Professional Documents
Culture Documents
Agricultural insurances[edit]
Insurance is a financial instrument, which allows exposed individuals to pool resources to spread their risk. They do
so by contributing premium to an insurance fund, which will indemnify those who suffer insured loss. This
procedure reduces the risk for an individual by spreading his/her risk among the multiple fund contributors.
Insurance can be designed to protect many types of individuals and assets against single or multiple perils and buffer
insured parties against sudden and dramatic income or asset loss.
Crop insurance is purchased by agricultural producers to protect themselves against either the loss of their crops due
to natural disasters. Two type of insurances are available:[158] (1) claim-based insurances, and (2) index-based
insurances. In particular in poor countries facing food security problems, index-based insurances offer some
interesting advantages: 1) indices can be derived from globally available satellite images that correlate well with
what is insured; (2) these indices can be delivered at low cost; and (3) the insurance products open up new markets
that are not served by claim-based insurances.[relevant? – discuss]
An advantage of index-based insurance is that it can potentially be delivered at lower cost. A significant barrier that
hinders uptake of claim-based insurance is the high transaction cost for searching for prospective policyholders,
negotiating and administering contracts, verifying losses and determining payouts. Index insurance eliminates the
loss verification step, thereby mitigating a significant transaction cost. A second advantage of index-based insurance
is that, because it pays an indemnity based on the reading of an index rather than individual losses, it eliminates
much of the fraud, moral hazard and adverse selection, which are common in classical claim-based insurance. A
further advantage of index insurance is that payments based on a standardized and indisputable index also allow for
a fast indemnity payment. The indemnity payment could be automated, further reducing transaction costs. [relevant? – discuss]
Basis risk is a major disadvantage of index-based insurance. It is the situation where an individual experiences a loss
without receiving payment or vice versa. Basis risk is a direct result of the strength of the relation between the index
that estimates the average loss by the insured group and the loss of insured assets by an individual. The weaker this
relation the higher the basis risk. It is obvious that high basis risk undermines the willingness of potential clients to
purchase insurance. It thus challenges insurance companies to design insurances such as to minimize basis risk
Food Security in India: Definition, Availability of Food Grains and Other Details!
Food Security is the ability to assure, on a long term basis, that the system provides the total
population access to a timely, reliable and nutritionally adequate supply of food.
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(iii) Food security to include cereals, pulses, milk and milk products.
(iv) Food security to include cereals, pulses, milk and milk products, vegetables and fruits, (fish,
egg and meat in case of non-vegetarians).
India has now reached a stage where the country is no longer exposed to real famines. All the
same there still exist pockets within the country where people have to face acute starvation year
after year.
10.3 million tons during 1965-66. Since then there was a decline and after 1995-96 India became
an exporter of cereals. During the last 50 years, there has been an increase in the per capita
availability of cereals to the extent of 9%.
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However the country has failed to increase the production of pulses consistent with the needs of
the growing population. This is significant since the large number of vegetarians in the country
depend on pulses for their protein requirements. Tenth Plan data indicate that consumption of
milk and meat products as well as vegetables and fruits has increased as a natural outcome of
economic development.
Eastern Madhya Pradesh, Andhra Pradesh, Orissa, Tamil Nadu, Kerala, Karnataka, Coastal areas
of Maharashtra. Rice is now also being grown in the irrigated areas of Punjab and Haryana.
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Wheat growing areas include Uttar Pradesh, Punjab, Haryana, parts of Rajasthan, and Bihar.
Wheat production for 2003-2004 was estimated at 727.4 lakh tones.
Millets include jowar, bajra and Ragi. Bajra is a crop of dry and warm regions of Rajasthan. Ragi
is a rain fed crop grown in drier parts of Karnataka and Tamil Nadu.
Maize is mainly produced in Karnataka, Uttar Pradesh, and Bihar, Andhra Pradesh and Madhya
Pradesh.
Pulses are grown both as Rabi and Kharif crops. The Rabi (winter season) crops are, Masoor and
Peas. The Kharif crops (sown around April and harvested in September- October) include Arhar,
Urad and Moong. The major gram producing areas are Madhya Pradesh, Uttar Pradesh and
Rajasthan. Food grains production touched 229.9 Million tons is 2008-09.
