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- The Indian currency has depreciated more than 7% this year, making it the worst performing Asian currency in the period.
- Climbing crude oil prices, which would fan inflation and widen the current account deficit, fears of a looming global trade war and the rising U.S. interest rates have combined to exacerbate outflows from emerging markets and impacted the rupee.
- The rupee will remain under pressure in the near term as oil prices continue to stay high and capital outflows from the emerging markets continue.
- The collapse of the rupee to a lifetime low against the U.S. dollar will not give an extra edge to domestic exporters but provide a level-playing field in the global market as currencies of other emerging economies, including China, too are depreciating.
- India’s low dependence on foreign currency borrowing limits risks to the sovereign even if the Indian currency weakens by more than 7% against the dollar in 2018, ratings agency Moody’s said in a note.
- Furthermore, while the current account deficit (CAD) had widened due to rising oil prices, it remained modest relative to the GDP and is largely financed by equity inflows, including foreign direct investment, the ratings agency said.
- India’s significant build-up of foreign exchange reserves in recent years to all-time highs provides a support buffer to help mitigate external vulnerability risk.
- The dwarf crocodile is an African crocodile that is the smallest crocodile alive.
- It is found on the western coast of Africa and live in different freshwater sources such as small rivers, swamps, and mangroves.
- They rarely bask in the sun, which is pretty different from most crocodile species.
- These cave-dwelling dwarf crocodiles live in complete darkness all year long and have probably never seen any real light in their entire life span.
- Since they have no need for seeing things because of the darkness, these crocodiles have turned blind, and rather uses their other senses to find food in the caves.
Theories for colour
- The lack of light in the Abanda caves may have caused depigmentation and urea in bat droppings may then have induced an orange hue.
- The bat guano began to attack their skin and transformed their colour.
- One possibility is that the orange crocodiles entered their present habitat through narrow openings which they then outgrew and could not return, and their skin eventually changed colour in response to the bat guano.
- These crocodiles have been in the Abanda caves for around 3,000 years, which correlates fairly well with a time when the sea level fell and this coastal zone became terrestrial once again.
- Mapping the cave complex, the scientists found four orange specimens in a community of 40.
- The crocodiles of normal colour live in grottos which are connected to the surface. But the orange-coloured ones live in caverns that are accessible today only from vertical shafts.
- However, the cave system also has smaller horizontal connections, which are filled with water or dry according to the level the ground water.
- In the total darkness, the animals survive on a diet of bats and crickets, unlike above-ground crocodiles of the same species which feed on fish and crustaceans.
- A comparison of cave-dwelling and above-ground crocodiles confirms that they have not become separate species.
- However, the subterranean creatures — whether orange or normal colour — have developed a specific genetic signature.
- The Convention on Biological Diversity (CBD), of which India is signatory too, is hindering biodiversity research and preventing international collaborations due to regulations that have risen due to its implementation.
- The CBD is aimed at conserving biological diversity, sustainably using biological components and fair and equitable sharing of benefits (with local or indigenous communities) that may arise out of the utilisation of genetic resources.
- India is one of the 196 countries that has committed to the CBD and ratified it in February 1994.
- But this has generated unintended consequences for research; due to national-level legislations instituted by countries under the CBD, obtaining field permits for access to specimens for non-commercial research has become increasingly difficult.
- They suggest that the International Treaty on Plant Genetic Resources for Food and Agriculture or the Seed Treaty, which ensures worldwide public accessibility of genetic resources of essential food and fodder, could be used as a model for exchange of biological materials for non-commercial research.
- Another solution may be to add an explicit treaty or annex in the CBD to promote and facilitate biodiversity research, conservation, and international collaboration.
International Treaty on Plant Genetic Resources for Food and Agriculture
- It is popularly known as the International Seed Treaty.
- It was adopted by the Thirty-First Session of the Conference of the Food and Agriculture Organization of the United Nations on 3 November 2001.
- It is a comprehensive international agreement in harmony with the Convention on Biological Diversity, which aims at guaranteeing food security through the conservation, exchange and sustainable use of the world’s plant genetic resources for food and agriculture (PGRFA), as well as the fair and equitable benefit sharing arising from its use.
- The Treaty aims at recognizing the enormous contribution of farmers to the diversity of crops that feed the world; establishing a global system to provide farmers, plant breeders and scientists with access to plant genetic materials; Ensuring that recipients share benefits they derive from the use of these genetic materials with the countries where they have been originated.
