Seeds of Despair

* Bimal Prasad Pandia

The amendments proposed to Seed Bill, 2004 do not make it any less dreaded. The amendments are mere cosmetic in nature and have not incorporated the Standing Committee’s recommendations where it really matter. It still exposes the Indian farmers to the perilous ideas of the private seed companies.

Had the Indian Parliament not been engrossed in the ‘IPL’ fiasco, the amended Seed Bill would have already been tabled in the Rajya Sabha by now. The Seed Bill that was first tabled in year 2004 was a sham on Indian agriculture and the farming community and in the name of ensuring quality and regulation to the seed industry, it infringes upon the rights of the farmers to have their own seeds quite blatantly. After severe pressure, the Bill was sent to a Standing Committee. The Standing Committee submitted its recommendations in 2006.  Now the Central Government is ready to table the amended Seed Bill as Seed Bill, 2010.

Please have a closure look at the comparison of the original Seed Bill of 2004; the recommendations of the Standing Committee; and the amendments proposed in the Seed Bill of 2010. It makes amply clear that the government has left the original seed Bill untouched at critical places - especially where the interest and profit motives of the seed companies are in question. It leaves ample scopes to the private seed companies and multinationals to play their dirty tricks and the cost of Indian farmers. Thus, the amended Seed Bill, 2010 is as unwelcome as its 2004 edition. 

Let’s oppose the Seed Bill, 2010 and tell our MPs that the government has least bothered to accept to the recommendations made by them as part of Standing Committee members.

By the way we do not require a new seed bill at all. The Seed Act, 1966 and PPV&FR Act, 2001 are already there. The new Seed Bill intended to give back door entries to the private seed producers and multinational seed companies and nothing else. Farmers of our country know the art to preserve and procure high quality seeds of various species and varieties to feed themselves and others pretty well. The Seeds companies have failed the farmers in the past and if the present Bill goes with the present contents it will make farmers puppets of the seed companies and will make their farming even more vulnerable.

We have very less time left for us to act and stall the Bill. The Rajya Sabha has already lost a lot of time this session and there is every possibility that it will continue to be so in the next few days due to the newly emerged phone tapping issue. Hence, there is every possibility that the Bill will be tabled and be passed without any debate towards the fag end of the session. Thus we have to be doubly careful of it, be proactive quite vociferously. 

