Gherkin and Pomegranate Cultivation

Gherkin and Pomegranate Cultivation Abstract Horticulture is an important component of agriculture accounting for a very significant share in the Indian economy. Rising consumer income and changing lifestyles are creating bigger markets for high-value horticultural products in India as well as throughout the world. Among these, the most important high-value export products are fruits and vegetables. This study was conducted to analyze the comparative advantage and competitiveness of pomegranate and gherkin which are the important foreign exchange earner among fruit and vegetable crops exported from India. The primary data was collected from Tumkur and Bijapur district of Karnataka, India and secondary data was collected from concerned government institutions, APEDA and also from exporters of fruits and vegetables. The Policy Analysis Matrix (PAM) was selected as the analytical tool to analyse the export competitiveness, comparative advantage, and the degree of government interventions in the production and export of gherkin and pomegranate. The policy distortions were measured through indicators of PAM. Garret ranking technique was used to analyse the constraints in the production and export of the selected crops. EPC of Gherkin (0.5) and pomegranate (0.45) values which found to be less than one indicates that producers are not protected through policy interventions. Whereas DRC (0.27 0.28) and PCR (0.43 0.59) values of Gherkin and Pomegranate respectively shows positive, social as well as private profit which indicates that, India has a competitive and comparative advantage in their production. The result for Garret ranking in case of gherkin shows that skilled labour and lack of superior quality are the major constraints in production and export of gherkin respectively. In case of pomegranate non availability of skilled labour, high incidence of pest and diseases, lack of transportation facilities, high residual effect of pesticide are the major constrain in production and export. The overall result shows that the cultivation as well as export of gherkin and pomegranate is economically profitable and efficient. Key Words: Gherkin, Pomegranate, PAM, EPC and DRC List of Acronyms Variable Definition APEDA Agricultural and Processed Food Products Export Development Authority CIF Cost Insurance and Freight Crores 10 million DRC Domestic Resource Cost EPC Effective Protection Coefficient EU European Union FAOSTAT Food and Agriculture Organization Statistics FOB Free On Border FYM Farm Yard Manure ha Hectares HEIA Horticulture Export Improvement Association kg Kilogram MHA Million Hectare MT Million Tons NHB National Horticulture Board NPCI Nominal Protection Coefficient on Inputs NPCO Nominal Protection Coefficient on Outputs NPV Net Present Value PAM Policy Analysis Matrix PCR Private Cost Ratio INR Indian Rupees UAE United Arab Emirates UK United Kingdom UNCOMTRADE United Nations Commodity Trade Statistics UNFAO United Nations Food and Agriculture Organization USA United States of America 1. Introduction 1.1 Background Indian agriculture is vested with the herculean responsibility of feeding over more than one billion people. Out of total, 72% of Indias population live in rural areas, further three-fourth of the rural populations depend on agriculture and allied activities for their livelihoods. The present growth in agriculture in India is hassle with problems most importantly, agricultural growth slowed down to 2.1% between 1998-99 and 2004-05. It is largely due to a decline in the food grain sector that grew at merely 0.6%. Given the high dependence of the poor on agriculture, the stagnation in this sector is currently threatening to stall poverty reduction in India (Reddy, 2007). Given the present scenario, the immediate question to be addressed is how agricultural growth can be accelerated. The question can be answered through by diversifying the consumption pattern towards high value agricultural commodities in general and high value horticultural products in particular such as fruits and vegetables. In recent years there has been a great deal of interest among policymakers and trade analysts in the role of horticultural products as a principle means of agricultural diversification and foreign exchange earnings in developing countries. Horticultural products have high income elasticity of demand as income goes up the demand raises rapidly. It grows especially in middle and high income developing countries. As people are more cautious on health and nutrition, there is a paradigm shift from high fat, high cholesterol foods such as meat and live stock products to low fat and low cholesterol foods such as fruits and vegetables. As a result, the world has change d its attention towards high value agricultural products. Hence, it is crucial to be competitive in the world market to reap the potential gains of increased and growing world demand for horticultural products such as fruits and vegetables. Thus, the purpose of the present study attempts to evaluate the consequences of international trade and competitiveness of Indian horticulture with special reference to pomegranate and gherkin crops. In the recent past, these two crops got high export potential and earned good foreign exchange. 1.2 Studies on export of fruits and vegetables There are many studies related to export of horticultural crops especially fruits and vegetables from India. Chiniwar (2009) explained the numerous opportunities and challenges of the horticulture sector and observed that there is a tremendous potential for Indian pomegranates in the global market. He examined the growth of pomegranate exports from India. The study revealed that the growth of pomegranate exports from India is moderate in comparision to the potential for its exports. Tamanna et al. (1999) examined the export potential of selected fruits from India by using Nominal Protection Coefficient (NPC). The results indicate that the exports of Indian fruits are highly competitive in the world market. Nalini et al. (2008) observed that India has made tremendous progress in the export of cucumber and gherkin products during the past 15 years (1990-2005). The export has increased by about 129 times with an impressive annual compound growth rate of 37.46 percent, as against only 4. 38 percent in the world market. An increasing and high value of Revealed Comparative Advantage (RCA) and a positive and increasing value for Revealed Symmetric Comparative Advantage (RSCA) have indicated high potential for their export. One percent increase in volume of international trade in cucumber and gherkin may increase the demand from India by 5.96 percent. This indicates that India is highly competitive in the export of cucumber and gherkin. It has ample scope to further increase its export. Gulati et al. (1994) analyzed the export competitiveness of selected agricultural commodities and identified the constraints in the export of fresh fruits, vegetables, processed fruits and vegetables. The above studies are related to export performance, growth, and constraints of fruits and vegetables. Most of these studies focused on aspects pertaining to export of fruits and vegetables. There are no studies on export policy especially related to efficiency and comparative advantage in world market. Therefore, the aim of the present study is to analyze the export competitiveness of pomegranate and gherkin by using Policy Analysis Matrix (PAM). The study has a high scope because competitiveness has become a key issue in the international market for export development of fruits and vegetables. 1.3 Research objectives In the present study, the export competitiveness of high value horticultural crops of India is analyzed. To be very precise, the study analyzes the competitiveness of gherkin and pomegranate in the world market. It also compares the advantages and constraints in the export of these crops with the following objectives and proposed hypothesis, which will be tested based on the results and conclusion. Specific objectives To assess the export competitiveness of Gherkin and Pomegranate To examine the production and export constraints of Gherkin and Pomegranate Hypothesis Export of gherkin and pomegranate are competitive in international markets 1.4 Structure of the thesis The study contains the results of the analysis of export competitiveness of horticultural crops in India. In the present study, opportunities are analyzed, constraints in production and export of gherkins and pomegranates from India. We further analyze the competitiveness and comparative advantage of these two crops in international market. The detailed information of this analysis is discussed in the following sections of the study. The first section of the thesis gives us an introduction and background on the nature of the problem, facts on the dynamics and underlying causes diversifying the consumption pattern of high value horticultural commodities. Further, a brief overview of existing studies on Indian agricultural and horticultural growth, export performance, and constraints will be discussed. The research question is broken down into specific objectives and a possible hypothesis has been put forth. The second section of the thesis will give a general overview of fruit and vegetable scenario in the world as well as in India. The section also explains the importance of selected fruit and vegetable by considering production, export and foreign exchange earnings which will help us to understand the export competitiveness of these crops from India. The third section deals with methodological framework which deals with the concepts and competitiveness of high value horticultural crops from India focusing on the application of PAM model for the study. In the same chapter, the current literature and outline of the major definitions for competitiveness and comparative advantage are studied. The above proposed model will be used as a tool to address the research objectives followed by data description. Fourth section highlights the findings of the research from the proposed model using collected information on pomegranate and gherkin cultivation, and their export. Finally, the proposed hypothesis is tested and the results inferred. The final section summarizes the whole research findings and provides meaningful policy implications. 