125th Anniversary; What's the Good Word ?

The Indian National Congress turned 125 on Monday, the December 28, 2009. A huge billboard appeared in front of Priyadarshini Park, near our house in Mumbai commemorating the event, with photographs of Mahatma Gandhi….. Jawaharlal Nehru, Indira Gandhi, Rajeev Gandhi, Sonia Gandhi, Rahul Gandhi and Priyanka Gandhi.

The Congress party is indeed quite old and has an illustrious history. 125 years is quite a long time. We are all familiar with silver, golden, diamond, platinum jubilees (in the ascending order of their prices) and even the centenary celebrations. I had faintly remembered a word used for 150 years, but had never known what a 125th anniversary is called.

i did a bit of research (in other words, Googled) and was startled to find out the names for different anniversaries. Unlike the easy to remember precious stones and metals, the three digit anniversaries are heavily rooted in Latin. And most of them are quite a tongue-twisters. Sample this.

The 125th anniversary is called ‘Quasquicentennial Anniversary’, a monstrous word indeed. With a little bit of more research, i ascertained that there indeed is a short history behind this terminology.

The 150th anniversary is called ‘Sesquicentennial Anniversary’. i was some what familiar with this as the University of Bombay had used this word during their 150th year celebrations. The word ‘sesquicentennial’ is derived from the ‘semis que’ meaning ‘and a half’. The two words ‘semis’ and ‘que’ were combined and shortened to produce ‘sesqui’.

The Latin word for ‘a fourth’ or ‘one-fourth’ is either ‘quarta’ or ‘quadrans’. So we get either ‘quarta que’ or ‘quadrans que’. Combining the two words we would have got ‘quartquicentennial’ or ‘quadquicentennial’ to mean 125. But linquists thought of shortening it in such a way as to bring it closest to ‘sesquicentennial’, and the word ‘quasquicentennial’ was born. Moreover, it is also the least ugliest of the set.

And by the way, the word for 175 years is ‘Septaquintaquinquecentennial’.

Norman Borlaug - Father of the Green Revolution

Few people have quietly changed the world for the better more than this rural lad from the mid-western state of Iowa in the United States. The man in focus is Norman Borlaug, the father of the ‘green revolution’, who died on Saturday, (September 12, 2009) at age 95. Norman Borlaug spent most of his 60 working years in the farmlands of Mexico, South Asia and later in Africa, fighting world hunger, and saving by some estimates up to a billion lives in the process. An achievement, fit for a Nobel Peace Prize.
Early years
“I am a product of the great depression” is how Borlaug described himself. A great-grandson of Norwegian immigrants to the United States, Borlaug, was born in 1914 and grew up on a small farm in the northeastern corner of Iowa in a town called Cresco. His family had a 40 hectare farm on which they grew corn, oats, maize and hay and raised pigs and cattle. Norman spent most of his time from age 7 – 17 on the farm, even as he attended a one room, one teacher school at New Oregon in Howard country.

Borlaug didn’t have money to go to college. But through a Great Derpression era programme known as the National Youth Administration, Borlaug was able to enroll in the University of Minnesota at Minneapolis to study forestry. He excelled in studies and received his Ph.D in plant pathology and genetics in 1942.

From 1942 to 1944, Borlaug was employed as a microbiologist at DuPont in Wilmington. However, following the December 7, 1941 attack on Pearl Harbor, Borlaug tried to enlist in the military, but was rejected under wartime labor regulations.

In Mexico
In 1944, many experts warned of mass starvation in developing nations where populations were expanding faster than crop production. Borlaug began work at a Rockefeller Foundation-funded project in Mexico to increase wheat production by developing higher-yielding varieties of the crop. It involved research in genetics, plant breeding, plant pathology, entomology, agronomy, soil science, and cereal technology. The goal of the project was to boost wheat production in Mexico, which at the time was importing a large portion of its grain
Borlaug said that his first couple of years in Mexico were difficult. He lacked trained scientists and equipment. Native farmers were hostile toward the wheat program because of serious crop losses from 1939 to 1941 due to stem rust.

