put unnecessary restrictions on exports denying farmers an opportunity to make it big. In the process they lost a market worth Rs 30,000 crore,” said Tiwari.

AP CM seeks remunerative MSP, confident of 10% growth for A.P. at NDC

Hon’ble Chief Minister Sri N.Kiran Kumar Reddy speech at NDC meet at Delhi on 22-10-11.

The Chief Minister Sri N Kiran Kumar Reddy today declared that Andhra Pradesh is confident of achieving a growth rate of 10% during the 12th Plan period. He said the corresponding sectoral growth targets would be 6% for agriculture, 10.5% for industry and 11.5% for services. He said the new initiatives undertaken for the welfare of the farmers, women, students, SCs, STs, BCs, Minorities and the poorest of the poor in the State definitely made their lives brighter.

The Chief Minister said under Jalayagnam, the State Government have taken up 86 major and medium irrigation projects with a massive outlay of Rs.1,86,000 crores that include creation of new ayacut, stabilization of existing ayacut, modernisation and flood control works in a comprehensive manner.

The Chief Minister also explained the efforts of the State Government in bringing 26 lakh licenced cultivators into the mainstream and ensuring the access of all benefits like crop loans, input subsidy, crop insurance, seed and fertiliser subsidy–the Government has enacted the landmark AP land Licenced Cultivator Ordinance, 2011. A.P. is the only State to have enacted such a progressive legislation.

The Chief Minister said A.P. stands 1st in the country in meat and egg production and the State targets to grow at a rate of 9% annually. He said A.P. accounts for 40% of Indian fishery export and the sector contributes 2.58% to the GSDP.

The Chief Minister also sought for adding 25 lakh tonnes of additional scientific storage capacity in the the broader national interest to store foodgrains.

Mr Kiran Kumar Reddy also said that the minimum support price fixed for food grains should compulsorily take into account the scientifically calculated cost of cultivation and should be remunerative to farmers and said this is specially relevant to A.P. since the State substantially contributes to the national food requirement and food security.

The Chief Minister also explained new schemes like the Stree Nidhi Credit Cooperative–the women-owned, women-operated micro finance system, Skill Development Centres, Re.1-a-kg rice scheme covering 2.25 crore families for white card holders with an outlay of Rs.2,600 crores per annum etc.,

Following is the full text of CM’s speech at NDC at Delhi on 22-10-2011:

Respected Prime Minister, Hon’ble Union Ministers, Deputy Chairman, Distinguished Chief Ministers, Distinguished Guests, Ladies & Gentlemen

I thank the Prime Minister and Chairman of the Planning Commission for convening the 56th Meeting of the National Development Council to discuss the “Approach to the 12th Five Year Plan (2012-2017)”. I am indeed happy that this forum is slated to discuss several important issues for achieving faster, sustainable and more inclusive growth. I am sure that the outcome of the discussions would give a direction to the States in formulating State specific strategies.

I would like to convey my sincere gratitude to the Hon’ble Prime Minister and the Deputy Chairman, Planning Commission for extending their unstinted support to our State and hope that it would continue and further strengthen in the future.

My assessment of the draft approach paper of the 12th Five Year Plan is that it is a well thought out and comprehensive document. It aims to providing an opportunity to restructure policies to achieve a new vision of growth that will be faster, more broad-based, ecologically sustainable and more inclusive eventually resulting in a faster reduction in unemployment and poverty through skill development and also help bridging multiple divides. Since the basic theme and overall objectives outlined in the approach paper are in conformity with our Government’s line of thinking, we support and endorse the broad approach of the Union Government.

With the experience gained during the last few years through implementation of several welfare and developmental programmes reinforced with fiscal discipline, Andhra Pradesh is confident of achieving a growth of 10% during the 12th Plan period. The corresponding sectoral growth targets would be 6% for Agriculture, 10.5% for Industry and 11.5% for Services.

In my discussion of the sectoral plans, I would like to share with this august gathering the basket of ongoing innovative schemes and new initiatives undertaken for the welfare of the farmers, women, students, youth, SCs, STs, BCs, Minorities & the poorest of the poor-and which have definitely made their lives brighter.

Irrigation –Our Life Line

Mahatma Gandhi once said and I quote, “India lives in villages.” Despite many changes, majority of India still lives in villages and agriculture and allied sectors are still the mainstay of our rural economy.

In Andhra Pradesh we are having a paradoxical situation where on the one hand we have large tracts of unirrigated cultivable land and on the other hand about 2,000 TMC of flood water goes to the sea unutilized, every year.

Therefore, in order to fully develop our irrigation potential and in order to improve agricultural productivity, the Government of Andhra Pradesh has focused on “Jalayagnam”, the accelerated development of irrigation sources, since 2004. We have taken up 86 major and medium projects with a massive outlay of Rs. 1,86,000 crores. These projects include creation of new ayacut, stabilization of existing ayacut, modernization and flood control works in a comprehensive manner.

The Jalayagnam projects, on completion, are going to contribute approximately 60 percent of the new ayacut in the country. It envisages 100 lakh acres of new ayacut and 22 lakh acres of stabilization. Further, it will meet the requirement of drinking water for 1.95 crore population, generation of 1850 MW of hydel electricity and supply of 46 TMC of water for industrial use. So far, 12 projects are completed and 21 projects are partly completed and a new IP of 26 lakh acres is already created. In the next three years, we plan to complete another 48 projects creating a new IP of 30 lakh acres.

Irrigation as an essential input to agriculture would continue to have the focus during the 12th Plan also. In addition to augmentation of irrigated area, our priority is to enhance water use efficiency. I am happy to announce that the 11th Plan target of 12% to 15% improvement in water use efficiency has been achieved through project cycle management in all the projects in Andhra Pradesh. Andhra Pradesh is the only State to have successfully conducted elections to Water Users Associations/Distributory Committees/ Project Committees for the entire command area. Additionally, our prime focus will be on completion of projects which are in final stages.

