INDIAN SERICULTURE AN OPTIMIST’S REVIEW- Dr. TP. Mohandas

Dr. T. P. Mohandas is a senior Scientist with Central Silk Board (CSB) India. He was born in Thrissur district of Kerala in 1962. After obtaining PhD in zoology from University of Calicut in 1993, he joined the Central Silk Board in 1996 as a Senior Research Officer where he rendered 15 years of fruitful service in various capacities. An entomologist by training, Dr. Mohandas has amply demonstrated his abilities as a silkworm molecular biologist during his tenure at the Seri biotech Laboratory of CSB in Bangalore. His work spans across the disciplines of Molecular breeding, Molecular genetics, Pest management, silkworm seed production & sericulture extension and his grasp of the subject, the seriousness of approach and depth of analysis are demonstrated by his publications in reputed journals such as Genome, Genetica, European Journal of Entomology etc. He is widely read and is a person with diverse interests and a most refined mind. Apart from his interest in biological sciences Dr. Mohandas loves music, literature and fine arts. He has a fine tuned ear especially to Indian classical music. As a person he is kind hearted and generous, sporting positive thoughts and always radiating enthusiasm and energy. In this article Dr. Mohandas gives us an overview of Indian sericulture through the eyes of a sericulture scientist. Dr. Mohandas can be contacted at: tpmdas@gmail.com

The history of sericulture in India dates back to even pre-Buddhist period. Till eleventh century the art of silk fabrics remained well-guarded secret. Japan was pioneer in giving scientific attention to the subject, especially in the utilization of the hybrid vigor. In India sericulture got rich patronage from kings or emperors. The British Raj particularly was interested in sericulture due to the world situation involving China and Japan during the world war periods as also to collect raw material for its own use.

In independent India, initially sericulture was export oriented. The export item was not raw silk, but finished silk fabrics. Today sericulture has gained new importance as agro-economic practice for rural development, generation of self-employment, empowerment of women and export earning. Moreover, sericulture fits in to the scheme of multi- farming system practices in many of the rural villages in India with farmers having marginal land holding.

Presently sericulture production is fast declining Japan. China is the biggest competitor for India being the producer of above 55,000 tons of raw silk. India is a poor second with around 15,000 tons of raw silk production. The capital intensive and labor saving temperate sericulture practiced by Japan achieved the highest level of productivity and quality. In contrast the tropical sericulture in India is labor intensive and low capital input is comparatively very poor in productivity and quality of the silk produced. Japanese sericulture failed to sustain in that country because of the changed socio economic situation there. Although China is the big player in the global silk market especially with the opening up of the marker following the GATT agreements effective from 2005 sericulture is recently showing some decline in that country also recently. India has a good opportunity now to emerge as world leader in the silk scenario. The technical know-how available and being developed is also ready to meet this challenge.

In this context, one aspect needs to be considered before dissecting out the exact issues concerning sericulture development in India. Many socio-economic studies have confirmed that the benefit –cost ratio of sericulture is highest among comparable agricultural cash crops in the country. Sericulture is not amenable to mechanization beyond a point, thus offers great scope for generating rural employment. Further analysis of trends in international silk production suggests that sericulture has a vast growth potential for developing countries. Out of the three countries, i.e., India Japan and China labor efficiency is lowest in India. Cost of production is also lowest (because inputs are given at subsistence level), but it is at the cost of quality, since India produces low quality polyvoltine (multivoltine) yellow cocoons, where as Japan and China produces high quality bivoltine cocoons. Both India and China took up the quality improvement cost reduction programs two decades ago. Now 70% of China’s raw silk production is of bivoltine and white polyvoltine, while India is still a polyvoltine (95%) silk producer.

It is important to look into the real situation in Indian sericulture. All the major commercial silks are produced in the country. However, different races and hybrids of the monophagous silkworm Bombyx mori produce the major portion of silk in India. The gene pool available in the country can be broadly divided in to two groups, low yielding stocks characterized by high adaptability to tropical conditions and the high yielding stocks exhibiting regular diapause, suffer from the low adaptability to the highly variable tropical agro climatic conditions.

To increase productivity and quality of silk there is an urgent need to develop technology suitable for tropical sericulture. Transplanting the technology developed for by the temperate sericulture is neither practical nor economically viable. This is because we have to consider at the same time the agro climatic conditions where the technology is going to be applied as well as the economic status of the technology user.

Sericulture R&D in India demanded the twin requirement of evolving of high yielding breeds and development of the sericulture technology suitable for it. Since the productivity through better conversion to silk is higher in bivoltine silkworm, the shift to bivoltine sericulture will add to reduction. Recent switching to the high yielding mulberry variety from conventional K2 and CSR2x CSR4 from the multivoltine x Pure Mysore x NB₄D₂ are typical examples, through which productivity increased dramatically.

