Multiple challenges threaten Kashmir’s prized spice
Shrivelling Saffron Production
Facing manifold challenges, world-famous Kashmiri Saffron, with huge revenue potential, is battling for survival due to shrinking land size, pollution, diseases, ancient farming practices, wanton construction activity and above all government apathy.
Pampore Karevas in south Kashmir known for growing world’s finest saffron, are the worst hit by the wilful negligence. The official data on saffron production reflects a disturbing scenario. The fields have shrunken from around 5,500 hectares in 1997-98 to less than 3,000 hectares as of now. Subsequently the crop production has fallen from over 16 metric tonnes annually to almost six metric tonnes with per hectare produce having plummeted from four kilograms to less than two kgs during this period.
What worries the farmers most is the little interest shown by the government for the past over two decades to take any concrete measures
for the revival of the precious crop.
“Although Saffron cultivation has spread to other parts of the Valley apart from its traditional home - Pampore – the production has declined phenomenally,” said Director Agriculture, Mian Abdul Majeed. However, he attributed many reasons including farmers’ disinterest, illegal construction and drought like situation prevailing over the years as reasons for the decline.
The worrying trends in the production have caused disinterest among the Saffron growers many of whom have either shifted to other kind of farming or sold out the land and started other ventures.
Bashir Ahmad Masoodi, a grower from Pampore is engaged in Saffron cultivation for the past 40 years. He argues that the climatic changes resulting in less snowfall and rains were main reason setting alarm bells ringing.
“Add to it the government failure to provide irrigation facility, better seed quality, the problem has compounded,” he said. The government’s apathy plus the socio-economic problems were forcing the growers to sell the priced land, he laments.
An Associate Professor at the Agriculture University here, Firdous Ahmad Nehvi who has been studying the Saffron crop for the past nine years agreed that there has been a decline of 45 percent in Saffron production. However, he added that adequate irrigation facilities could increase the yield by 40 percent.
Kashmiri growers have another concern. Recently a New-Delhi based newspaper carried a report that low production in Kashmir had created huge demand-supply gap in Indian markets, which was being exploited by the smugglers who smuggle Iranian Saffron and sell it under Kashmiri brand name.
According to the report low cost, low variety saffron from Iran is mixed with the Kashmiri flowers and then sold in the markets in disguise.
“While Kashmiri saffron costs anything between Rs 1.5 lakh to Rs 2 lakh per kg, the total cost of bringing the Iranian saffron is far less,” the report added.
Explaining the reasons for the fall in production, Prof Nehvi says that due to non-scientific cultivation techniques, the crop has been hit by corm-rot disease which had phenomenally grown from just 11 percent in 2000 to 46 percent in 2006, the planting cycle is faulty as the corm (bulb) from which the flowers grow is not changed for 15 years when the cycle should not go beyond four years.
However Masoodi argues that repeating the plantation cycle frequently was expensive besides it would result in less crop yield for the first three to four years. “It costs Rs 30,000 per hectare to a farmer to go for fresh plantation of corms. Government is not coming forward for help on this front,” he said.
The growth of the cement plants in the Khrew and Wuyan area of Pulwama was considered another threat to the crop as more than one dozen factories have come up in past one decade in this belt.
“The pollutants including the cement dust emanating from the factories settles on the leaf surface, blocking the stomata and in turn reducing the yield besides affecting the chemistry of the soil and hence its fertility,” said Masoodi’s son, Riyaz who is following in his father’s foot-steps as a Saffron-grower. Apart from Pampore, the crop is grown in Khrew, Khanmoh, Quinbal, Lethpora and dozens of villages in Pulwama district besides some areas in Budgam and Varmul.
The illegal constructions cropping up in the Pulwama belt was turning Saffron fields into residential colonies. “Despite strict laws in place, government is watching as a mute spectator the conversion of land for residential and commercial purposes. If immediate steps are not taken the crop will vanish from Kashmir,” said another grower Mushtaq Ahmad.
What is giving sleepless nights to the farmers is the competition they are facing in the international markets like Iran and Spain. In Iran, world’s largest Saffron producing country, the area under Saffron cultivation is reportedly more than 40,000 hectares and the production has gone up to more than 200 metric tonnes annually. While Iran accounts for nearly 80 per cent of the saffron cultivation, Spain accounts for 15 per cent. The two countries have adopted modern irrigation system to increase the production.
However Prof Nehvi argues that the Kashmiri Saffron was qualitatively better and expensive.
“Our Saffron is far better quality-wise than the crop produced in Iran and Spain,” said Prof Nehvi.
The state government, he said was mulling manifold measures including adequate irrigation facility to encourage revival of the crop.
If things go as planned the days are not far off when per hectare saffron production would jump to six kilograms per hectare in Kashmir if farmers develop better understanding for cultivating Saffron.

