India's farmers happy as ban on smoky stubble burning repealed


Taniya Dutta
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Indian farmers and environmentalists have hailed the government’s move to decriminalise stubble-burning but have urged authorities to help end the earth-scorching method that is blamed for aggravating worsening air pollution in New Delhi.

The capital is one of the world’s most polluted cities. It suffers from the scourge of air pollution throughout the year but toxic air levels soar during winter when winds push the smoke from farmlands into the city and shroud it under a blanket of smog.

Stubble-burning, which involves farmers setting fire to leftover rice straw, was banned by an environmental court in 2015. It was repeatedly endorsed by the Supreme Court after several studies found that the crude practice exacerbates the air pollution crisis in Delhi.

Estimates say about 20 million tonnes of stubble is burnt in the vast farmlands of the northern states of Haryana and Punjab between October and November when farmers clear their fields for the next crop.

More than 70,000 farm fires were reported in the twin breadbasket states this season, with Nasa satellite imagery showing 57,000 fires between November 1 and November 13.

This month, the government told the Supreme Court that farm fires accounted for an average of 10 per cent of the city’s air pollution. But government monitoring agencies say at its worst the effect of farm fires can account for 45 per cent of Delhi’s pollution.

Those caught stubble-burning are either fined for flouting the court ban or charged under the Indian penal code, which could lead to jail terms of one month.

The announcement by the government is the latest move to placate protesting farmers – who are camping at the borders of Delhi to press for renewed demands – after Prime Minister Narendra Modi’s decision to repeal three divisive farm laws.

A farmer burns straw stubble after harvesting a paddy crop in a field near the India-Pakistan border. AFP
A farmer burns straw stubble after harvesting a paddy crop in a field near the India-Pakistan border. AFP

Farmers have refused to end their year-long protest, which was sparked by the contentious legislation, until the government decriminalises stubble-burning, reforms its electricity laws and promises guaranteed benchmark rates for agricultural produce.

"The farmers' demand was to decriminalise stubble-burning. The Government of India has agreed to this demand," Agriculture Minister Narendra Singh Tomar told an Indian news agency.

Farmers hailed the move but have demanded that the government follows up with subsidies and alternative methods to help them manage and dispose of millions of tonnes of farm residue.

“It is a welcome move but rather than just decriminalising it, farmers should be given a substitute. People will stop burning stubble if they know how to get rid of the stubble without burning it,” Lovepreet Singh, 24, a farmer protesting at the Singhu border, told The National.

Environmentalists say the ban on stubble-burning was an ad hoc measure and is a move in the right direction as the government needs to find a long-lasting solution to the issue.

“While decriminalising stubble-burning, the government has a responsibility to raise awareness in farmers and to find and implement real solutions to farm waste management,” Sunil Dahiya, an analyst for the Centre for Research on Energy and Clean Air, told The National.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Updated: November 29, 2021, 10:01 AM