Central Silk Board took up the bivoltine sericulture technology development program (BSTDP: 1991-99) in a bigger way with the cooperation Japan International Cooperation Agency (JICA). R&D was put to full swing to develop various technologies, which were duly test verified on a multi-location base. Shoot system of mulberry cultivation and rearing, which is extensively followed in Japan, is a notable one. In this method shoot cut along with leaf is fed to the silkworms on large rearing racks instead of the individually picked leaves reducing labor cost by 60%. Following the paired row system it is also possible to partially or fully mechanize the plantation. Separate garden for young age rearing (it is generally called Chawki rearing) ensures a healthy crop as the early age rearing is very critical from the nutrition and sanitation point of view.

Water is limiting factor in agricultural system. So to conserve it water shed management concepts are hugely introduced. Drip system is followed to maximize the utility of available ground water. Recycling of seri-waste through composting/ vermi-composting is value addition while helping to reduce contamination of rearing premises. Inter-croping with leguminous plants is also recommended to improve fertility of the soil. In put cost is drastically cut by complementing chemical fertigation with use of biofertilisers (Azatobacter and Vesicular Arboscular Micorhizha). About Rs. 5000/- per ha is saved in this way.

There are new technologies developed or adopted in the field of mounting of worms for cocooning, harvesting etc. Examples are those for fast uniform ripening and better cocoons (rotary mountage). These may involve high investment initially, but in the long run cost effective.

In the field of pest and disease management also the developments are noteworthy. Microsporidiosis or Pebrine, which is trans-ovarially transmitted and thus the most serious disease in silkworm is all most fully controlled by the various mother moth examination methods. Even its immuno-diagnosis and DNA (through polymerase chain reaction) methods are developed for precise identification of the virulent strains. Some pyralids are already identified as alternate host of the pathogen which opens up scope for further studies in these lines. Flacherie is another serious disease condition, which is actually a complex involving certain non-occluded viruses and bacteria, which act either individually or synergistically. Two major ones are Infectious Flacherie Virus (Bm IFV) and Densonucleosis Virus (Bm DNV). Another viral disease of concern is Nuclear Polyhedrosis or grasserie caused by the Bm NPV, and are contained in polyhedra. Among fungal diseases muscardine caused by Beauveria and Metarrhizium; and aspergilosis (agent Aspergillus) are important.

Current stress on disease management is rather on prevention rather than on control. Proper disinfection using slaked lime, formalin and/or bleaching powder, Chlorine dioxide (500 ppm) are found to be most effective. Rearing rooms, appliances and the premises are to be disinfected thoroughly before the start of the crop. Many rearing bed disinfectants ( under the coomercial names like Resham Keed Oushad, Resham Jyothi and Vetcare Vijetha) are developed which are very useful in the control/ secondary contamination of various diseases.

Among the pests uzifly, Exorista sorbillans (=bombysis) of silkworm is the major destructor. Other than the convention use of net various types of traps and chemicals (‘Uzicide’, Uzipowder)were developed to control the pest. Several natural enemies are also used against uzi, viz., Nesolynx thymus (Giroult), N. dipterae (Hymenoptera: Eulophidae), Exoristobia philippinensis Ashmead (Hymenoptera : Encyrtidae ), Dirhinus anthracia Walker (Hymenoptera: Chalcididae). CSR&TI, Mysore has developed a technology to mass multiply and release N. thymus which is found to be very effective in the control of the pest. Some studies involving the use of kairomones is also reported the field application of which is still to be made effective. An IPM package is developed, which along with proper quarantine practices are playing very crucial role in the reduction of spread of the pest.

Although the bivoltine technology is popularized, it is a wide consensus that it is not suitable for all regions and all seasons in India. Moreover, given the higher input cost and the rural situation of sericulture in India the idea of sustainable sericulture is muted. The technologies developed are in a large perspective catering to this aspect also.

Various authors reviewed silkworm breeding in India. As mentioned earlier the polyvoltine races of silkworm and breeds evolved from them dominate Indian sericulture. The production expoits the hybrid vigour of either polyvoltine x polyvoltine or polyvoltine x bivoltine crossings. However, bivoltine silk of high quality is imported to meet the need of power loom sector.

Breeding generally concentrated on the improvement of traits correlated to productivity, which are mostly quantitative in nature and are controlled by polygenes. So attempts to improve these traits needs understanding of their response to selection and the relationship of the selected traits with unselected traits. In silkworm these are observed to be very complex.

Prior to the introduction of the breeds it was either the indigenous (Pure Mysore, Nistari) or the exotic (C’Nichi, Sarupat) pure races, which were exclusively used for rearing. Crossing these races with those from Italy, Russia, Japan, or China several new polyvoltines were evolved. But, these could not make much impact. During the 60s many improved polyvoltine breeds like Kolar Gold, Kollegal Jawan, Mysore Princes, Hosa Mysore were developed. During 1981, CSR&TI, Mysore evolved polyvoltine breeds with shorter larval duration, high silk content, better disease tolerance, better quality and higher yield (e.g.: BL23 & BL24). CSR&TI, Berhampore came up with beneficial mutants evolved though x-ray and chemical mutagenesis; and used these in further crossbreeding programs. Better silk quality and productivity were achieved by using the hybrids BL23 x NB4D2 and BL23 x NB4D2_.

