Coconut Industry in the 12th PLAN

I had written a blog on CDB plea to provide an outlay of Rs 2,400 Cr to the Coconut industry in the 12th Five Year Plan. I am an ardent supporter of Kerala and I had a thumb in bringing National Institute of Fashion Technology to set up a facility in Kerala, and many towns were declared as “Town of Export Excellence” due to representation of mine before the concerned at Delhi. I was largely responsible for creating a no of Textile Clusters and providing consultancy to the Government and entrepreneurs to set shop here. Coir and coconut industries have been able to get lot of central patronage, and became eligible for Schemes of the FTP. Therefore, when I received a number of calls I thought I should explain. CDB received Rs 395 Cr in the XI Five Year Plan, 200% improvement on its outlay of Rs 145 Cr in the X Five Year Plan. The component of existing Schemes (Rs 150 Cr) and new Scheme namely Replantation and Rejuvenation of the Coconut industry (Rs 250 Cr) , 200% over and above the existing Plan outlay of X Plan was sanctioned due to the fact that the Plantation industry and the Kerala’s principal crops all got Special outlay sanctioned- Spices, Rubber, Cashew, Coir, Coconut, Tea, Coffee, marine/fisheries due to special initiatives of Hon’ble Shri Jairam Ramesh, who had extensively argued the same before the Hon’ble Prime Minister. The economy was also in full bloom, liquidity was plenty, and so making additional allocation was not a problem. If one were to look at the allocation made for different sectors, they would see that only a feeble percentage of increment was sanctioned as additional allotment, Plan after Plan at quin quinneal interval. Presently, the economic condition in India is rather weak. Global markets are fragile. India’s fiscal deficit is far beyond the target. The GDP growth is expected to crumble to 6.9 %( target 9%). Though food, general inflation has been tamed, it may bout at any juncture. Hence caution is the economic policy of expedience. The XI Five Year Plan Schemes, if they are to be continued, then evaluation status would need to be filed. Here quantitative analysis of cost: benefit analysis would have to be progressive. However, the new major Coconut scheme was a pilot Scheme, and it was just introduced and it would take gestation before the results bear fruit. Secondly, the conversion of logs to Particle boards, setting up of a manufacturing facility is yet to materialize. A huge growth is visualized in this stream. Coconut industry’s dominance is on Coconut Oil and Copra. It is highly saturated. High dominance is given to this segment in the Coconut sector. The Government in order to protect the farmers announces a Minimum Support Price for Coconut as well as Copra. The MSP of milling Copra was fixed at Rs 5,100 per quintal and Rs 5,350 per qtl for ball copra. De-husked Coconut has a MSP of Rs 1,400 a quintal. Presently, the market price is less than that of the MSP (Rs 4,500 -Copra). It is further expected to decline. The demand is expected to be in the region of 10.5 lakh tones (for Copra). The price of Coconut Oil (Copra) is Rs 6,700 per quintal. The total manufactured quantity of Coconut Copra oil is 4.5 lakh tones, which is equivalent to 1% of India’s total demand of edible oil in India. Rightly recognizing the trends, the Board has decided to focus on other sub sectors of the Coconut segment along with enough weightage of Coconut, Copra, and Coconut Oil. One major step envisaged by them is to increase the productivity in coconut nuts production. Presently it is 8303 nuts per hectre meaning 48 per palm. If productivity is increased to produce 100 nuts per tree, 17,500 nuts will be available from 1 hectre land used by palms. This would definitely scale down the costs of products. There are two issues here. The number of palms per hectre should also be simultaneously increased along with increase in nut growth per tree to maximize output. Law of diminishing Returns, non availability of labour has already strained the sector. Then the supply chain. It is not direct farmer-market linkage, but farmer-middleman-market linkage. The (middle man) buys Coconut at cheap prices, and waits for the price upheaval to dispose off his stocks. This is one of the manifest reasons Coconut prices are mid-dip. With the proportional growth of livestock and animals, the oil meal which is a by-product of Crushing of Copra which gets 65% oil, 28% oil meal, 6-7% moisture, is having an uppish demand. Recently, Tata Global beverages signed a MoU with PepsiCo (India) to distribute their Himalayan water and Tata Glucose Plus thro’ the distribution arm of PepsiCo. The Pepsi holding Company is distributing tender Coconut water in America in 330 ml and 500 ml packs. If this JV takes interest, then tender coconut water can be produced and marketed by this MNC in India. The Unique selling Preposition can be “Sports drink from Coconut water”. The one missing link in the Coconut industry is the new entrepreneur setting shop to produce value added products. The CDB should address entrepreneurs and draw them to the Coconut industry. Other countries have an upper hand in this sphere. Coconut shell has amazing properties. Its fibre is natural filler. Coconut filler can be used in broad range of applications to overcome the poor crack resistance of epoxy resin polymer used in aerospace, bridges, automobiles, sale boats. Epoxy is a copolymer polyepoxide thermosetting polymer formed from reaction of an epoxies resin with polyamine hardener. It gets tensile and flavoured property by using coconut shell filler particles. It is estimated that the world would require 3.03 million tones against present production of 1.46 billion tones. Its present value is around $ 150 billion. 3 M, Aditya Birla (India), Sumitomo (Japan), UPPC GmbH (Germany), and Companies in China are producing Epoxy Polymer. This would open up new opportunities for Coconut shell sellers. Handicraft is another area where the Board has given a feeble attention. It can contribute huge business opportunities to the handicraft manufacturers. By way of conclusion, what I had stated in my earlier blog was just drawing the attention of the authorities to the huge outlay proposed which may not augur well in the current situation. Any new proposal need to be vetted by a Group of Ministries, Planning Commission after being recommended by the administrative Ministry. While the proposal to trim the allocation of the XII Plan is in the air, with the economy downcast with low growth, hopeful assessment of expectations is very low. Hence focus on holistic growth with a higher outlay may not find favour at the present juncture with the Govt of India. That was the point I was trying to make. The very low turnout of Coconut’s value in the GDP of the Country is a negative factor which will weigh against the Industry.