What was in the Seed Bill, 2004	What the Standing Committee suggested	What is in the proposed Seed Bill, 2010	Implication
1(3)(b) every producer of seed except when the seed is produced by him for his own use and not for sale.	The Clause 1(3)(b) should read as under: every producer of seed, other than farmer, except when the seed is produced by him for his own use.	1(3)(b) every producer of seed, other than farmer, except when the seed is produced by him for his own use.	The suggestion of the committee has been accepted.
Definition of farmer; Clause 2(9): “farmer” means any person who cultivates crops either by cultivating the land himself or through any other person  but does not include any individual, company, trader or dealer who engages in the procurement and sale of seeds on a commercial basis;	The Committee observe that the definition of farmer is incomplete. Therefore, the following words should be added after the words ‘through any other person’ to make the definition of farmer more comprehensive:‘or who conserves and preserves, severally or jointly with any person, any traditional varieties or adds value to such traditional varieties through selection and identification of their useful properties’	2(11) "farmer" means any person who cultivates crops either by cultivating the land himself or through any other person or who conserves or preserves, severally or jointly with any person, any traditional varieties or adds value to such   traditional varieties through selection and identification of their useful properties, but does not include any individual, com pany, trader or dealer who engages in the procurement and sale of seeds on a commer cial basis;	The suggestion of the committee has been accepted.
	The Committee recommend that a suitable clause should be added to the Bill itself for describing the mechanism for disposal of misbranded and spurious seeds so that undesirable seeds are not sold in the market.
2(19)      “producer” means a person, group of persons, firm or organisation who grows or organizes the production of seeds;	Clause 2 (19) should read as under: “producer” means a person, group of persons other than the farmer, firm or organisation who grows or organizes the production of seeds;	2(19) "producer" means a person, group of persons, firm or organisation who grows or organizes the production of seeds, but does not include a farmer;
27 (1) (b)   individuals or seed producing organisations to carry out self- certification, in such manner as may be prescribed.	The Committee strongly recommends that the provision of self-certification in the Bill should be dispensed with.	27. (1) the State government may, with the prior approval of the Central government,   accredit the organizations owned or controlled by the Central government or the State governments to carry out certification, on the fulfillment of such criteria, as may be prescribed.
	The powers of the Central Seed Committee given in the Bill are very comprehensive, yet there is no mention of price regulation of seeds either by the Central Seed Committee or State levels Committee or by any other agency/authority. The Committee feel that the Seed Company will be getting exclusive, perpetual and monopolistic rights over the seed prices… … The Committee recommend that a price regulatory provision should be provided in the Bill itself so as to ensure that the farmers are not charged arbitrary price by the seed producer/supplier.		The amended Bill has not made any provision with regard to ‘price regulation’. The seed companies will continue to have the perpetual and monopolistic rights over the seed prices.
20.    Where the seed of any registered kind or variety is sold   to a farmer, the producer, distributor or vendor, as the case may be, shall disclose the expected performance of such kind or variety to the farmer under given conditions, and if, such registered seed fails to provide the expected performance under such given conditions, the farmer may claim compensation from the producer, distributor or vendor under the Consumer Protection Act, 1986.	The Committee are of the opinion that the farming community in the rural areas, are not aware of the existence of the Consumer   Protection Act, 1986 or the District Consumer Forum or the State Consumer Council or for that matter any other authority set up for the purpose of claiming compensation. The Committee strongly feel that compensation provision should be included in the Bill itself on the lines of Clause 39 (2) of the Protection of Plant Varieties & Farmers’ Rights Act, 2001, which can be implemented through specially designated arbitration Tribunal/ Compensation Committee or any other authority constituted for this purpose by the Government.	20. (1) Where the seed of registered kind or variety is sold to a farmer, the producer, distributor or vendor, as the case may be, shall disclose the expected performance of such kind or variety to the farmer under given conditions, and if, such registered seed fails to provide the expected performance under such given conditions, the farmer may claim compensation from the producer, dealer, distributor or vendor as may be determined a compensation Committee. (2) The Central government may prescribe ;- (a) the composition and experience of the members of the Compensation Committee; (b) the procedure to be followed by such Compensation Committee; (c) the manner of giving compensation by such Compensation Committee to the farmer; (d) the time within which the compensation so determined shall be paid to the farmer. (3) Any compensation determined by the Compensation Committee under sub-section (1) if not paid to the concerned farmer, shall be recovered as an arrear of land revenue. (4) any farmer aggrieved from the decision of the Compensation Committee may prefer an appeal to the prescribed authority which shall dispose off the appeal within such time and in such manner as may be prescribed.	The compensation committee may be even further out of reach of the farmer. The Bill is too ambiguous on where these committees will be located and how they will be more accessible to the farmers.
	The Committee feels that ‘seed crop insurance’ scheme should be re-introduced by incorporating a suitable provision in the Bill itself so as to award timely compensation to the farmers. The seed producer should pay the premium for the seed insurance.		This recommendation of the committee has been not incorporated at all. The government has succumbed to the seed company lobby and protecting their   interests at the cost of the farmer.
	The Committee are in agreement with the conclusions arrived at a symposium organized by the Government on seed sector reforms that a seed mark, or symbol on the lines of Agmark to denote quality of the seed should be introduced and the labelling provisions under the Seeds Act should be harmonized with the provisions of other Acts such as Weights & Measurement Act, Package Act, etc.		This recommendation has not been heeded.
35.(1)   The Seed Inspector may-  (c)        enter and search, at all reasonable times, with such assistance, if any, as he considers necessary, any place in which he has reason to believe that an offence under this Act has been or is being committed and order in writing the person in possession of any seed in respect of which the offence has been or is being committed, not to dispose of any stock of such seed for a specific period not exceeding thirty days or, unless the alleged offence is such that the defect may be removed by the possessor of the seed, seize the stock of such seed;  (2)        The power conferred by this section includes the power to break-open any container in which any seed of any kind or variety may be contained or to break-open the door of any premises where any such seed may be kept for sale:            Provided that the power to break-open the door shall be exercised only after the owner or any other person in occupation of the premises, if he is present therein, refuses to open the door on being called upon to do so. (3)        Where the Seed Inspector takes any action under clause (a) of sub-section (1), he shall, as far as possible, call not less than two persons to be present at the time when such action is taken and take their signatures on a memorandum to be prepared in such form and manner as may be prescribed.	The Committee apprehend that Clause 35 will bring an ‘Inspector Raj’ to exploit the poor farmers. Under this Clause the inspector can enter and search any place in which he has reason to believe that an offence under this Act has been or is being committed. The Committee strongly recommend that the controls over the power of the inspector should also be provided in the Act itself. The inspector should be allowed to search or break open any premises only on the written orders of the District Collector or a Magistrate specially authorised to exercise the powers given under the Seeds Act. Moreover, as the farmers are not selling any branded seeds, they should be exempted from this Clause.	35. (1) The Seed Inspector may in such manner as may be prescribed— (c) enter and search with prior written authorization of the District Magistrate, at all reasonable times, with such assistance, if any, as he considers necessary, any place in which he has reason to believe that an offence under this Act has been or is being committed and order in writing the person in possession of any seed in respect of which the offence has been or is being committed, not to dispose of any stock of such seed for a specific period not exceeding fifteendays or, unless the alleged offence is such that the defect may be removed by the possessor of the seed, seize the stock of such seed; (3) Where the Seed Inspector takes any action under clause (a) of sub-section (1), he shall, as far as possible, call not less than two independent persons from the same locality to be present at the time when such action is taken and take their signatures on a memorandum to be prepared in such form and manner as may be prescribed.	While some modification by adding ‘with prior written authorization of the District Magistrate’ to Clause 35 (1) (C) has been made, no such change has been made to Clause 35 (2). Further the amended bill has not heeded to the suggestions made by the standing committee to exempt farmers from this clause. The new amendments to control the inspectors  is too insignificant.
4(4)(iv) The committee (Central Seed Committee) will have “two representatives of farmers;”	The Committee feel that two representatives of the farmers in the Central Seed Committee is too small a representation keeping in view the number of farmers in our country. Since the farming in India is of a diverse nature, as there are different kinds of land formations and climatic zones, the Committee recommend that farmers representation on the Central Seed Committee should be raised to five Members, one each from different geographical zones.	the representatives of farmers, one each from the geographical zones of the country as specified in the Schedule on rotation basis;
5(e) seed registration and its enforcement;	The powers of the Central Seed Committee given in the Bill are very comprehensive, yet there is no mention of price regulation of seeds either by the Central Seed Committee or State levels Committee or by any other agency/authority. The Committee feel that the Seed Company will be getting exclusive, perpetual and monopolistic rights over the seed prices… The Committee, therefore, recommend that a price regulatory provision should be made in the Bill itself to ensure that the farmers are not charged exaggerated price by the seed supplier……. This can be done by setting up a sub-Committee of the Central Seed Committee to control the prices of the seeds and for that the Clause 5 (e) should be amended and read as under,  ‘Seeds registration, its enforcement and price regulation;’	5(e) seed registration and its enforcement;	Price regulation is an important concern. But the government has not heeded to this important suggestion of the committee and no change has been made either to the Clause 5(e) or anywhere else in the amended bill to include price regulation mechanism. As in the original bill, the seed companies will be required to only furnish ‘the production, stocks, sales and prices of planting material in the nursery at such intervals as may be prescribed.’
7 (2)   It shall be the duty of the Registration Sub-Committee-  (a)   to register seeds of varieties after scrutinizing their claims as made in the application in such manner as may be prescribed;	The Committee recommends that the Clause 7 should be suitably amended to hold the Central/State Seed Certification Committee responsible for the powers exercised and functions under Clause 5 and issuance of seed certificate under Clauses 13, 14 and 28 of the Bill. In Clause 7(2)(a) the word, ‘kinds and’ should be added after the words, ‘to register seeds of’.	7. (2) It shall be the duty of the Registration Sub-Committee— (a) to register kinds of varieties of seeds after scrutinizing their claims as made in the application in such manner as may be prescribed;	The Committee suggested to include ‘kinds and’ and but the amendment adds ‘kinds of’. This small difference is big enough to keep the committee still out of any accountability towards the seed purchasers. There is clear ambiguity to nail the seed committee for false certification. Even the standing committee did not give clear recommendations on this. We strongly object to this ‘let off’.