Your savings bank account will now earn 16-18% more
MUMBAI: From Thursday, every rupee that you keep in your savings bank account will earn more money. According to a Reserve Bank of India (RBI) mandate, from April 1, banks will calculate interest paid on money kept in the savings bank account on a daily basis. This is a departure from the earlier practice of calculating interest on the lowest balance after the 10th of every month.
This change in calculation of interest paid on money kept in one's savings bank account, made possible by the use of technology in banking, will translate to about 16-18% higher earnings for the depositor, top bankers said. This means that if a person now earns around Rs 100 annually as interest income from his savings bank account, from the next financial year, the amount will jump to Rs 116-Rs 118.
There is a caveat though: although the interest will be calculated on a daily basis, it will be credited to the account only at the end of each quarter or the half year. Top bankers also pointed out that this new structure for interest calculation will force interest paid on ultra short-term fixed deposits, say for 15 days to 45 days, to go up substantially.
At present, the rate of interest in your savings bank account is 3.5% per annum as mandated by the government. But going by the current structure of calculating interest rate, the effective rate applicable to customers is about 2.90-2.95%, said Bipin Kabra, CFO, Dhanlaxmi Bank. In the new structure, this will be exactly 3.5%.
Since the RBI had announced to move to this structure one year ago--in its April 2009 policy meeting--all the banks got sufficient time to get their IT infrastructure ready. "All the test runs...dummy runs have been done. The technology has been tested to move to a system of daily calculation of interest (in savings bank)," said Seshan Ramakrishnan, head, retail liabilities product group, HDFC Bank. "Technology plays a huge role in this," he added.
The move to daily calculation of interest also has the potential to push up interest rate paid on very short-term FDs. This is because a number of banks pay just about 2.5-2.75% per annum on these FDs. But now that depositors can earn at least 3.5% in savings banks, and that too without any lock-in like in FDs, customers will have the freedom to arbitrage between the two types of deposits. "Savings bank accounts give liquidity, but here the interest income is credited at the end of the quarter or half year. On the other hand, in FDs, one could get the interest income at the end of term (that could be on the 46th day)," pointed out Ramakrishnan. "So it needs to be seen how customers behave under the new structure."
While account holders will earn some extra money, banks will be hit. Banks with a higher percentage of funds in their total liabilities coming from savings bank accounts would be affected more. According to balance sheet of banks for the year ended March 2009, SBI had 27% of its liabilities in savings bank accounts and HDFC Bank had 24%. Similarly, Axis Bank had 22%, Federal Bank had 20% and Dhanlaxmi Bank 15% in savings banks.

Fuel on Fire
LPG Costlier By Rs 35, Petrol Rs 3.50, Diesel Rs 2, K-Oil Rs 3
New Delhi, June 25: The central government Friday hiked prices of petrol by Rs 3.50 a litre and diesel by Rs 2 a litre, raised LPG by Rs 35 a cylinder and the poor man’s cooking fuel kerosene by Rs 3 a litre.
Petrol prices will be decontrolled from midnight tonight leading to Rs 3.50 a litre hike in rates in Delhi and diesel rates will be linked to market prices in stages, Oil Secretary S Sundareshan said after a meeting of an Empowered Group of Ministers chaired by Finance Minister Pranab Mukherjee.
“For the present, an increase of Rs 2 per litre in diesel prices has been approved,” he said.
Prior to the hike, petrol in Delhi cost Rs 47.93 a litre and diesel Rs 38.10 per litre.
The government is decontrolling petrol prices after a gap of six years and together with increase in diesel, LPG and kerosene rates, the move would lead to a 0.9 percentage points surge in inflation.
ith the decontrolling of petrol prices, it will now be linked to the market price of crude. Whenever international crude prices go up, users will have to shell out more for petrol. Also, the government will no longer subsidize petrol and diesel.
Opposition parties launched a scathing attack on the government for the unpopular decision, saying it would hit hard the masses already reeling under soaring prices.
Giving details of the decision, Sundareshan said that there was, however, no move to end subsidy on LPG and kerosene and added that diesel that is now being sold at a loss of Rs 3.80 per litre would also be eventually priced at market rate. The government currently gives a subsidy of Rs 262 per LPG cylinder.
As per the latest decision, petrol and diesel prices per litre in different cities of the country - in Mumbai petrol would cost Rs 52.50 and diesel would cost Rs 39.88, Chennai Rs 52 for petrol and Rs 54 for premium petrol, in Delhi, petrol would cost Rs 47.93 and diesel Rs. 38.10, in Kolkata petrol would cost Rs 51.65 and diesel Rs 37.99, in Hyderabad petrol would cost Rs 53.24 and diesel Rs 38.96.
The hike in petrol and diesel prices is the third this year.
Rates where first hiked on February 27 when Finance Minister raised duties on the two fuel and prices were again revised on April 1 on account of introduction of Euro-IV compliant motor fuels.

Gold demand nosedives in Kashmir
Price crosses Rs 19,000 mark
Gold dealers in Kashmir remained glued to their TV sets for monitoring the price of precious metal as it crossed the psychological barrier of Rs 19,000 per 10 grams. As customers are hard to come by, the high price is directly telling on the demand in the current wedding season.
Dealers say that the demand for gold has nosedived by more than 40 per cent in the Valley and is set to go further south.
“The high prices have constrained the budget of the customers and they hesitate to buy gold,” said General Secretary All Kashmir Gold Dealers and Workers Association, Bashir Ahamd Rather. “We are worried,” he adds.
In India, gold prices have crossed Rs19,000 per 10 grams while gold futures on the Multi Commodity Exchange (MCX) where commodities and metals are traded also touched a new record after the rupee weakened against the dollar.
“The trading at MCX has shot up the prices of the gold contrary to our expectation that price will ease out in near future,” said Rather.
However, the prices are likely to sore up further, which is likely to dent the local gold market.
“It is likely to touch Rs 2,100 per 10 gram in coming weeks,” said Franchisee owner Tanishq at Srinagar, Nisar Ahamd Malik.
As against a price of Rs1,975 per 10 grams currently prevailing, the price during corresponding period last year hovered around Rs1527.
“Last year, there was good demand for gold during the wedding season but this time it has gone down by 30-40 per cent,” said Malik.
Malik said the soaring prices have not affected their franchisee sales to a major extent as “good chunk of our customers belong to elite class.”
Now customers seem to be buying the gold, when they are left with little option.
"Gold prices have soared so high that it is no more worth buying. But we have to buy it in times of need," said Rahila, a customer.