Andhra Pradesh has also launched a major effort to restore about 10,000 minor irrigation tanks with the help of the Central Government support through Renovation, Revival and Restoration (RRR) support. Consequently, the area irrigated under Minor Irrigation has gone up from 13 lakh acres in 2004 to 35 lakh acres in 2010.

Paucity of financial resources is the main constraint to early completion of remaining Jalayagnam projects. Andhra Pradesh has invested Rs.53,000 crores on irrigation during the last 5 years. However, our efforts fall short of what is actually required. I am confident that the Government of India will recognize and appreciate these efforts to stimulate growth in the agricultural sector and to bolster national food security.


Agriculture sector in the State has regained dynamism in the recent past. The growth rate in excess of 7% registered during the first four years of the 11th Plan period is the result of the several farmer-friendly initiatives of the Government. We would like to improve agriculture growth rate in the State and this requires multidimensional strategies to be adopted. The primary requirement is of institutional support for purchase of input and output through Self Help groups(SHGs). Technical support for soil testing and micro irrigation and infrastructure development through storage & warehousing with private sector participation for reduction in post-harvest losses is required.

The welfare of the 1.2 crore farmers has always been and shall continue to be the focus of the State. Free power is being provided to 29 lakh pump sets which irrigate 70 lakh acres and benefit 35 lakh families with an annual outlay of Rs 5,000 crores. To encourage and support farmers we have recently launched a new scheme to provide interest free crop loans up to Rs 1 lakh upon prompt repayment from rabi, 2011, benefitting 95 lakh farmers.

To reduce input cost and to avoid wastage of food grains a massive farm mechanization programme with an outlay of Rs 1,000 crores in the coming three years as also a programme for construction of 25 lakh tonnes of scientific storage space, with an outlay of Rs.2,500 crores, have been initiated.

To bring the 26 lakh licensed cultivators into the mainstream and ensure the access of all benefits viz. crop loans, input subsidy, crop insurance, seed and fertilizer subsidy- the Government has enacted the landmark AP Land Licensed Cultivator Ordinance, 2011. Andhra Pradesh is the only State to have enacted such a progressive legislation.

As part of the ongoing Agriculture Technology Mission, we aim 300 lakh metric tonnes of food grain production by end of 12th plan from the current 195 lakh metric tonnes, in 2010-11. This requires a Second Green Revolution and the thrust areas for achieving this would be – promoting the system of rice intensification(SRI) cultivation in 5 lakh hectares by 2016-17, seed replacement, focus on oil palm development, cluster development for value addition up to 50%,avoidance of handling losses and agri-business strategy involving investment of at least Rs.20,000 crores in next five years. Correcting micro nutrient deficiency will be a major initiative in the 12th Plan supported by seed management, farm mechanization, and better water management practices in rain fed areas and ensuring equitable distribution of water and increasing efficiency of its use. Agriculture diversification to high value commodities has been gaining importance in the rain-fed areas.

Andhra Pradesh ranks 1st in micro irrigation & production of spices & fruits and 3rd in the production of flowers. We propose to provide micro irrigation systems to a further 10 lakh hectares under Andhra Pradesh Micro Irrigation Project, benefiting 12.5 lakh farmers.

We aim are targeting to reduce post-harvest losses from 40% to less than 25% by post-harvest infrastructure facilities like cold storages, integrated pack houses, ripening chambers and reefer vans etc., and strengthening the linkages between production clusters and buyers.

Livestock is a key area of intervention during the 12th Plan. Andhra Pradesh currently ranks 2nd in milk production in the country with a production of 112 lakh metric tonnes. To provide a steady focus upon both the increase in the production of milk and the productivity of the milch cattle and thereby provide manifold increase to the incomes of the famers we have recently launched the State Milk Mission with an outlay of Rs 6,000 crores

Standing 1st in the country in meat and egg production, the State targets to grow at a rate of 9% annually.

Our State accounts for 40% of Indian fishery export and this sector contributes 2.58% to the GSDP. About five lakh families are engaged in marine fishing and it supports livelihoods of approximately 15 lakh people. The State plans to maintain its strength in brackish water shrimp, fresh water prawn and fresh water fish production.

As I have already stated, for achieving an overall growth target of 10% during the 12th Plan, Agriculture & Allied sectors require to grow at 6%. Livestock (9%) and Fisheries (7.5%) would be the major contributors followed by the crop sector & horticulture (4.5%) and forestry (2.5%). This reemphasizes the focus on activities and strategies relating to animal husbandry and fisheries sub sectors.

My State suffers from a woeful inadequacy of storage space which on one hand affects the farmers since it reduces their ability to hold grain for obtaining better prices and on the other hand leads to wastage and deterioration of quality of the food grains.

I request a special package for adding 25 lakh tonnes of additional scientific storage capacity in the broader national interest.

Further, I request that the minimum support price fixed for food grains should compulsorily take into account the scientifically calculated cost of cultivation and should be remunerative to farmers. This is especially relevant in the context of my State which substantially contributes to the national food requirement and food security.

Rural Development

Andhra Pradesh has set several impressive benchmarks in the implementation of MGNREGS and we aim further improvement of our performance. Our current focus areas are bringing the under-utilized and fallow lands under cultivation by improving irrigation facilities, water shed development, land use planning, etc. 9.7 lakh acres of SC/ST land was developed in 11th Plan, including 3.5 lakh acres under horticulture. With fairly high completion rates, we compliment the Government of India for the MGNREGS, which with its inclusive approach and wide scope is a key employment generation scheme which stimulates capital formation in the rural sector.

MGNREGS has made a significant impact in the rural areas. It has led to increased wages, eliminated the gender disparity in wages, created assets for poor people and brought an end to distress migration.

