CALL US : 
WAPP : 
The law will provide adequate confidence to farmers and incentives to the sponsors to enter into a contract, says Union Agriculture Minister Radha Mohan Singh
The concept of Contract Farming (CF) refers to a system of farming in which bulk purchasers including agro-processing/exporting or trading units enter into a contract with farmer(s) to purchase a specified quantity of any agricultural commodity at a pre-agreed price. Although varied forms of contract farming existed in pockets in the country, the formal contract farming is not, however, widespread in India. By and large, cultivation of commercial crops like cotton, sugarcane, tobacco, tea, coffee, rubber and dairy have had some elements of informal contract farming for a long time.
In order to protect the interests of producers and sponsors of Contract Farming, the Ministry of Agriculture FW drafted Model APMC Act, 2003, which provided provisions for registration of sponsors, recording of agreement and dispute settlement mechanism.
Due to conflict of interest of contract farming sponsors with the APMCs, which were the designated registering, agreement recording and dispute settlement authority the atmosphere was not facilitative. It did not provide adequate confidence to the farmers and incentive to the sponsors to enter into a contract. Thus, the formal contract of farming could not pick up at the ground level as expected. In some states like Maharashtra, Haryana, Karnataka, Madhya Pradesh, limited formal contract farming has been in practice. This warranted for developmental, holistic and progressive law on contract farming. Further, though there exists Indian Contract Act, 1872, it is felt not very conducive for agriculture. It considers the two parties to the agreement as equals, while farmers are weaker vis-à-vis the sponsor-company.
In the above context and with a view to integrate farmers with bulk purchasers including exporters, agro- industries et al for better price realisation through mitigation of market and price risks to the farmers and ensuring smooth agro raw material supply to the agro industries, Union Finance Minister in the budget for 2017-18 announced to prepare a Model Contract Farming Act and circulate the same to the States for its adoption. In pursuance, the Union Agricultural Minister constituted a Committee under the Chairmanship of Dr Ashok Dalwai, CEO, NRAA in February, 2017 to draft a holistic, facilitative and promotional Model Contract Farming Act. Jt secretary (marketing), advisor, NITI Aayog, and principal secretaries, in-charge of agricultural marketing of Maharashtra, Karnataka, Odisha, Punjab and Madhya Pradesh are amongst the members.
The committee held five meetings; and held wider consultations with experts, academics, professionals, contract farming companies/firms, trade associations and food value chain operators apart from undertaking field visits.
The final Model Act The State/UT Agricultural Produce and Livestock Contract Farming and Services (Promotion and Facilitation) Act, 2018 has been approved by the Competent Authority and was released on May 22 at Vigyan Bhawan by Radha Mohan Singh, Union Agriculture Minister.
The details of the act were presented by Dr Ashok Dalwai, CEO, National Rainfed Area Authority. This was followed by open house discussion. There was unanimity among the States to adopt the Model Contract Farming and Services Act so as to ensure assured market at pre-agreed prices.
Archives
AIC-NIFT TEA Incubation Centre for Textiles and Apparels is inviting textile colleges to submit ideas and concepts, which suits areas mentioned in Atal New India Challenge.
The winners could get an incubation grant up to Rs 1 crore to develop their products and commercialise them. The applications should be submitted before Atal Innovation Mission (AIM) and the last date to apply is June 10.
NITI Aayog, the Central government organisation, had recently announced that the people from MSMEs, start ups, research and development sectors and academicians could submit ideas and concepts in 17 areas including waste management recycling and reuse. Five Union ministries including agriculture, railways, road transport, drinking water and sanitation, and housing and urban affairs are on board for the contest.
“Anyone, who has market-ready products, which could have positive impact on environment, economy and society could present their ideas. The objectives of the contest are to generate employment and contribute to economic growth,” said chief executive officer of AIC-NIFTTEA centre R Periyasamy.
“The innovative concepts in production management, smart factory, waste management and packaging management could suit the bill in the textile and apparel industry. Being the incubation centre for textiles and apparels, we have planned to invite potential incubatees from the textile and fashion institutions to present their innovative ideas for the contest,” he said. The selected incubatees will be sent to respective incubation centres. AIC-NIFTTEA centre will train the incubatees, who have proved their mettle, in apparel sector.