Clause 12 (1) a register of all kinds and varieties of seeds to be called the National Register of Seeds shall be kept by the registration Sub-Committee wherein all specifications, as may be prescribed, shall be maintained.	The Committee are of the opinion that the farmers’ varieties should be entirely excluded from the registration in the Seeds Bill. The Committee, therefore, recommend that the following words should be added to Clause 12: ‘However, Farmers will not be required to register farmers’ varieties in the National Register Of Seeds’.	12. (1) For the purposes of this Act, a register of all kinds and varieties of seed to be called the National Register of Seeds shall be kept by the Registration Sub-Committee wherein all specifications, as may be prescribed, shall be maintained, Provided that the farmers shall not be required to register the farmers varieties of seeds in the said register.
13.(1)  No seed of any kind or variety shall, for the purpose of sowing or planting by any person, be sold unless such seed is registered under sub-section (2) by the Registration Sub-Committee in such manner as may be prescribed.	In order to exempt the farmers from compulsory registration of their seeds, the words ‘except the farmers’ variety’ should be added after the words ‘No seed of any kind of variety’ and Clause 13 (1) may read as under ‘No seed of any kind or variety, except the farmers’ variety, shall, for the purpose of sowing or planting by any person,   be sold unless such seed is registered under sub-section (2) by the Registration Sub-Committee in such manner as may be prescribed.’	13. (1) No seed of any kind or variety except the farmers variety shall, for the purpose of sowing or planting by any person, be sold unless such kind or variety is registered under sub-section (2) by the Registration Sub-Committee in such manner as may be prescribed.	The recommendation of the Committee has been accepted.
13 (4) Registration made under this Act shall be valid for a period of fifteen years in the case of annual and biennial crops, and eighteen years for long duration perennials.   13 (5) At the expiry of the period granted under sub-section (4), the kind or variety of seed may be re-registered for a like period by the Registration Sub-Committee on the basis of information furnished by the producer on the results of such  trials as may be prescribed under sub-section (2)  to re-establish performance of the kind or variety of seed.	The Committee are of a firm opinion that this provision of re-registration will give monopolistic control on the seeds marketing by the seed industry, which may go on exploiting the farmers for unlimited period. Even the period of fifteen years, in case of annual and biennial crops, and eighteen years for long duration perennials, is quite a long time considering the progress/innovations in research and development   being made in the agricultural sector worldwide… The duration of registration period for any kind or variety of a seed should be reduced to ten and twelve years for annual & biennial crops and perennials, respectively. The Committee, strongly recommend that this provision of re-registration under Clause 13 (5) should be deleted.	13(4) A registration made under this Act shall be valid for a period of ten years in the case of annual and biennial crops, and twelve years for long duration perennials. 13(5) At the expiry of the period granted under sub-section (4), the kind or variety of seeds may be re-registered for a like period by the Registration Sub-Committee on the basis of information furnished by the producer on the results of such trials as may be prescribed under sub-section (2) to re-establish performance of the kind or variety of seeds.	While the recommendation with regard to Clause 13 (4) has been adhered to in the amended bill, Standing Committee’s ‘strong’ recommendation to delete the provision of re-registration under Clause 13 (5) has not been accepted. We are of the opinion that validity of registration from 15 years to 10 and 18 years to 12 is mere cosmetic. This will still ensure substantial monopolistic control by the seed companies. Further non-deletion of the clause (5) is will ensure that seeds companies continue to get enough time to maneuver and monopolies.
Seed Bill, 2004 had no provision for ‘pre-grant opposition to registration of new kind of variety of seed.	The Committee recommends that a suitable Clause containing the pre-grant opposition to the registration of the new kind or variety of the seed be added to the Bill.	The amended Seed Bill does not have provisions for ‘pre-grant opposition’ either.	This is an important recommendation that has not been included in the amended bill. The standing committee had reasoned that “The Committee notes that there is no provision in the present Bill for pre-grant opposition to registration of a new kind or variety of seed, on the lines of Section 21 of the PPV&FR Act 2001, to ensure more transparency. They are of the considered view that a provision for pre-grant opposition will allow legitimate opposition to the grant of a registration of a new variety before registration is granted. Thus, people will have an opportunity to raise objections, if they have reason to believe that the variety is not what is being claimed or the person opposing the application is entitled to the breeder’s right as against the applicant or the variety may have adverse effect on the environment or any other reason which the Government may consider appropriate for pre-grant opposition to the registration of any new kind or variety of a seed.” Now there is no scope to oppose registration of seeds before its registration.
Seed Bill, 2004 silent on the origin and ownership aspect of seed.	The Committee recommend that a sub-Clause may be added to the Clause 14 as under: ‘Every application for registration under Section 13 shall contain a complete passport data of the parental lines from which the variety has been derived and from where the genetic material has been taken and all such information relating to the contribution, if any, of any farmer, village community, institution or organisation in breeding, evolving or developing the variety’.	The amended bill still stays same with regard to origin and ownership aspect of seed.	The committee had reasoned that, “The Committee note that the present Seeds Bill is silent on the origin and ownership aspect of a registered variety of seed”….. “In the absence of such a provision, established seed companies could use farmer varieties in breeding the new species without paying anything to them or to the Government.” The seed companies still go scot free even if they use farmer varieties or varieties developed in government institutions.
15. (1) Notwithstanding anything contained in section 14, no seed of any transgenic variety shall be registered unless the applicant has obtained clearance in respect of the same as required by or under the provisions of the Environment (Protection) Act, 1986:             Provided that the Registration Sub-Committee may, subject to clearance under the said Act, grant provisional registration, for a period not exceeding two years on the basis of information furnished by the producer on the results of multi-locational trials in the prescribed manner.	The Committee is of a strong view that the provisional registration of transgenic varieties would bring the untested seeds and genetically engineered food crops in the market from backdoor, which may sabotage the entire bio-safety regulatory system of our country. Also, as the transgenic seeds cannot be released for commercial cultivation without the approval of the Genetic Engineering Approval Committee (GEAC), provisional registration /clearance should not be allowed and the proviso to   Clause 15 (1) should be deleted.	15. (1) Notwithstanding anything contained in section 14, no seed of any transgenic variety shall be registered unless the applicant has obtained a clearance in respect of the same as required by or under the provisions of the Environment (Protection) Act, 1986: 29 of 1986.	As per the strong recommendation of the committee, the provision has been deleted.
19.   The Committee may, for conducting trials to assess performance, accredit centers of the Indian Council of Agricultural Research, State Agricultural Universities and such other organizations fulfilling the eligibility requirements as may be prescribed, to conduct trials to evaluate the performance of any kind or variety of seed.	The Committee recommend that in Clause 19 the words ‘and such other organizations’ may be replaced with the words ‘and such other government/semi-government/autonomous organizations’ so as to avoid any private and trans-national seed-testing laboratory to conduct the trials to evaluate the performance of any kind or variety of seeds, as they are not directly accountable to the Government of India or any State Government.	19. The Committee may, for conducting trials to assess the performance, accredit centres of the Indian Council of Agricultural Research, State Agricultural Universities and such other organizations fulfilling the eligibility requirements as may be prescribed, to conduct trials to evaluate the performance of any kind or variety of seeds.	The words ‘and such other organizations’ still remain in the amended Bill and thus continues to open spaces for private and trans-national seed testing laboratory.
20.    Where the seed of any registered kind or variety is sold   to a farmer, the producer, distributor or vendor, as the case may be, shall disclose the expected performance of such kind or variety to the farmer under given conditions, and if, such registered seed fails to provide the expected performance under such given conditions, the farmer may claim compensation from the producer, distributor or vendor under the Consumer Protection Act, 1986.	The Committee strongly feel that compensation provisions should be included in the Bill itself on the lines of Section 39 (2) of the Protection of Plant Varieties & Farmers’ Rights Act, 2001, through specially designated arbitration Tribunal/Compensation Committee constituted by the Government. After the words ‘compensation from the producer, dealer, distributor or vendor ’ in Clause 20 the following words may be added: ‘through a Sub-Committee especially designated for this purpose within the Consumer Protection Act, 1986 or certifying agency through Arbitration or Compensation Committees or Special Tribunals/Fast Track Court/Authority established by the Government which may award the compensation within 30 days of the filing of the claim’. The Consumer Protection Act, may be amended accordingly, if needed.	20. (1) Where the seed of registered kind or variety is sold to a farmer, the producer, distributor or vendor, as the case may be, shall disclose the expected performance of such kind or variety to the farmer under given conditions, and if, such registered seed fails to provide the expected performance under such given conditions, the farmer may claim compensation from the producer, dealer, distributor or vendor as may be determined a compensation Committee. (2) The Central government may prescribe ;- (a) the composition and experience of the members of the Compensation Committee; (b) the procedure to be followed by such Compensation Committee; (c) the manner of giving compensation by such Compensation Committee to the farmer; (d) the time within which the compensation so determined shall be paid to the farmer. (3) Any compensation determined by the Compensation Committee under sub-section (1) if not paid to the concerned farmer, shall be recovered as an arrear of land revenue. (4) any farmer aggrieved from the decision of the Compensation Committee may prefer an appeal to the prescribed authority which shall dispose off the appeal within such time and in such manner as may be prescribed.	It accepts the recommendation of the Standing Committee and incorporates provision for a ‘compensation Committee’.
22.(1)   Every person who desires to carry on the business of selling, keeping for sale, offering to sell, bartering, import or export or otherwise supply any seed by himself, or by any other person on his behalf  shall obtain a registration certificate as a dealer in seeds from  the State Government .	The farmers’ exchanging seeds through ‘barter system’ among themselves should be exempted from the purview of these Clauses and the word ‘bartering’ should be removed from Clause 22(1), Clause 25 & Clause 28(1).	22. (1) Every person who desires to carry on the business of selling, keeping for sale, offering to sell, import or export or otherwise supply any seed by himself, or by any other person on his behalf shall obtain a registration certificate as a dealer in seeds from the State Government.	The term ‘bartering has been deleted from all three clauses as per the recommendation of the Standing Committee.
27. (1)    The Committee may in consultation with the State Government and the State Seed Committee, accredit – (a)      organizations to carry out  certification, on the fulfillment of such criteria, as may be prescribed, or (b)     individuals or seed producing organisations to carry out self- certification, in such manner as may be prescribed.	…. the Committee recommend as under:  In Clause 27(1) (a) add ‘Government/Semi-Government’ before the words ‘Organisations to carry out certification….’	27. (1) the State government may, with the prior approval of the Central government,   accredit the organizations owned or controlled by the Central government or the State governments to carry out certification, on the fulfillment of such criteria, as may be prescribed.	The recommendation of the Standing Committee has been accepted.
