Dow Chem's Kickback + WTO & US + India-Pak Water Issue & Baghliar Project + Wheat Stock + Micro-finance

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In This NEWS Bulletin *********************************** 1. Dow Chem’s kick-back issue rocks agriculture ministry 2. US wants India to help break WTO deadlock 3. INDIA- PAKISTAN ISSUE - Baglihar power project gets World Bank approval 4. Govt plans to procure 15 million tonne of wheat for buffer stock 5. MICRO-FINANCE IN DELHI - Still a long way to go Dow Chem’s

kick-back issue rocks agriculture ministry http://www.financialexpress.com/fe_full_story.php?content_id=155106 ASHOK B SHARMA Posted online: Saturday, February 17, 2007 at 0014 hours IST NEW DELHI, FEB 16: The agriculture ministry has been taken aback by reports that a heavy penalty has been imposed on US company Dow Chemical for making “improper” payments to Indian government officials for allowing the use of its pesticides. The Securities and the Exchange Commission (SEC) in the US on Tuesday slapped a civil penalty of $325,000 on Dow Chemical in an effort to settle the charge that the company’s subsidiary, DE-Nocil Crop Protection Ltd, made “improper” payments to Indian government officials. Dow

Chemicals agreed to settle the matter without admitting or denying wrong-doings and to desist from future violations of the Foreign Corrupt Practices Act. The SEC found that DE-Nocil improperly paid an estimated $200,000 to government officials in India for registration of some of its products in the period 1996-2001. The SEC noted that the payments were not adequately reflected in Dow Chemical’s books and records, and the company’s internal control failed to prevent the payments. When asked to comment on the situation, a senior official of the Union agriculture ministry said: “We are surprised at this development. We follow strict norms for registration of pesticides in the country. There is a registration committee of experts to assess the hazards connected with pesticides and their effectiveness. On the basis of the registration committee’s recommendations, the Central Insecticides Board allows registration

and use of pesticides.” According to sources in the ministry, the registration committee and the Central Insecticides Board would be asked to review all the products of DE-Nocil registered in the period 1996-2001. Over 203 pesticides have been so far registered in the country. The manufacture and import of about 27 pesticides have been banned. The registration committee refused registration of 18 pesticides and allowed restricted use of about 8 pesticides-- US wants India to help break WTO deadlock http://www.financialexpress.com/fe_full_story.php?content_id=154780 ASHOK B SHARMA Posted online: Wednesday, February 14, 2007 at 0100 hours IST NEW DELHI,

FEB 13: The US defended its new Farm Bill 2007 for providing more direct support to its farmers and asked India to work towards breaking the deadlock in WTO negotiations for fulfillment of the Doha Development Round The US Farm Bill 2007 has increased direct payments to farmers by 10% over a period of five years to $ 5.5 billion. It has also extended support to horticulture crops in the garb of ‘specialty crops’ and diverted a huge chunk of subsidies to Green Box. US commerce secretary Carlos M Gutierrez speaking to FE said: “These are our domestic measures. It should not come in the way of breaking the WTO deadlock”. • The Bill has increased direct payments to farmers by 10% over 5 years to $ 5.5 billion• It has also extended support to horticulture crops in the garb of ‘specialty crops’ Refusing to elaborate on farm subsidies of developed

countries distorting global trade, Gutierrez insisted that opening up of markets can ensure expansion of trade leading to creation of more jobs and poverty alleviation. “In US we have created an export culture throughout the country. We, too, are working for opening up of global markets and ensure access to our markets and choices to our consumers,” he said and added “India is a leader of the developing world and should take initiative in breaking the deadlock.” The US administration was working with the new Congress to renew President Bush’s fast track trade promotion authority, slated to expire at June-end, he said. US exports to India has increased by 25%. The two-way trade amounted to $29 billion in 2005. Gutierrez also said India, apart from opening up its markets should put in place a strong intellectual property regime. He alleged that about two-third of US software used in India was

pirated versions. He said that a strong IP regime can attract more investments, particularly in R & D. The Union commerce minister, Kamal Nath when asked to comment on the new US Farm Bill said : “This Bill is yet to be approved by the Congress. We are in negotiation with US on the issue of capping farm subsidies.” Gutierrez had arounds of discussions with Nath and the Union science and technology minister, Kapil Sibal on cooperation in science and technology. He also addressed an interactive session hosted by the Federation of Indian Chambers of Commerce and Industry. - Baglihar power project gets World Bank approval - INDIA-PAK ISSUE http://www.financialexpress.com/fe_full_story.php?content_id=154640 ASHOK B SHARMA Posted online : Tuesday, February 13, 2007 at 0000 hours IST NEW DELHI, FEB 12: The World Bank has finally given India the go-ahead for the controversial Baglihar Power Project. However, the Bank-appointed neutral expert has asked India to reduce the height of the dam by 1.5 metre, earlier proposed to be 144.5 metre. It may be noted that Pakistan had raised an objection to the height of the dam. The other objections raised by Pakistan over the dam have been overruled. The final report was handed over by to the Indian and Pakistani diplomats in Berne. The Baglihar dam issue has been a bone of contention between India and Pakistan, affecting bilateral relations. In 2005, Pakistan had sought the intervention of the World Bank, which is the third party