While we will strive to further consolidate the gains made under MGNREGS, at the same time we feel that it is very important to synchronize MGNREGS with agriculture in order to ensure that it continues to benefit the agricultural labour. MGNREGS has promoted the mechanization of the agricultural activities in response to the increase in the agricultural wages. This trend is likely to accentuate further and the availability of private agricultural labour is likely to shrink as a result of the increased mechanization. This shortage may have to be compensated by increasing the number of wage days under MGNREGS from the present 100 days which will lead to an increased programme cost.

A better solution would be to link the various agriculture-related labour activities with MGNREGS so that both the farmers and the wage labourers co-exist harmoniously. The wages towards tilling, sowing, weeding, harvesting and threshing even in privately owned farms should be paid under MGNREGS by increasing its scope. This proposal needs serious consideration by the Central Government.

Andhra Pradesh is proudly the home of the Self Help Groups (Indira Kranti Patham) movement in the country and pioneer in the implementation. Our success in organizing the rural poor women into self-help groups (SHGs) and promoting their financial inclusion by accessing bank credit for productive activities has been a precursor to the National Rural Livelihood Mission (NRLM).

The urban and the rural Indira Kranti Patham(IKP) groups will access Rs.10,000 crores of credit from the banks during 2011-12, which they will deploy for income generating activities. I request the Government of India to promote the SHG-Bank linkage further, since it is the cheapest and most sustainable mode of financial inclusion.

The IKP movement of Andhra Pradesh has been provided due encouragement by the “Paavla Vaddi”scheme which provides an effective 3% rate of interest on the prompt repayment of the bank loans. The interest subvention of an average of 9% and amounting to Rs.600 crores is being met by the government.

In order to further make available credit for unforeseen purposes and higher order needs, we have promoted STREE NIDHI Credit Cooperative as a women-owned, women-operated micro finance system, which is expected to meet the credit needs of the rural poor to an extent of Rs.1,000 crores in the 1st year itself.

The IKP women of Andhra Pradesh are breaking new ground by means of innovative schemes which have now gone beyond income generating activities. They encompass almost every sphere that impinges upon the poor and thus implementing a comprehensive strategy for the alleviation of poverty viz., activities related to Health & Nutrition, Insurance, Early Childhood Education, Literacy, Gender, improving agricultural productivity through community-based sustainable agriculture, etc. with the government providing a sensitive support mechanism to the SHGs.

An important initiative of the IKP is the setting up of Nutritional cum Day Care Centers (NDCCs). The NDCCs are run by the SHGs and provide daily 3 nutritious hot cooked meals to every pregnant woman. The villages where the NDCCs have been established have shown encouraging results comparable with the best in the World and 3 kg average weight of child at birth. Therefore, my government has decided to increase the number of the NDCCs from the present 4,000 to 40,000 centers, linked with the ICDS Anganwadi centres.

We believe that the economic empowerment of women holds the key for transformative rejuvenation of the poor and poverty alleviation. The SHG-Bank linkage has significantly increased the ability of the women to access credit and utilize it for economic activities and to take control over their livelihoods.

In this context, I firmly believe that the fixation of a lower rate of interest on prompt repayment of SHG loans, similar to the regime in respect of agriculture loans, strongly incentivizes loan repayment especially in view of the scarcity of livelihood opportunities which provide significant return on capital. This will help the poor to emerge out of poverty faster.

Drinking water and Sanitation have been given full attention by our Government. Of the 72,407 habitations in the State, 45,785 habitations covering 54% of the rural population are fully covered with safe drinking water and 26,243 habitations are partially covered. During the 12th Five Year Plan, the balance 46% of the rural population will be provided full coverage. A major concern for the 12th plan is the increasing number of quality affected habitations. 22,981 habitations have been covered with sanitation facilities in the State which include providing water supply to schools, school toilets and anganwadis.

Rural road connectivity is an important concern for the State. Out of the total length of 1.35 lakh kms in the State, up-gradation of roads is yet to be ensured for 32,229 km. Due to certain reasons the State is not able to access funds under PMGSY and we seek early resolution of this issue. The Centre may liberally consider the release of funds for the up gradation of rural roads.

Skill Development:

Lack of employment opportunities has made our youth despondent. My government has formulated a twin pronged strategy to address this vital issue. Recruitment to one lakh government jobs being one; the second is to deepen the opportunity for the youth of the State in the private sector by skilling. No doubt such efforts have been made in the past but they have been largely spasmodic and not concerted. In such context our Government has launched the Rajiv Education and Employment Mission. The Mission seeks to identify employment opportunities in the private sector, define the required skill set and then identify and take up skilling of the willing youth while targeting guaranteed placement. The Mission is tasked with providing placement to 15 lakh youth by 2014 and of which at least 50 % shall be from among women, SCs, STs and Backward Classes.

The development of higher education-including technical education leading to enhancement of skill development remains the core agenda for 12th Plan period. Towards this, 97 Skill Development Centers have been commissioned in the State.

Ensuring Social harmony and equity:

Welfare is the cornerstone of the development effort in Andhra Pradesh.

Under the Indiramma Pensions Scheme, universal pension coverage is being provided to 72 lakh old aged, differently abled, weavers, toddy tappers and the widows with an outlay of Rs.2,000 crores.

With a view to ensuring Food Security and enhancing nutritional support to the people, our government has launched supply of rice @Rs.1.00 per kg, under the Public Distribution System covering 2.25 crore families with an outlay of Rs.2,600 crores per annum. Under this scheme, the White Card holders are entitled to a minimum of 4 kg per person and 20 kg per family monthly.

Our 2004 dream of Andhra Pradesh without huts(Katcha houses) shall be realized by 2014 and by that time we would have constructed 74 lakh houses for the poor with an expenditure of Rs.20,000 crores.

The Arogyasri scheme provides universal health insurance coverage to poor families. So far, 13 lakh surgical operations have been conducted under it, with a cumulative expenditure of Rs.3,300 crores.