Another approach was to extract inbreds from hybrids. Earlier works on silkworm breeding for high yielding stocks were restricted to temperate areas like Kashmir (J&K), Kalimpong (W.B.)and Dehradun (Uttaranjal). Kalimpong-A (KA) and Kalimpong-B are evolved in this way, which were were very promising in the field. The hybrid KA x NB₄D₂ was also very popular. CSR&TI, Mysore evolved two BV breeds CC1 and CA2 in 1980s which had better cocoon shell ratio compared to that of KA x NB₄D_{2 .}

The target set by the bivoltine development program (BSTDP) was to achieve higher survivability (> 90%) and better silk ratio (>23%). Japanese hybrids with desired qualitative and quantitative traits were chosen as breeding material. Eighteen breeds were evolved out which hybrids of CSR2 x CSR4, CSR2 x CSR5, CSR3 x CSR6 etc., were proved to be highly productive (Pupation rate: 89.7-94.7%; Silk Ratio: 23- 24.4%; Renditta: 5.0-5.6). All these hybrids are authorized by Central Silk Board. Breeding for robustness and breeding for disease tolerance are also under way.

Tremendous strides were made in the field of silkworm genetics, molecular characterization, molecular breeding and to a limited extent in the domain of genetic engineering. Recent developments in these fields open up new ways to overcome the limitations of conventional breeding system. Molecular markers are genome wide, highly specific, phenotype/ environment independent, and are faster to work on. It can considerably reduce the breeding time. There are many robust molecular biological tools available now. Of these isozymes, restriction fragment length polymorphism (RFLP), inter simple sequence repeats (ISSR), random polymorphic DNA (RAPD) sequence tagged sites (STS), and microsatellites are a few to mention. Identification of linked molecular markers is useful in marker assisted selection (MAS), which has made big strides in plant molecular breeding for crop improvement.

Apart from identifying linked markers molecular characterization helps to work out the affinities of gemplasm resources available in the country, which in turn will help to weed out duplicate in the accessions and support the conventional breeder in selecting the right breeding material. Of late DNA markers are extensively used for mapping quantitative trait loci (QTL). However, the quantitative genetics in silkworm as such is poorly worked on.

The use of Bt. cotton of conferring resistance to pest and sunflower plant can be used for production of rubber is now well known. In the same line transgenic mulberry and silkworm is also possible. Genes from any organism can be transferred to mulberry/ silkworm through genetic engineering.

Germline transformation could be effected in B. mori using the piggi Bac transposon. Mos 1 mariner element of Drosophila mouritiana is capable of mediating excision and trasposition events in silkmoth which promise the development of genetic transformation system for the lepidopteran insects.

Accurate diagnosis of silkworm diseases is being made possible by the protein and cDNA based diagnostic kits for Nosema, BmNPV, BmIFV, BmDNV. An immonodiagnostic kit was developed by CSR&TI, Mysore for detection of virus disease. One such kit is being developed at the SeriBiotech Research Laboratory for detecting specific virulent strains of pebrine disease.

In conclusion, it can be said that India can take up the challege of production of high quality silk in required quantity to meet the domestic requirement as well as to earn valuable foreign exchange. The textile sector is also developed to support the agro system so that optimum value addition is possible.

Interview with Dr. RK. Datta.

Dr. RK. Datta is a prominent name in Tropical sericulture research. He belongs to that rare genre of technocrats who successfully combined scholarship, research and administration in their career. He was born in 1943 in Bengal, India. After obtaining Ph.D in Genetics, Dr. Datta built up his career as a teacher and a researcher. During his 31 years long career with Central Silk Board, India, as a researcher, Dr. Datta gained rich experience by working in various capacities and heading reputed national and international projects such as: National Sericulture Project of Government of India, JICA Project. FAO Project (Iran), Malaysian sericulture Project, Bangladesh sericulture Project, IFAD Project in DPR of Korea etc. He has also served as Member of Task Force, Dept. of Biotechnology, India, member of research Advisory Committee of CSR&TI, Mysore, Member of Editorial board of the Journals “Sericologia”, Lyon, France and Indian Journal of Sericulture.

As the Director of the Premier Sericulture Research Institute (CSRTI) at Mysore Dr. Datta steered the institution to higher levels of Science, Technology & training. He is widely regarded as the founder of a new school of silkworm breeding in India with a well directed application of principles of genetics and biotechnology. His work has earned him several laurels such as the prestigious Louis Pasteur Award of 1999, National Research Development Corporation awards in 1999 and 2004, Baldeodas Shah National Award (thrice) 1990-91; 1994-95; 1998-1999. A dedicated researcher, an inspiring teacher and a prolific writer, Dr. Datta has published more than 250 research papers in National and International journals, authored twelve books and supervised nearly ten PhD theses under his guidance. Dr. Datta is widely traveled. He has visited almost every part of the world which fostered interest in silk such as USA, Japan, France, China, CIS (Erstwhile USSR), Greece, UK, Italy, Belgium, Brazil Iran, Thailand, Malaysia, Bangladesh, Kenya and Cairo on various assignments.