Wheat varieties that Borlaug worked with had tall, thin stalks. While taller wheat competed better for sunlight, they had a tendency to collapse under the weight of extra grain – a trait called lodging. To overcome this, Borlaug worked on breeding wheat with shorter and stronger stalks, that could hold on larger seed heads. Borlaug's new semi-dwarf, disease-resistant varieties, called Pitic 62 and Penjamo 62, changed the potential yield of Mexican wheat dramatically. By 1963 wheat production in Mexico stood six times more than that of 1944.

Green revolution in India
During 1960s, South Asia experienced severe drought condition and India had been importing wheat on a large scale from the United States. Borlaug came to India in 1963 along with Dr.Robert Glenn Anderson to replicate his Mexican success in the sub-continent. The experiments began with planting of few of the high yielding variety strains in the fields of the Indian Agricultural Research Institute at Pusa in New Delhi, under the stewardship of Dr. M S Swaminathan. These strains were subsequently planted in test plots at Ludhiana, Pantnagar, Kanpur, Pune and Indore. The results were promising, but large scale success, however was not instant. Cultural opposition to new agricultural techniques initially prevented Borlaug from going ahead with planting of new wheat strains in India. By 1965, when the drought situation turned alarming, the Government of India took the lead and allowed wheat revolution to move forward. By employing agricultural techniques he developed in Mexico, Borlaug was able to nearly double South Asian wheat harvests between 1965 and 1970.

India subsequently made a huge commitment to Mexican wheat, importing some 18 thousand tons of seed. By 1968, it was clear that the Indian wheat harvest was nothing short of revolutionary. It was so prolific that there was a shortage of labor to harvest it, of bullock carts to haul it to the threshing floor, of jute bags, to store it. Local governments in some areas were forced to shut down schools temporarily to use them as store houses.

United Nation’s Food & Agriculture Organization, FAO observed that in 40 years between 1961 and 2001, “India more than doubled its population, from 452 million to more than 1 billion. At the same time, it nearly tripled its grain production from 87 million tons to 231 million tons. It accomplished this feat while increasing cultivated grain acreage a scant 8 percent.”
It was in India that Norman Borlaug’s work was described as the ‘Green Revolution.’
In Africa
Africa suffered wide spread hunger and starvation through 70s and 80s. Food and aid poured in from most developed countries into the continent, but thanks to the absence of efficient distribution system, the hungry remained empty stomach. The then Chairman of the Nippon Foundation, Ryoichi Sasakawa wondered why the methods used in Mexico and India were not extended to Africa. He called up Norman Borlaug, now leading a semi-retired life for help. He managed to convince Borlaug to help with his new effort and subsequently founded the Sasakawa Africa Association. Borlaug later recalled, "but after I saw the terrible circumstances there, I said, 'Let's just start growing'”.

The success in Africa was not as spectacular as it was in India or Mexico. Those elements that allowed Borlaug's projects to succeed, such as well-organized economies and transportation and irrigation systems, were severely lacking throughout Africa. Because of this, Borlaug's initial projects were restricted to developed regions of the continent. Nevertheless, yields of maize, sorghum and wheat doubled between 1983 and 1985.

Nobel Prize
For his contributions to the world food supply, Borlaug was awarded the Nobel Peace Prize in 1970. Norwegian officials notified his wife in Mexico City at 4:00 a,m., but Borlaug had already left for the test fields in the Toluca valley, about 65 kms west of Mexico City. A chauffeur took her to the fields to inform her husband. In his acceptance speech, Borlaug said “the first essential component of social justice is adequate food for all mankind. Food is the moral right of all who are born into this world. Yet, 50 per cent of the world population goes hungry.”