My government is committed to the welfare of the SC/STs. Access to cultivable land is central to the strategy since land evokes both livelihood security as well as emotional security. As part of a massive Land Distribution programme for SC/STs six lakh acres of land have been distributed since 2005 in six phases of land distribution. Another one lakh acres shall be distributed by December, 2011. Under MGNREGS comprehensive land development of 50 lakh acres has been taken up and of which 30 lakh acres belongs to SC/STs.

Realizing that the mere assignment of land without irrigation facilities may not serve the intended purpose of alleviating the poverty of the beneficiaries, commemorating the birth anniversary of Mahatma Gandhi, our government has launched the Indira Jal Prabha scheme on 2nd October, 2011 which will provide assured irrigation tied up with micro irrigation to 10 lakh acres of land belonging to the SC/STs, at a cost of Rs.1800 crores and ultimately benefiting 3.30 lakh SC families and 2.37 lakh ST families and forever banishing poverty from their lives.

Ensuring an inclusiveness agenda, the State needs to focus on development of SCs, STs, BCs, Minorities and Women during the 12th Plan period also.

Development of Minorities is one of the concerns of the government under ensuring Social Justice. The State outlay for minorities has significantly increased from Rs.20 crores only in 2004-05 to Rs 270 crores during the current fiscal. We are implementing reservation of 4% to minorities and effectively implementing the 15-Point programme of the Central government.

In our State, all the welfare programmes are effectively implemented in the tribal areas through the Integrated Tribal Development Agencies. Recognition of Forest Rights (RoFR) Act, 2006 is being implemented and a Conservation-cum-Development Programme has also been launched in the state to develop the primitive tribal groups.

Human Development

Human Development continues to be our prime concern and the State is yet to achieve the Millennium Development Goals and remains behind the other Southern states.

Our strategies during the 12th Plan includes focus on developing better health infrastructure, achievement of Millennium Development Goals by 2015 on poverty, literacy, gender balance, and access to health and drinking water. While almost all the vacancies in the health sector being filled, efforts are on to fill up a number of teacher vacancies soon. We have evolved plans to bring down the drop-out rate in the secondary level of education from 46.21% in 2010-11 to zero per cent by the end of the 12th Plan and to ensure complete Gender Enrolment Ratio (GER) by 2016-17 in secondary education and also focus upon literacy.

Scholarships are provided to 27 lakh poor students belonging to SC, ST, BC and Minority community on saturation basis with an annual outlay of Rs 3,500 crores.

We would request the Central Government for continuation of NRHM during the 12th Plan and also to launch National Urban Health Mission on similar lines to NRHM. The Planning Commission may consider developing a National Policy on Health Insurance and the 12th Plan should provide support for strengthening the secondary hospitals.

Special provision may be made in the 12th Plan for strategic innovations in the social sector, especially in interventions that would contribute directly to the achievement of the Millennium Development Goals (MDG) outcomes. Andhra Pradesh which is targeted to achieve Infant Mortality Rate (IMR) of 28 by the end of the 11th Plan period presently has an IMR of 49 and needs greater push during the 12th Plan period. Similar encouragement is also sought in respect of reducing Maternal Mortality Rate (MMR) as well.

Industry – Looking beyond growth

Industrial development in the State has been the priority sector since it generates large scale employment directly and indirectly through its service sector. The State has a strong industrial base with industrial investments of Rs.1.18 lakh crore providing employment to 28.26 lakh persons in both Large and Marginal, Small and Medium Enterprises (MSMEs). Employment in MSMEs is nearly 10 times that of the large industries.

Andhra Pradesh is a leading investment destination because of large resources of fruits, vegetables, oil seeds, dairy products, meat poultry, marine products, spices, chillies, coconut, cashew etc. for value addition by the food processing industry. In addition to this large number of mineral resources like coal, limestone, granite, barytes, bauxite, iron ore, beach sands etc. are available. This has led to a strong manufacturing strength in cement, paper, granite, pharma and bulk drugs, textiles, electronics and defense equipment, heavy electrical engineering industries and defense electronics and aerospace industries. Andhra Pradesh is also having strong presence in biotechnology through promotion of Genome Valley near Hyderabad which has ICICI Knowledge Park, Alexandria Biotech Park, Indian Immunological Limited, Unicorn, Nektor, DuPont etc..

A number of initiatives for creating infrastructure like road network, port development, airports, industrial water supply and waste management through Public Private Partnership to host large manufacturing industries in the state have been taken up. Andhra Pradesh has the 2nd longest sea coast with potential for export logistics and exports of marine products.

Due to significant gas finds in the KG basin, Government of India has sanctioned a Petroleum, Chemical, and Petrochemical Investment Region (PCPIR) in 600 sq. kms between Visakhapatnam and Kakinada where a number of chemical industries are located. I request Union Government to liberally support the infrastructure development in PCPIR. Under the National Manufacturing Policy of Government of India, it is requested to sanction one National Manufacturing and Investment Zone in the State.

Our Industrial strategy envisages enhancement of productivity of MSMEs through clusters, under PPP model particularly in the employment intensive sectors like readymade garments, textile, electronics, footwear, food processing etc. Skill development, employment generation especially under the manufacturing sector through development of MSME is going to be yet another focus area during the 12th Plan period. My government is planning to create 7.5 to 8.0 million employment opportunities in the textiles, construction, and IT & ITES, tourism and health care and other sectors during the 12th Plan period.

The Industrial Investment Promotion Policy 2010-15 of the State envisages an employment target of 5 lakhs per year for achieving 17% growth in the manufacturing sector. Andhra Pradesh has the highest number 74 notified SEZs, the highest in the country. 27 of them are in operation providing employment to over 1.40 lakh persons.

