Flood-hit farmers: Govt asked to offer cheap loans

ISLAMABAD: The National Assembly Standing Committee on Food and Agriculture has suggested to the government to disburse the $900 million World Bank loan to the flood-hit farmers at one per cent interest rate and declare the entire cropping zone as ‘calamity area’.
 

The committee which met here on Thursday also demanded the government to draw a relief policy for the flood-affected areas and recommended that long-term loans granted by all commercial banks and Zarai Taraqqiati Bank Ltd (ZTBL) should be waived.

It also asked the government to pay Rs56 billion to the ZTBL which were waived in the past. The committee asked the ZTBL to dispose of the claims of farmers affected by the flood on priority basis.

The meeting chaired by Javed Iqbal Warraich asked the ministry of food and agriculture to issue notification for declaration of calamity area in view of cropping zone, disease zone and crop susceptibility. The ministry should also devise the crop insurance policy.

The committee asked the ZTBL to issue loans on war-footing to rehabilitate agricultural land damaged by floods. At the same time, the ministry of food and agriculture should develop a comprehensive working plan for detailed survey of flood-hit areas, including a water policy for irrigation purposes.

With regard to establishing model villages, the Standing Committee suggested to re-name the scheme. It decided to visit such a village in Sargodha district.

The committee recommended that the ZTBL should reorganise and improve its credit scheme, and introduce innovation and modern technology of tractors, tube-wells, to farmers through private sector.

With regard to insurance policy, the committee recommended that the ZTBL should devise a clear loan policy for individual small farmers. In this regard, a full working plan should be prepared by the ministry of food and agriculture in collaboration with the ministry of finance, FBR and insurance companies.

The committee asserted that ZTBL should come up with efficient ways to revolutionise agricultural lending. The bank should devise strategies for lending to small and marginalised farmers. It should also ensure lending to farmers in livestock, dairy and fisheries and for development purposes including farmers in livestock and dairy fisheries.[DAWN]

IMF agrees to release installment

ISLAMABAD: The International Monetary Fund (IMF) has agreed to release the next instalment of $1.2 billion of the Standby Arrangement Programme. The decision followed assurances over the implementation of reformed General Sales Tax (GST) from October 1.

However, a final decision on the release of the loan tranche will be taken later by the IMF Board.

The Fund has also agreed to relax some of the economic targets previously set for fiscal 2010-11, according to a senior member of the Pakistani delegation. This includes a further reduction in the tax collection target from Rs1,604 billion earlier proposed by the Federal Board of Revenue, according to sources.

The IMF delegation expressed reservations about the expected failure to achieve the economic targets for the July-September quarter set during the last meeting between the two sides.

The failure to implement reformed GST, eliminate subsidies on electricity and limit government borrowing from the central bank were the issues raised by the IMF during the discussions.

The IMF added that the next instalment shall be contingent upon the fulfilment of economic targets agreed upon during the meeting.

In response, the Pakistani delegation explained that the delay in the implementation of reformed GST was due to the failure of negotiations between Islamabad and the provinces regarding the collection and distribution of GST on services.

However, they informed the IMF that reconciliation between the provinces and the federal government was likely soon.

The Pakistani delegation also provided a schedule for the elimination of subsidies on electricity and outlined a plan of action to meet the shortage of electricity and other economic challenges, sources said.

The IMF was apprised that economic targets will be revised downwards after estimates of flood losses are made available. They outlined the damages caused by massive flooding to the infrastructure and economy and offered a conservative estimate of $5 billion in losses. The delegation predicted that the agriculture sector will suffer the most in the aftermath of the floods and hence GDP growth will be stunted. The balance of payments will worsen as the trade deficit widens following increased imports of foodstuff and agricultural inputs.

As a result, the IMF has agreed to relax the conditions for the next instalment, but subsequently stressed the realisation of reformed GST schedule from October 1.

According to sources, the delegation will also attempt to obtain additional emergency funding of around $2 to $3 billion for the reconstruction of areas affected by the floods.

Published in The Express Tribune, August 27th, 2010.

Commodity News Snposhot -

National News

Government faces $25 million loss due to delay in sugar import: Senate body informed

ISLAMABAD (August 27, 2010): Senate Standing Committee on Industries and Production on Thursday was informed that Pakistan has faced 25 million dollars loss due to delay in the import of sugar. The Committee was also informed that Pakistan can face 19 million dollars loss in future if sugar is not imported in time.