Green revolution vs environmentalists
Borlaug’s advocacy of intensive high-yield agriculture came under severe criticism from environmentalists in recent years. His work faced environmental and socio-economic criticisms, including charges that his methods have created dependence on monoculture crops, unsustainable farming practices, heavy indebtedness among subsistence farmers, and high levels of cancer among those who work with agriculture chemicals. There are also concerns about the long-term sustainability of farming practices encouraged by the Green Revolution in both the developed and the developing world.

In India, the Green Revolution is blamed for the destruction of Indian crop diversity, drought vulnerability, dependence on agrochemicals that poison soils but reap large-scale benefits mostly to the American multi-national corporations. What these critics overwhelmingly advocate is a global movement toward "organic" or "sustainable" farming practices that eschew chemicals and high technology in favor of natural fertilizers, cultivation and pest-control programs

Borlaug’s reply

But Borlaug and those who followed his lead argue that older methods of sustainable farming or for that matter, organic farming, can not produce enough food to prevent hunger in poorer regions of the world.

Of environmental lobbyists Borlaug once said "Most of the environmental lobbyists of the Western nations are elitists. They've never experienced the physical sensation of hunger. They do their lobbying from comfortable office suites in Washington or Brussels.”

On the sustainability of organic farming, Borlaug argues that the world consumes some 82 million metric tons of chemical fertilizer per annum to supply the nitrogen crucial to plant development. Replacing these nitrogen inputs would require some 3 billion tons of cattle manure. This means to produce the required amount of organic manure, the cattle population needs to increase six times to 800-900 crore heads from the current 134 crore cattle heads. Now imagine the destruction of vast swaths of wilderness to make room for grazing land.”

Biotechnology is the future
Borlaug was also an enthusiastic proponent of biotechnology. He believed biotech will be key to meeting the enormous demands that will strain the globe in the next 30 years. He says global food production will have to nearly double to keep pace with the projected population of 10 billion people by 2050. While biotech has yet to improve yields by any appreciable level, it shows promise in alleviating global malnourishment through the engineering of vitamin- and mineral-enhancing characteristics into cereal crops.

Unappreciated American
Despite his yeomen service to the humanity, Borlaug largely remained an un-appreciated American. The reasons for this are not difficult to understand. The beneficiaries of his innovations and energies are primarily the people from Third World countries. Desperate hunger is an alien affliction in the United States, where malnourishment is more likely to result in obesity than flattened bellies. India though, did not forget to repay its tribute, by releasing a postage stamp in the honour of the ‘father of the Green Revolution’, way back in 1968. Ends

Secure Your Future with the New Pension System

May Day 2009 marked a watershed in employee welfare, with the launch of the New Pension System. A first step has been taken towards finding sustainable solution to the problem of providing adequate retirement income for millions of workers and other employees. Initially, the Pension Fund Regulatory Development Authority (PFRDA) has operationalized the Tier I of NPS constituting non-withdrawable pension account. The Tier-II of NPS, comprising withdrawable account, will be launched six months later.

The New Pension Scheme is voluntary and any citizen of India can participate in it. To open a pension account, you have to approach the branches of any of the 22 Points of Presence (POP) service providers selected by PFRDA. POP service providers include leading banks like LIC of India, State Bank and its associates, ICICI Bank, Kotak Mahindra Bank, IDBI Bank, Oriental Bank of Commerce, Central Bank of India , Allahabad Bank, Axis Bank and Citibank among others.

Investments - Under the scheme, a person needs to invest a minimum of Rs 6,000 per annum in the Pension Account. There is no maximum ceiling, but the tax benefits will be available only up to Rs 1 lakh under Sec 80C of the Income Tax Act.

The funds will be managed by six designated Fund Managers, who would make investments in accordance with the guidelines prescribed by the PFRDA. SBI Pension Fund, UTI Retirement Solutions, ICICI Prudential Pension Funds, Kotak Mahindra Pension Fund, Reliance Capital and IDFC Pension Fund have been selected to act as the fund managers.

Portfolio Management - Pension fund managers will manage three separate schemes, each investing in a different asset class. These asset classes are equity, government securities and credit risk-bearing fixed income instruments.