- Up to now, mathematical models have suggested that the solidification of the Red Planet took up to 100 million years.
- The new study tackles the question by examining a chunk of Mars that streaked into the Saharan Desert and was discovered in 2011.
- The Black Beauty meteorite weighed 320 grams when found.
- The researchers secured 44 gm of the precious space rock Black Beauty and extracted seven bits of zircon that could be used in experiments.
- The data supports newer models indicating the very rapid formation of terrestrial planets.
- Scientists have found that the Red Planet’s outer layer hardened 4.547 billion years ago, only 20 million years after the birth of the Sun.
- The results indicate that Mars could have had an environment with oceans, and potentially life, much earlier than Earth.
- Water is considered to be an essential precursor for life, at least as we know it.
- Mars was once much more Earth-like, with a thick atmosphere, abundant water and global oceans.
Challenges in this year
- Good rains, excessive sowing and the bumper harvest last year produced gluts in the market that sent the prices of many crops, and therefore farm incomes, crashing.
- None of the economic tools available for protecting farm incomes — the price support scheme, the price stabilisation fund and the market intervention scheme — was employed to the best advantage.
- Quick and precise adjustments to the export and import rules could have arrested the price fall by diverting the excess supplies to overseas markets.
- But the changes required were not carried out in time. Instead, inflows of imports were allowed to go on, which worsened the price situation.
The MSP issue
- This year’s Budget promised that the Minimum Support Prices (MSPs) would be at least 150% of production costs.
- The intention of assuring 50% profit margin over the cost of production is to make farming remunerative.
- On the formula for calculating production costs for plugging into the MSP formula, farmer groups and the government are not as yet on the same page.
- But howsoever production costs are calculated, simply announcing higher MSPs will not raise farmer incomes. The system is not geared for scaling up procurement.
- For several crops last year, the quantities procured were small portions of the total produce.
- Although MSPs are announced for more than 20 crops, noteworthy procurement is conducted for three: paddy, wheat and sugarcane (procurement by sugar mills, not the government, given cane must be crushed within a few hours of being cut, or it dries, impacting sugar recovery drastically).
- Further, procurement frequently takes places at prices below the MSP, as is happening this year, according to reports. Finally, small and vulnerable farmers usually do not get paid MSPs at all, as they sell their produce to aggregators, not directly in mandis.
- In these circumstances, and given an imminent general election, the government is likely to take recourse to payments compensating for the difference between market prices and the MSP to appear farmer-friendly.
- In principle, it is only right and fair that the government pay reparations to farmers. The gluts, depressed market prices and mounting farmer losses are a direct consequence of the malfunction in agri-pricing policies.
- But price differential payments, no matter what mechanism is used for calculating and distributing them, would be yet another example of economic policies that get drafted purely on political appeal, without full grasp of the underlying economic principle, and backfire badly.
- A set of estimates of the price differential payments likely this year, premised on realistic assumptions, from agriculture economists led by Ashok Gulati projects that the MSP of paddy for the 2018-19 kharif season will have to be raised 11-14%, cotton 19-28%, and jowar 42-44%, if the MSP pricing formula of 1.5 times the cost is employed.
- The trouble is, pricing policies distort market prices and send the wrong signal to farmers on what to produce and how much. Our inept policy system fails to correct such situations, which then spiral out of control.
- But if the problem is volatile incomes, the solution must target incomes, not prices. Income support payments, paid on a per hectare basis through direct transfers, offer an administratively neater, economically far less distortionary and politically more attractive solution.
The Telangana example
Telangana has announced such payments for farmers at the rate of Rupees 10,000/ha per season.
The cost projections for scaling up this model to the national level, excluding the procurement of sugarcane, wheat and paddy, and non-MSP crops, are roughly as much as the estimated bill for the price differential payments.
- Agriculture sector engages more than 50% of the total workforce, and that agri-prices, and therefore farm incomes, are not free-market driven.
- They are kept artificially low, through use of pricing policy instruments, so that inflation does not erode the rest of the population’s purchasing power.
- The current farm crisis is purely because of policy failure. Fiscal space must be found for providing income support this year to the most vulnerable farmers at least. Over the longer term, there is no alternative to deep reforms.
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