Wednesday, August 29

A tale of three farmers

When we talk about farmers in the west, the idea that emerges is of automation, subsidies, factory farming, etc. When we talk about farming in the lesser developed countries, they are at the subsistence level (farming just enough to feed their family). So the economics and public policy orientation for these emerging market farmers is seriously different to the western farmers. After all, if they do not make it work and their farms are flooded out, they get insurance and other assistance. But for farmers in say India, the results are tragic.

Many farmers suffer from overload of debt, fall into the trap of loan sharks and then commit suicide. In just one Indian state, Maharashtra, there have been 500 farmer suicides already according to a recent report. But be very careful when politicians start talking about farmers. I am immediately very suspicious about political help for farmers. Almost always, it is related to the politicians interest, and not to the farmer nor to the country and is almost always economically bad for the farmer, the state, the region and country.

And this is the tale of the second farmer. The BBC reports that Reliance, a conglomerate is closing its stores in another Indian state because of politically motivated violence against its stores. Apparently left wing and other political party supporters have attacked Reliance stores and destroyed property. You might think, yes, sir, makes sense, evil capital sucking the blood out of the farmers and small shopkeepers. But as I mentioned in an email today morning,

How amusing! :), the delicious irony when politics, love of power and ideology go bang against each other.
guess who loses? the poor themselves who have to pay for the inefficiencies of the farmer, infrastructure, skewed policies, corruption and various other grand standing stupid economically illiterate ideas that have kept our people poor. But the genie is out of the jhola, and if even one other state goes ahead with these new stores, the fraud comitted on the poor will be exposed! :)

And then came this story, that farmers in Uttar Pradesh, another very poor state in India, are demanding that the Reliance stores be re-opened. It is worthwhile quoting the entire section from the third set of farmers.

Gosainganj farmers also joined the protests on Monday. They said the Reliance stores had greatly benefited farmers. Farmer from Gosaiganj Dev Narayan said, “The government has done a great injustice to farmers. We got better facilities at Reliance. We were finally free from the nexus of middlemen at mandis. The government’s decision has pushed back investment in the state.”
Usually, when a farmer takes his produce to the mandis, he has to pay a 2.5 per cent mandi tax, besides bearing cost for loading, unloading and weighing. Farmers said they lost around 20 to 30 per cent of their produce in this process.
The Reliance collection centres had negated the role of middlemen as farmers could directly sell their produce here. This also meant keeping at bay the numerous other hands that were thrust forward to squeeze money from them.
Farmer Shiv Kumar said: “We got the best prices without much haggling. The method of weighing was electronic and, so, more transparent. We got immediate cash payment and were exposed to new technology. The consumer too could take their pick of products at good prices. We request the government to open the Reliance stores to afford farmers a better future.”

So for political reasons, these political parties are willing to knock the poor farmers and the urban poor. Their investment in corrupt practises, their sheer economic illiteracy, their desire to keep people poor and kill themselves is criminal. Did you notice another word there? transparency? That's what scares these political parties, because transparency exposes these cockroaches and maggots feeding on the body of the state.

Long way to go yet, but as I said in my email, you cannot stop progress and you cannot keep on violating the laws of economics! :)

All this to be taken with a grain of piquant salt!!!

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