For achieving an overall growth target of 10% during the 12th Plan period, the industries sector need to grow at 10.5%. Of this, mining and quarrying is projected to grow at 12%, while construction (11.5%), manufacturing – registered (9.5%), electricity, gas & water supply (9%) would be the other contributors to industry sector growth.

Energy – an imperative infrastructure growth engine:

Rapid growth of the economy will place a heavy demand on electric power and power generation holds the key for faster development.

Although we have made decent strides in the power sector, we need to make this sector efficient and more competitive. We have successfully reduced the T&D losses from 21.42% in 2004-05 to 17.05% in 2010-11 – one of the lowest in the country. With the total installed capacity in the State at 15,768 MW, peak demand at 12,000 MW and energy demand at 78,000 MU, we could effectively reduce the transmission losses to 4.48% and ensured highest transmission availability of 99.89%. The state targets 17,126 MW additional capacity to the existing installed capacity by the end of the 12th Plan period and APGENCO, the State power utility alone contributing 9012 MW.

In order to achieve the targeted growth in the electricity sector, fuel is a major concern for the power sector. Meeting increasing demand for power is going to be a major challenge. Our State being the Gas-hub of India, we target to utilize natural gas resources of the state with the intervention of Centre more effectively and promote gas based captive power plants. Firm allocation of gas for power projects being taken up by APGENCO needs consideration besides providing adequate gas for ensuring full capacity utilization of the existing power projects in the State.

Similarly, in case of thermal power, supply of coal as per the linkage agreement by PSUs to generating stations and granting long term coal linkages for the new Thermal Power Plants being set up by State PSUs is of vital importance. I solicit the Union Government’s intervention in this regard.

Andhra Pradesh is going headway in exploring the extensive use of non-conventional energy.

Gas driven economy:

Andhra Pradesh and its adjoining sea Bay of Bengal has become a major source of Natural Gas for the Country. The State has decided to obtain maximum benefit of this important natural resource which at the moment, is moving to other parts of the country for lack of connectivity development. We have good demand within our State and we have approached Government of India and its Regulator to permit us to lay extensive Gas Distribution Network to take the gas to the intended beneficiary which in turn will optimize our State economy and propel industrial development. Government of India may kindly take active steps to authorize immediately for construction of two trunk pipelines viz., Kakinada-Basudevpur-Howrah and Kakinada-Vijayawada-Nellore-Chennai. The State government is keen to develop, in collaboration with Government of India, a RLNG Terminal and taking active steps in this regard. The State also seeks your indulgence in ensuring that it gets due priority in allocation of natural gas for its optimal development and to mitigate the difficulties of the power plants and industry which are presently starved and operates at sub-optimal level for want of natural gas.

Information Technology – an employment growth engine:

Our Government shall continue to maintain its ascendancy in Information Technology. Our software exports grew over 100% per annum during the 90s and over 40% per annum later. IT sector contributes 49% of total exports from Andhra Pradesh and the State occupies 4th position in India with a share of 15% of the national IT exports. We have plans to achieve annual growth rate of over 17% in software exports and create additional direct employment of 1.5 lakh by 2015. To improve the quality of the technical manpower Jawahar Knowledge Centers (JKCs) were established.

In view of it’s huge potential I urge upon the Union Government to declare ITIR(Information Technology Investment Region) city of Hyderabad expeditiously to enable the flow of investment and creation of employment opportunities.


Infrastructure has been identified as a key component for sustainable economic development.

The Government of India is now formalizing PPP as the preferred implementation model. We have the institutional framework – an enabling act, Andhra Pradesh Infrastructure Development Enabling Act, 2001, an exclusive department of Infrastructure and Investment, an Infrastructure Corporation of Andhra Pradesh (INCAP) and substantial implementation experience in PPP projects.

Andhra Pradesh is encouraging the private sector to improve port infrastructure.3 ports in commercial operation are being developed under PPP mode. Another 3 non-major ports were awarded under PPP mode, and are under development. Expression of Interest (EoI) is being issued for development of two other non-major ports.

Shamshabad is one of the finest international greenfield airports constructed and operated under a PPP model. We are collaborating with AAI to develop regional airports. Development of non-AAI airports through PPP initiative is a priority area.

We are continuously investing significant resources in developing the road infrastructure but, we require substantial support from the Union Government in upgrading important state roads to national highways, development of existing single lane to double lane and construction of Road Over Bridges in lieu of level crossings on national highways.

Urban Development – building infrastructure for growth:

Union Government’s innovative programmes like the JnNURM have been very useful in addressing a large number of urban management problems. In fact Andhra Pradesh with 251 projects sanctioned under JnNURM costing Rs. 11,877 crores stands 2nd highest in the country.

In continuation of the Government of India’s announcement of the path-breaking scheme of Rajiv Awas Yojana (RAY) outlining the vision of Slum Free India by 2014, the Government of Andhra Pradesh has also unveiled a policy for a Slum Free Andhra Pradesh by 2014 and committed to provide houses and infrastructure facilities to all houseless urban poor.

The urban poor families in Andhra Pradesh are organized into 2.5 lakh Self Help Groups (SHGs) in slums and provided bank credit of Rs. 2,600 crores to help them to achieve better quality of life. To empower women and their participation in decision making, government has enhanced the reservation in number of seats and offices of Mayors and Chairpersons in Urban local bodies to 50% for women in the State.

To meet the growing challenges of urbanization, I urge upon the Union Government to expedite the Rajiv Awas Yojana (RAY) and to consider continuation of JnNURM during the 12th Plan.

Law and order: curbing extremism –the development way:

Maintenance of law and order is a prerequisite for any development. Andhra Pradesh has been in the forefront in tackling the Maoist problem with significant results.