2. Scenario of fruits and vegetables in India and the world 2.1 World scenario of fruits and vegetables 2.1.1 High value agricultural production Rising consumer income and changing lifestyles are creating bigger markets for high value agricultural products throughout the world. Among these, the most important high value export sector is horticulture, especially fruits and vegetables. The growing markets for these products present an opportunity for the farmers of developing countries to diversify their production out of staple grains and raise their income. Annual growth rates on the order of 8 to 10 percent in high value agricultural products is promising development (Fig.1), as the production, processing and marketing of these products create a lot of needed employment in rural areas. The rapid growth in high value exports has been part of fundamental and broad reaching trend towards globalization of the agro food system. Dietary changes, trade reform and technical changes in the food industry have contributed to the growth of high value agriculture and trade (World Bank, 2008). 2.1.2 World production of fruit and vegetables The production of fruit and vegetables all over the world grew by 30 percent between 1980 to 1990 and by 56 percent between 1990 to 2003. Much of this growth occurred in China where production grew up by 134 percent in 1980 and climbed to 200 percent by 1990 (UNFAO 2003). At present the world production of fruits and vegetables reached to 512 MT and 946.7MT respectively (Table 1 5). Vegetables: China is currently the worlds largest producer of vegetables, with the production 448.9 MT with an area of 23.9 MHA (47%) (Table 1), whereas India is in the 2nd position with the production of 125.8 MT with an area of 7.8 MHA (13%) followed by USA (4%), Turkey (3%) etc (Indian Horticulture Database, 2008) (Fig.2). Among the vegetable crops gherkin is considered for the study as it is one of the most important vegetable all over the world. Table 2 shows the international production of cucumber and gherkin from different parts of the world during 2007-08. China, Turkey, Iran, Russia and USA are the world largest producers of cucumber and gherkin (Table 3), whereas India position in the production is 34th but it reached 1st (Table 3) and 55th (Table 4) position in export of provisionally preserved and fresh cucumber gherkin respectively. Table 1 Major vegetables producing countries in the world (2007-08) Country Area(000 ha) Production(000 MT) Productivity(MT/ha) China 23936 448983 19 India 7803 125887 16 USA 1333 38075 29 Turkey 996 24454 25 Russia 970 16516 17 Egypt 598 16041 27 Iran 641 15993 25 Italy 528 13587 26 Spain 379 12676 33 Japan 433 11938 28 Others 16957 222625 13 Total 54573 946774 Source: Indian Horticulture Database (2008) Table 2 International production of cucumber and gherkin (2007-08) Country Production (MT) Share (%) China 28062000 62.9 Turkey 1875919 4.21 Iran, Islamic republic 1720000 3.86 Russian federation 1410000 3.16 USA 920000 2.06 Ukraine 775000 1.74 Japan 634000 1.42 Egypt 615000 1.38 Indonesia 600000 1.34 Spain 510000 1.14 Mexico 500000 1.12 Poland 492000 1.10 Iraq 480000 1.08 Netherland 445000 1.00 India 120000 0.27 Others 5452024 12.22 World 44610943 100 Source: Author, FAO (2008) Table 3 Major exporting countries of fresh cucumber and gherkin (2007) Country Value (USD) Share (%) Spain 557088 30.13 Mexico 437369 23.65 Netherland 419824 22.70 Canada 81707 4.42 Germany 44437 2.40 Turkey 40300 2.18 Greece 38920 2.10 Iran 27768 1.50 Belgium 25361 1.37 USA 16313 0.88 India 235 0.01 Others 159815 8.64 World 1849137 Source: Data from Agricultural and Processed food products Export development Authority (APEDA), India. Table 4 Major exporting countries of preserved cucumber and gherkin Country Value (USD) Share (%) India 33476 49.39 China 16754 24.72 Turkey 4193 6.19 Netherlands 3397 5.01 Belgium 2670 3.94 Vietnam 40300 2.11 Sri Lanka 1003 1.48 Germany 925 1.37 Spain 596 0.88 USA 992 0.87 World 65040 Source: U.N COMTRADE (2007) Fruits: World fruit production has steadily risen for the past four years (see Appendix 3 ). Table 5 shows the largest fresh fruit producers from different countries during 2007-08. China is the worlds largest fruit producer, producing 19 percent of the world fruits. India ranks second in the list of world producer accounting 12 percent of the worlds production followed by Brazil, where 7 percent of the worlds fruit was grown. (Figure 3) As production is increasing in China at alarming rate compare to other top producing countries. Production growth almost averaged 6 percent per year in China, while production growth in India averaged 2.73 percent per year. The EU experienced the lower annual growth rate of 0.89 percent. Whereas, the production in USA and Brazil has been relatively constant over the period, with average annual growth rates of 0.61 percent for the former and 0.34 percent for the later. Other countries Mexico, South Africa and Chile have experienced slightly higher av erage annual production growth rates of 2.12, 2.56 and 1.3 percent respectively over the same period (FAOSTAT 2008). Among all fruits pomegranate is considered for the present study. Figure 4 shows India is the world largest producer of pomegranate with 900 MT (36%) followed by Iran (31%), Iraq (3%), USA (4%) etc. Over the years Indias export rate for pomegranate has grown steadily to worth of INR0.61 million (US$13741) in 2007-08 with the share of 1.2 percent (Table 6). Table 5 Major fruit producing countries in the world (2007-08) Country Area(000 ha) Production(000 MT) Productivity(MT/ha) China 9587 94418 10 India 5775 63503 11 Brazil 1777 36818 21 USA 1168 24962 21 Italy 1246 17891 14 Spain 1835 15293 8 Mexico 1100 15041 14 Turkey 1049 12390 12 Iran 1256 12102 10 Indonesia 846 11615 14 Others 22841 208036 9 Total 48481 512070 Source: FAO Indian Horticulture Database (2008) Table 6 Pomegranate export from different parts of the world (2007) Country Value (USD) Share (%) Thailand 172781 15.06 Spain 138911 12.11 Vietnam 84532 7.37 Mexico 67739 5.91 Netherlands 63858 5.57 Madagascar 53822 4.69 Israel 45219 3.94 Uzbekistan 44128 3.85 Colombia 40459 3.53 Azerbaijan 37977 3.31 France 36975 3.22 Germany 17750 1.55 India 13741 1.20 Others 309565 27.45 World 1127457 100 Source: Agricultural and Processed Food Products Export Development Authority (APEDA), India 2.2 Scenario of fruits and vegetables in India. Horticulture is an important component of agriculture accounting for a very significant share in the Indian economy. It is identified as one of the potential sector for harnessing Indias competitive advantage in international trade. Further it prepares India to achieve an overall trade target of 1% or more in the share of world trade. Meanwhile, making the country self-sufficient in the last few decades, horticulture has played a very significant role in earning foreign exchange through export. Horticultural crops cover approximately 8.5 percent of total cropped area (20 MHA) (Table 7) with annual production of 207 MT, and productivity of 10.3 MT per hectare during the year 2007-08 (FAO Indian Horticulture Database 2008). Among the horticultural crops fruits and vegetables play an important role, whereas exports of fruits and vegetables have increased over the years (Table 8). During 2004-05 export of fruits and vegetables was INR 13637.13 million as against INR 24116.57 million during 2006-07 (APEDA, 2008) Table 7 Area, production and productivity of horticultural crops in India Year Area (MHA) Production (MT) Productivity (MT/ha) ) 2001-02 16.6 145.8 8.8 2002-03 16.3 144.4 8.9 2003-04 19.2 153.3 21 2004-05 21.1 170.8 8.1 2005-06 18.7 182.8 9.8 2006-07 19.4 191.8 9.9 2007-08 20.1 207.0 10.3 Source: FAO Indian Horticulture Database (2008) Table 8 Export of horticultural produce in India Products 2004-05 2005-06 2006-07 Quantity Value Quantity Value Quantity Value Floriculture seeds 34496 2871 42659 3922 50048 7713 Fresh Fruits vegetables 1296530 13637 1465040 16587 1983873 24117 Processed fruits vegetables 325293 9614 501826 13595 549949 17316 Total 1656319 261227 2009525 341051 258387 491459 Source: APEDA, India Note: Qty: MT, value : Million INR Vegetables: In vegetable production, India is next to China with a production of 125.8 million tonnes from 7.8 million hectares with a share of 13 percent in relation to world production (Table 9). The per capital consumption of vegetables is 120 grams per day (APEDA 2009). In case of Fresh vegetable Indias export has been increased from INR 433.14 Crore in 2006-07 to Rs 489.49 Crore in 2007-08. Major Export Destinations of these vegetables are UAE, UK, Nepal, and Saudi Arabia. (APEDA, 2009) Table 9 Area, production and productivity of vegetable crops in India Year Area (MHA) Production (MT) Productivity (MT/ha) ) 2001-02 6156 88622 14.4 2002-03 6092 84815 13.9 2003-04 6082 88334 14.5 2004-05 6744 101246 15.0 2005-06 7213 111399 15.4 2006-07 7584 115011 15.2 2007-08 7803 125887 16.1 Source: FAO Indian Horticulture Database (2008) Among all vegetables gherkin is considered for the present study due to following reasons. Indias export of gherkin has been steadily increased since 1997-98. It accounts for 24,490 tonnes of gherkins having an export potential of INR 50.27 crore as against 35,242 tonnes worth of INR 69.86 crore in 1999-2000 (Venkatesh, 2003). In recent year gherkin export has been increased to 61.5 million tonnes with a trade value of INR1465.5 million during 2007-08 (UNFAO Export Data, 2009). 