Wheat damaged by rain, floods being auctioned today

LAHORE (August 27, 2010): The Punjab Food Department will be holding auction for wheat affected due to rain and flood waters at its different storage centres on August 27 (Friday). Sources in the provincial food department told Business Recorder here on Thursday that earlier the auction was scheduled for August 25, but the department did not receive any suitable bid.

Cotton prices avert sharp fall due to fresh partial rains in Sindh, Punjab

KARACHI (August 27, 2010): More rains in some parts of country, helped cotton prices halt sharp losses amid good trading, dealers said on the cotton market on Thursday. The Karachi Cotton Association (KCA) official spot rate was inert at Rs 6,450, they said. In the ready business nearly 11000 bales of cotton changed hands between Rs 6350-6800, they said.

Government urged to take preventive measures to save cotton crops

LAHORE (August 27, 2010): Chairman Pakistan Cotton Forum (PCF) Seth Muhammad Akbar has asked the government to take urgent precautionary measures to save cotton crops from further damage. He said the cotton crop in Punjab has entered into its most crucial phase where picking of each extra boll would matter. Therefore, timely preventive measures are required to save the cotton crops.

Cotton market remains steady

LAHORE (August 27, 2010): Barring a short-lived spike early this week which later petered out, cotton prices have more or less remained steady over the past one week or so. Some volatility creeps in and the market becomes fidgety due to uncertainty bred by rains and floods of gargantuan proportions which have created chaos and havoc over a large part of the country since last one month.

Flash floods destroy crops worth Rs 72 billion

KARACHI (August 27, 2010): Besides displacing millions of people and loss of the lives and property, the current floods have caused a loss of at least Rs 76.067 billion to the standing crops in the Sindh so far, it is learnt.

THE RUPEE: dollar marginally up

KARACHI (August 27, 2010): Slight fluctuations were seen on the currency market on Thursday in process of trading, dealers said. The rupee shed four paisa against dollar for buying at 85.64 and it also slid by two paisa for selling at 85.67, moneychangers said.

International News

Malaysian palm oil rebounds

KUALA LUMPUR (August 27, 2010): Malaysian crude palm oil futures rebounded on Thursday from one-month lows hit the previous day due to technical buying and firmer oils markets. Crude oil rose for a second day in Asian hours as investors bought back into the market after it hit 11-week lows, but analysts said the fundamental outlook was still bearish with ample stocks to cover any rebound in demand.

US wheat futures fall to one-week low

CHICAGO (August 27, 2010): US wheat futures fell 4 percent to their lowest level in a week on Wednesday on a wave of technical selling after Egypt bypassed US supplies in its latest purchase, traders said. "I think its a technical blow-off," said Mike Krueger, president of The Money Farm, a grain market advisory service near Fargo, North Dakota. "When wheat goes, it goes in a hurry. It is running into these sell stops and it just blows right through them."

Gold steadies after US jobless claims fall

* Copper rallies, helped by a weaker dollar

LONDON: Gold steadied on Thursday, having hit its highest level in two months earlier in the day, after US unemployment data beat expectations, boosting the dollar and other risk-linked assets such as equities.

Talks with IMF on: Pakistan seeks release of $2.6bn

ISLAMABAD: Under immense pressure from the International Monetary Fund over failing to make any headway on implementation of reformed GST on services and reducing power subsidy, Pakistan economic managers are not sure if they can convince the Fund for combine release of last two tranches amounting $2.6 billion, official sources told Dawn on Wednesday.
Sources said that the Pakistani delegation in the ongoing fifth review with the IMF at Washington was trying to convince the IMF Board to approve release of the two instalments $1.3 billion each in one-go.

“But there are serious difficulties mainly owing to the issues of power subsidy and implementation of reformed GST in October 2010,” the official added.

Finance Minister Dr Abdul Hafeez Sheikh on Wednesday also joined the Pakistani team, which is headed by the Secretary Finance.

The IMF has been informed about the difficulties faced by the government owing to colossal damages caused by the devastating floods across the country, the sources said.

Pakistan has missed the fiscal deficit target agreed with the IMF both at the conclusion of the last fiscal year and the same is expected for the current year due to the flood damages, while the policy of zero borrowing limit from the State Bank of Pakistan has been breached by Rs40 billion.