“Despite the development achieved so far in Tirupur knitwear cluster, the concept of product development did not evolve properly on par with the international scientific standards. Contests like this could help to improve in the required areas with the help of innovative ideas generated within and outside of the industry. The incubatees selected will get the infrastructure, technical support from experts and grant to develop their products,” he added
India has launched a complaint against the US to challenge US President Donald Trump’s tariffs on steel and aluminium, a filing published by the World Trade Organization showed on Wednesday.
Indian officials told Reuters last month that their government would open a WTO dispute if the country’s firms were not granted an exemption.
Trump imposed the tariffs in March, levying 25 per cent on steel imports and 10 percent on aluminium.He said they were justified by national security concerns and therefore outside the WTO’s remit.
India, China, Russia, Japan, Turkey and the European Union have all dismissed that claim, regarding the US tariffs as “safeguards” under the WTO rules, entitling them to a combined $3.5 billion in annual compensation. India’s retaliation claim seeks to recoup a cost of $31 million levied on its aluminium exports and $134 million on steel, and it has said it could target US exports of soya oil, palmolein and cashew nuts in its retaliation. Its latest legal challenge seeks to force the United States to scrap the tariffs entirely. It follows a similar move last month by China, which Washington called “completely baseless”
Government has decided to augment coal supplies to centre/ state power plants and independent power producers (IPPs) from May 19 to June 30 to overcome shortage of the dry fuel and check power crisis.
Government has decided to augment coal supplies to centre/ state power plants and independent power producers (IPPs) from May 19 to June 30 to overcome shortage of the dry fuel and check power crisis. The decision was taken in a joint meeting of power, coal and railways ministries on May 17, 2018. However, experts think the move may affect captive power generators in sectors like steel and cement. Ministry of railways has asked all its zones to accord high priority to power plants from May 19-June 30.
“It has been decided that loading of coal for power houses (plants of central/state utilities and IPPs) from good sheds should be accorded high priority till June 30, 2018. These instructions will be applicable on the rake supplies made in goods sheds from May 19, 2018 onwards,” it said in a letter to the zones.
The move comes in the wake of power ministry’s request for granting high priority in loading of coal for power houses from goods sheds so as to facilitate higher supplies of coal to power sector, it added. Similar directive was given to South East Central Railways by Coal India arm Mahanadi Coalfields. Indian Captive Power Producers Association Secretary Rajiv Agarwal however termed the decision “bad” and said in the last four years the share of industrial power consumption has reduced from 45 per cent to 40 per cent. “In the last one year, the captive power producers have been suffering. They are getting 10 to 30 per cent of their coal requirement. We see it as clear discrimination between small and large power plants.
It will affect all major sectors including cement, steel, textile, chemicals and aluminium,” he told PTI. According to the data complied by the Central Electricity Authority on May 17, as many as 24 non-pit heads plants were facing coal shortage out of monitored 114 plants. Among the 24 plants, 18 coal stocks for less than 4 days and classified as super critical while other 6 have coal stocks for less than a week and categorised as critical ones.
Some experts think this may increase coal imports in the country by captive power plants and others. The shortage of coal has resulted in surge in spot prices to as high as Rs 10.80 per unit in September last year. The government in October last said the issue of coal supply to power plants is being addressed in a co-coordinated manner by the ministries of power, coal and railways.
The Indian Textiles and Clothing (T&C) industry has registered 5.37 per cent export growth in 2017 as against 3.94 per cent globally, despite the challenges of demonetisation and GST on the sector, Southern India Mills Association (SIMA) said here today.
“The Indian T&C exports increased from 35.5 billion US Dollars in 2016 to 37.4 billion USD in 2017 and textiles exports (yarns, fabrics and made-ups) were up by 7.82 per cent. Clothing exports (garments) increased by 2.82 per cent in 2017 compared to 2016,” SIMA chairman P Nataraj said today.
India remained the world’s second largest T&C exporter in 2017, accounting for 4.95 per cent global share, while China, the largest exporter, had 34.2 per cent share in 2017,he said.
Nataraj said countries like Germany, Vietnam, Spain and India are capturing the export space vacated by China, registering increase in exports in 2017.
In 2017,India sustained itself as the largest cotton yarn exporting country with a 25 per cent global market share. Yarn exports increased by 7.21 per cent in the year compared to 2016, Nataraj said in a release.
However, Vietnam with a 11.93 per cent global cotton yarn trade in 2015, increased its share to 18.13 per cent in 2017 and 23.93 per cent growth this year as China shifted its major volume of yarn imports from India to Vietnam, where there is zero duty.