Company in India (1765-1858).The frequency of famines increased after the transfer of power to
the Crown. In 1943 famine occurred in Bengal and it was a tragedy of unprecedented magnitude.
The death toll due to starvations and diseases was around 1.5 million persons.
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Periods of famines in India have also been the periods of high food, prices and agricultural
unemployment. Famines were caused during the period of British rule due to a variety of
reasons.
(a) The import of machine made goods from Britain forced the Indian artisans out of business.
This increased the pressure of population dependent on land. The landless labourers were the
worst sufferers of famines.
(b) The new land system created a class of land owners who did not till the land and peasants
who worked on lands but had no ownership or even permanent tenancy rights. The process of
agricultural development was retarded since the real peasant had not much left after paying rent
and interest to the moneylenders.
(c) Food grains were exported even during the famine years. The peasantry was burdened by
high taxation. Wages among the rural population were highly depressed due to unlimited
supplies of labour.
Need for Self-Sufficiency:
India suffered two very severe droughts in 1965 and 1966. Food Aid to India was restricted to a
monthly basis by USA under the P.L. 480 programme. India had been a severe critic of the US
policy of intervention and war in Vietnam. This was not liked by the then President Lyndon
Johnson.
Prime Minister Jawaharlal Nehru had foreseen such a situation and declared, “It is only when we
attain self-sufficiency in food that we can progress and develop ourselves. Otherwise there is the
constant pressure of circumstances, there is trouble and misery and sometimes shame and
humiliation.”
The Green Revolution made a significant change in the scene. India achieved self-sufficiency in
food grains by the year 1976 through the implementation of the seed- water-fertilizer policy
adopted by the Government of India.
212 million tones. The country is no longer exposed to real famines. Total lack of purchasing
power however continues to haunt people in some parts of the country. They starve even when
the country’s granaries are overflowing.
(ii) Providing minimum support prices for procurement and storage of food grains.
(iv) Maintaining buffer stocks to counteract any pushing up of prices of food grains during
periods of shortages.
Well before the harvest time, the government declares a minimum floor price at which the
government would buy cereals to maintain its own buffer stocks. Minimum support prices ensure
that the growers do not suffer if the traders form syndicates and force low prices on the farmers
for their produce.
the consumer in 1960s. Those were the years of food shortage. The basic items covered were
rice, wheat, sugar, edible oil, and kerosene to be sold at subsidized prices.
The coverage was extended to rural areas by some states during the 1980s. Effort was made to
cover the tribal blocks with a population around 57 million persons in 1985. Central government
expenditure on Food Subsidy was 43,668 crores of Rupees in the year 2008-2009.
There had been a growing feeling that the non-poor were the beneficiaries of the PDS in large
numbers especially in respect of sugar and Kerosene oil. Under the new system, the non-poor
sections have been kept out.
However large quantities of Kerosene oil keep on being diverted from the PDS to adulteration in
diesel and petrol. The Public Distribution System was very well conceived. However it has
remained very ill manned. PDS has remained an expensive and largely untargeted programme.
The very poor are unable to take the benefit of the PDS for a variety of reasons. They do not
have a regular income. They are unable to lift a month or a fortnight’s quota at one time for want
of enough money. In most cases the PDS shops are closed by the time the labourer is back home.
Supplies are irregular and the workers cannot afford to waste a day waiting for the supply to
come and be distributed. The inspecting officials are friendlier to the dealer than to the very poor
consumer for whom the whole system is supposed to work.
PDS and Wage Employment Programmes:
Wage employment programmes are a much better option for helping the poor sections of the
society. Employment Guarantee schemes and the Jawahar Rozgar Yojna create improvements in
agricultural labourers wages and even create some assets.
The non-poor are excluded from such programmes since those who can afford to buy food from
open market would not come to work under these schemes.
It is not that there would be no leakages under wage employment schemes. Cases of fake muster
rolls are not unknown. But these can be checked by better surveillance.
directly. This will eliminate the middlemen and also eliminate profiteering and black marketing.
Bigger societies could have their own storage and warehousing facilities. This will go a long way
in reduction storage losses.