30.       The Central Government may, on the recommendation of the Committee and by notification, recognise any seed certification agency established in any foreign country, for the purposes of this Act.	In Committee’s view it is dangerous to accredit any foreign seed certification agency to certify the seed to get it registered in India without conducting localised trials of that seed in our country. They, therefore, recommend that the Seed Certification Agency established in any foreign country should be recognised only if the seed   certified by it is invariably tested on Indian soil to conform to the specified minimum limits of germination, genetic and physical purity and maximum seed health.	30. The Central government may, on the recommendations of the Committee, by notification, recognize any seed certification agency established in the territory outside India, for such purposes as may be specified therein.	Laughably, the amended Bill does nothing but replace the word ‘foreign’ with ‘the territory outside India’. It has not provisioned for compulsory testing on Indian soil for certification of a seed by a foreign agency. However, we are strictly opposed to any certification by any agency situated anywhere in the world where the Indian law is not applicable or where Indian farmers have no access.
(2)        The State Government may, in consultation with the Committee, and by notification, establish one or more State Seed Testing Laboratories or declare any seed testing laboratory in the Government or non-Government sector as a State Seed Testing Laboratory where analysis of seed of any kind or variety shall be carried out under this Act in the prescribed manner.	The Committee desire that since this lab will be called ‘State Seed Testing Laboratory’ so the word ‘non-Government’ in clause 32(2) should be replaced with ‘Semi-Government’	32 (2) The State Government may, by notification, establish one or more State Seed Testing Laboratories or declare any seed testing laboratory in the Government or non-Government sector as a State Seed Testing Laboratory where analysis of seed of any kind or variety shall be carried out, under this Act, in the prescribed manner.	Recommendation of the Standing Committee has been not accepted. So analysis of seeds can still be conducted by non-government laboratories. This will open up spaces   for further abuse by seed companies.
	The Committee note that there is no audit of the performance of the Government Seed Testing Laboratories (STLs). … there should be a provision for the audit of the notified STLs to conform to the ISO standards by accredited Central Seed Testing Laboratory especially designated for the purpose.		Still no such audit mechanism has been provisioned in the amended Bill and we will left to depend on sub-standard and inefficient seed testing laboratories.
35 (3)        Where the Seed Inspector takes any action under clause (a) of sub-section (1), he shall, as far as possible, call not less than two persons to be present at the time when such action is taken and take their signatures on a memorandum to be prepared in such form and manner as may be prescribed.	Clause 35(3) should read as under: ‘Where the Seed Inspector takes any action under clause (a) of sub-section (1), he shall call not less than two independent persons from the same locality, to be present at the time when such action is taken and take their signatures on a memorandum to be prepared in such form and manner as may be prescribed.’	(3) Where the Seed Inspector takes any action under clause (a) of sub-section (1), he shall, as far as possible, call not less than two independent persons from the same locality to be present at the time when such action is taken and take their signatures on a memorandum to be prepared in such form and manner as may be prescribed.	The Standing Committee had reasoned that “the words ‘as far as possible’ may give a handle to the seed inspector to not to call the two independent witnesses of the same locality at the time of taking the samples of any seed”. But the words ‘as far as possible’ still stay in the amended Bill.
36. (1)  (c) All import of seeds– shall be subject to registration as may be granted on the basis of information furnished by the importer on the results of multi-locational trials for such period as may be prescribed to establish   performance.	The Committee recommend that after the words ‘on the results of multi-locational trials’ the words ‘and also localized trials in India’ should be added to Clause 36 (1) (c).	36 (1) (c) shall be subject to registration as may be granted on the basis of information furnished by the importer on the results of multi-locational trials conducted in such manner and for such period as may be prescribed to establish agronomic performance.	The Standing Committee had reasoned that “the importers’ data on multi-locational trials should not be accepted as it is, because the climatic, soil, crop management and other conditions vary from country to country and region to region and so their results may not be applicable to India as the aforesaid conditions mentioned above may not be the same here as in the trial country.” The amended Bill still does not makes it mandatory for localized trials in India for registration of imported  seed. This is a clear indicator that the government is toying the lines of the multinational seed companies.
38 (2) If any person sells any seed which does not conform to the standards of physical purity, germination or health or does not maintain any records required to be maintained under this Act or the rules made thereunder he shall, on conviction, be punishable with fine which shall not be less than five thousand rupees but which may extend to twenty- five thousand rupees.	The Committee feel that Rs.500 in 1966 would become more than Rs.1,00,000 in 2006 even if we calculate the interest on bank rates prevailing from time to time. It is not understood, how the penalty of only Rs.5000 in place of Rs.500 (in the 1966 Seeds Act) has been fixed in the new Seeds Bill…. This will be an encouragement to commit the offences, which may have irreparable and incalculable loss to the farmer who may use these seeds for cropping. Given that the misbranded and spurious seed trade is worth crores of rupees, the small penalties being proposed are of no use to deter the offenders. The Committee recommend that the punishment for the offences committed under the new Seeds Bill should be in consonance with the stringent penalties provided in PPV&FR Act, 2001. The Committee recommend, ‘Considering the huge losses, the person using these seeds may suffer as a result of contravention of one rule or the other by the holder of the seed registration certificate, the punishment in the Seeds Bill should be minimum of Rs.50,000 which may extend to Rs.2,00,000 along with an imprisonment which may extend to three month or with both depending on the offender involved from vendor, distributor, seed producer for the violations of the provisions of Clause 38 (1) & (2).’	38 (2) (2) If any person sells any seed which does not conform to the standards of physical purity, germination or health or does not maintain any records required to be maintained under this Act or the rules made thereunder he shall, on conviction, be punishable with fine which shall not be less than five thousand rupees but which may extend to thirty thousand rupees.	In place of the Standing Committee’s recommendation to increase the fine from a minimum of 50,000 rupees which may extend up to Rs. 200,000 rupees, the amended Bill raises the fine to the range of Rs 5,000 to 30,000. Besides, the   amended Bill has not made provision of imprisonment at all. Thus the level of fine and non-inclusion of imprisonment provision in the amended Bill is purely absurd mocks the penalty recommendations made by the Standing Committee.
38 (3) If any person –   (3)        If any person furnishes any false information relating to the standards of genetic purity, misbrands any seed or supplies any spurious seed or spurious transgenic variety, sells any non-registered seeds he shall, on conviction be punishable with imprisonment for a term which may extend to six months or with fine which may extend to fifty thousand rupees or with both.	The Committee further recommend that since the person who indulges in ‘fly by night’ seed business cannot be controlled by imposing a small fine for the violation of the provisions of Clause 38 (3), the punishment for such person who furnishes any false information relating to the standards of genetic purity or misbrands any seed or supplies any spurious seed or spurious transgenic variety, the level of punishment should begin with the fine of Rs.2,00,000 which may extend up to Rs.10,00,000 along with an imprisonment for a term of three months which may extend up to one year… For repeated violations under this Clause, the punishment should be in consonance with the penalties provided in Section 73 of PPV&FR Act, 2001.	(3) If any person furnishes any false information relating to the standards of genetic purity, misbrands any seed or supply any spurious seed or spurious transgenic variety or sells any non-registered seeds he shall, on conviction be punishable with imprisonment for a term which may extend to six months or with fine which may extend to one lakh rupees or with both.	Where the Standing Committee recommended a fine not less than two lakh rupees and which can extend up to 10 lakh rupees, the amended Bill just says ‘fine which may extend to one lakh rupees’. Besides the standing Committee had recommended up to one year of imprisonment, and for repeated violation punishment as per penalties provided in Sectioin 73 of PPV&FR Act, 2001, has not been accepted.
40.(1)  Where an offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:           Provided that nothing contained in this sub-section shall render any such person liable to any punishment under this Act if he proves that the offence was committed without his knowledge and that he exercised all due diligence to prevent the commission of such offence.	The Committee note that Clause 40(1) excludes higher ups in the company if they could anyhow prove that the offence was committed without their knowledge. Therefore, the proviso to the Clause 40(1) should be deleted.	40. (1) Where an offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to any punishment under this Act if he proves that the offence was committed without his knowledge and that he exercised all due diligence to prevent the commission of such offence.	The Standing Committee’s recommendation has not been adhered to leaving the higher ups in the company to scrape through.
	The Committee are of considered view that Clause 43 will restrict the rights of the farmers. The Committee recommend that in Clause 43(1) the word ‘grow’, should be added after the words, ‘the right of the farmer to’ and the word ‘barter’ should be added after the word ‘exchange’. the Committee recommend that the words, ‘or which does not conform to the minimum limit of germination, physical purity, genetic purity prescribed under Clause (a) or Clause (b) of section 6’ should be deleted from the Clause 43 (1) so that the rights of the farmer are saved and the provision is made consistent with the corresponding provision in the PPV&FR Act 2001.
43. (1) Nothing in this Act shall restrict the right of the farmer to save, use, exchange, share or sell his farm seeds and planting material, except that he shall not sell such seed or planting material under a brand name or which does not conform to the minimum limit of germination, physical purity, genetic purity prescribed under clause (a) or clause (b) of section 6.	The Committee recommend that in Clause   43(1) the word ‘grow’, should be added after the words, ‘the right of the farmer to’ and the word ‘barter’ should be added after the word ‘exchange’. The Committee recommend that the words, ‘or which does not conform to the minimum limit of germination, physical purity, genetic purity’ prescribed under Clause (a) or Clause (b) of   section 6’ should be deleted from Clause 43 (1).. The committee recommended that “Clause 43, which exempts the farmers from registration, should come in the beginning of the Bill and may be placed just after Clause 1 (3) so as to avoid any confusion about the registration of the farmers’ seeds.”	43. (1) Deleted entirely. However, “Provided that the farmers shall not be required to register the farmers varieties of seeds in the said register” has now been added at the end of clause 12 (1)which reads: ‘For the purposes of this Act, a register of all kinds and varieties of seed to be called the National Register of Seeds shall be kept by the Registration Sub-Committee wherein all specifications, as may be prescribed, shall be maintained’….. Further, Clause 1 (3) (b) now adds ““provided that nothing contained in this Act shall restrict the right of the farmer to grow, sow, re-sow, save, use, exchange, share, or seel his farm seeds and planting material except when he sells such seed or planting material under a brand name”.”	Suggestion of the committee has been followed. However, requirement to register if the farmer sells in a brand name still stays.
45. (1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as may appear to be necessary for removing the difficulty:        Provided that no order shall be made under this section after the expiry of two years from the date of commencement of this Act.	Some unforeseen circumstances may arise necessitating amendments even after the expiry of the period of two years after the commencement of this Act, and at that time the Government will be helpless to make any amendment due to this proviso. Therefore, the Committee recommend that: the proviso to Clause 45(1) should be deleted.	45. (1) If any difficulty arises in giving effect to the provisions of this Act, the Central Power to Government may, by order, published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as may appear to be necessary for removing the difficulties. Provided that no order shall be made under this section after the expiry of two years from the date of commencement of this Act.	The Clause has not been deleted.