2.2.1 Production and export importance of gherkin in India Gherkin crop is being selected for the present study. It is regarded as HEIA crop especially a hybrid crop. Gherkin cultivation and processing started in India in the early 90s and presently cultivated over 19,500 acres in the three southern states of Karnataka, Tamil Nadu and Andhra Pradesh. Although gherkin can grow virtually in any part of the country, the ideal conditions required for growth prevail in these three states where the growing season extends throughout the year. It requires adequate water and temperature between 15-36 degree centigrade and the right type of soil. The crop takes 85 days to reach the required maturity level. Productivity is approximately four to five tonnes per acre and the best months are from February to March followed by June to August. India is a major exporter of provisionally preserved gherkin. Table 10 11 shows the cucumber and gherkin export from India. In India, Karnataka stands first in export, where cultivation is steadily growing since 2001 -02 accounting for a worth of INR 1200 million. During 2006-07 gherkins accounts to INR 3133 million which has been exported (Table 12). Table 10 Cucumber and gherkin exports from India (2007-08) Country Value( Million INR) Quantity (Tonnes) Share (%) ) UAE 1.96 142.75 17.55 Bangladesh 1.92 290.00 17.17 Netherland 1.78 93.10 15.92 Russia 1.66 83.50 14.91 Estonia 0.80 43.94 7.17 Nepal 0.75 74.42 6.75 Oman 0.75 70.00 6.74 Spain 0.55 31.82 4.95 France 0.47 20.21 4.27 Others 0.51 26.42 4.56 Total 11.20 876.18 100 Source: Gherkin and Pomegranate Cultivation Gherkin and Pomegranate Cultivation Abstract Horticulture is an important component of agriculture accounting for a very significant share in the Indian economy. Rising consumer income and changing lifestyles are creating bigger markets for high-value horticultural products in India as well as throughout the world. Among these, the most important high-value export products are fruits and vegetables. This study was conducted to analyze the comparative advantage and competitiveness of pomegranate and gherkin which are the important foreign exchange earner among fruit and vegetable crops exported from India. The primary data was collected from Tumkur and Bijapur district of Karnataka, India and secondary data was collected from concerned government institutions, APEDA and also from exporters of fruits and vegetables. The Policy Analysis Matrix (PAM) was selected as the analytical tool to analyse the export competitiveness, comparative advantage, and the degree of government interventions in the production and export of gherkin and pomegranate. The policy distortions were measured through indicators of PAM. Garret ranking technique was used to analyse the constraints in the production and export of the selected crops. EPC of Gherkin (0.5) and pomegranate (0.45) values which found to be less than one indicates that producers are not protected through policy interventions. Whereas DRC (0.27 0.28) and PCR (0.43 0.59) values of Gherkin and Pomegranate respectively shows positive, social as well as private profit which indicates that, India has a competitive and comparative advantage in their production. The result for Garret ranking in case of gherkin shows that skilled labour and lack of superior quality are the major constraints in production and export of gherkin respectively. In case of pomegranate non availability of skilled labour, high incidence of pest and diseases, lack of transportation facilities, high residual effect of pesticide are the major constrain in production and export. The overall result shows that the cultivation as well as export of gherkin and pomegranate is economically profitable and efficient. Key Words: Gherkin, Pomegranate, PAM, EPC and DRC List of Acronyms Variable Definition APEDA Agricultural and Processed Food Products Export Development Authority CIF Cost Insurance and Freight Crores 10 million DRC Domestic Resource Cost EPC Effective Protection Coefficient EU European Union FAOSTAT Food and Agriculture Organization Statistics FOB Free On Border FYM Farm Yard Manure ha Hectares HEIA Horticulture Export Improvement Association kg Kilogram MHA Million Hectare MT Million Tons NHB National Horticulture Board NPCI Nominal Protection Coefficient on Inputs NPCO Nominal Protection Coefficient on Outputs NPV Net Present Value PAM Policy Analysis Matrix PCR Private Cost Ratio INR Indian Rupees UAE United Arab Emirates UK United Kingdom UNCOMTRADE United Nations Commodity Trade Statistics UNFAO United Nations Food and Agriculture Organization USA United States of America 1. Introduction 1.1 Background Indian agriculture is vested with the herculean responsibility of feeding over more than one billion people. Out of total, 72% of Indias population live in rural areas, further three-fourth of the rural populations depend on agriculture and allied activities for their livelihoods. The present growth in agriculture in India is hassle with problems most importantly, agricultural growth slowed down to 2.1% between 1998-99 and 2004-05. It is largely due to a decline in the food grain sector that grew at merely 0.6%. Given the high dependence of the poor on agriculture, the stagnation in this sector is currently threatening to stall poverty reduction in India (Reddy, 2007). Given the present scenario, the immediate question to be addressed is how agricultural growth can be accelerated. The question can be answered through by diversifying the consumption pattern towards high value agricultural commodities in general and high value horticultural products in particular such as fruits and vegetables. In recent years there has been a great deal of interest among policymakers and trade analysts in the role of horticultural products as a principle means of agricultural diversification and foreign exchange earnings in developing countries. Horticultural products have high income elasticity of demand as income goes up the demand raises rapidly. It grows especially in middle and high income developing countries. As people are more cautious on health and nutrition, there is a paradigm shift from high fat, high cholesterol foods such as meat and live stock products to low fat and low cholesterol foods such as fruits and vegetables. As a result, the world has change d its attention towards high value agricultural products. Hence, it is crucial to be competitive in the world market to reap the potential gains of increased and growing world demand for horticultural products such as fruits and vegetables. Thus, the purpose of the present study attempts to evaluate the consequences of international trade and competitiveness of Indian horticulture with special reference to pomegranate and gherkin crops. In the recent past, these two crops got high export potential and earned good foreign exchange. 1.2 Studies on export of fruits and vegetables There are many studies related to export of horticultural crops especially fruits and vegetables from India. Chiniwar (2009) explained the numerous opportunities and challenges of the horticulture sector and observed that there is a tremendous potential for Indian pomegranates in the global market. He examined the growth of pomegranate exports from India. The study revealed that the growth of pomegranate exports from India is moderate in comparision to the potential for its exports. Tamanna et al. (1999) examined the export potential of selected fruits from India by using Nominal Protection Coefficient (NPC). The results indicate that the exports of Indian fruits are highly competitive in the world market. Nalini et al. (2008) observed that India has made tremendous progress in the export of cucumber and gherkin products during the past 15 years (1990-2005). The export has increased by about 129 times with an impressive annual compound growth rate of 37.46 percent, as against only 4. 38 percent in the world market. An increasing and high value of Revealed Comparative Advantage (RCA) and a positive and increasing value for Revealed Symmetric Comparative Advantage (RSCA) have indicated high potential for their export. One percent increase in volume of international trade in cucumber and gherkin may increase the demand from India by 5.96 percent. This indicates that India is highly competitive in the export of cucumber and gherkin. It has ample scope to further increase its export. Gulati et al. (1994) analyzed the export competitiveness of selected agricultural commodities and identified the constraints in the export of fresh fruits, vegetables, processed fruits and vegetables. The above studies are related to export performance, growth, and constraints of fruits and vegetables. Most of these studies focused on aspects pertaining to export of fruits and vegetables. There are no studies on export policy especially related to efficiency and comparative advantage in world market. Therefore, the aim of the present study is to analyze the export competitiveness of pomegranate and gherkin by using Policy Analysis Matrix (PAM). The study has a high scope because competitiveness has become a key issue in the international market for export development of fruits and vegetables. 1.3 Research objectives In the present study, the export competitiveness of high value horticultural crops of India is analyzed. To be very precise, the study analyzes the competitiveness of gherkin and pomegranate in the world market. It also compares the advantages and constraints in the export of these crops with the following objectives and proposed hypothesis, which will be tested based on the results and conclusion. Specific objectives To assess the export competitiveness of Gherkin and Pomegranate To examine the production and export constraints of Gherkin and Pomegranate Hypothesis Export of gherkin and pomegranate are competitive in international markets 1.4 Structure of the thesis The study contains the results of the analysis of export competitiveness of horticultural crops in India. In the present study, opportunities are analyzed, constraints in production and export of gherkins and pomegranates from India. We further analyze the competitiveness and comparative advantage of these two crops in international market. The detailed information of this analysis is discussed in the following sections of the study. The first section of the thesis gives us an introduction and background on the nature of the problem, facts on the dynamics and underlying causes diversifying the consumption pattern of high value horticultural commodities. Further, a brief overview of existing studies on Indian agricultural and horticultural growth, export performance, and constraints will be discussed. The research question is broken down into specific objectives and a possible hypothesis has been put forth. The second section of the thesis will give a general overview of fruit and vegetable scenario in the world as well as in India. The section also explains the importance of selected fruit and vegetable by considering production, export and foreign exchange earnings which will help us to understand the export competitiveness of these crops from India. The third section deals with methodological framework which deals with the concepts and competitiveness of high value horticultural crops from India focusing on the application of PAM model for the study. In the same chapter, the current literature and outline of the major definitions for competitiveness and comparative advantage are studied. The above proposed model will be used as a tool to address the research objectives followed by data description. Fourth section highlights the findings of the research from the proposed model using collected information on pomegranate and gherkin cultivation, and their export. Finally, the proposed hypothesis is tested and the results inferred. The final section summarizes the whole research findings and provides meaningful policy implications. 