At 65, Dr. Datta is still involved in active research. Currently he is the R & D consultant to the Bangalore Company “Sericare” who produces various products useful to the silk industry as also large scale production of silk proteins for use in animal tissue culture, nutraceuticals and silk films. During 2005, he could initiate a project on burn wound cover utilizing the bioengineered silk proteins. Results of this research offers solution to the much awaited demand for covering the burn and ulcers with non allergenic- epidermal growth promoting biomaterials.

Talking with Dr. Datta has been a pleasant and enlightening experience, given his flair for conversation and humour. Dr. Datta can be contacted at: rkdatta1943@hotmail.com

What is the importance of Indian sericulture, in the national and global contexts?

In India, importance of Sericulture at National level lies with its Immense potentiality to provide employment opportunity to rural people even more to women folk by avoiding their migration to alien urban areas (around 5 million people are engaged as full time or part time workers); also notable are its role in supporting to the need for recurrent income from sale of its products, its vital role in transferring wealth from rich to the poor; Employment support and continuance of handloom and decentralized power loom sectors both in rural or semi-urban areas of the country; Urban employment support like manufacturing seri-equipments, making silk handlooms, disinfectants, pest control products, growth hormones for mulberry and silkworm and finally and most importantly, it is catering to the demands of silk Saris, dress materials, silk carpets, blended fabrics etc in both rural and urban areas.

Its importance at the global context: Indian handloom materials like blended fabrics, dress materials, carpets which are unique in their quality and design are appreciated in the world market and demands are in increasing trend. India has trained large number of persons from the developing countries like many African and Asian personnel who later participated in promoting sericulture in their countries.

India is designated as world’s second largest silk producer. However we have not yet been capable of making any significant impact in the global silk market. What are the reasons?

Sericulture in India is practiced in tropical zone and thus success of bivoltine crops as seen in Seri-culturally developed country like Japan, China where it is concentrated only in temperate zone assuring higher silk yield stadium, is not found in India. Moreover, traditionally we grow silk to cater to the need of saris where preference is for handloom designs and of heavier weight of the cloth. Charka reeling which is highly cost effective and economic but makes uneven quality of weft (70%) is sufficient for making high quality handloom saris using filature reeled silk for warp (30%). Thus transformation of charka reeling to filature/ multi-end machined reeling remained a paradox over the decades. To capture the world market demand we require producing high quality warp and weft as well. Availability of cheap Chinese silk yarn and fabric remained as a bottleneck to expanding silk industry in India. Indian export failed to lead over that of Chinese silk fabrics due to price and quality differences.

During your tenure as the Director of CSRTI, Mysore, a large number of technologies were developed for tropical sericulture. Could you tell us three most important contributions during your tenure?

The three major achievements that I would like to high light are One- release of high yielding mulberry variety like V1 along with its cultivation practices which produces one and half times to that of the prevailing variety. Two- release of high yielding bivoltine hybrid, CSR2 X CSR4 and the full proof package of practices for successful rearing. And three- Development of a non-corrosive, non-irritating rearing room disinfectant, Sanitech replacing age-old use of formalin as well as unique bed disinfectant, Vijetha.

India is the only country that produces all the four commercial varieties of silk. How well have we exploited this opportunity to contribute to the country’s GDP?

Though India produces all the four commercial varieties of silk viz. Eri, Muga, Tropical and Temperate Tasars, exploitation of these varieties continued to be limited due to its existence in hilly forest terrenes of different states. Aboriginals residing in different forests though practice these wild silkworms, total production remained limited except in case of Eri culture. The latter is widely used as spun silk that blends well with mulberry yarn for making fabrics of different quality especially used for making male garments including suits. Of late tasar garments and suiting have gained momentum in export. However, overall contribution to country’s GDP is very negligible.

As a silkworm breeder and being at the helm of the most important tropical silkworm breeding station at a crucial period of Indian sericulture growth, could you tell us your experiences in developing various silkworm hybrids for the tropic?

In our main breeding Institutes of Central silk Board the thrust on silkworm breeding is a two pronged approach, i.e. evolution of both bivoltine and multivotine hybrids. Some of the new multivoltine hybrids (Multi- x bivoltine breeds) evolved are found highly promising having improved shell ratio and yarn neatness. In tropical climate, farmers prefer to rear multi x bivoltine hybrids over that of bivoltines due to low risk factor. Fairly large number of bivoltine hybrids including double hybrids evolved at CSRTI, Mysore is found very good for silk industry since raw silk percentage and neatness are very high in those hybrids compared to multi-bivoltine hybrids. Some of these hybrids are in field and India is able to produce 1200 MT of bivoltine silk now.

Since National Sericulture Project, Bivoltine Sericulture has been given major stress. Do you think the salvation of Indian sericulture is through Bivoltine sericulture alone?