* Bimal can be contacted at bimalpandia@gmail.com.

Time to Act Again! The Seeds Bill 2004 is coming

Dear friends,

Greetings !! The necessity to learn and act on the seed bill proposed to be tabled later in this session has come. Please find below a reminder from Living Farms.

Time to Act Has Come!

Bimal

The Seeds Bill 2004 is expected to be placed in the second half of the Budget session of Parliament which is scheduled to start on 13^th of this month, April. Is it a mere coincidence that the push to approve GM crops, the draconian BRAI bill and now the Seeds Bill 2004 are being placed before the Parliament without any national debate? This is not a coincidence. It is a well orchestrated plan to make the path clear for the "Gene Revolution".

In this type of do or die situation the voices of protest should be loud and clear.

Present position of the Bill: It is the same Seeds Bill which was tabled in Parliament on 9^th Dec 2004. This had come under severe criticism countrywide, from farmers’ groups, civil society organisation and many other sections as well. The demand then was complete withdrawal of this proposed bill and recognition of farmers’ absolute rights over indigenous seeds.

Because of this opposition the Bill was handed over to Standing Committee on Agriculture, who submitted its report on 28^th Nov. 2006.

But whether the recommendations of the Standing Committee are incorporated into the Bill and what is the present version of the Bill, is not yet made public.

Though the Seeds Act 1966, Plant Variety Protection & Farmers Rights Act 2001 are in place, there arises question about the purpose of this Seed Bill which overrides many of the farmer friendly provisions of the above mentioned Acts.

We are putting our efforts to share other concerns related to this Bill. Below is mentioned a brief on the highlights and key issues of the Bill. A brief explanatory note on both of these points are given as an attachment. We have done so keeping in mind your tight work schedule.

We request you to kindly go through this and share your responses which will enable all of us for next collective step.

We will be sharing with you more information on this which will affect our food sovereignty.

Regards,

Jagannath (Living Farms)

The Seeds Bill, 2004

Legislative Brief

The Bill was introduced in the Rajya Sabha on December 9, 2004.

It was referred to the Standing Committee on Agriculture (Chair: Prof Ram

Gopal Yadav).

Highlights of the Bill

      The Seeds Bill, 2004 aims to regulate the quality of seeds sold, and replaces the Seeds Act, 1966.

       All varieties of seeds for sale have to be registered. The seeds are required to meet certain prescribed minimum standards.

      The Bill does not restrict the farmer’s right to use or sell his farm seeds and planting material, provided he does not sell them under a brand name. All seeds and planting material sold by farmers will have to conform to the minimum standards applicable to registered seeds.

      If a registered variety of seed fails to perform to expected standards, the farmer can claim compensation from the producer or dealer under the Consumer Protection Act, 1986.

      The Bill permits self certification of seeds by accredited agencies and allows the central government to recognize certification by foreign seed certification agencies.

      Every seed producer and dealer, and horticulture nursery has to be registered with the state government.

Key Issues and Analysis

  

        Mandatory registration and the National Register of Seeds. Although farmers are exempt from registering their seed varieties, the seeds have to conform to standards prescribed for commercial seeds. Farmers may find it difficult to adhere to the standards required of commercially sold seeds.

        Compensation for underperformance of seeds will be governed by consumer courts.

        Seed inspectors can take samples from anyone selling purchasing or transporting seed. They have the power of search and seizure without a warrant.

        It is not clear whether the Bill bans certain genetic engineering technologies such as “genetic use restriction technology” and “terminator technology.” These technologies preserve intellectual property rights by either requiring specific additives, or by making the next generation seeds sterile.

        Under the new Seed Bill all imported seeds will also need to be registered, though the government may allow the import of an unregistered seed for research purposes. Apart from the registration of imported seeds, the new Bill does not make any other provisions.

        The Bill does not make it mandatory that an applicant has to furnish, such as data about the source and geographical origin, in order to register a seed variety.

        The Bill does not have the provision of benefit sharing (as mentioned in the Convention on Biological Diversity and the PPVFR Act), in which case any applicant can register and use a farmer’s variety of seed without compensating the farmer.

        There is no specification of quality assurance systems.

        Self Certification and testing before registration. Seed producers would be permitted to self-certify the performance of their seeds under certain conditions. The seed companies need to provide the results of multi-locational trials before registration. This opens up the possibility of false declaration by seed companies

        Some provisions of the Seeds Bill, 2004 contradict and overlap with the Protection of Plant Varieties and Farmers’ Rights Act, 2001 (PPVFR Act).

High Voltage

*Bimal Prasad Pandia

As consumers in Orissa were bracing to face the summer, power tariff hike came in as big shock. While they are being made to believe that the hike was unavoidable as hydro power generation has suffered a lot owing to low rainfall, this report finds that the reservoirs are in fact teeming with higher levels. Definitely there is something fishy in the whole episode.

The order of Orissa Electricity Regulatory Authority (OERC) to hike power tariff has jolted a big shock to the people of Orissa.  “It’s a big and unnecessary increase”, fumes Bhupinder Singh, the leader of the opposition in Assembly. Even the industry-wallahs are very unhappy with it. “We did not expect the hike to be so steep. It will take the competitive edge out of Orissa,” rues R K Jena, chairman, CII's Orissa State Council.   While it has shocked most, a minority section of the society justifies it by arguing that “It was long overdue as Orissa continued with the same tariff structures since 2000”. When every other commodity has become costlier, this justification succeeded in soothing many. “May be, there was no other way out”, Sujit Nath, a student of Pharmacy in Bhubaneswar, tries to reason out.

While people slowly come to terms, a deceptive strategy - which was in all probability well planned and executed – was succeeding on its objectives. The focus of objection has been on the steep rate of hike rather than on whether the hike was warranted at the first place or not. And this was the plan to lead people that way. They wanted people to focus their attention on lesser important things.  People are shouting about the end result while remaining ignorant about the mischiefs that have been played to achieve that result. There is enough evidence to suggest and prove that the condition of ‘severe power shortage’ has been an artificially created one aimed at achieving many objectives – power tariff being just one among those. And hydro-power production has been the most preferred tool to create that condition. 

Loss – A deliberate creation

Raising the tariff structure, OERC has noted that the Grid Corporation (Gridco) – which buys power from producers and sells to distribution companies – has suffered huge losses and by the end of year 2009-10 the loss may well surpass 1,500 crore rupees. While the loss to Gridco is true, not many people know that the loss was - to a large extent - an outcome of very low power supply from Orissa Hydro Power Corporation (OHPC), the state owned corporation that owns hydro-power units in Orissa.  