Under the high risk- high return E class - equity investment is permitted to subject to a cap of 50% of individual’s investment. Additionally, the fund managers cannot invest in shares of individual companies, but only in index funds linked to the BSE’s Sensex or the NSE’s Nifty.

Under G class – the money is invested in safe but low return yielding Central and State Government bonds.

C Class scheme falls in between E and G in risk-return trade off and includes investments in liquid funds, fixed deposits, bank and corporate debt instruments, PSU bonds, infrastructure bonds and municipal bonds.

Investment Mix or Auto Choice - Pension Fund subscribers can choose their investment options and indicate the same to the POPs. For those who would rather leave it to experts to decide what the balance should be, there is ‘auto choice’ option. Under this option, for those aged 18-36, 50% of the amount in their pension account will be invested in equity, 30% in corporate bonds and the remaining 20% in government securities. From age 36 onwards, the proportion of investments in equity and corporate bonds will decrease annually while that in government securities will increase till the mix reaches 10% in equity, 10% in corporate bonds and 80% in government securities at age 55.

Money invested in the pension fund during the working life of the investor will come back partly as a lump sum and partly as an annual payment or pension upon retirement. The account is portable, that is it can be operated from anywhere in the country, even if you change the job or change the city. There is also a provision for changing the fund manager.

Issues and Challenges - The launch of the New Pension System has been by and large welcomed as it offers hassle free retirement solution to a large section of the society. The NPS, which was earlier thrown open to the Central Government employees, who entered the service after 1.1.2004, has managed to earn an average yield of 14.5 % during 2008-09, which is significant, especially under the present economic circumstances.

The taxation is a challenge in making NPS an attractive pension fund. As of now, the withdrawals from NPS have not been given tax exemption, while similar withdrawals from PPF or Employees Provident Fund are not taxed. Investment analysts feel this asymmetry is unfair and should be removed, as all long-term saving schemes should have the same tax treatment during contribution, accumulation and withdrawal. PFRDA too agrees with this view and hopes that the new government may take a decision on this in the full budget.

Another issue that is being debated is the PFRDA decision to put a 50 % ceiling on equity investments. A committee chaired by HDFC chairman Deepak Parekh that advised PFRDA in framing the investment norms had recommended that risk-hungry subscribers should have the freedom to invest all their savings in equities. It had also recommended a 65% equity exposure for auto choice. But the PFRDA reduced the equity exposure limit based on the recommendations of the Board of Trustees of the NPS and the advice of the government.

While it is argued that equity investment is the appropriate instrument for wealth maximization in the long term, a conservative ceiling appears justified in a country like ours, where the interests of large number of small investors need to be protected. The idea is to differentiate between pension funds and mutual funds. In pension funds it is the ‘safety first, return next,’ while it is the other way round in case of mutual funds. The ceiling may be pushed up to 60% in future but not beyond. Even, the United States has a equity exposure ceiling in the range of 50-70 %.

New Pension System is arguably, the least cost pension fund in the world. The cost of fund management is 9 paise per 1000 rupees. In February, the six fund managers – ICICI Prudential Pension Funds Management, IDFC Pension Fund, Kotak Mahindra Pension Fund, Reliance Capital Pension Fund, SBI Pension Funds and UTI Retirement Solutions – were selected on the basis of a technical evaluation, which was followed by a bidding process. With UTI emerging as the lowest bidder, the others were asked to match the bid if they wanted to be a fund manager and the remaining five players grabbed the opportunity. Now most Fund Managers are complaining that the 9 paise fee is too less, as investment managers do not come cheap, even during recessionary period. But, at the same time, no one has approached PFRDA demanding higher fees.

The Outlook - The New Pension System has already been notified by 22 state governments for their employees. According to preliminary estimates, the pension business could reach Rs 50,000 crore in five years and rise to Rs 1,50,000 crores by 2015. By then India, would also have joined the list of developed countries, where Pension Funds hold a strategic position in investment markets. Ends