However, the sources said that the most serious issue was the failure of the government to eliminate subsidy on electricity from July 1, 2010 as was committed with the international donors.

Sources said that the IMF would be given assurances that the reformed GST on services would be implemented in the VAT mode from October 1, 2010.

Despite assurances being made by the Pakistani delegation to the IMF, no settlement has been made domestically over implementation of GST on services in the VAT mode.

In the last interaction between the federal finance ministry and the Sindh finance department on Sunday, the only decision made was that the issue would be resolved soon and both sides reiterated that the reformed GST on services would be implemented from October 2010.

Adviser to the Chief Minister Sindh Dr Kaiser Bengali criticised the federal finance ministry for failing to finalise the issue and said that the mode to implementation had been decided in June but it had yet to be approved and made a law.

“I have written two letters to the finance ministry while the CM Sindh has also written a letter to the prime minister, but nothing has been achieved,” Dr Bengali said, adding that the finance ministry was delaying the formal settlement for implementation of GST on services.

Sindh has suggested that all the taxes on financial services, advertising, construction and franchises be deposited in a pool and its distribution be made under the NFC formula.

While, Punjab has demanded the distribution on the basis of population of each province whereas Balochistan and Khyber-Pakhtunkhwa have supported Sindh over the issue, but the final settlement has yet to be achieved.

However, the sources said that the authorities anticipate that the IMF would agree to release the single tranche of $1.3 billion immediately after completion of the ongoing talks.[DAWN]

ADB and WB to lead damage assessment

SLAMABAD: The damage and needs assessment of Pakistan following calamitous floods will be conducted by the Asian Development Bank (ADB) and the World Bank (WB). Reconstruction efforts will be initiated following assessments of losses caused by the flooding.

The ADB and the WB were invited by Pakistan to lead the assessment and have been requested to complete the survey by mid-October.

A conference in Islamabad to obtain pledges for the upcoming multi-billion-dollar reconstruction and rehabilitation phase will follow the assessment.

Sixteen areas, divided in half between the ADB and the WB, will be covered in the survey. The survey will focus on estimating three types of costs.

Direct damages caused by the floods will be estimated in the first category of losses. This includes monetary estimates of completely or partially destroyed assets.

Estimates of income losses, decreases in the flow of goods and services and increases in other economic costs comprise the second category of losses.

The costs of rebuilding lost assets and restoring lost services are the final category of the costs to be measured.

Previously, the WB and the ADB carried out a damage assessment of the Malakand operation.
“Numerous damage and needs assessments have been completed by the World Bank in collaboration with other key financiers and donor institutions such as the ADB and that experience will be utilised in this assessment,” said Rachid Benmessaoud, the World Bank country director for Pakistan, labeling this assessment “a challenge for the WB considering the enormity of the disaster.”

“This is the fourth damage and needs assessment the ADB and the WB are conducting in Pakistan in close collaboration with the Economic Affairs Division, but it is unique given the scale of devastation and the geographic spread of the calamity,’’ said Rune Stroem, the ADB Country Director for Pakistan.

Given no fresh wave of flooding occurs, the damage data collection and compilation will continue without interruption and the assessment is expected to be completed by mid-October, he added.

The ADB and WB will also collaborate with One UN, a collaboration of all UN agencies and other key donors.

The floods have affected over 134,000 square feet of territory, displaced 20 million people, destroyed over 720,000 homes and washed away billions of dollars of infrastructure.

Damage and need assessments are generally conducted in the shortest possible time immediately after a natural disaster to provide the government and international community with a credible assessment of the extent of the damage and an estimate of the cost to reconstruct and rehabilitate the damaged infrastructure and services.

Response to natural calamities consists of rescuing, providing immediate relief, initiating early recovery and commencing reconstruction. Rescue and immediate relief efforts focus on providing temporary shelter, food and primary health care. During early recovery, restoring functions interrupted by the disaster, such as communications and service delivery, is prioritised. The reconstruction phase focuses on the replacement of infrastructure damaged or destroyed by the disaster.

The data in the assessment will be scrutinised using various analytical and statistical tools, including rationality and plausibility checks. Damage analysis across sectors will also be conducted by comparing relative percentage damage in various sectors at the provincial and district levels. Field visits will also be conducted to meet various stakeholders, particularly the affected population, to assess the accuracy of the data.
Published in The Express Tribune, August 26^th, 2010.