2. Scenario of fruits and vegetables in India and the world 2.1 World scenario of fruits and vegetables 2.1.1 High value agricultural production Rising consumer income and changing lifestyles are creating bigger markets for high value agricultural products throughout the world. Among these, the most important high value export sector is horticulture, especially fruits and vegetables. The growing markets for these products present an opportunity for the farmers of developing countries to diversify their production out of staple grains and raise their income. Annual growth rates on the order of 8 to 10 percent in high value agricultural products is promising development (Fig.1), as the production, processing and marketing of these products create a lot of needed employment in rural areas. The rapid growth in high value exports has been part of fundamental and broad reaching trend towards globalization of the agro food system. Dietary changes, trade reform and technical changes in the food industry have contributed to the growth of high value agriculture and trade (World Bank, 2008). 2.1.2 World production of fruit and vegetables The production of fruit and vegetables all over the world grew by 30 percent between 1980 to 1990 and by 56 percent between 1990 to 2003. Much of this growth occurred in China where production grew up by 134 percent in 1980 and climbed to 200 percent by 1990 (UNFAO 2003). At present the world production of fruits and vegetables reached to 512 MT and 946.7MT respectively (Table 1 5). Vegetables: China is currently the worlds largest producer of vegetables, with the production 448.9 MT with an area of 23.9 MHA (47%) (Table 1), whereas India is in the 2nd position with the production of 125.8 MT with an area of 7.8 MHA (13%) followed by USA (4%), Turkey (3%) etc (Indian Horticulture Database, 2008) (Fig.2). Among the vegetable crops gherkin is considered for the study as it is one of the most important vegetable all over the world. Table 2 shows the international production of cucumber and gherkin from different parts of the world during 2007-08. China, Turkey, Iran, Russia and USA are the world largest producers of cucumber and gherkin (Table 3), whereas India position in the production is 34th but it reached 1st (Table 3) and 55th (Table 4) position in export of provisionally preserved and fresh cucumber gherkin respectively. Table 1 Major vegetables producing countries in the world (2007-08) Country Area(000 ha) Production(000 MT) Productivity(MT/ha) China 23936 448983 19 India 7803 125887 16 USA 1333 38075 29 Turkey 996 24454 25 Russia 970 16516 17 Egypt 598 16041 27 Iran 641 15993 25 Italy 528 13587 26 Spain 379 12676 33 Japan 433 11938 28 Others 16957 222625 13 Total 54573 946774 Source: Indian Horticulture Database (2008) Table 2 International production of cucumber and gherkin (2007-08) Country Production (MT) Share (%) China 28062000 62.9 Turkey 1875919 4.21 Iran, Islamic republic 1720000 3.86 Russian federation 1410000 3.16 USA 920000 2.06 Ukraine 775000 1.74 Japan 634000 1.42 Egypt 615000 1.38 Indonesia 600000 1.34 Spain 510000 1.14 Mexico 500000 1.12 Poland 492000 1.10 Iraq 480000 1.08 Netherland 445000 1.00 India 120000 0.27 Others 5452024 12.22 World 44610943 100 Source: Author, FAO (2008) Table 3 Major exporting countries of fresh cucumber and gherkin (2007) Country Value (USD) Share (%) Spain 557088 30.13 Mexico 437369 23.65 Netherland 419824 22.70 Canada 81707 4.42 Germany 44437 2.40 Turkey 40300 2.18 Greece 38920 2.10 Iran 27768 1.50 Belgium 25361 1.37 USA 16313 0.88 India 235 0.01 Others 159815 8.64 World 1849137 Source: Data from Agricultural and Processed food products Export development Authority (APEDA), India. Table 4 Major exporting countries of preserved cucumber and gherkin Country Value (USD) Share (%) India 33476 49.39 China 16754 24.72 Turkey 4193 6.19 Netherlands 3397 5.01 Belgium 2670 3.94 Vietnam 40300 2.11 Sri Lanka 1003 1.48 Germany 925 1.37 Spain 596 0.88 USA 992 0.87 World 65040 Source: U.N COMTRADE (2007) Fruits: World fruit production has steadily risen for the past four years (see Appendix 3 ). Table 5 shows the largest fresh fruit producers from different countries during 2007-08. China is the worlds largest fruit producer, producing 19 percent of the world fruits. India ranks second in the list of world producer accounting 12 percent of the worlds production followed by Brazil, where 7 percent of the worlds fruit was grown. (Figure 3) As production is increasing in China at alarming rate compare to other top producing countries. Production growth almost averaged 6 percent per year in China, while production growth in India averaged 2.73 percent per year. The EU experienced the lower annual growth rate of 0.89 percent. Whereas, the production in USA and Brazil has been relatively constant over the period, with average annual growth rates of 0.61 percent for the former and 0.34 percent for the later. Other countries Mexico, South Africa and Chile have experienced slightly higher av erage annual production growth rates of 2.12, 2.56 and 1.3 percent respectively over the same period (FAOSTAT 2008). Among all fruits pomegranate is considered for the present study. Figure 4 shows India is the world largest producer of pomegranate with 900 MT (36%) followed by Iran (31%), Iraq (3%), USA (4%) etc. Over the years Indias export rate for pomegranate has grown steadily to worth of INR0.61 million (US$13741) in 2007-08 with the share of 1.2 percent (Table 6). Table 5 Major fruit producing countries in the world (2007-08) Country Area(000 ha) Production(000 MT) Productivity(MT/ha) China 9587 94418 10 India 5775 63503 11 Brazil 1777 36818 21 USA 1168 24962 21 Italy 1246 17891 14 Spain 1835 15293 8 Mexico 1100 15041 14 Turkey 1049 12390 12 Iran 1256 12102 10 Indonesia 846 11615 14 Others 22841 208036 9 Total 48481 512070 Source: FAO Indian Horticulture Database (2008) Table 6 Pomegranate export from different parts of the world (2007) Country Value (USD) Share (%) Thailand 172781 15.06 Spain 138911 12.11 Vietnam 84532 7.37 Mexico 67739 5.91 Netherlands 63858 5.57 Madagascar 53822 4.69 Israel 45219 3.94 Uzbekistan 44128 3.85 Colombia 40459 3.53 Azerbaijan 37977 3.31 France 36975 3.22 Germany 17750 1.55 India 13741 1.20 Others 309565 27.45 World 1127457 100 Source: Agricultural and Processed Food Products Export Development Authority (APEDA), India 2.2 Scenario of fruits and vegetables in India. Horticulture is an important component of agriculture accounting for a very significant share in the Indian economy. It is identified as one of the potential sector for harnessing Indias competitive advantage in international trade. Further it prepares India to achieve an overall trade target of 1% or more in the share of world trade. Meanwhile, making the country self-sufficient in the last few decades, horticulture has played a very significant role in earning foreign exchange through export. Horticultural crops cover approximately 8.5 percent of total cropped area (20 MHA) (Table 7) with annual production of 207 MT, and productivity of 10.3 MT per hectare during the year 2007-08 (FAO Indian Horticulture Database 2008). Among the horticultural crops fruits and vegetables play an important role, whereas exports of fruits and vegetables have increased over the years (Table 8). During 2004-05 export of fruits and vegetables was INR 13637.13 million as against INR 24116.57 million during 2006-07 (APEDA, 2008) Table 7 Area, production and productivity of horticultural crops in India Year Area (MHA) Production (MT) Productivity (MT/ha) ) 2001-02 16.6 145.8 8.8 2002-03 16.3 144.4 8.9 2003-04 19.2 153.3 21 2004-05 21.1 170.8 8.1 2005-06 18.7 182.8 9.8 2006-07 19.4 191.8 9.9 2007-08 20.1 207.0 10.3 Source: FAO Indian Horticulture Database (2008) Table 8 Export of horticultural produce in India Products 2004-05 2005-06 2006-07 Quantity Value Quantity Value Quantity Value Floriculture seeds 34496 2871 42659 3922 50048 7713 Fresh Fruits vegetables 1296530 13637 1465040 16587 1983873 24117 Processed fruits vegetables 325293 9614 501826 13595 549949 17316 Total 1656319 261227 2009525 341051 258387 491459 Source: APEDA, India Note: Qty: MT, value : Million INR Vegetables: In vegetable production, India is next to China with a production of 125.8 million tonnes from 7.8 million hectares with a share of 13 percent in relation to world production (Table 9). The per capital consumption of vegetables is 120 grams per day (APEDA 2009). In case of Fresh vegetable Indias export has been increased from INR 433.14 Crore in 2006-07 to Rs 489.49 Crore in 2007-08. Major Export Destinations of these vegetables are UAE, UK, Nepal, and Saudi Arabia. (APEDA, 2009) Table 9 Area, production and productivity of vegetable crops in India Year Area (MHA) Production (MT) Productivity (MT/ha) ) 2001-02 6156 88622 14.4 2002-03 6092 84815 13.9 2003-04 6082 88334 14.5 2004-05 6744 101246 15.0 2005-06 7213 111399 15.4 2006-07 7584 115011 15.2 2007-08 7803 125887 16.1 Source: FAO Indian Horticulture Database (2008) Among all vegetables gherkin is considered for the present study due to following reasons. Indias export of gherkin has been steadily increased since 1997-98. It accounts for 24,490 tonnes of gherkins having an export potential of INR 50.27 crore as against 35,242 tonnes worth of INR 69.86 crore in 1999-2000 (Venkatesh, 2003). In recent year gherkin export has been increased to 61.5 million tonnes with a trade value of INR1465.5 million during 2007-08 (UNFAO Export Data, 2009). 