The Gridco procures power from various sources at OERC fixed rates. As per the process, Gridco had informed the OERC that Orissa will require a total of 18,726.15 Million Unit (MU) in the year 2009-10. It then informed about the sources from which it intends to procure and meet this requirement. Like the Gridco, other players in the power supply network like the power producers, transmitters and consumer representatives also submitted their design power generation, expenditure burdens and what price they expect etc. Taking everything into account the OERC decides quantity of power to be supplied to Gridco and their rate. It also decides power tariff for consumers and end users. While going through this process for the year 2009-10, the Gridco had submitted its plan to meet Orissa’s power requirement. There is no point for guessing that hydro power being the cheapest among all sources was and is the first choice for Gridco. The Gridco, relying on OHPC sources, had estimated that it will get 6,184.44 MU from OHPC. However parties appearing for the consumers submitted that this was a too conservative estimate and ‘Gridco has merely accepted the data submitted by the OHPC and has not done independent assessment of hydro power availability’.  They submitted that ‘the availability of power from state hydro stations would be around 7,680 MU in FY 2009-10 as against the GRIDCO proposal of 6,184 MU’. But the OERC negated consumer’s estimation and instead agreed to the estimates made by Gridco. Though, OERC did not agree to consumer’s assertion that the consumers are losing out on cheapest energy, still 6184 MU from the OHPC in the year 2009-10 was the single most dominant procurement source for Gridco.  This allotment constituted about one-third of its total energy procurement target for the year at a very cheap rate of 57.66 paise per unit on an average with power from Machhkund being the cheapest among all hydro power centres at 13.90 paise per unit and Indravati being the costliest at 73.35 paise.

In contrast, other sources - from which Gridco budgeted to procure the remaining two-third of required power - were 3.35 to 5.2 times costlier. The purchase rate – fixed by OERC - from Orissa Power Generation Corporation (OPGC) owned thermal power plants is 193.70 paise per unit; from Central Power Generation Corporation (Primarily NTPC) is 197.31 paise; from central hydro sources like Chukha, Tala and Teesta is 190.30 paise; from Captive Generation Plants (CGPs) in Orissa is 300 paise; and from renewable sources at 269.43 paise per unit. OHPC’s power, being the cheapest and the largest source, was expected to moderate all these costly sources and keep Gridco’s total purchase cost at 2,923.80 crore rupees for 19,619.11 MU of power required for Orissa in the year 2009-10, at 148.27 paise per unit.    

So the power sources, per unit cost, units to be made available etc. were all decided by the OERC. Had everything gone as per the plan, Gridco would not have bled losses. But that was not to be. OHPC - the most vital source that moderated Gridco’s total purchasing cost to a reasonable level – faltered in making committed supply to the Gridco. For a period OHPC’s supply almost dried up as if its reservoir beds have gone bare. At the last count, OHPC managed to produce just 4,136.139 MU till 25 March, 2010. With only six days remaining of this financial year, the OHPC is expected to produce another 60 MU. This will take OHPC’s total energy production for the year 2009-10 to about 4,200 MU. This is a mere two-third of what was expected from it. Because of this huge deficit supply from the OHPC, the Gridco was forced to scout for other suppliers to plug the gap. That has undone all calculations and caused severe losses to Gridco. As the other sources from which Gridco gets supply are already stretched, they are in no position to make additional supply to Gridco. Even if they make supply, the cost will be many times more than that of OHPC’s power. Now, Gridco has no other way than to purchase power from wily producers at exorbitant cost. Some privately owned CGPs, with whom the Gridco has purchase agreement, charge OERC fixed rate up to the agreement level. Beyond that... it’s the producer’s fiefdom - to grab profits as much as possible from the Gridco’s misery. The negotiations are held hardly on equal terms. The OERC plays no role there; it does not have any jurisdiction to play either. Naturally, power rates spiral with the summer heat. In such a similar situation, the Gridco purchased power at more than 800 paise per unit last year. The situation is ripe to worsen this year. Gridco has lost substantial units of very low cost energy – hydro power - and is now compensating that loss with very high cost energy.

Smacks of Subterfuge

Low hydro power production cannot be reasoned in any manner

As power situation worsens to new lows, people get bemused by the status of the so called ‘energy capital of the nation’ – that Orissa was flaunting as its USP not long ago. But the government had a ready excuse – that reservoirs have dangerously low water level. That excuse has fooled many people into believing in that.  But the reality of reservoir level is starkly the opposite. As the summer was approaching all the major power producing reservoirs were having higher than their normal water level.

With March we entered the summer months. On the first day of March this year, all the major reservoirs had higher water level than what they had on the same day last year. Hirakud, one of the largest reservoirs of Asia, was at 618.73 feet level against last year level of 612.47 feet. Indravati, the largest hydropower producing reservoir of the state, had a level of 635.6 meter against last year’s 632.61 meter. Rengali, Orissa’s second largest reservoir, was at 118.94 meter level on 1 March 2010 against 116.02 meter level that it had on the same day in year 2009. Only Kolab reservoir had a slightly lower water level than what it had on the same day last year. In fact, the water levels maintained by these reservoirs on the 1 March were higher than not just their last year’s level, they surpassed their past five year’s average level too by quite a big margin (See table: On a High...**). In the last five years, excluding this year, Hirakud reservoir had maintained an average water level of 616.63 feet against this year’s level of 618.73 feet. Similarly, Rengali this year was at 390.12 meter level against last five year’s average 383.82 meter. The catchment area of Indravati reservoir received less rainfall this year. But still, Indravati reservoir maintained a higher water level this year than its average level of last five years. Only Balimela reservoir maintained a slightly lower level than its average level in past years.

When water levels in the reservoirs are at higher than their normal levels, government’s contrary propaganda is very hard to swallow and is perplexing. May be a cleaver ploy is cooking to benefit wily parties at the cost of the consumers. Clearly, while some are probably smiling at the deceitful act of the government, awed common people are floundering on their ways to brace the shock in the ensuing heat.

-------------------

* The writer is a development researcher. He can be contacted at bimalpandia@gmail.com  

** Figures in the bracket shows difference in water level compared to 1st March 2010.

Hydropower in Hibernation

Bimal Prasad Pandia*


Power shortage has reached an unprecedented high in Orissa, which was promoting itself as an ‘energy surplus’ state till last year, as hydro power generation has plunged to never before low. This report dissects the realities and finds out that probably some other motives are working behind the hydro-power management than shortage of water.

As Orissa approaches the summer, people’s fear of powerless days grows bigger. Stretching hours of power cut, and innumerable power disruptions have already become the order of the day in both the urban and rural areas. “Dibri (a small kerosene lit lantern) has become another accompaniment of my son along with books, notes and copies,” rues Shankar Kanha Hota, father of a class 10th student of Binka town in Orissa. Power cut has reached an unprecedented level. “Never in the recent history, power cuts had been so long and power disruptions so frequent even before the summer. I am having a horrible time in saving my crops,” alleges Sunil Mishra, a farmer of Bargarh district. The government and other agencies involved in distribution of energy blame it on ‘very low hydro power production’ due to ‘seriously low water level in major reservoirs’.

Power Plunge

Indeed, hydro-power production in the state has come to an abysmal low. Orissa Hydro Power Corporation (OHPC), the state government undertaking in-charge of hydro power production, produced an average 99.3 Mega Watt on March 1, 2010. This is only one-sixth of the average hydro power produced on April 1 in past five years, from year 2005 to 2009. The government has resorted to strategic water blockade for hydro-power generation soon after the monsoon. In this post-monsoon to pre-summer season - November 2009 to February 2010 - the OHPC produced only 770.73 Million Units (MU) of energy from its hydro-power generating units. This is a mere 40 percent of the OHPC’s average generation in the same period over the past six years, 2003-04 to 2008-09.

Even with additional installed capacity and large-scale modernisation of its power generation units, post-monsoon to pre-summer hydro-power production by OHPC this year has been the lowest of the decade (See chart: Power plunge). This year it produced a mere one-third of what it had produced in the November-February season 2003-04 and 2007-08 and less than half of other years.

This level of energy production will surely lead a lay man to believe that it has been one of the worst years as far as rainfall is concerned. But facts tell differently. Year 2002-03 was one of the worst drought years in the recent memory. We had far better rainfall this year than year 2002. Still, this year’s post-monsoon season hydro-production has been lower than the 2002-03 season.

On a ‘High’, But they say ‘Dry’!

While very low hydro power production this year is a fact, a look at the reservoir levels and the manner in which they have been managed in the past few months lays bare the gross inappropriateness in putting the blame on low water level in reservoirs. Government’s attempt to blame ‘low water level in reservoirs’ for low hydro power production resulting in inadequate availability is nothing short of an abject strategy to continue with a entirely false statement to make people believe that falsity as true. Starkly opposite to what the government wants us to believe, almost all of Orissa’s major power producing reservoirs are teeming with higher level than previous years (See table: Definitely… Water level is not worse).