Vietnam is not a cotton producer, but imports it and exports yarn to China, while Indian yarn attracts 3.5 per cent duty in China.
Nataraj said if the Indian spinning sector’s demand of extending MEIS benefit for cotton yarn export was considered, it would enable them have a level playing field, use surplusspinning capacity and convert 60 to 70 lakh bales of raw cotton into value added yarn for export, thereby creating jobs for thousands of persons and increase Forex. Recently,the Government extended MEIS (Merchandise Export from Indian Scheme) benefits for all textiles and clothing exports beyond June 30 2018, except cotton yarn, he said.
The stability and advantage in homegrown cotton prices in 2016-17 and 2017-18 cotton seasons had helped the industry mitigate the challenges, Nataraj said.
The delay in releasing export benefits like RoSL (Rebate on State Levies), refund of GST accumulated credits, TUF subsidies and also in announcing enhanced duty drawback rates have caused financial crunch for the whole value chain, especially the garment sector, he said.
The yarn market has gained momentum and unsold yarn stock level was one of the lowest in recent years. With increased fabric demand, yarn prices increased to some extent in mid May 2018 compared to the previous month, he said.Nataraj said demand for coarse and medium counts, especially open end yarn in the domestic and export markets has increased considerably and several mills have got advance bookings for a few months.
“Early refund and clearing of government dues will strengthen the financial position of exports and all other textile manufacturing units to revive from the financial crisis and capture emerging market opportunities,” he said.
According to Angel Commodities, MCX May Cotton closed higher last week on improved physical demand and tracking firm International prices.
MCX May Cotton closed higher last week on improved physical demand and tracking firm International prices. USDA forecasts India cotton production for 2018/19 at 28.5 million 480 – pound bales (6.21 mt ), unchanged from last year. Harvested area is forecast at 11.8 million hectares, down 4 % from last year. In its latest press release, CAI, retained its estimate for the country’s output in 2017 – 18 (Oct – Sep) at 360 lakh bales (1 bale = 170 kg). Cotton prices are still trading at higher levels for the season tracking firm trend in International markets, higher exports and expectation of lower acreage in the country in next season. Cotton exports from the country are still behind at 34.1 lakh bales of cotton during Oct – Feb period compared to 36.4 lakh bales last year same period.
Outlook
Cotton futures are expected trade sideways on report of normal monsoon and higher physical arrivals. However, improved cotton exports to China may keep the prices supported above 20,6 00 levels.
The textile ministry has asked all ministries as well as departments and public sector undertakings (PSUs) to buy their textile and fabric requirements locally, a move that is expected to boost earnings of artisans in the country.
In a May 15 letter, the textile ministry asked all ministries to give “purchase preference” to local content in the textile sector under the ‘Make in India’ scheme. This order seems to be on the lines of a diktat on flying, where government mandates its officials to fly state-owned Air India for official trips.
The Make in India programme seeks to ensure growth of the manufacturing sector and, thus, create jobs. Though the programme did not achieve the desired result in its initial years, it is expected to in the future.
The textile industry accounts for 2% of India’s GDP (gross domestic product) and 15% of the country’s export earnings. The textile sector, with over 45 million people employed directly, is one of the biggest employment generators in the country.
The textile ministry has also asked ministries to furnish details on “how much of nonlocal content do the government and departments buy from textile sector”, a government official said on condition of anonymity.
The ministries will now ask the departments and PSUs to share their total expense on local and non-local buys with respect to the textile sector.
“We do not think any company keeps a break up of textile or garments or other related things bought from local and non-local sectors. But we will ask them to share as much details as possible,” said the official quoted above.
A senior PSU official, who did not want to be identified, said every government company, one way or the other, promotes local artisans.
“Government companies promote art, culture as well as artisans by buying directly from them. I do not understand what more can a PSU do to ensure that local artisans are given preference in purchase,” said the official.
Government companies like Air India promote local artisans by providing Khadi’s utility kit to business class passengers on their flight. While the Airports Authority of India also promotes local artisans in various ways, it is also planning to promote local culture at upcoming airports.
Nearly a year after the implementation of Goods and Services Tax (GST), exports of textiles as well as garments have been found to have declined significantly. Manufacturers of textiles and apparels in the state have indicated that exports have gone down by an estimated 30% in Gujarat, after the cut in export incentives that came with the implementation of GST.
“The export incentive has been reduced to 1.6% in cotton while the same for polyester is 1.8%. These have reduced roughly by 4%. This makes our products more expensive in the international market and reduces our competitiveness,” said Nitin Thaker, a textile exporter of Ahmedabad.