Mullaperiyar- Why hype?

Kerala endures all injustice, because the people of Kerala always give much more than what they take. The state is not a land of plenty, but when it comes to hospitality, it ranks Number one. Mullaperiyar issue has been made psychological and sensational by our neighbouring state of Tamilnadu. For no reason. The Dam is a masonary gravity dam over Periyar River and its tributary Mullayar. The River does not take a detour of Tamilnadu, hence it does not have riparian rights. The northererly arm of this man-made water body, water is diverted through a deep cutting about a mile, and then through a tunnel 5704 ft in length and later through another cutting on the other side of the Water bed and into a natural ravine and so onto the Vaigai River. Tamilnadu uses this water for irrigation of Theni, Madurai, Sivaganga, Ramanathapuram districts and also for Power generation. When the British ruled the Madras Presidency, they exerted undue pressure for 24 years before the Maharaja of Travancore signed a Lease Indenture on 29 Oct 1886 for 999 years with the Madras Presidency the right over the waters of Mullaperiyar and its catchment basin for a paltry sum. The generous Government of Kerala signed another agreement in 1970. Kerala had the highest density of population and the areas downstream of Mullaperiyar became heavily populated because of the acute scarcity of land. Tamilnadu increased its withdrawal, increased its demand, and brought in new areas under irrigation. There have been cracks, seepages, and repeated earthquakes in the area, making people vulnerable to the fear of a catastrophe. The dam was constructed more than a century ago, and the dam that controls water is no position to hold on the water. Any catastrophe would create heavy dent on the lives of the people. There are few precautions in place to run to cover because of the dense and malarial jungle. Even though Dr Abdul Kalam, India’s former President and a honest and sincere Scientist saying that there are multiple dangers if the nuclear plant is established and all political parties in chorous demand its scrapping. What is the anticipated danger in the nuclear plant? In Japan, it was tornado that caused destruction and not the plant inter se. Why is alarm bells rung when there is no alarm. Jayalalita, Chief Minister and Vaiko, and the one man party Subramanya Swami, have been claiming that there is no seepage in the dam, and Kerala is getting hysterical only to create empathy. Will they articulate this in the form of affidavit and agree to take responsibility if any untoward happened? Kerala has no Jayalalita, nor Vaiko, nor the flamboyant Subramanya Swami. But they want good neighborly relations with Tamilnadu. They will always provide Tamilnadu, water that has been agreed. Kerala always honours agreements. The construction of the new dam suggested is in the present circumstances, precautions cannot be in-built. But if we are structuring a new dam, disaster management would be inbuilt. Kerala has no other motive other than this. This issue is not to be debated on a Political plank but in a responsible forum.