2.2.1 Production and export importance of gherkin in India Gherkin crop is being selected for the present study. It is regarded as HEIA crop especially a hybrid crop. Gherkin cultivation and processing started in India in the early 90s and presently cultivated over 19,500 acres in the three southern states of Karnataka, Tamil Nadu and Andhra Pradesh. Although gherkin can grow virtually in any part of the country, the ideal conditions required for growth prevail in these three states where the growing season extends throughout the year. It requires adequate water and temperature between 15-36 degree centigrade and the right type of soil. The crop takes 85 days to reach the required maturity level. Productivity is approximately four to five tonnes per acre and the best months are from February to March followed by June to August. India is a major exporter of provisionally preserved gherkin. Table 10 11 shows the cucumber and gherkin export from India. In India, Karnataka stands first in export, where cultivation is steadily growing since 2001 -02 accounting for a worth of INR 1200 million. During 2006-07 gherkins accounts to INR 3133 million which has been exported (Table 12). Table 10 Cucumber and gherkin exports from India (2007-08) Country Value( Million INR) Quantity (Tonnes) Share (%) ) UAE 1.96 142.75 17.55 Bangladesh 1.92 290.00 17.17 Netherland 1.78 93.10 15.92 Russia 1.66 83.50 14.91 Estonia 0.80 43.94 7.17 Nepal 0.75 74.42 6.75 Oman 0.75 70.00 6.74 Spain 0.55 31.82 4.95 France 0.47 20.21 4.27 Others 0.51 26.42 4.56 Total 11.20 876.18 100 Source:

Nano Chemistry Essay

1.1 Definition Nanochemistry is concerned with generating and altering chemical systems, which develop special and often new effects as a result of the laws of the nanoworld. The bases for these are chemically active nanometric units such as supramolecules or nanocrystals. Nanochemistry looks set to make a great deal of progress for a large number of industry sectors. Nanotechnology exists in the realm where many scientific disciplines meet. Achievements in physics are getting progressively smaller – from valves to electronics, down to microelectronics and quantum computing. It mirrors the downsizing in focus in the biological sciences, from cells to genomics. Conversely, achievements in chemistry have been converging into the nanometre range from below – from atoms and molecules to supramolecular chemistry. Nanochemisty focuses on the unique properties of materials in the 1–100 nm scale. The physical, chemical, electrical, optical and magnetic properties of these materialsare all significantly different from both the properties of the individual building blocks (individual atoms or molecules), and also from the bulk materials.Nanochemistry is a truly multidisciplinary field, forming a bridge between nanotechnology and biotechnology, spanning the physical and life sciences. The Nanochemistry Research Institute (NRI) at Curtin carries out world-class research to provide innovative solutions to – energy and resources – materials and manufacturing – electronics – agricultural – environmental management, and – health and medical industries Nanochemistry applications in the materials, resources and energy sectors range from the design of crystalline catalysts and the control of crystal size, morphology, phase and purity, to the design and use of additives to control crystallization and inhibit scale formation. In the biological field, control of chemistry at the supramolecular level can lead to the development of a wide variety of new and improved biomaterials, such as artificial bones and tissues, as well as new pharmaceuticals and improved methods of drug delivery.1 ENGINEERING, SCIENCE ‘‘We are like dwarfs on the shoulders of giants, so that we can see more than they.’’ Bernard of Chartres, 12th century with nanoscience being the discipline concerned with making, manipulating and imaging materials having at least one spatial dimension in the size range 1–1000 nm and nanotechnology being a device or machine, product or process, based upon individual or multiple integrated nanoscale components, then what is nanochemistry? In its broadest terms, the de.ning feature of nanochemistry is the utilization of synthetic chemistry to make nanoscale building blocks of different size and shape, composition and surface structure, charge and functionality. These building blocks may be useful in their own right. Or in a self-assembly construction process, spontaneous, directed by templates or guided by chemically or lithographically de.ned surface patterns, they may form architectures that perform an intelligent function and portend a particular use.2 1.2 Objective of nanochemistry – Creating nanoparticles – Allowing properties of nanosystems to evolve, manipulating and controlling them – Encapsulating and transporting materials (e.g. deodorant with nanodroplets)4 1.3 Nanochemistry used in: – – Cosmetics, e.g. sunscreen, toothpaste, skincare products – Sanitary ware – Built-in ovens and baking trays – Gas-tight packaging – Screens, photographic films – Separating technology for waste water treatment and food production – Catalysers for chemical reactions – Exhaust purification5 It is also used in formation of :- – Commercialization of nanochemicals – Nanooxides of precious, ferromagnetic, rare metals (Ti, Zr etc.) Nanopolymers and membranes – Nanomaterials (cement, fertilizers) – Nanopowders in chemical applications – Nanogreen chemistry – Nano energy applications – Environmental applications of nanotechnology When thinking about self-assembly of a targeted structure from the spontaneous organization of building blocks with dimensions that are beyond the sub-nanometer scale of most molecules or macromolecules, there are five prominent principles that need to be taken into consideration. These are: (i) building blocks, scale, shape, surface structure, (ii) attractive and repulsive interactions between building blocks, equilibrium separation, (iii) reversible association–dissociation and/or adaptable motion of building blocks in assembly, lowest energy structure, (iv) building block interactions with solvents, interfaces, templates, (v) building-blocks dynamics, mass transport and agitation. A challenge for perfecting structures made by this kind of self-assembly chemistry is to .nd ways of synthesizing (bottom-up) or fabricating (top-down) building blocks not only with the right composition but also having the same size and shape. No matter which way building blocks are made they are never truly monodisperse, nless they happen to be single atoms or molecules. There always exists a degree of polydispersity in their size and shape, which is manifest in the achievable degree of structural perfection of the assembly and the nature and population of defects in the assembled system. Equally demanding is to make building blocks with a particular surface structure, charge and functionality. Surface properties will control the interactions between building blocks as well as with their environment, which ultimately determines the geometry and distances at which building blocks come to equilibrium in a self-assembled system. Relative motion between building blocks facilitates collisions between them, whilst energetically allowed aggregation deaggregation processes and corrective movements of the self-assembled structure will allow it to attain the most stable form. 6 Providing the building blocks are not too strongly bound in the assembly it will be able to adjust to an orderly structure. If on the other hand the building blocks in the assembly are too strongly interacting, they will be unable to adjust their relative positions within the assembly and a less 1 ordered structure will result. Dynamic effects involving building blocks and assemblies can occur in the liquid phase, at an air/liquid or liquid/liquid interface, on the surface of a substrate or within a template co-assembly. As this text describes, building blocks can be made out of most known organic, inorganic, polymeric, and hybrid materials. Creative ways of making spheres and cubes, sheets and discs, wires and tubes, rings and spirals, with nm to cm dimensions, abound in the materials self-assembly literature. They provide the basic construction modules for materials self-assembly over all scales, a new way of synthesizing electronic, optical, photonic, magnetic materials with hierarchical structures and complex form, which is the central theme running throughout this chapter. A .owchart describing these main ideas is shown in igure 1. Nano-, a pre.x denoting a factor, its origin in the Greek nanos, meaning dwarf. The term is often associated with the time interval of a nanosecond, a billionth of a second, and the length scale of a nanometer, a billionth of a meter or 10 A  ° . In its broadest terms, nanoscience and nanotechnology congers up visions of making, imaging, manipulating and utilizing things really small. Feynman’s prescient nano world ‘‘on the head of a pin’’ inspires scientists and technologists to venture into this uncharted nano-terrain to do something big with something small.7 1.4 Large and Small Nanomaterials It was not so long ago in the world of molecules and materials that 1 nm (1 nm  ¼ 10 A  ° ) was considered large in chemistry while 1 m m (1 m m  ¼ 1000 nm  ¼ 10,000 A  ° ) was considered small in engineering physics. Matter residing in the ‘‘fuzzy interface’’ between these large and small extremes of length scales emerged as the science of nanoscale materials and has grown into one of the most exciting and vibrant fields of endeavor, showing all the signs of having a revolutionary impact on materials as we know them today. In our time, ‘‘nano’’ has left the science reservation and entered the industrial technology consciousness and public and political perception. Indeed, bulk materials can be remodeled through bottom-up synthetic chemistry and top-down engineering physics strategies as nanomaterials in two main ways, the first by reducing one or more of their physical dimensions to the nanoscale and the second by providing them with nanoscale porosity. When talking about finely divided and porous forms of nanostructured matter, it is found that ‘‘nanomaterials characteristically exhibits physical and chemical properties different from the bulk as a consequence of having at least one spatial dimension in the size range of 1–1000 nm’’.