We are of the concerted opinion that Naxalism has to be tackled more as a socio-economic problem than as a mere law and order problem. There are eight (8) inter-state border districts of Andhra Pradesh adjoining Chattisgarh, Orissa and Maharashtra states which continue to face the risk of relapse into extremism. Supplementing the Central Government’s initiative through the Integrated Action Plan (IAP) to tackle extremism in the two LWE districts, the State Government on its part is implementing various welfare and developmental programmes. I am happy that the Centre has sanctioned IAP for two districts viz.Khammam and Adilabad.

I take the opportunity in requesting the extension of the IAP scheme for 6 more districts of the State on account of their contiguity and proximity to intensely naxal affected districts in the neighbouring states which are already categorized under LWE Special Development Plan (SDP). Approval for development of Special Infrastructure corridor (Roads & Bridges) as Garland Road at a cost of Rs.2400 crores will help in controlling LWE on a permanent basis.Remote and Interior Area Development is a serious concern and the State is planning a comprehensive development strategy in the identified 300 high SC/ST density mandals.

Governance reforms

Rachabanda is a people-centered initiative and a massive outreach program bringing the government at the doorstep of the people and the first phase was held during January-February, 2011 covering all the Gram Panchayats/ Wards in the State. The 2nd phase is scheduled to commence on the 2nd of November, 2011.

The basic aim of Rachabanda Programme is to motivate and instill confidence among the public by redressing their grievances on the spot. The thrust areas covered in Rachabanda programme are Ration Cards, Pensions, Arogyasri, Housing and Pavala Vaddi. 31 lakh families have been benefited, so far under the scheme.


In these challenging times; Government of India has taken a number of initiatives including entitlement based legislations for growth, equity, inclusivity and security. Government of Andhra Pradesh is totally committed to these measures. In this connection, I would like to mention about certain issues which would help achieve these goals. I request for continual leadership to forge consensus among States for the early implementation of the Goods and Services Tax (GST) which would spur growth. In the implementation and financing of the Centrally Sponsored Schemes there is a need for providing some flexibility to the states to take care of their state specific priorities and programmes. Further, we also propose to focus more on Flexi-flagship programmes which would help the State to use the funds more effectively through dovetailing with State funds and target them for local-specific requirements.

We look forward to the early implementation of the steps taken for improving the public expenditure framework.

Concluding we stand shoulder to shoulder with other states to working together with Government of India in realizing a Resurgent, Vibrant and Inclusive India.


Mohan Kanda suggests ‘MSP should cover cost of production at least’

Mohan Kanda committee which looked into the crop holiday crisis in AP apart from other things suggested that government should ensure that MSP announced by Govt. of India should cover the cost of production and if there is a gap, state government should bear the gap. According state govt reports it costs Rs. 1270/q for common varieites and Rs. 1335/q for A grade. Accordingly AP govt asked the Centre to fix MSP at Rs. 1905/q and Rs. 2033/q respectively. But the centre has announced the MSPs only as Rs. 1030 and Rs. 1080/q respectively. If state accepts the Mohan Kanda’s recommomendations, even if they dont pay the price they recommended, at least should cover the cost of production. In which case the prices would be Rs. 1270/q for common varieites and Rs. 1335/q for A grade. This would require about Rs. 55,000 cr additionally as the govt may have to give about Rs. 275/q as bonus. Still it would only cover the costs and wont leave any profit for the farmers. Is it not the time to rethink the whole pricing policy in agriculture? why farmers should be put to loss?

శాస్త్రీయ విధానంలో మద్దత్తు ధర (ఎంఎస్‌పి)

సెంటర్ ఫర్ సస్టైనబుల్ అగ్రికల్చర్, May 25th, 2011

వరిధాన్యానికి కనీస మద్దతు ధరను శాస్ర్తియ విధానంలో నిర్ణయిస్తేనే రైతులకు గిట్టుబాటు అవుతుంది. ప్రస్తుతం అవలంభిస్తున్న విధానం లోపభూయిష్టంగా ఉంది. దాంతో రైతులు ఆర్థికంగా కుంగిపోయి జీవిస్తున్నారు. వ్యవసాయ ఉత్పత్తుల ధరలను నిర్ణయించడానికి, వ్యవసాయేతర ఉత్పత్తుల ధరలు నిర్ణయించడానికి అసలు పొంతనే లేదు. ప్రస్తుత ధరలను 1997-98తో పోలిస్తే వ్యవసాయ ఉత్పత్తుల ధరలు కేవలం 25 శాతం పెరిగితే సిమెంట్, స్టీల్, ప్రాసెసింగ్ ఫుడ్ తదితర వస్తువుల ధరలు 300 నుండి 600 శాతం పెరిగాయి. ఇదే సమయంలో ఉద్యోగుల వేతనాలు 150 శాతం పెరిగాయి. రైతుల ఆదాయం మాత్రం పాతిక శాతం కూడా పెరగలేదు. పంటలకు పెట్టుబడులు పెరగడంతో పంటల ఉత్పత్తులకు లభిస్తున్న ధరలు గిట్టుబాటు కావడం లేదు. 2004-05లో క్వింటాల్ ధాన్యానికి పెట్టుబడి ఖర్చు 578 కాగా, అదే క్వింటాల్‌కు ఎంఎస్‌పి 560గా నిర్ణయించారు. 2010-11 సంవత్సరానికి క్వింటాల్ ధాన్యానికి పెట్టుబడి ఖర్చు 1500లకు పెరగగా, ఎంఎస్‌పి మాత్రం 1030గా నిర్ణయించారు. వాస్తవాలను పరిగణనలోకి తీసుకుపోవడమే ఇందుకు కారణం.