Commodity News Snapshot-Pakistan

Sugar price may rise further

ISLAMABAD (August 26, 2010): Sugar price is expected to skyrocket to about Rs 90 per kg in the coming weeks as stocks with sugar mills are inadequate, said a market player on Wednesday. Currently, sugar price in Pakistan is higher than in India, Sri Lanka and Bangladesh but lower than Afghanistan. A ministerial committee, headed by the Minister for Industries and Production, Hazar Khan Bijarani, which met last week, did not reach any agreement on a plan to deal with the rising sugar prices.

Sindh's major crops badly hit by floods

KARACHI (August 26, 2010): Three major crops-sugarcane, cotton and rice-have been badly hit by the recent floods as the standing crops on some 1.4 million acres have been badly damaged in Sindh, it is learnt. The field staff of Agriculture Department has submitted a district-wise crop damage report after conducting survey of all 23 districts of the province to find out the agricultural loss to the standing Kharif crops in the province by flash floods, sources told Business Recorder on Wednesday.

Prices at cotton market firm amid strong demand

KARACHI: The Karachi cotton market witnessed a firm trading session while quality lint remained an issue on the trading floor amid strong physical prices, traders at the Karachi Cotton Association (KCA) said Wednesday.

Lint prices remain range-bound, spot rate stays put on cotton market

KARACHI (August 26, 2010): Steady trend was seen on the cotton market on Wednesday as buyers showed no reluctance in new deals on short crop news after historical floods in the country, dealers said. The Karachi Cotton Association (KCA) official spot rate was inert at Rs 6,450, they said. In the ready business nearly 9000 bales of cotton changed hands between Rs 6400-7000, they said.

Dollar slumps versus rupee

KARACHI: The dollar lost strength against the rupee in the interbank market, dealers said on Wednesday. The dollar commenced the day’s trading at Rs 85.66 for buying, lost three paisas and closed at 85.63 for buying and Rs 85.68 for selling. The euro regained its strength versus the rupee, as it started the day’s trading at Rs 108.19 for buying, gained 48 paisas and closed at Rs 108.67 for buying and Rs 108.87 for selling. The British currency appreciated against the rupee, as it started the day’s trading at Rs 131.97 for buying, rose 14 paisas and closed at Rs 132.11 for buying and Rs 132.31 for selling.

Bullion Rates

KARACHI (August 26, 2010): Gold and silver rates in rupees per 10 grams prevailing in major cities on Wednesday (August 25, 2010).

  

'Floods inflicted Rs 250 billion loss to agriculture sector'

MULTAN (August 26, 2010): Former Federal Minister Alhaj Sikandar Hayat Bosan has said that recent devastating floods across the country have caused damage worth Rs 250 billion to the agriculture sector with maximum losses suffered by the small farmers of around Rs 100 billion, while some facing total annihilation of their crops.

Damage to wheat stock: clarification

KARACHI (August 26, 2010): The Food Department is not in agreement with the contents of a news item carried by Business Recorder on Wednesday regarding damage of over 0.3 million tonnes of wheat stock by the recent flood and torrential rains. It is categorically stated that after taking into consideration of the monsoon rains and the damage probably caused by it in consequent thereupon.

Global Commodities Recap – 25th August, 2010

Precious metals rose for a second day as the dollar fell against the euro and raised concern over economic growth that hit equities, stimulating interest in the metal as a safe haven.

Gold is benefitted from renewed investor demand for safe-haven assets as evidence of a slowing economy mounts, which in turn has dragged global equities to their lowest since early July, when a recovery in risk appetite led prices to retreat from June's record highs.

Egg on Their Faces

What the USDA and the FDA can learn from the recall of 500 million eggs due to salmonella.

As you scramble to determine whether the eggs in your fridge have been affected by the massive recall over salmonella, blame unclear jurisdiction. The bumbling "Who's in charge?" helped to generate the current U.S. outbreak. But some good may come from the disastrous recall: It may give new life to legislation that would strengthen oversight of agricultural producers and keep consumers safe.

Historically, eggs have fallen into the cracks between animal and food products and the federal divisions that regulate each. The U.S. Department of Agriculture oversees our animals and plants, while the Food and Drug Administration is charged with monitoring our food. But what about hens who are raised to produce eggs for human consumption? Bacteria have crept into this no-man's bureaucratic land, infecting live chickens and then coating the surface of the eggs they produce.