The Problem And Its Impact On Teen Pregnancy - 3184 Words

THE PROBLEM AND ITS IMPACT Teen Pregnancy in the United States Teen pregnancy in the United States has been an ongoing issue for well over 50 years. The United States ranks first amongst developed countries in teen pregnancy rates (See Table 2). Approximately 750,000 teenage girls between ages 15 and19 will become pregnant every year (Do Something.org, 2014). Statistics show that of the teen population that will become pregnant annually, only a small percentage complete their high school education, much less fulfill a college degree. In fact, about 38% of teenage mothers who have a child before the age of 18 will obtain a high school diploma (The National Campaign, 2014). In addition, less than 2% of young mothers (those who had a child before age 18) will obtain a college degree by age 30 (Why it Matters, 2012). Contributing Factors of Teen Pregnancies There are various factors that contribute to increased teenage pregnancies in the United States such factors include: race, ethnicity and socioeconomic status. However, low socioeconomic status corresponding with single marital status is determined to be a frequent risk factor for teenage pregnancy. Teenage pregnancy has also been correlated with increased poverty rates for young mothers; this is especially true for single mothers. Studies have determined that un-wed-single teenage mothers are more likely than their childless peers to be impoverished during their lifetime. Overall, population studies have estimated thatShow MoreRelatedTeen Pregnancy1426 Words   |  6 PagesIntroduction Teen pregnancy is often unplanned and challenging for the future life of mother and child. The increase risk of health problems for both mother and baby occur during teen pregnancy. 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The Efficacy Of Early Warning Systems Finance Essay - Free Essay Example

Sample details Pages: 16 Words: 4811 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? This document examines the efficacy of early warning systems with respect to predicting incipient financial distress of banking institutions. Their practical use by policy makers is limited, even in the international financial institutions. This is a paradox since the changing nature of banking risks as more economies liberalise and develop their financial systems, as well as ongoing innovation, makes the use of EWS for informing policies aimed at preventing crises more necessary than ever. Don’t waste time! Our writers will create an original "The Efficacy Of Early Warning Systems Finance Essay" essay for you Create order A model of banks with different of total assets (small, medium large) is selected, financial and economic data for individual banks are collected, and EWSs that have been applied in banking studies are tested. During a period of few bank failures, the relevance of this bank failure model for surveillance depends to some extent on the accuracy of the model in predicting which banks will have their supervisory ratings downgraded to problem status in future periods. Rather than attempting to guess bank failure as in previous banking literature, we classify banks as capital adequate or capital inadequate and seek to predict inadequately capitalized banks one year prior to the initial decline of the capital ratio. The early warning systems models developed in this document could identify capital inadequate banks with a sufficient amount of accuracy. It is important to consider the policy makers objectives when designing predictive models and setting related thresholds since there i s a sharp trade-off between correctly calling crises and false alarms. Introduction Economic crisis caused a loss a lot of assets and hit banks and money markets and stock markets. Many experts put global and causes of the crisis and tried to put many of the solutions, in order not to repeat the crisis, with the yoke of crises frequently occur once in a while. Usually in a crisis Wallis rush to withdraw some or most of their money from banks, resulting in a smaller cache and entry into force of the banks as quickly lead to bankruptcy of the bank, or falling into financial hardship unless the state stepped quickly to support the bank or if the bank insured money of depositors. It has been said and will say a lot about how that occurred where the global economic crisis, which began in the precursors to the disclosure of the same several months ago. The world know this crisis with the emergence of the subprime mortgage crisis that took place in the United States to be followed by United kingdom after period, and peaked following the announcement of a number of ins titutions and banks in the forefront of the World famous Leman Brothers for bankruptcy, due to lack of liquidity, and the inability to meet the demands of customers, forcing some into bankruptcy, and caused the collapse of the market. The causes of the crisis The reasons for the current global financial crisis back to the year 2006 and the outbreak of the so-called crisis of high-risk loans, which introduced the banking sector and U.S. banking in the spiral of losses and disorders, and claimed the lives of hundreds of thousands of American citizens. The crisis erupted high-risk loans because of the feet of many of the authorized banks in real estate loans to hundreds of thousands of citizens with limited income, ignoring the rule of caution and risk assessment. And adopted the banks of this approach is characterized by unprecedented growth of the real estate sector and a significant reduction of interest rates in place, which resulted in significant numbers of Americans to the conviction that the highly favorable opportunity to buy a house. With the sudden increase of interest rates in the banking markets of America, a large number of Americans have been unable to repay their loans, and the numbers have increased over the months to crea te an atmosphere of panic in financial markets and among investors in the real estate sector. Banks have been affected in the relevant high-risk loans more than other because of high interest rates, and their impact on the situation of borrowers with modest incomes. As soon as the first disturbance, accelerated banks to the confiscation of homes who are unable to repay the loans and sell them on the back of a sudden and severe crisis for the real estate sector is a result of declining prices by much. The series deal with the repercussions of the financial crisis since the outbreak of the credit crunch, high-risk, the central banks in the United States, Europe and Asia are being forced to move, leaving her only the choice between changing interest rates, pumping money into banks affected. The U.S. Federal Reserve deliberately approaches the first option, which took the initiative in many times to reduce the rate fell from 5.25 percent in June 2006 to 2 percent in April 2008. Not only has the U.S. government take this action, but has chosen to go away in their quest to prevent the spread of the crisis, which decided to nationalize the three big banks. Manifestations of this crisis, Manifestations of this crisis, for example, the following: Rush to withdraw deposits from the banks; because capital is coward, and this as stated by the mass media. The fact that many financial institutions to freeze loans to companies and individuals for fear of the difficulty of recovery. Lack of cash in circulation of individuals, companies and financial institutions, and this led to a sharp contraction in economic activity and all aspects of life; which led to the suspension of the borrowers to repay their faith. Low level of transactions in the financial markets, and this caused confusion and disruption in the indicators of ups and downs. Low level of energy used by the companies due to lack of liquidity and a freeze on access to loans from financial institutions, but interest rates are very high and difficult guarantees. Lower sales, especially in real estate, cars, etc.; because of poor liquidity. Increasing rate of unemployment due to the bankruptcy and liquidation, and every employee and worker threatened with dismissal. Increased demand for social subsidies from governments. Low rates of consumption and spending, saving and investment, and this has led to more: recession, unemployment, and slower, stop, and liquidation and bankruptcy. Banking is one of the more closely supervised industries in the United States, reflecting the view that bank failures have stronger adverse effects on economic activity than other business failures. Capital adequacy is central to regulatory oversight of security, safety and reliability in the U.S. banking system. From a regulatory point of view, inadequate capital reflects financial distress that often leads to failure and crash. Regulators ability to predict bank capital shortage would really improve the success of the supervisory process, thereby affording regulators extra time to closely watch potential crisis banks and force sanctions (on dividend payments, asset increase, new business activities, salaries, deposit rates, etc.) to facil itate institutional recovery. Because inadequate capitalization is a pre-condition to bank failure, it has been the focus of widespread study. It is well documented in the literature that financial distress is a prolonged process that in general takes place over an extended period of time. Previous work on financial distress attempts to predict bank failure or closure by regulatory authorities. These studies