With March we entered the summer months. On the first day of March this year, all the major reservoirs had higher water level than what they had on the same day last year. Hirakud, one of the largest reservoirs of Asia, was at 618.73 feet level against last year level of 612.47 feet. Indravati, the largest hydropower producing reservoir of the state, had a level of 635.6 meter against last year’s 632.61 meter. Rengali, Orissa’s second largest reservoir, was at 118.94 meter level on March 1, 2010 against 116.02 meter level that it had on the same day in year 2009. Only Kolab reservoir had a slightly lower water level than what it had on the same day last year. In fact, the water levels maintained by these reservoirs on the 1st March were higher than not just their last year’s level, they surpassed their past five year’s average level too by quite a big margin (See Chart: On a High). In the last five years, excluding this year, Hirakud reservoir had maintained an average water level of 616.63 feet against this year’s level of 618.73 feet. Similarly, Rengali this year was at 390.12 meter level against last five year’s average 383.82 meter. The catchment area of Indravati reservoir received less rainfall this year. But still, Indravati reservoir maintained a higher water level this year than its average level of last five years. Only Balimela reservoir maintained a slightly lower level than its average level in past years.

A systematic neglect to stymie hydro-power?

So, why does the government continue to blame ‘low level in the reservoirs’ for the present mess in the energy sector? After all, almost all reservoirs of the state are maintaining a healthy level and definitely a higher level than most of last few years. Answer to this question might just be a speculation, but we have enough indications to presume that it is a well thought out plan by the government to gradually neglect the hydro-power sector. While hydro-power production in monsoon months have somewhat increased, non-monsoon production is on a constant decline. Even with capacity additions and modernisation of its units, annual hydro power production has drastically nosedived (See Chart: Towards Dead Head). In 2009 it produced slightly higher than half of what OHPC had produced the year before.

Hence, something else is driving the government’s decision to prune hydro-power than low water level in reservoirs. It says that ‘providing irrigation to the agriculture sector is the first priority’ and thus hydro-power production has been reduced. While such an excuse definitely pleases the masses, the problem is that the excuse is based on very loose footing. Irrigated areas from the reservoirs have not increased, and the reservoirs hold a higher level than past years. Hence, agriculture sector did not require more than what they were normally requiring.

What is the reason then that the government is so desperate to close the gates for hydro-power production? There are many possible reasons. The first is that almost nobody cares about the water level of the reservoirs and hydro-energy production. They can be easily led to a false belief that water level is very low and hence hydro-power production potential has reduced a lot. Water saved through such falsity can be then diverted towards others uses. Government is now under serious pressure from both pro and anti industrial lobby on water diversion issue. The anti-diversion lobby alleges that government is diverting water at the cost of agriculture and by blatantly violating the State Water Policy of 2007. The pro-industrial lobby, on the other hand, rues that government is not doing enough to provide them enough water quickly. Government has already burnt its fingers in Hirakud as irrigation got severely affected after heavy industries started using water from it. The ensuing farmer’s movement is still alive. The movement has put strong brakes on government’s industrial overdrive plan. Thus the government now does not wish to be fooled the second time. It has found a convenient scapegoat in hydro-power production.

The second reason is probably a result of succumbing to private power producer’s lobby. Many large steel, iron and aluminum plants are coming up with their own Captive Generation Plants (CGPs). Besides, many coal based thermal power plants are coming up. They will bargain the most remunerative price for their energy in a situation of shortage and gain handsome profits. Reducing hydro power production may have been a definite ploy to create a shortage condition.

The third reason may have been an attempt to artificially raise production rate of hydropower energy. Besides being one of the cleanest sources of energy, hydro-power is the cheapest sources of power that the transmission company Grid Corporation of Orissa (Gridco) procures. The Orissa Electricity Regulatory Commission (OERC) has fixed Gridco’s purchase price from the CGPs at the range of 3.10 to 4.05 Rupees per unit. The purchase cost from Orissa Power Generation Corporation (OPGC) comes at 1.94 Rupees per unit. From outside state sources like Farakka, Kahalgaon, TSTPS etc., the Gridco’s purchase rate ranges between 1.69 to 2.28 Rupees per unit. Even the states renewable energy sources cost 2.64 Rupees per unit. In contrast, the Gridco proposed to pay only 51.77 Paise to OHPC in the year 2009-10.

OHPC’s energy rate is primarily governed by its design capacity. Design capacity is the total production capacity of its unit(s) in a year. Total cost – including fixed, variable and depreciation costs - of the power producing units is divided by the design capacity to arrive at per unit production cost. Thus, if the design capacity is higher the per unit cost of energy produced will be lower as OHPC’s total production cost almost stays stable, irrespective of the units it produces. Based on the design energy of the OHPC units, the Gridco had planned to purchase 6184.44 MU of energy from OHPC for the year 2009-10. Now, that plan has gone haywire as OHPC is producing almost nothing. OHPC produced only 4,530.8 MU, including its share from Machhkund, in the 2009 calendar year. Up to March 15 of the present financial year 2009-10 (April 2009 to March 2010), OHPC produced only 4,176.7 MU including its share from Machhkund. In the remaining fortnight of the financial year, it can at best produce another 150 MU. Thus, the total hydro power production in the financial year 2009-10 will be somewhere around 4,300 MU mark. The Gridco was quite conservative in expecting 6,184.44 MU from OHPC. Ironically, the OERC in one of its order made on March 20, 2009 pertaining to case number 62/2008 had rapped the Gridco for such low estimation from OHPC. The order stated, “The availability of power from state hydro stations would be around 7,680 MU in FY 2009-10 as against the Gridco proposal of 6,184 MU.” Hence, OHPC will be producing only 56 percent what the OERC had expected from it (See chart – Fooled by the Fall).

Such low production by the OHPC is affecting itself, the Gridco and ultimately the consumers. The OHPC is losing because its sell price is fixed at the beginning of the year. As its establishment and other variable cost remains almost same, low power production hits its finance badly. Now the OHPC is vigorously pleading before the OERC to reduce its design capacity and increase per unit selling cost. While OHPC is pleading, Gridco is bleeding with losses. Gridco was aiming to buy about 31.5 percent of total procurement required for the state from the state’s hydropower units. For this 31.5 percent power it would have paid only 11.1 percent of its total power purchase budget. Now that Gridco will not get those many units, it has not only lost on the cheapest source of energy, it is now breathlessly scouting for alternative sources to maintain a bare minimum standard supply. And the alternative sources are waiting to cash in from such desperation. Last year, the Gridco was forced to buy energy at more than 8 Rupees per unit from such sources during the summer crisis period. It may be worse this year. No surprise that the Gridco is now staring at a loss of over 1,650 Crores in 2009-10 financial year. The ultimate loser will be the consumers as the burden of the additional cost will inevitably fall upon them very soon. The OERC has already started the process to reevaluate the design energy capacities and price structure. Higher price and even longer hours of power cut is going to be the order now.

Avoidable Fiasco
Not long ago, Orissa government was thumping its chest for being a ‘energy surplus state’ and ‘energy capital’ of the country. It is now one of the most energy deficient states of the country. But the status of the reservoirs and the manner in which hydro-power has been produced suggests that the energy fiasco was avoidable. There was no reason to push the panic button and hydro-power production could have been normal. But the ultimate question is, did the government really panic or is it is a clever ploy to allow more profits for the private power producers and private distribution companies at the cost of general public?
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*The author is a farmer and a social researcher active in the development sector of Orissa. He may be contacted at: bimalpandia@gmail.com

Upward Flow in Urban Water Services?

Urban water supply at the hand of the proposed ‘Odisha Water Corporation’ has both hopes and apprehensions.
Bimal Prasad Pandia

As the Odisha government’s decision to form ‘Odisha Water Corporation (OWC)’ gradually sinks in, responses and reactions of different kinds keep bulging. The OWC will take over the urban water supply responsibility from the Public and Health Engineering Organisation (PHEO). Going by declaration of the government it will start its work first from the state capital. While the exact framework of the OWC is still unknown, the general perception of a ‘Corporation’ is that of a body that undertakes a set of business with an intention of making profits. Many state owned corporations do make losses also, but the intention is always to make profit. Hence, the initial reaction to the OWC has also been quite apprehensive as there is a great deal of difference and reservations on whether water supply to urban areas can be an area of business.