to the 1960 Indus Water Treaty. Pakistan alleged that the construction of the project was in violation of the accord. As per the provisions of the treaty, the neutral expert’s decision would be final. The project would produce 900 MW of power, of which 450 MW would go to the state of Jammu and Kashmir, which faces acute shortage of electricity.-------- Govt plans to procure 15 million tonne of wheat for buffer stock http://www.financialexpress.com/fe_full_story.php?content_id=154596 ASHOK B SHARMA Posted online : Tuesday, February 13, 2007 at 0000 hours IST NEW DELHI, FEB 12: Encouraged with the good

prospects for a bumper wheat crop in the current season, the government- designated agencies are gearing up to purchase at 15 million tonne for buffer stocking. There will be no need for import, if the government procures sufficient wheat for maintaining buffer stock. Government, at present, has a stock of 6.2 million tonne wheat. This stock is sufficient to feed the public distribution system (PDS) in the country till April and also meet the minimum buffer norm of 4 million tonne for the month. Market arrivals of wheat begin from April every year, but due to early sowing operations in the current season, government expects early market arrivals. Apart from this, the weather conditions have been conducive for grain formation and ripening. Good rains in the last four days leading to a fall in temperatures and washing out of the fog cover have brightened the prospects of the wheat

crop. The government has already announced the minimum support price for wheat procurement at Rs 750 a quintal. The farmers' bodies say that this is not enough and the government is contemplating on extending a bonus price on procurement. Last year the government could procure only 9.23 million, as the procurement price was low at Rs 650 per quintal. In the middle of the marketing season the government extended a bonus of Rs 50 per quintal, raising the procurement price to Rs 700 a quintal. If the government designated agencies are successful in procuring 15 mt wheat in the marketing year 2007-08, there would be no need for imports on government account. The government has projected a conservative estimate of wheat production of 72.5 million, though the area under wheat has increased by 1.6 million hectare in the current season to be at 28 million hectare. Experts say that the estimate needs to be revised

sufficiently upwards to 80 million tonne. The Union food and public distribution secretary, T Nand Kumar on Monday convened a meeting of the food secretaries of wheat producing states. He called upon the state secretaries to take necessary advance actions so that the procurement operations run smoothly in all procurement centres in their states and farmers do not have inconvenience in selling their produce. He emphasized that especially Madhya Pradesh, Rajasthan and Uttar Pradesh will need to strengthen their procurement infrastructure because in these States, wheat has been sown in more area in the present rabi season and a significant increase in production is expected. Teams from the Food Corporation of India (FCI) will soon visit all the wheat growing states to coordinate procurement arrangements. FCI and state agencies will identify areas with maximum production and open adequate number of purchase

centres. They will also coordinate on other related matters such as storage, availability of gunny bags, movement of stock and vigilance. FCI and state agencies have been asked to ensure strict monitoring at procurement centres so that the quality of the procured grain is not below the fair average quality (FAQ). In today’s meeting, state secretaries agreed to make arrangements for additional storage and make sufficient funds available to their agencies so that farmers get their payments immediately on delivery of wheat.------------------ MICRO-FINANCE IN DELHI Still a long way to go http://www.financialexpress.com/fe_full_story.php?content_id=154819 ASHOK B SHARMA Posted online : Monday, January 12, 2007 at 0000 hours IST With institutional micro-credit taking root in Delhi, nine major players have reached out to over 7 lakh beneficiaries with an aggregate outstanding of Rs 15.8 crore by March 31, 2006. Micro-finance institutes (MFIs) in the country operate on the basis of disbursing loans and also conducts capacity building and networking. In Delhi, organisations like AIAMED, Pradan, Care, Sewa Bharat and Aseed are working exclusively for capacity building and networking with banks and MFIs for providing loans to the poor. MFIs like Indicare Trust, SPYM, All-India Women’s Conference (AIWC), Lok Capital, Project Concern International, Aajeevika Trust and Ishara Foundation for Finance and Rural Development undertakes both loan

disbursement and capacity building. “Capacity building is inevitable for the poor so that they can properly use the loans for helping them to come out of poverty. MFIs spend a considerable time and energy for capacity building. The cost for capacity building is factored in the interest rates charged. People wrongly allege that MFIs charge higher interest rates without knowing how they function and with what noble intention,” said Mathews Titus, executive director of Sa-Dhan, the apex body of MFIs in the country. A majority of the lending in Delhi by MFIs is through self-helf groups (SHGs), a model widely prevalent in India. According to Census 2001, Delhi has a population of 138,50,507 and about 14.6% of the population lives in slums and constitute the poor. Analysing the situation, a Sa-Dhan report says that unlike other parts of the country, Delhi is economically active and the category

of “very poor” is largely absent. Most of the poor constitute migrants from different poor districts of the country. About 50% of poor migrants come from UP, 12% from Haryana and 11% from Bihar. The percentage of population in Delhi below the poverty line for the period was 8.23% only. Most of the poor are yet out of the ambit of institution credit. They source money from private money lenders and there is a need for enhancing delivery of institutional credit, the report said. alongwith capacity building the report said. • Most of the poor in Delhi constitute migrants from different poor districts of the country and are out of the ambit of institution credit and source money from private money lenders ---------

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