observe the endpoint in the timeline of financial distress, which extends from the early phase of inability to earn competitive profits to a period of financial turmoil and ultimate failure. Consistent with this judgment, Gilbert, Meyer, and Vaughn (1999) attempt to predict banks that are likely to develop financial problems in the near future predicting a CAMELS downgrade from a safe level (rated 1 or 2) to a watch list level (rated 3, 4, or 5).4 Using a logit analysis, found a simple equity to asset ratio to be one of the important predictors for a CAMELS downgrade. Thi s article describes the process of developing an early warning system for banks to predict financial crises in the God of the banks capital significantly. We apply both logit analysis as well as trait recognition analysis (TRA), a neural network-like method, to the financial and economic data for the period 1988 to 1990. Literature on Predicting Financial Distress Several studies have examined financial distress, which is a pre-condition to firms failure. In general, these studies have found that accounting information can detect incipient financial distress of nonfinancial firms, and that different firm states on the financial distress continuum appear to be independent of one another. There are two branches of literature on financial distress the multinomial choice approach and the survival time approach. multinomial choice models In multinomial choice models a number of states of the firm are hypothesized to exist. For example, some studies define five possible states financial stability, omitting or reducing dividend payments, default on loan payments protection from the Bankruptcy Act, and bankruptcy and liquidation. Some studies define a continuum of financial distress. Others collapse these five states into non bankrupt, financially weak, and bankrupt firms. In most of these studies, an ordinal logistic regression (OLGR) technique is employed, where the response variable is multinomial (as opposed to binomial), and explanatory variables are used to approximation the cumulative probability that a firm is a member of the response states. An additional branch of financial distress, survival time research, these techniques were primarily developed in the medical and biological sciences, but they are also widely used in the social and economic sciences, as well as in engineering, censored observations arise whenever the dependent variable of interest represents the time to a terminal event, and the duration of the study is limited in time. Censored observations may occur in a number of different areas of research. For example, in economics we may study the survival of new businesses or the survival times of products such as automobiles. Survival time research Survival time research, Predicts the probable time to failure using financial, economic, managerial, and regulatory factors. Using Cox proportional hazards models, as well as split-population survival time models, earlier studies compute survival time relative to bank closure or failure. In general, the empirical results support the notion that financial distress is a dynamic process that can be predicted using financial, economic, and other explanatory variables. We applied a survival time model with time-varying predictors to savings and loan (SL) institutions. Interestingly, the authors noted that, among numerous studies attempting to predict SL failure, only one variable was significant in all such studies the equity capital ratio. Our study attempts to shut this gap in the literature by using the equity capital ratio as the dependent variable to reflect an early stage of financial distress. Our aim is to build up a model that predicts one of two states capital-adequate ve rsus capital-inadequate where the latter state represents incipient financial distress to be predicted by bank supervisors. The Methodology EWS Models Use the EWS Survey, to measure the amount of knowledge of individuals about the early warning system in financial institutions and its relationship to economic crises that occur in the world. Objectives of the study Identify the current situation on the economic crisis Measure the individual information about the early warning system Procedural steps Sample Study The sample study consists of 100 individuals which distributed in different ministries, institutions, some branches of the Bank and the training institutes. The tables and graphs showing the distribution of the following members of the sample by: GENDER male female total Gender 42 41 83 Table 1: Distribution of the sample by gender figure 1: Distribution of the sample by gender AGE  20-35 36-50 51-above total Age 52 26 5 83 Table 2: Distribution of the sample by age figure 2: Distribution of the sample by age SALARY  under 1000 1000-2000 above 2000 salary 61 17 5 Table 3: Distribution of the sample by salary figure 3: Distribution of the sample by salary JOB  Business Economy other job 29 3 51 Table 4: Distribution of the sample by job figure 4: Distribution of the sample by job NO. OF BANKS THAT DEAL WITH  1 2 3 or more No. of banks that deal with 49 24 10 Table 5: Distribution of the sample by the number of banks that deal with figure 5: Distribution of the sample by the number of banks that deal with Building Study Tool We designed a Questionnaire to measure the amount of knowledge of individual on the economic crisis(Appendix 1) The Questionnaire consists of public statements and two area : 1-The first area about the economic crisis 2-The second area about the early warning system Applying the Tool study -The questioner was distributed to different ministries, institutions, some branches of the Bank and the training institutes Survey was sent to many groups of individuals on 14-12-2009 via fax, e-mail and by hand. Data was collected through 17-12-2009. 83 responses were received from 100 surveys. Programming Study Tool The questionnaire data was insert and analyze using Microsoft spreadsheets . Data and Empirical Results Survey Results from the viewpoint of individual The public question results : Notice here that the sample almost equally between males and females. It is noted that a large proportion of respondents said their incomes less than a thousand Kuwaiti Dinars ($ 3000) and they represent a large segment of workers in the community. These individuals are most affected by any economic crisis It is noted that one-third of respondents working in the business sector and the rest spread over other sectors. It is noted that a large proportion of respondents dealing with one bank and a significant proportion of individuals dealing with two banks and a few deals with three banks Results of the study are divided into two parts: 1-The first part about the economic crisis 2-The second part about the early warning system Part1 : Economic crisis have you heard about the Economic crisis that occurred recently? Yes No I dont know Q1 81 2 0 Table 6 It is noted that most of the respondents (97.5%) ha d heard about the economic crisis, either through television or radio or newspapers or friends or seminars. figure 6 Did you expect the economic crisis?  Yes No I dont know Q2 34 47 2 Table 7 There are convergent between the percentage who predicted the crisis and among those who did not. figure 7 Is the economic crisis affected your ability purchasing?  Yes No I dont know Q3 48 35 0 Table 8 A percentage of its purchasing power was affected (57.8%) more than those who did not(42.1%), either because of lack of their incomes or because of their expulsion from their jobs or reduce their salaries or high prices of some goods. figure 8 Is the economic crisis affected the number of your trips?  Yes No I dont know Q4 34 46 3 Table 9 Proportions of those not affected by its ability to travel (55.4%)more than those who affected(40.9%), because of the decline in oil prices, which led to lower fuel prices, which in turn lower prices of air tickets. figure 9 Is the economic crisis affected your Bank?  Yes No I dont know Q5 34 39 10 Table 10 figure 10 Do you take a loan from the bank because of the economic crisis?  Yes No I dont know Q6 15 67 1 Table 11 We note here that most of the respondents (80.7%)did not take loans because of the crisis and that back to either they take loans in the past and they cannot take again, or because they dont need loan. figure 11 Do you feel that the economic crisis affected your behavior in dealing with banks?  Yes No I dont know Q7 29 54 0 Table 12 We note here that some members of the sample (34.9%)affected by their dealings with the bank this may be due to the presence of installment or obligations of the bank they could not meet them. figure 12 Have you taken your actions for fear of another economic crisis?  Yes No I dont know Q8 43 39 1 Table 13 We note here that some members of the sample (51.8%)taken precautions for fear of another crisis, because they hurting of the current crisis, we find some of them shift from work in the private sector to the government sector. figure 13 Do you expect another economic crisis?  Yes No I dont know Q9 53 17 13 Table 14 We note here that most of the respondents (63.8%) do not expect a repeat of the crisis once again. figure 14 Part 2: Early Warning system Have you heard about the Early Warning System?  Yes No I dont know Q10 16 67 0 Table 15 We note here that most of the respondents (80.7%) had not heard of early warning systems, due to a lack of informing, or because of lack of attention because of government-sponsored banks and guarantee deposits figure 15 Do you deposit your money in banks that rely on early warning system?  Yes No I dont know Q11 10 5 1 Table 16 We note here that most of the respondents deposit their money in bank that rely on EWS because of government-sponsored banks and guarantee deposits. figure 16 Do you feel the importance of the existence of early warning system?  Yes No I dont know Q12 14 2 0 Table 17 We note here that most of the respondents who had heard about the early warning system believe the importance of having early warning systems in the bank. figure 17 Do you agree with the need to adopt financial institutions and economic of early warning system?  