Tuesday, April 24, 2007

India Cannot Afford Rural Failure

When you see a title like that, you know what you are going to read about. I wrote this piece, even as I read it in another window. It is brilliant, beyond description.

In foreign media reports India is shining. Even India’s biggest English daily has begun a campaign called India Poised. But India’s leaders know that a deepening crisis facing India’s multitude of farmers threatens to spoil the party in Mumbai and Bangalore. India’s Minister of Finance Palaniappan Chidambaram put agriculture at the center of India’s latest budget.

The article quotes the Finance Minister who in all his wisdom, mentioned: "Everything else can wait, but not agriculture" and showed a red (hint, hint) signal, red (it is just a colour) flag at the same time.

The government’s challenge is to implement policies that promote growth but also provide relief to India’s stressed small-scale farmers, or else the country will have to reckon with much more than a missed growth target.

And then the article puts the cart before the horse, the effect before the cause and very nearly blames the medicine for the illness.

Large-scale industrial agribusiness will not work in India. Why? Have you heard of e-choupal? or contract farming?
Indian farmers have little hope of finding employment elsewhere. Have you tried?

Chidambaram admits that his government’s true challenge is not only to come up with the right policies and programs but “to deliver the intended outcomes.”
The success India achieved with its IT-led service and now manufacturing industries made it a poster child for globalization.

The two sentences above are not connected. Both the latter, IT and manufacturing grew thanks to government staying away and not because they framed the right policies. They simply had no policy (yes, there is a tax holiday and all that, but little beyond that).

Microfinance can help (even at an unthinkable 2% a month), but what if the land is arid? or too small as the article itself points out? Is it not important to develop alternatives other than agriculture?

What is stated as the "party" is the medicine. Success in IT, manufacturing and other areas that are now knocking the doors at the second and third tier cities. They will give an opportunity for farmers to work in factories - not necessarily as farmers - which is important. We have to give up our obsession with the "small farmer".

The small farmer is an animal that perhaps deserves to be extinct - we should not keep them alive on artificial respiration - they deserve to be free, and live as another species. Aha, but if they are extinct the remaining farmers would be counted as rich and then they would have to pay taxes, for electricity, give up subsidies, which, as we all know is another story to tell...

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