వ్యవసాయానికి పెట్టే పెట్టుబడితో పాటు రైతుల జీవన ఖర్చులను కూడా పరిగణనలోకి తీసుకోవాలి. జాతీయ రైతు కమిషన్ చేసిన సిఫార్సు ప్రకారం పెట్టుబడి ఖర్చుతో పాటు యాభైశాతం అదనంగా కలిపి కనీస మద్దతు ధర నిర్ణయించాలి.
రైతుల నుండి కొనుగోలు చేసే ధాన్యం మొత్తాన్ని ప్రభుత్వమే నేరుగా కొనుగోలు చేసే విధంగా ఒక విధానాన్ని రూపొందించాలి. చత్తీస్‌గఢ్ రాష్ట్రం సమర్థవంతమైన కొనుగోలు విధానాన్ని అమలు చేస్తోంది. ఇదే విధానాన్ని మనం కూడా అమలు చేస్తే బాగుంటుంది. మన రాష్ట్రంలో మహిళా సంఘాల ద్వారా జరిగిన ధాన్యం కొనుగోలు బాగానే ఉంది. ఈ విధానాన్ని విస్తృతం చేస్తే బాగుంటుంది. మహిళా సంఘాలు 2006-07 నుండి కొనుగోలు చేస్తున్న ధాన్యాన్ని మిల్లింగ్ చేసి భారత ఆహార సంస్థకు విక్రయిస్తున్నాయి. దాంతో మహిళా సంఘాలు తమ ఖర్చును మినహాయించుకుని రైతులకు మంచి ధరను చెల్లిస్తున్నాయి. ఈ విధానాన్ని విస్తృతం చేసి మిల్లర నుండి ఎఫ్‌సిఐ లెవీ బియ్యం కొనుగోలు చేసే పద్ధతికి స్వస్తి పలికితే రైతులకు లాభదాయకంగా ఉంటుందనడంలో సందేహం లేదు.
2009-10లో సేకరించిన బియ్యం నిల్వలతో రాష్ట్రంలోని గోదాములు నిండి ఉన్నాయి. ఈ కారణంగానే 2010-11లో ఇప్పటి వరకు ప్రభుత్వం రైతుల నుండి కొనుగోలు చేసిన ధాన్యం 4.70 లక్షల టన్నులు మాత్రమే కావడం గమనార్హం. రబీకి సంబంధించి 60 లక్షల టన్నులు మార్కెట్లోకి వచ్చింది. ప్రస్తుతం ధాన్యం వ్యాపారం మొత్తం మిల్లర్ల చేతిలో ఉండటంతో వారు ఏవో కారణాలు చెబుతూ రైతులకు ఎంఎస్‌పి ఇవ్వడం లేదు. ఒకవైపు రైతులకు తక్కువ ధర చెల్లిస్తున్న మిల్లర్లు మరోవైపు ఎఫ్‌సిఐకి మిల్లింగ్ చేసిన బియ్యం ఎక్కువ ధరకు ఇస్తూ, బియ్యంతో పాటు వచ్చే ఉపఉత్పత్తుల ఆదాయాన్ని కూడా తినేస్తున్నారు. పంటలు వేసేందుకు ఆరు నెలల ముందే ఎంఎస్‌పిని ప్రకటించాల్సిన అవసరం ఉంది. ఈ విధానం వల్ల ఏ పంటలు వేసుకోవాలో రైతులే నిర్ణయించుకుంటారు. సకాలంలో బ్యాంకుల ద్వారా రైతులందరికీ రుణసౌకర్యం కల్పించాల్సిన అవసరం ఉంది.
– డాక్టర్ జి.వి. రామాంజనేయులు
ఎగ్జిక్యూటివ్ డైరెక్టర్, సెంటర్ ఫర్ సస్టైనబుల్ అగ్రికల్చర్


Agri-reforms should be placed on priority: Dr Ashok Gulati
Monday, May 16, 2011
Irum Khan

Dr Ashok Gulati, chairman, Commission for Agricultural Costs and Prices (CACP), says liberal agri-reforms with more involvement of private players will help begetting progressive changes in the market. Gulati particularly stresses on building an intelligent market agency to expediting the decision making process during critical market situations. Excerpts from the interview..

What is the role that you would want Commission for Agriculture Costs and Prices (CACP) to play pro-actively under your chairmanship in the coming days?
First and foremost, I would like to see that the MSP (minimum support price), which is announced by the government for various agricultural commodities, after taking into consideration the recommendations of the CACP, is effective and actually paid to the farmers. There are reports even in the current marketing season that wheat is being sold at 10 to 15% below the MSP in several markets in Gujarat, Madhya Pradesh and Uttar Pradesh. This does not auger well for incentivising peasantry to adopt new technologies and raise their productivity. Nor does it lend credibility to the government’s price policy.

What are the immediate agri-reforms would you like to see taking place in agriculture?
Market reforms in agriculture need to be put on a much higher priority than is the case currently. This is required not only in the case of commodities like rice and wheat, but also perishable commodities like fruits and vegetables. We need to make the value chains much more efficient so that a larger part of the consumer’s rupee can pass on to the producers. This requires changes in laws (such as Agricultural Produce Marketing Committee (APMC) and Essential Commodities Act (ECA) and also investments in value chains, like logistics and storage.

How has the government responded to your demand for de-linking of procurement price with the MSP? What are the challenges in standardising rule of this kind?
MSP is supposed to be the “minimum” support price, but unfortunately in many commodities, most notably rice and wheat, this has also become the procurement price. I would urge the government to liberalise markets of these commodities so that farmers can get the market price and the procurement agencies should buy at the market price in full competition with private trade. That was the original idea of the Agricultural Prices Commission when it was founded in 1965. We need to revive that spirit.

How do you suggest to address the problem of excessive hoarding and middlemen, which distort the food prices in the country?
The rules of the game in the market economy are different. You do not go about beating the traders (hoarders) with a stick! What you need is a good market intelligence agency which continuously monitors the situation for sensitive commodities, say 10 to 15 commodities, and alerts the government well in time of any impending crisis. This agency collates information on production, stocks, prices, trade, etc. and can suggests the government when to unload stocks and when to build stocks; when to lower or raise import duties, all with a view to keep relative stability in food system. Absolute stability is neither possible nor perhaps desirable. Currently, we lack such an agency in the country, and many a time, even when the government knows reasonably well of the coming deficit or deluge of surplus, the policy action is very slow. There is a need to expedite the decision making process to align it with the emerging market situations.