No. As I have mentioned in response to your question earlier, Indian sericulture is dependent on both multivoltine and bivoltine hybrids. This is so due to massive demand for silk saris in the country, where multivoltine silk support is crucial. Moreover, in tropical climatic conditions one can’t rear bivoltine hybrids in all the seasons.

Why in spite of technological advancements, foreign technology support and huge investments for past 15 years, diffusion of Bivoltine hybrids is just 5% in India?

It is unfortunate, despite evolution of excellent bivoltine hybrids only 9% of the total silk is the bivoltine (1200MT) one and the rest is multivoltine. However, some quantity of bivoltine hybrids also goes for preparing multi x bivoltine hybrids. Reasons are not difficult to understand- (i) bivoltine cocoons many a times do not fetch the expected higher price, since demand for multi-bivoltine cocoons is higher from the charka and cottage basin reelers [bivoltine cocoons are transacted in Ramnagaram (Karnataka State) market only]; (ii) processing cost of bivoltine silk is higher (iii) Chinese bivoltine silk are comparatively cheaper compared to bivoltine silk produced in India (iv) Farmers experience difficulty in raising bivoltine cocoons in tropical climate.

Given the potentials of silkworm as a model genetic system and a bio reactor, how well did India exploit it either industrially or academically? What are the reasons for the sluggish progress?

Significant progress has been made in Indian research on the molecular genetics and biotechnological researches on silkworm and mulberry including the use of silkworm bye-products. Research Publications of last ten years confirm that. Now transgenic silkworms were utilized for developing silkworm strains controlling the virulent silkworm disease like NPV using the latest technique of RNAi. Private Company researches are initiated on the use of silk proteins like fibroin, sericin for use of biomedical devices, nutraceuticals, mulberry tea, health drink etc. Department of Biotechnology (DBT), Govt. of India has now decided to establish a full fetched Silk-biotechnology Research Institute in Bangalore.

Sericulture is one of the most technology rich areas in Indian agriculture. Do you think matching technological progress was made in the post cocoon sector? What are the reasons?

So far as my knowledge goes silk technological researches undertaken at Central Silk Technological Research Institute (CSTRI), Bangalore have done impressive work in last two decades. Problem lies with the implementation of those technologies in the silk industry which is uniquely different from that of Japan or China. Silk Industry in India remained as an unorganized decentralized sector. Only a few progressive reelers or silk factories are coming forward to utilize the expertise available with CSB. However, CSTRI has also done lot of work for the improvement of decentralized sectors too, like existing charka reelers, multiend reeling, handlooms, Jacquard machines, cheaper drying equipments for cocoons, dyeing and printing of handloom fabrics. Some of the Bangalore silk fabrics manufacturing companies are able to compete with the renowned international companies for the sale of silk fabrics at a very high cost in USA.

Do you think that the allegation that Peoples Republic of China is dumping silk in India is true? Isn’t it a natural outcome of liberalization of Indian economy, and a part of the globalization phenomenon? Why couldn’t we utilize this opportunity to strengthen the domestic silk weaving sector in an export oriented manner?

I don’t call it an intentional dumping of silk. National demand of silk is very high (23000MT or above) compared to that produced in India (17000MT). Chinese silk being cheaper, Indian companies purchase the silk in order to cater to the need of export market. In fact, good silk fabric manufacturing companies have come up in India using imported silk yarns for exporting Indian silk goods in foreign countries. Unfortunately, powered handloom and small power loom sectors are also using the Chinese silk to meet their need for warp and creating pressure on development of domestic silk industry. Good news now a few entrepreneurs have now installed 400 end multiend reeling machine in the States of Karnataka, Tamil Nadu and Andhra Pradesh with the support of Govt. subsidy (50:50) for machines procured from China. One thus wishes more number of such entrepreneurs enters in the reeling business with the increase in production of bivoltine cocoons.

We see that sericulture gets gradually eliminated as countries improve their GDP. What is the fate of Indian sericulture in another 20 years time?

It is a fact and no one can deny that. Sericulture being highly labour intensive, it is difficult for making silk products at a cheaper cost. Owing to the huge internal demand of silk in the country we are able to sustain this enterprise. As long as elite classes pay for silk at a higher price, sericulture will continue to survive in the villages. But most alarming situation has arisen now due to sudden hike in labour cost that does not commensurate with the increase of silk price fetched in the market. Thus production drop in different states can’t be ruled out. However, Indian sericulture will survive as long as sale of Chinese silk remain moderately competitive or high in the market.

Is China the Villain? Silk ‘dumping’ and the plight of Indian silk reeler

In spite of its key role in the process of silk production and it’s high and growing potential to employ poor workers particularly women, the reeling activity is a relatively neglected area from the research point of view. The post WTO developments especially the relaxation of import restrictions in the post liberalization regime also has apparently taken its toll on the silk reeling sector. Not many studies were conducted on this issue. The objective of this paper is two fold 1. To throw up a few important issues faced by the silk reeling sector in India and 2. To suggest a broad direction of research in the Indian silk sector in the wake of globalization.

