23/10/07

how to save indian agriculture: some freely traded ideas

How did Malawi turn from a nation that had 1,500 starvation deaths in 2002 to a nation that in 2007 is exporting 400,000 tonnes of maize for emergency operations in neighbouring Zimbabwe?
bhupinder has the answer:
Malawi said goodbye to the ‘wisdom’ of free market economy, and re- introduced subsidies for its farmers.
the implication, of course, is that this would save indian agriculture too. dweep has an equally convincing solution: cut indian subsidies even if the americans and the europeans don't reduce their own farm support budgets.
Farm subsidies take attention away from the very serious failure of the government, through its monopoly on procurement and intervention in distribution, to provide a supply chain and market that work. This, in fact, explains why the Indian government is so keen to fight for farm subsidy cuts - because it involves little effort to keep a major vote bank happy. Actually doing something about the pitiable state of Indian agriculture is a far less enviable proposition.
malawi is a small african country which supports a population slightly less than mumbai's. and america spends around 57,000 dollars a year on each of its 7 lakh farmers while india spends less than a 100 dollars a year on subsidising agricultural inputs for each of more than 50 million farmers in the country (as i pointed out in this comment on this post which tried to justify dweep's earlier argument).

9 comments:

harini calamur said...

there was this sabzi wallah who was telling me that the bulk of the onions in the Indian market were from Pakistan.
And, the reason they were from Pakistan (it could just as well be Mars) was because large corporate giants who had entered the retail sector -- purchased all the onions and exported them..
if this is true..... then you and i as tax payers are not only subsidizing the farmer but also the corporate.....
:)

kuffir said...

trade between india and pakistan isn't very easy, as far as i know..we'd accorded mfn status to pakistan but pakistan hasn't. pakistan imposes harsher restrictions on goods from india than from elsewhere. but the indirect trade between the two countries- through the gulf and onwards to poakistan, or through smuggling across the border is several times higher than trade through official channels. and india is a net importer of onions from pakistan.

Praveen said...

I've seen many farm lands being converted in to real estate in the coastal regions where the land is fertile. Isn't that a problem that needs to be addressed.

kuffir said...

praveen,

whose problem is that? the farmers' or of the country as a whole?

praveen said...

i think it's the country's problem as it reduces production. farmers are happy selling their land for high returns.

but even if it's a farmers problem isn't it a country's problem?

kuffir said...

praveen,

you're right about it being the country's problem. so bringing in legislation to further restrict the sale of agricultural land in those areas would make it a farmer's problem. he can't sell the land and earn the best returns- he has to either till it himself or lease it out to other farmers and remain content with lower returns or no returns or even losses in either cases. and end up indebted like the majority of farmers today..

the problem is to confuse the country's food security needs with the farmers' needs.

praveen said...

Thanks for the explanation.

I landed on your blog while surfing and almost read it for 2 hours. And from now I think I'll be a regular reader.

BTW: If I can ask you.. what do you do? You seem to be like a news channel :-))

kuffir said...

praveen,

you're very kind. thank you. no, i don't work in the media. i watch the media work on all of us..:-)just like you might too, i guess.

praveen said...

> just like you might too, i guess.

Nope. I'm a media naive:-) Or probably a starter as started I read your writings.

ps: I'm sorry sir if I had ever sounded offensive.

 
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