Are you in favour of complete abolishment of the APMC Act and prefer to have a completely new Act which would actually address the market hassles for farmers and other stakeholders?
To start with, at least fruits and vegetables need to be de-listed from the APMC. In due course, we have to encourage direct buying by processors and organised retailers from the producer companies.

How do you propose to involve private players in agr-reforms?
Already there are various PPP ( Public-private partnership) models in building storage capacity, in extension work, and so on. The space for the private sector needs to be enlarged within the agriculture system, from provision of inputs (seeds, irrigation, fertilisers, pesticides, etc.) to buying and storing of outputs from farmers, grading, packing, and moving it to urban areas. All along the supply lines, private sector can play an important role, and I feel the government should tap the potential of our private sector by making it a strong ally. It will need some regulation, but excessive controls breed corruption and slow down the process of investments and growth. We need to give some fresh air and breathing space to the private sector in agri-systems.

Do you have a tentative plan in mind to bringing about transparency in prices and establishing a market forecast on which exports could be based?
As I said above, we need a market intelligence agency, which is currently missing. It will be a dream come true, if CACP can fill that vacuum!

Managing a Rich Harvest, Urgently

We need to both extend procurement, using private or cooperative agencies, and export surplus stocks There is a good news on the farm front. After the dip in 2009-10 due to severe drought, agri-production in 2010-11 has bounced back on its rising trend. The third Advance Estimates for 2010-11 indicate a rich harvest with foodgrains touching a new peak at 235.9 million tonnes. Of this, more heartening is the production of pulses which has registered a quantum jump of more than 18% to touch 17.3 million tonnes, an all-time high. Oilseeds production has jumped by 20% to cross 30 million tonnes, and cotton by a whopping 40% to touch 34 million bales. These are all laudable achievements by Indian farmers, duly supported by scientists, bureaucrats, agri-business, and, of course, the rain gods to give us a normal rainfall year. But now comes the challenge of managing efficiently this bountiful harvest. If this is not addressed seriously, and quickly, it can play spoilsport and turn this bounty into a crisis. First and foremost is the need to hold the price line for the farmers, who have toiled hard in the face of rising labour and energy costs, to ensure that they get at least the minimum support price (MSP) that the government has announced. Already there is a news that in Uttar Pradesh wheat is being sold at . 1,050/quintal as against an MSP of . 1,120 plus, the likely bonus of . 50 per quintal. Earlier, in the kharif season also, paddy prices were below the MSP in several mandis in UP and Orissa. With increasing arrivals of wheat in mandis, the situation is going to worsen. All government machinery related to procurement, be it FCI, Nafed, state agencies, etc., need to be put in high gear. And if these agencies still cannot hold the floor price, the government needs to do some ‘out-of the-box’ thinking and invite the non-governmental agencies to join them under the PPP mode for procurement. Cooperatives (like Iffco, etc), NGOs (like BAIF, etc) and the private sector companies (like ITC, HKBs, etc) could be partners in procurement with government agencies. They could buy at MSP and be given same terms and conditions as given to FCI and state agencies. In particular, this needs to be experimented in areas of eastern region where the government is trying to usher in second green revolution and government procurement machinery is somewhat weak. By bringing in these strong allies in procurement, the country can have a win-win situation. On one hand, farmers can be assured of MSP, incentivising them to adopt modern technologies and raise productivity. On the other, non-governmental agencies can hopefully do the procurement in a more cost-effective manner and make some savings, thereby incentivising them to build backend storage infrastructure that is so badly needed. And, if all this fails, the government should think of the ways and means to compensate the farmers for the loss accruing due to market prices going below MSP. It is going to be challenging, identifying farmers who have sold their produce at prices below MSP, and then transferring money directly to their accounts through an electronic platform using UID. But as they say, the promise of an MSP is a promise by the government, and needs to be honoured to give credibility to its price policy. The other challenge is efficiently managing the grain stocks. Saving an already produced grain from damage is much more cost-effective than producing additional grain with scare land and scarcer water. Currently, the country is saddled with large grain inventories of about 46 million tonnes, more than double the buffer stock norms. And in the next three months, with an expected wheat procurement of more than 26 million tonnes, this is feared to turn into a ‘crisis of plenty’ as the storage capacity with FCI and CWC is limited. Even when states like Andhra Pradesh and Tamil Nadu (and more states are treading that path) are selling foodgrains at token prices of . 1 and . 2/ kg, the country is not able to liquidate the stocks, notwithstanding the harsh fact that there are serious problems of delivery to the needy people which require improvisations. The extra inventory, over and above the buffer stock norms, is currently estimated at more than . 40,000 crore, which is not giving any meaningful return to the country. The immediate need, therefore, is to find its appropriate use. One such option is to unload a part of it in the domestic market at a price not below the MSP. The other option could be to distribute more through welfare programmes (subsidised ones), and yet another option is to export part of it to make some profits that can be ploughed back to build modern storage facilities. We feel that the international market for grains is reasonably good and India could export 3-5 million tonnes of wheat and rice each, in a gradual manner, to make some profits by the government agencies and/ or by the private sector. But in the business of trade, speedy decisions are needed. The procurement season has begun, the crop is good, and unless a clear policy direction is given, the country may miss this opportunity. It will not serve anyone’s purpose if excessive stocks kept in the open get damaged and spoiled in rains. Timely decision is the need of the hour, and time is already knocking at our doors! (Co-authored with Rugmini Parmar, Advisor, CACP) ASHOK GULATI CHAIRMAN, COMMISSION FOR AGRICULTURAL COSTS AND PRICES (CACP)