What is most significant in this salmonella frenzy is not the number of humans who have fallen ill so far—an estimated 1,300 cases have been documented—but the number of eggs that must be recalled in order to try to slow the spread: about 500 million from two Iowa distributors. This lopsided ratio demonstrates just how difficult it is to find the elusive infected egg once a bacterium like salmonella gets loose in the henhouse. It also shines a light on the ineffectiveness of our federal regulators at monitoring and controlling the process of egg production.

The hens live tightly packed together in cages, facilitating the transmission of bacteria. There have been reports of dead hens in the same cages where live hens are producing eggs for human consumption. Salmonella outbreaks frequently originate when rodents get into the feed and their droppings are infected with the bacteria, which the hens consume, passing it along to their eggs. Austin "Jack" Decoster—who is the owner of Wright County Egg, the first farm implicated, and a supplier of chickens as well as feed to both farms—has been cited for many health and safety violations since the 1990s. Conditions at some of his facilities have been deemed dangerous and oppressive. In 2000, he was cited for hog-manure runoff into waterways; just this June, Maine Contract Farming (successor to Decoster Egg Farms) was cited for animal cruelty.

So why haven't our federal agencies clamped down on Decoster and others like him? The USDA and the FDA have clearly laid an egg when it comes to keeping bacteria off the egg shells. For one thing, the FDA has been responsible for monitoring eggs after they have been processed and the USDA before. Furthermore, USDA inspections have not involved issues of food safety but rather quality-control issues such as appearance, cracks, and thickness. And historically, the FDA has only become involved with food-safety issues at the farms once problems crop up—after the cases of salmonella have already been spotted, recalling millions of eggs too late to stop the problem. But even without sufficient official regulations to guide them, it seems clear that a more proactive coordinated effort at improving conditions and better screening involving both the USDA and FDA could have kept contagions from emerging. The poor conditions that have lead to these outbreaks reflect badly on both agencies.

This may soon change: One month ago, new regulations were instituted that enable the USDA and FDA to better share responsibility to inspect egg manufacturers, with the FDA playing a more prominent role. The regulations, originally announced in July 2009, also set new safety standards for farms, which were given one year to update their facilities and comply. The new regulations target egg safety, particularly salmonella, as a growing public health problem. The rules apply to large-scale egg producers (those with at least 50,000 laying hens) and call for refrigeration, rodent and pest control, and biosecurity measures. These changes, if implemented properly, might have prevented the outbreak: The new rules include mandates for better monitoring of nonpasteurized eggs and farms for salmonella, and also require facilities to test water and feed. Chicks must be purchased from places that monitor for salmonella; poultry houses that test positive for salmonella must be cleaned and disinfected.

With their new authority, the FDA plans to conduct frequent farm inspections. However, the inhumane conditions that the chickens live under will still not be addressed, and it is unclear just how compliant the farms will actually be. They may choose to pay a fine of several thousand dollars rather than spend the millions of dollars needed to truly reform egg production.

Given the limpness of these changes, consumers, and their breakfasts, would be better served by the FDA Food Safety Modernization Act, which has already passed the House and is currently before the Senate, where it has sat for several months. The delay is likely due to political concerns in an election year, but the new spotlight on egg safety seems likely to resurrect the legislation. Just this week, the Consumer Union has come out publically urging the Senate to pass it. This bill might provide the teeth the FDA needs to effectively clamp down on violators and make recalls mandatory. It also grants the Health and Human Services secretary the authority to close down facilities where a serious health risk is uncovered before unsafe foodstuffs make it onto grocery store shelves. (One caveat: There is some concern that the bill could hurt small businesses by subjecting small farms to the same kind of federal oversight as big consortiums. )

As congressional investigations begin into the causes of the current salmonella outbreak in eggs, all the media attention is creating an opportunity to finally reform the way chickens are raised and eggs are produced. Cooking an egg fully may kill the bacteria and protect your intestines, and screening for salmonella may keep it from getting onto your egg in the first place, but far more fundamental is the need to improve the conditions where the egg is laid.

The USDA has been completely ineffective at keeping our hens healthy. Now it's the FDA's turn. The concept of food begins with live animals. In order to protect our stomachs, we must first protect our chickens. [slate.com]