Yes No I dont know Q13 13 2 1 Table 18 We note here that most of the respondents who had heard about the early warning system agree with the need to adopt financial institutions and economic of early warning system. figure 18 Do you agree that the early warning system reduces the incidence of economic crises?  Yes No I dont know Q14 13 2 1 Table 19 We note here that most of the respondents who had heard about the early warning system agree that the early warning system reduces the incidence of economic crises. figure 19 Summary and Conclusions This paper has sought to empirically test the efficacy of EWS models as prediction tools in identifying incipient capital inadequacy in U.S. commercial banks. Our results demonstrate that capital deficient banks are much different from other banks in terms of their financial health. We find that capital adequacy is a broad concept that requires review of a wide array of different kinds of financial and economic variables. In addition, the TRA results highlight the importance of complex interaction variables in identifying banks with deficient capital. Our EWS models could detect the early onset of financial distress in commercial banks one year in advance with a reasonable degree of accuracy. By implication, the EWS models can be used to provide a timely signal of impending bank problems to supervisory agencies. Our group belief, international financial institutions do not employ an EWS specifically for banking crisis. However, given the ongoing liberalization of emerging mar ket financial sectors as well as the changing nature of banking risks as more economies move into market and securitized banking phases, the use of EWS for crisis prevention is more necessary than ever. It is important to consider the policy maker objectives when designing predictive models since there is a trade of between correctly calling crises and false alarms. In this sense our study confirms that EWS for banking crises are a necessary but not sufficient tool for predicting further crisis episodes, since a generalized global model cannot be a substitute for country-specific prudential surveillance. Group Recommendation of Some solution of the problem: Adaptation of this crisis as the financial crisis on financial institutions is to adapt away from the fact that the crisis has, in fact, is a crisis of the capitalist system in its foundation underlying mechanisms and in terms of work and in terms of ethics in his dealings and explained as follows: in its foundation, the system of modern capitalist embrace to say the following: (a more efficient economic role of the state not to have a role in it), we believe that this is a real reason for the crisis and the President of the capitalist system. Here we say that Islamic economics does not is left to the entire economy with the decisions of individuals, but there are individuals in the state with economic decision. Islamic jurisprudence by the richness and wide on the role of the state and nature of the tools and understanding of the evolution. So, we say that the treatment of the entrances to this crisis was the introduction of Islam to the decision on the management of economic p artnership between both the State and individuals. B- in terms of the mechanisms of the capitalist system: multiple of these mechanisms, but we refer only to the interest system which is managed by the capitalist economy, and we remember that the system of interest with his control in the capitalist system, but criticized by economists and capitalists permanent link system crisis in the interest of many of their writings here provide a solution to the mechanism of action of the Islamic economic system with reference only to the subject of the basis upon which the funding mechanism, a system of participation, this system has no system of co-effectiveness and economic efficiency is not economic when the Islamists alone, but when the economists who have studied this system objectively and impartially. Under the impact of financial crisis offers contemporary Muslims as the Islam of the system of participation to be the mechanism governing the work of financial institutions. This syst em of legislation of the Almighty God believes in achieving economic stability and this alternative courses and violent fluctuations caused by the system of interest. In terms of micro and macro view of the economy, the financial crisis of contemporary adaptations of partial adjustment is said it is a crisis at banks or at the level of the stock market, and this adaptation as a minor part of this crisis is now hitting all sectors of the economy. Here we come to the Islamic economy; Islam does not deal with the economy separate intervals, but the entire economy is taking his view to accommodate a total of all sectors of the economy and its branches. Islam, when funding be organized, for example, it takes all matters of economy in terms of equal distribution of incomes, where the interests of society and in terms of interest and not that which is known in the organization of Islam to the economy. In summary, Islam takes all matters of the economy as a complex and interactive, this adaptation of the true economic reality leads to the proper management of the economy. . Economy of the Islamic moral economy: the phrase start by talking on the economy, ethics and this is highly complex in spite of the economy, some economists have warned against the danger to separate economy from ethics, however, the reality of modern capitalist economy no uncertain terms that the role of ethics in the economy and this command from the clarity in the contemporary economic reality, does not need to prove it. Hence the one of the largest Islamic contributions in the economy. Economics of Islam is linked firmly to ethics in all aspects of the economy and the production sector, for example, is governed by specific ethical disciplines of Islam, and the area of finance at the same level, even in consumption is governed by specific ethical controls. So, we say that Islam addresses the economy with moral links secured setbacks arise because of a lack of ethics Here we refer to what is said about the current financial crisis and the reasons that led to and including those related to the lack of morality when some managers financial institutions in capitalist societies. The application of control systems of banks and early warning to financial institutions, and provides the prediction of the expected losses to banks by estimating the potential future losses. Statistical early warning models are useful models to predict the banks that may face problems in the future, and thus the banks that need more intensive monitoring. But to ensure this benefit must be to continue the development of such models in terms of accuracy and reliability, studies have shown that the introduction of some economic variables in these models, such as unemployment and economic growth rate and growth rate of per capital income, increases the ability of these models to predict, as studies have shown the need to use these models in the analysis of scenarios. Educate people about th e crises and early warning systems and the need for these systems in all banks and financial institutions. Discussion: First: the spread of moral corruption, economic, such as: exploitation, lies and malicious rumors, fraud, fraud, monopoly and illusory, and these vices lead to injustice, which leads to the oppressed people complained when they could not afford it, and thereby lead to disgruntled civilians and social revolutions occur when non-payment of debts and loans. Secondly: One of causes of the crisis as well as the article is becoming a weapon of tyranny and tyrants, and control over policy and decision-making sovereign in the world, and money is the god materialists Third: The interest-based banking system on a system of interest taking and giving, and works within the system, debt trading and buying and selling broker, the higher the interest rate on deposits, the higher the interest rate on loans to individuals and companies and the beneficiary is the banks and financial intermediaries, the burden and injustice is that borrowers who receive on loans, whether for consumption or for production purposes. Some economists have argued that real development cannot be achieved and the rational use of factors of production only if the interest rate is zero, because it would bring stability and security, also said that the system of interest leads to a concentration of funds in the hands of a few will control the wealth. Forth: The financial system and the traditional banking system debt at higher interest rates, or replace the loan due and payable loan new interest rate is high, and this places additional burdens on the borrowers inability to pay the first loan; because of the higher interest rate. Fifth: The bad manners of financial intermediation institutions which are based on loans and induce people to them and lure them with fraud, and deceit, and ignorance to take loans from financial institutions, high commissions and ask if there is risk, and who bears the risk of all is the borrower who does not about him or force, and this is what actually happened, which ultimately leads to the crisis. Sixth: The over-expansion and the introduction of credit cards without balance (overdraft), which carry high costs and the owner of the causes of this crisis, and when the cardholder is unable to pay off its debt, has increased the interest rate, and so on until the inquiries by the or under his car or his house, and this is what actually happened to many holders of these cards and led to an imbalance in the House budget and the cause of the crisis in some of the riba-based banks. References: Coats, P. K. and L. F. Fant. 1993. Recognizing financial distress patterns using a neural network tool. Financial Management 22: 142-155. Whalen, G. and J. B. Thomson. 1988. Using financial data to identify changes in bank Condition. Economic Review, Federal Reserve Bank of Cleveland: 17-26. James B Thomson Predicting Bank Failures in 1980s Federal Reserve Bank of Cleveland Economic Review, 1991, Quarter 1 pages 9-20. Alejandro Gaytà ¡n and Christian A. 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