Water, everywhere, but not a drop to drink

The Industrial sector’s demand for water is growing by leaps and bounds. Industry should learn to augment its water resources; it should minimize its water use, conserve water. It should adopt waste treatment procedures. Ground Water levels are declining precipitously in Growth Centres as people bore deeper in search of water that municipalities cannot supply. Large-scale groundwater extraction for over a decade because of the burgeoning demand spawned by mushrooming industries has caused depletion of water sources.

The situation for agriculture, however, seems worse than perceived, judging by the obstructions in even routine recharge of groundwater at recharge-locations. Evidence collated by researchers, points to ‘an unsustainable consumption of groundwater for irrigation and other anthropogenic uses in India’.
It paints a bleak picture about the fate of 114 million people sandwiched between ‘reduction of agricultural output and shortages of potable water’, resulting in ‘extensive socioeconomic stress’. The loss of water is of the order of 109 cu km, ‘which is double the capacity of India’s largest surface water reservoir.
The Government knows fully well that rampant groundwater withdrawal had created a major deficiency in sustainability in lift-water structures. Farmers continue their reckless adherence to cultivation of high-yielding varieties, which exploit lift-water resources more than flow-water. An expert hydro geologist opined that groundwater is first and foremost “a resource for potable water, and should be sparingly used for irrigation, least of all power-generation. This is happening throughout the country, including the northeastern region”. Groundwater contributed significantly to the tripling of gross irrigated area between 1970 and 1999, estimated at 33,100,000 hectares. This should not have happened.
Not that India has deficient rainfall. The average annual precipitation of 120 cm is adequate.. The problem is that we seldom try to address the anomalous distribution of rainfall. We seem blissfully unaware that the distribution pattern is reflected in the number of rainy days, not total rainfall.
Kerala was the land of abundant water. It had ample rainfall. But this is old fable. Today, its per capita usage of Water is worst than that of Rajasthan! It occupies the 20th place amongst the States in India in the per capita usage of Water.

People must begin to value their water endowment. This means implementing rainwater harvesting in each house, shed, and colony. Even during the unknown periods of History, every city had a treasure of water harvesting structure, which provided it with a flood cushion and allowed it to recharge its ground water reserves. But today’s planners cannot see anything beyond land. With the result, towns forgot that they need water. They forgot their own lifeline.

Today, builders and architects have simply never been taught that many other ways of holding water that exist outside. They have been trained to see water as waste and build systems that dispose it as swift as possible. We have to retrain our builders and architects. Our planners do need to understand conservation of Water.

We are all mindless about wasting water; now let us get mindful of retaining it.

Can India be an economic powerhouse without water? That is the question the country should be asking after per capita availability of fresh water has fallen from 5177 cubic meters to 1869 cubic meters in 50 years. That is preciously close to the 1700 mark fixed by the United Nations, below which we will become a “water stressed” nation.