The Food Corporation of India should buy food grains from co-operative marketing societies.
Cooperative marketing has made good progress in Maharashtra, Andhra Pradesh, Tamil Nadu,
Uttar Pradesh and Bihar. The sugarcane marketing societies in Bihar and Uttar Pradesh protect
the interests of the members. Cooperative societies in Maharashtra specialize in the sale of
tobacco, fruits and vegetables.
Punjab, Maharashtra, Gujarat and Uttar Pradesh account for 75% of the total value of the
agricultural produce marketed by cooperatives.
Condensed Milk, butter, ghee, cheese, chocolate, ice cream, pizza, paneer, shrikhand, Cream,
Mithaee, Amul Masti Dahi and the Amul shakti & Nutramul brand of Health food drink are
widely used throughout India and abroad and have made Amul the largest food brand in India
today with an annual turnover of some Rs. 30 Billion per annum.
The primary goal of the ‘Milk Cooperative’ has been to build a strong Indian society
economically through an innovative cooperative network, to provide quality service and products
to end-consumers and good returns to the farmer members.
Information Technology (IT) has played a significant role in developing the Amul brand. The
logistics behind co-ordination the collection of some 7 million liters of milk per day from 11,400
separate Village Cooperative Societies throughout Gujarat and then storing, processing and
producing milk products at the respective 12 District Dairy Unions, are awesome.
The installation of 4000 Automatic Milk Collection System Units (AMCUS) at Village Societies
to capture member information, milk fat content, the volume collected and amount payable to
each member has proved invaluable in ensuring fairness and transparency throughout the whole
Amul organisation.
In 1996 Amul was one of the first major organisations in India to have a website. This site has
been used both to develop an intranet of Amul distributors as well as a cyber-store for
consumers, one of the first examples of e-commerce activity in India.
Internet Sewa Project in their district called Banaskantha. This is a village-level effort at bridging
the Digital Divide by providing information kiosks at the Village Cooperative level.
Each village has one information kiosk, which is the single point of contact for Internet and other
e-governance activities for the co-op. Official forms, Rural Jobs, Veterinary, Agriculture, and
Matrimonial details, educational applications and local market prices with buy & sell options are
provided at the information kiosk so that people do not have to travel all the way to the district
headquarters for these information.
To address poor connectivity at some sites, the Banas dairy uses a wireless connection to the
Internet. The wireless equipment is cheap since there is only a one-time setup charge and less
recurring charges. To improve the farmer members’ living standards and to facilitate affordable
Internet access services including VOIP Net telephony, the district union has also become a local
Internet Service Provider (ISP) using these Village Information Kiosks. Today the services are
subsidized but the goal is for the kiosks to become self-supporting.
embraced the ideas behind cooperatives with such enthusiasm. Not only will the TLD enable
consumers in India to recognize an established brand they can trust online, it will enable Amul to
begin trading competitively throughout the world, reaching markets which have hitherto been
inaccessible.
In case of Amul, Information Technology is the most effective tool in communicating with
members and the millions of consumers who purchase Amul products throughout India every
day. Cooperatives in this way give a vital business advantage with a view to develop the Amul
brand throughout the world.
As a result of this alignment of business purpose and technology, GCMMF (Amul) was named
the winner of the prestigious international CIO 100 Award from IDG’s CIO Magazine (USA) for
resourcefulness in the use of technology. The efforts of the entire cooperative were honored at
the CIO 100 symposium and award ceremony on August 19, 2003 in Colorado Springs.
permanent poverty alleviation measure. While it does provide some immediate relief, it fails to
provide enduring food security to the poor. It would be more appropriate to focus on strategies
that reduce poverty and stabilize prices of food grains.
At one time we had 300 million people at various degrees of starvation while there were 64
million tons of food grains rotting in the go-downs of the Food Corporation of India. The rural
poor did not have the purchasing power to buy food grains even at the PDS prices.
Food grains were being transferred to private mills and traders through collusion on the part of
corrupt civil supplies officers. Only the very inferior grains were supplied to the ration card
holders. The minimum buffer stock now required in India has been fixed at around 16-17 million
tons of food grains.