Silk reeling sector in India

There are around 24 thousand reelers (as per the registered number of reeling units up to March 97) in the state (Vasumathi, 2000). They all own small reeling units and the maximum size of a reeling unit does not exceed 20 basins. Manual silk reeling provides employment to around 50,000 persons in semi-urban locations; most of these live in conditions of absolute poverty and exist on subsistence incomes. Yet the economic and working conditions of reelers and the reeling activity have received little research attention when compared with other aspects of sericulture (Economic development associates, 1990)

Liberalisation and Rawsilk imports

Since liberalization of imports in 2001, import of raw silk has been steadily increasing with low prices. Raw silk imports have increased from 4713MT in 2000-01 to 9258 MT in 2003-04 (Ministry of Textiles, Government of India, 2005). Increase in imports from 2001-02 to 2002-03 reportedly impacted the domestic price of raw silk. Price of imported silk in India fell drastically from US $ 24.50 per kg in May 2001 to US $ 13.50 per kg. in June 2003. This apparently disrupted the domestic silk market and prices of cocoons and raw silk fell by about 40% due to large volume of import at relatively low prices. As a consequence farmers and the reelers, who were the most affected segment, approached the Directorate General of Anti Dumping and Allied Duties (DGAD) requesting to impose levy of anti-dumping duty against China. As dumping of raw silk by China was established, the GOI imposed antidumping duty against the import of mulberry raw silk (not thrown) of international grade 2A and below, originated in or exported from People’s Republic of China (DGAD, 2003). According to government sources, in spite of antidumping duty on all imports of mulberry raw silk of grade 2A and below from China, the imports of raw silk were on the increase and the antidumping duty was being evaded by China by exporting to India raw silk of Grade-2A and above and twisted silk yarn which is beyond the purview of the antidumping notification (Ministry of Textiles, GOI, 2005).

The case concerns the silkworm rearers and silk reelers on the one side and handloom weavers and power loom weavers on the other side. The rearers and reelers are adversely affected by (cheap) imports of rawsilk by experiencing fall in price of rawsilk and cocoon. Though the weavers are supposed to be benefited by the cheap imports of rawsilk, it can’t be expected that the imports will continue to be cheap for ever. There are reports of closure of many reeling units (Vasumathi, 2000), the exact figures of which are not available. This indicates that the reeling industry is incapable of buffering against the shocks of price fall, presumably due to the small firm size. The farm sector is also reportedly affected by the downward price shifts of cocoon which is reflected on the down fall in acreage over the years (CSB, 2006). The area under mulberry plantation had increased from 170000 hectare during 1980-81to 343000 hectare during 1992-93. Since then it had fallen gradually to 172000 hectare during 2004-05. (CSB, 2006)

The phenomenal decline in mulberry area did not result in drastic downfall in cocoon production only because of productivity gains, thanks to the huge R&D expenditure borne by the government in the farm sector. The cocoon production during 1997-98 was 127495 tons. During 2004-05 it fell to 120027 tons. Raw silk production statistics also reveal the stagnation of the industry over the period, save a slight increase from 14048 tons to 14620 tons (Ministry of textiles, 2005). Thus sericulture farmers and silk reelers organized against cheap rawsilk imports to the country and demanded anti dumping sanctions.

Cheap imports benefit weaving sector

The silk weaving sector favored cheap imports of Chinese rawsilk. The organized power loom weavers represented to the DGAD in favour of Chinese rawsilk imports. To quote from their representation: ‘The indigenous prices have come down on account of increase in production and quality as a result of R & D. As against a total of 16000 tons of silk produced in the country, the current domestic demand is 23000 tons leaving a huge gap in demand and supply to the extent of 7000 metric tons. The demand-supply gap in mulberry raw silk exists basically for warp-grade silk for power looms. Warp-grade silk preferred by powerlooms can usually be had only from bivoltine races and is being met by imported Chinese bivoltine silk. There are more than 30000 powerlooms and 180000 handlooms in the country using pure silk yarn for manufacturing fabrics. In the production of pure silk fabrics, 6 handlooms are equal to 1 powerloom. Thus the production of both the sectors is almost equal. Both the sectors employ more than one million workers. If Chinese imports are restricted the powerlooms will stop production and the workers will be thrown out of employment’ (DGAD, 2003). Thus there started a hot debate between parties in favour and against cheap imports of Chinese silk.

Who purchase Chinese silk and why?

The argument that ‘the imported Chinese silk is consumed only by the power loom sector’ is to be taken with a pinch of salt. As per the official statistics over the six year period from 1999-2000 to 2004-05, the number of powerlooms in the country remained stagnant at 29340 where as the number of handlooms increased from 227701 to 258000, which is a 13% increase (Ministry of Textiles, 2006). During this period the domestic demand-supply gap of rawsilk increased from 5852 tons to 10180 tons which is 74% increase (COMTRADE, 2007). It takes only logic to understand that the excess demand has been being created by the handloom sector and that the imported Chinese silk were being absorbed by the handloom sector as well. Because of the price differential the natural choice of the hand looms would be imported Chinese silk. It is also important to note that during this period the number of reeling units (filature, charka and multi end) in the country has fallen from 60838 to 54846 (Ministry of Textiles, 2006). This means that 10% of the reeling units have closed down, as an after effect of the fall in price of rawsilk. It is clear that the increase in number of hand looms has not helped the domestic reeling industry by creating matching demand for domestic rawsilk. Thus the answer to the question ‘why Chinese silk?’ doesn’t seem to be ‘material quality’ but ‘price’ instead.