The situation with apparel exports is no different, “Exporters used to get duty drawback of 7.5% before GST implementation. This has been slashed to 2.5%, due to which there is a significant impact on exports. As incentives have been cut, the prices of our products have increased,” said Arpan Shah, vice-president, Gujarat Garment Manufacturers Association (GGMA).
For apparel manufacturers, it was a double whammy, as some of the key global markets imposed value-added tax (VAT) on apparel exports from India.
“Sri Lanka and Middle Eastern countries are some of the key markets for garment manufacturers from Gujarat. Recently, UAE imposed VAT on apparels imported into their country, which further led to an increase in prices. With duty drawback slashed, exporters were already struggling to generate export volumes at competitive prices, and they now face a stiffer competition in these regions due to changes in tax rates,” said Vijay Purohit, president, GGMA.
According to data provided by Apparel Exports Promotion Council (AEPC), Gujarat accounts for 12% of the apparels exported from India. Manufacturers also indicated that they are facing stiff competition from their counterparts in Bangladesh and Vietnam. “With a cut in duty drawback, there is stiff competition from international counterparts such as Bangladesh and Vietnam, both of which gets tax incentives in addition to export incentives. Besides, these countries are preferential importers for several global markets. With major slashing in export incentives here, it is tough to survive the competition,” said Bhavin Parikh, a textile exporter from the city.
New showroom of M/s Ramraj Cotton was inaugurated on Sunday by cine lyric writer Kanukuntla Subhas Chandrabose at Kondapur in Serilingampally. The showroom has a wide variety of dhotis, shirts, T-shirts, banians, innerwear, dhoti drawers, special belts for dhoti wearers, handkerchiefs, socks, towels and etc.
Also, on sale are slips for women and all varieties of innerwear. The company will open its branches in Telangana shortly, besides major cities and airports in south India, a company spokesman told The Hans India.
The idea is to have one M-Park with an investment of Rs 225 crore to create 1,500 jobs in each of the 175 Assembly constituencies, with a newly-created AP MSME Development Corporation overseeing the process
The Andhra Pradesh government has come up with an ambitious M-Parks (Micro, Small and Medium Enterprises Parks) Policy with the objective of creating at least 200 such parks across the state by the year 2023.
The idea is to have one M-Park with an investment of Rs 225 crore to create 1,500 jobs in each of the 175 Assembly constituencies, with a newly-created AP MSME Development Corporation overseeing the process.
The overall target is to create around 200 parks by 2023 with 30,000 MSMEs with an employment potential for three lakh people and an investment of Rs 45,000 crore, according to the Chief Minister’s Office.
But, financial crunch and non-availability of land have become major impediments in rolling out the policy, official sources said. “We could so far identify required land in only 42 Assembly segments in different districts for the proposed M-Parks,” a senior Industries department official said. “Revenue officials are still working on identifying land in each constituency for these parks and that process might take many more months,” he said.
Each M-Park is proposed to be set up in an extent of 100 acres in each of the 175 constituencies with the state government providing Rs 10 lakh per acre as subsidy for infrastructure development.
The total fund required for this is Rs 1,750 crore, while the government has earmarked only Rs 100 crore towards this in the 2018-19 Budget. This apart, the M-Parks Policy also promises a 50 per cent grant of the total project cost (excluding land value) but no budgetary provision has been made for this, the official added.
“Anyhow, we are going to kickstart the MSMEs in June, initially where land is readily available. Other parks will follow,” he said.
Focus of the M-Parks Policy will primarily be on manufacturing and the state government has identified sectors like small engineering, fabrication, plastics, automobiles and textiles that have large scope for employment creation.
Hitherto, the so-called entrepreneurs used to get land allotted, raise a shed or so and never actually run the unit after availing the subsidy, the official claimed.
“Under the new policy, however, we will ensure that the units are functional with real employment creation. We are involving the local public representatives also to make the MSMEs effective,” he added.
The state government has mooted the idea of promoting large and mega enterprises as anchor investors in the proposed M-Parks so as to enhance the market prospects of the MSMEs. At least ten per cent of the total land in each M-Park will be earmarked for large and mega enterprises to give a thrust to industrial promotion across all regions of the state.
The AP MSME Development Corporation will provide necessary business development support to MSMEs like improving quality, marketing, exports, access to warehouse facilities and skill development once the M-Parks are established.