Activists argue that - water being a basic necessity - it is the fundamental duty of the government to provide that to its citizens. Many Court rulings have also maintained that providing clean water is a state responsibility. A recent Apex Court bench - while making orders in a writ petition filed by M.K. Balakrishan and others – held, “In our opinion the right to get water is a part of the right to life guaranteed by Article 21 of the Constitution.” But as cities and towns grow rapidly, the government has lagged in providing that basic necessity. Till now, the business of supplying water has been quite confined to just one entity, the PHED in Odisha – which is severely criticized for poor reach and unprofessional services. It is the only entity doing business of providing water to the urban denizens and thus has monopoly over the business. Economists caution that monopolistic business of a commodity is bad. In case of PHED, it is not bad because of its profit making intentions. It is bad because it provides very poor service with which the user has to be content with. The proposed corporation, too, will be the only entity. There will be no improvement as far as additional choice is concerned. But it comes with added apprehensions. One of the major apprehensions is that OWC, having same monopoly as the PHED but added commercial orientation of a corporation, may begin commoditization of water - a basic good, which was considered free till recently - as a commercial good.

Having raised this apprehension, we must have to admit that we have very few choices left. The urban water supply systems, the way it is being managed now, raises serious concern not just about the sustainability of the system but also about the qualitative and quantitative coverage of the burgeoning urban population. Growing numbers of people complain about lack of water distribution coverage. Those who have tap connections complain of very poor quality and quantity of supply. The PHED, on the other hand, says that people are least bothered to check wastage, leaks and illegal uses. They also say that in spite of the water rate being so cheap, the rate of collection is quite abysmal and the department’s workforce being so thin, it is not able to give proper attention towards collection of revenue and maintenance of the system. Independent watchers say that the department is not very concerned about improving the present gap in potential and achievement of its infrastructures. They rue that the department is neither answerable to the government nor accountable to the water users. Some also say that it tries to find engineering solution to every problem, whereas most of the problems relating to water use behavior are basically of social nature. With such backdrop, the PHED provides a sub-standard service and burdens a very heavy financial liability. When the cities are growing at breakneck speed, the PHED’s services and networks have almost stayed standstill. This situation is quite worrisome. Thus some kind of change is quite inevitable, some argue. The proposed OWC is probably intended towards bringing in such change.

Obvious reasons for selecting Bhubaneswar first?
While the OWC brings in hope as well as apprehensions, why Bhubaneswar was chosen as the first city for the OWC to work is a thing to ponder. A convenient answer to this could be that it is the state capital. But the feel is that there are other reasons also. Bhubaneswar has been selected for facelift under the Jawaharlal Nehru National Urban Renewal Mission (JnNURM). The most important component covered therein is the water supply system. The City Development Plan (CDP), prepared under the JnNURM, has estimated a total capital investment of Rs. 2,220.11 Crores during the period 2007-2012 in an ‘optimum scenario’. Of this, investment in water supply system accounts for 31.14 percent; Underground sewerage system accounts for 22.35 percent and Storm water drains accounts for 5.84 percent. Thus, close to 700 Crores rupees will be spent on improving water supply system in Bhubaneswar in the mission period. This, being a big amount, probably necessitated a professional organisation to manage such a big amount.

Another important status of Bhubaneswar may also have weighed in for selecting that city first. Bhubaneswar is one of the rare cities of the country where the present installed supply capacity is almost double of the requirement of the whole city. It has been estimated that for an ‘A’ class city like Bhubaneswar, 155 Litres Per Capita per Day (LPCD) water is adequate. Bhubaneswar has a supply capacity of 276.24 Million Liters per Day (MLD). The present population of the city has been estimate at a little above 9 lakh. Thus, the PHED now has the capacity - and reportedly supplies – water at 305 LPCD. But the common men, ignorant of such statistics, draw their perception from what they get or suffer. And that’s what really matters as that is the plain truth. People with connection hardly get supply more than 4 hours a day. In addition to 578 public stand posts, the department has given only 55,340 service connections whereas the city has about three times more households residing in it. The 911 kilometers long pipe supply network has barely covered half of the city. So, while the PHED’s capacity is there to provide twice of the ideal water requirement to the whole population of the city, in practice it barely manages to reach one-third of the population directly. This managerial inadequacy is showing in its accounts. While it collects about 12 Crores an year as water dues from consumers, it spends more than that on payment to the CESCO towards energy charges alone. There are other major expenditures like repair, maintenance and salary etc. This cripples the performance of the department and makes it overly dependent on grants from the government to carry out even the routine activities. While the present finance of the water service provider is quite pathetic, the potential for doing great business and making big money is definitely present at Bhubaneswar. The present water rate for 1000 liters of supply is Rs 2.80. Thus, if the supplier supplies at a rate of 305 LPCD then it will have the potential to earn 77.35 lakhs a day. At this rate the annual income will be about 280 Crores against the present 12 Crores rupees. The department is losing substantially to leaks, theft, wastage and lack of professionalism in billing and collection.

Bhubaneswar is at least rich as far as installed capacity for supply is concerned. Most cities do not have that adequacy and hence a corporation will not have to bother about creating or augmenting supply capacity for Bhubaneswar. It will just have to look at the distribution part, at least for now. That makes the job of the corporation half done. Thus, the scope to carry out ‘reforms’ – both from technical and financial angle - is probably a lot easier at Bhubaneswar than any other city. That may have been a reason for choosing Bhubaneswar as the newly created OWC will have it a lot easier at Bhubaneswar than many other cities.

But the prominent reason for forming the OWC and selecting Bhubaneswar as its first play field is the compulsion to bring reforms in the water supply system. Without reforms Odisha or Bhubaneswar will not receive JnNURM grants. The JnNURM has set forth many mandatory conditions of institutional, financial and managerial reforms both at the state and city level. Implementation of the 74th Constitution amendment to give more powers to local urban government, i.e., the Municipality; Association of elected municipalities with the city planning function; Repeal of Urban Land (Ceiling and Regulation) Act, 1976; Rationalization of stamp duty to bring it down to no more than 5 percent within seven years etc. are some of the compulsory reform conditions set forth at the state level. The mandatory reforms requirement at the city/municipality level includes, Adoption of a modern, accrual-based, double entry system of accounting; Introduction of a system of e-governance using IT applications, GIS and MIS for various urban services; Reform of property tax with GIS, and arrangements for its effective implementation so as to raise collection efficiency to 85 percent; Levy of reasonable user charges with the objective that full cost of operation and maintenance is collected within seven years; Internal earmarking of budgets for basic services to the urban poor; and Provision of basic services to the urban poor, including security of tenure at affordable prices etc.

The idea of the OWC is, therefore, definitely aimed towards meeting some of those state and city level mandatory requirements. However, there are a lot of confusions on the scope of the OWC; and what will be its relation with the Municipalities and other organisations etc. One of the prominent requirements of JnNURM is to give the Municipalities more governance power. Presently, the PHED – not Municipalities - is in charge of making water supplies to the cities. In other states the Municipalities are in charge of urban water supply. The Municipalities have some form of public representative but the PHED has none. If the proposed OWC too works independently of the Municipalities, then there will not be much difference as far as accountability and public participation is concerned. Thus, while there will be no improvement to public participation or public accountability the OWC, on the other hand, will be more intended towards strengthening its finances. This has the threat of becoming a more dangerous proposition than the present PHED structure.

With such hope and apprehensions, the state government must be careful in making the OWC accountable to public. Doing business in water is nowhere akin to doing business in other consumer goods. General public probably will not be averse to OWC’s intentions of improving financial viability of their services because quality service can be expected otherwise. But they must come with sufficient scope for public participation in its plans and activities, more accountability and responsiveness towards the water users. Thus, while formation of the OWC is quite welcome, care must be given to make it participatory and accountable to the public. It cannot just be given the license to do business with financial considerations first.
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The author may be contacted at: bimalpandia@gmail.com
This article can also be viewed at: http://kalingatimes.com/views/20100115_Upward_Flow.htm
and
http://orissadiary.com/ShowOriyaColumn.asp?id=16259