Argument of the (organized) power loom weavers that ‘the indigenous prices have come down on account of increase in production’ (DGAD, 2003) is not true. During the above said period the increase in domestic rawsilk production was from 15214 ton to 15445 ton, the percentage increase being only 1.5% (COMTRADE, 2007). This meager increase in production is incapable of creating a fall in rawsilk price, given the 74% increase in demand-supply gap over the same period. When the imported quantity is taken as percentage of domestic production it can be seen that over the six years period from 1999-00 to 2004-05 it has increased from 39% to 68%. The absolute quantity of ‘cheap imports’ has increased by 75% during this period (ibid). Thus the role played by the imported silk on the price fall of domestic raw silk is evident.

It is reported that the cocoon cost constitute about 80% of the silk yarn price (DGAD, 2006). Other studies show that the cocoon price constitutes nearly 90% of the yarn price (Vasumathi, 2000). Owing to this very little value addition takes place. The pricing of cocoons in turn is guided by government norms and the marketing of cocoons is done through regulated markets. Thus Reelers do not enjoy sufficient economic profits to purchase sophisticated reeling machinery and to adopt advanced processing technology or to establish more number of reeling units. Official sources report closure of 5992 reeling basins during the six year period from 1999-00 to 2004-05 (Ministry of Textiles, 2006).

Thus it is evidenced that the Indian reeling industry operates with wafer thin margins and might easily get whiffed-off in adverse situations. The sector is financially weak and has no bargaining power. Credit flow into the sector being extremely poor, purchase of cocoons and selling of raw silk in opportune situations is not possible. The government regulated cocoon market on the one hand is offering a tough competition for the reelers due to supply side domination. On the other hand, failure of the Silk Exchange in facilitating raw silk sale has placed them at the receiving end in the environs of a buyers market. The reeler is thus sandwiched between the domination of supply side on the one side and weaver or trader on the other. On top of this, the after effects of trade liberalization have added to the suffering of the reeling sector.

What is Dumping?

The term ‘dumping’ is used to denote ‘export of commodities at prices below the cost of production’. The most common definition of dumping at the WTO is ‘the sale of exports at prices below the prevailing prices in the domestic market’. Dumping is formally prohibited by Article VI of the GATT. Trade officials presume dumping as a good thing for the importing country (they are getting cheap merchandise) unless the country complains (usually because the cheap imports are threatening domestic producers). [For a theoretical explanation of ‘dumping’ please read the previous story in this blog].

So it is up to countries to put in place the national legislation they need to protect themselves from dumping, and the onus is on the country receiving the dumped production to prove harm to its domestic producers before anti-dumping duties can be imposed (Institute for Agriculture and Trade Policy, 2004). ‘Contingent protection (CTP)’ may be used by the governments to protect their domestic producers from unfair competition. Contingent protection measures fall under three categories – antidumping, countervailing and safeguard measures. Of these antidumping remains the most commonly used contingent protection measure. It proliferated in the 1990s and is now used extensively by developed and developing countries alike (Agarwal, 2003). The use of CTP implies a violation of one of the GATT fundamental principle, namely the reciprocity principle codified by article 28. There are theoretical explanations justifying the presence of CTP within WTO trade liberalizing agreements which show that the use of CTP is a necessary condition for optimal trade liberalization (Kohler, 2001). At the same time a growing body of literature criticizes the dramatic increase of anti dumping measures over the last two decades (Miranda, Torres and Ruiz, 1998; Prusa, 2001), the proponents of which believe that the rise in anti dumping (AD) activity can’t be solely explained by an increase in unfair trade. According to a recent study by Aggarwal (2002), the surge in the use of anti dumping measures by India cannot be justified on economic grounds.

Is China dumping silk in India?

Indian silk industry is a bundle of contradictions. Second largest producer of silk, the largest silk consumer and the largest importer of rawsilk. Unable to exploit export potential by equipping processing industry to value add cheap imported rawsilk. In spite of huge R&D investments and extension efforts for 15 years the (desired) technology diffusion in the farm sector is below 5%. The legislations and regulations favoring the farming sector have nearly suffocated the reeling industry. The processing industry is marked by low end technology use, lack of investment, poor quality produce and high cost of production.

Statistical evidence indicates that the agro industry has received blows due to cheap imports of rawsilk. However whether these cheap imports could be designated ‘dumping’ and whether anti dumping measures can save the situation are questions not easy to find answer but important enough to be probed in greater depths. In the mainstream economic theory, ‘predatory dumping’ requires fulfillment of a number of stringent conditions. For example the firm who has the predatory motive should have a dominant position in home as well as in the global market. Again, predator must be in a position to check entry of other firms to that market. Thus one possibility of the exporter using predatory power is when it has higher share in the total import of the product as well as in the total domestic consumption of the product. The share of the named country in total domestic consumption of the product or the ‘import penetration ratio’ (Dumped Imports as a Percentage of Domestic Consumption) should be calculated to verify whether there is predatory dumping.

There are not many well directed and theoretically sound economic studies in this area. The fact that such an interesting and important issue escaped scholastic attention is surprising. Considering the efforts made by the Government of India to modernize its silk industry vis-à-vis its dismal performance over the years raises the question whether any anti dumping and countervailing measures could save it from cheap imports and for how long such measures can prevail in a fast globalizing world? The situation demands a realistic and impartial investigation to arrive at a broad direction of policy in order to utilize the strengths of the domestic industry as well as to exploit the cheap raw material imports from China constructively for modernizing the domestic silk weaving industry in an export oriented perspective. The following fundamental studies are suggested as a ground work for better understanding the dynamics of the silk imports from China.

1. Assess and quantify the material injury suffered by the Indian reeling industry due to cheap imports of rawsilk.
2. Study the impact of cheap rawsilk imports on cocoon price and its consequent farm level implications.
3. Study how China is able to produce silk at relatively low cost
4. Establish whether the anti dumping measures adopted by India against Chinese rawsilk import are justifiable on economic grounds.
5. Study the extent of absorption of imported rawsilk by hand looms in the country over the years and to analyze the dynamics of imported silk.
6. Analyze the performance of sericulture farm sector and reeling sector before and after the imposition of anti dumping duties on Chinese silk.
7. Understand and document the factors responsible for the reportedly low end technology use by the reeling sector.
8. Evaluate whether the country is prepared for producing sufficient quantities of high quality silk with in the time span offered by AD and CV measures against silk imports from China by analyzing a) the extent of diffusion of the bivoltine hybrid, b) the price differential enjoyed by the bivoltine hybrid rearers and bivoltine silk reelers over those subscribing to traditional and cross breed silk worm/ silk c) whether the domestic reeling sector is prepared absorb the high quality cocoons produced by the farm sector and process it to produce high quality of silk usable in power looms

Reference:

Aggarwal A (2002): ‘‘Anti Dumping Law and Practice: An Indian Perspective’’, Indian Council Research on International Economic Relations (ICRIER) Working Paper, No. 85

Aggarwal A (2003): The WTO Antidumping Code: Issues for Review in Post-Doha Negotiations, ICRIER working paper No. 99

Baruah Nandana (2005): Anti Dumping Duty As A Measure Of Contingent Protection: An Analysis Of Indian Experience. Center for Development Studies Working paper No. 377

COMTRADE (2007): United Nations, Comtrade Data Base (New York: United Nations Statistical Office, 2007).

CSB (2006): annual report of Central Silk Board 2005.

Curry Ronald (1997): Global silk industry: today and tomorrow. Indian silk vol 35., No. 12, 1997

Czako J, Human J and J Mirinda (2003): A Handbook of Anti dumping Investigations, Cambridge University Press, UK

DGAD (2003): Notification No: 14/28/2002-DGAD DATE: 03/07/2003 Anti dumping Investigations Concerning Imports of Mulberry Raw Silk (not thrown) originating in or Exported from China PR.-Final Findings.

Economic development associates (1990): Manual silk reeling in south India, a preliminary study of technology transfer. Report by Economic Development associates

Feinberg R M. and B T Hirsch (1989): “Industry Rent Seeking and the Filing of ‘Unfair Trade’ complaints,” International Journal of Industrial Organization, 7 (3) 325-340

Institute for Agriculture and Trade Policy (2004): Glossary for the WTO agreement on agriculture

Kohler Philippe (2001): The role of contingent protection in WTO agreements. Working version, GEM, Institut d’Etudes Politiques de Paris – 2, square de Luynes – 75007 Paris.

Ministry of Textiles, GOI (2005): Sericulture Industry a report.

Miranda, Jorge, Raul A. Torres and Mario Ruiz. (1998): “The International Use of Antidumping: 1987 – 1997.” Journal of World Trade 32(5), pp. 5-71.

Naik Gopal and Babu KH, (1993): Demand and Supply Prospects for High Quality Silk, Oxford & IBH Publishing Co. Pvt. Ltd, New Delhi.

Prusa T (2001): ‘‘On the spread and Impact of Anti dumping’’ Canadian Journal of Economics 34 (3) 591-611.

Prusa T and S Skeath (2001): ‘‘The Economic and Strategic Motives for Antidumping Filings’’, NBER Working Paper, No. 8424.

Prusa, Thomas J. (2001): “On the Spread and Impact of Antidumping.” Canadian Journal

Tikku .MK. (1999): Tangled threads: Silk growers and imports EPW, March 6-13., 1999

Vasumathi. B. V (2000): An Analytical Study of the Silk Reeling Operations in Karnataka, PhD thesis, Department Of Management Studies Indian Institute Of Science, Bangalore, India.