Radically rethinking Indian agriculture – Sanjeev Sanyal

In recent weeks, there have been growing apprehensions that the monsoons of 2009 will fall short of normal. This has again raised fears of rising food prices, collapse in rural incomes and possibly farmer suicides. Many a tear will be shed for rural India. Predictably, there will calls for greater support for the agriculture sector in the form of subsidised fertilisers/pesticides, cheap electricity for pumping ground water and farm loan waivers. We have been doing this now for generations now and our impoverished farmers still commit suicide. Surely, it’s time to rethink this strategy. (via Sanjeev Sanyal: Radically rethinking agriculture).

The Good …

Sanjeev Sanyal’s article does raise some interesting points – and usual points. After a promising start he then loses his way half way through.

He demolishes the idea that “the route to prosperity in rural India lies in accelerating farm production. Agriculture … contributes 16.5 per cent of the economy … great exertion … cannot … (make it) grow much more than 3 per cent per annum on a sustained basis (when the rest of the economy routinely does 7-8 per cent).”

He correctly points out that “India … produces enough food to feed itself but … 20 per cent of output is wasted (a) problem … of distribution and storage, (and with) population growth is now 1.6 per cent per year … we need to grow production by no more than this rate. … we should … slow agricultural growth … if we do not want … greater wastage or a structural price decline …a buffer for drought years … is better management of bumper crops rather than ever more production. India should shift focus from increasing agricultural production to improving its efficiency (with) investment(s) … in storage and distribution.”

His best one is the warning that “farming comes with a large environmental cost … the Green Revolution is anything but “green”. Current farming techniques are severely damaging to the environment through the depletion of ground water, conversion of forest land and over-use of pesticides, fertilisers and other chemicals … sacrificing the long-term viability of the farm sector. It … made sense in the ‘70s to force a level-shift in food-grain production but why should we be still sacrificing the food security of future generations?”

He reminds us that “it makes … sense to strictly conserve ground water and use it only when the monsoons fail. Special attention should be given to water management (as opposed to extraction). Agriculture consumes 80 per cent of the country’s fresh-water in order to produce just 16.5 per cent of GDP … poor use of a scarce resource.”

The Bad …

Do we need this "Great American Dream"

After such good work, he succumbs to the banal – with some usual conclusions. He thinks that,

very large investments in water systems are needed to maintain even the current growth path.

Large investments in water systems are a bad, imported idea. India’s successful water management model is the nearly local 500,000 water bodies – ponds, lakes, anicuts, barrages, bunds, talabs, bawlees, wells. These water bodies stored surface water – and sustained Indian agriculture for the last 2000 years. Post-colonial India’s quest for Nehruvian “temples of modern India” spurred huge and wasteful investment in large hydro-electric dams. Reviving Indian water systems and rivers will take some 10 years and Rs.25,000 crores. About the cost of two large dams.

With around 70 per cent of the population still in the villages, it is absurd to hope that such a small and slow-growing part of the economy can bring salvation to such a large population.

US agricultural subsidies

Mr.Sanyal, you should consider the following, before you make such a sweeping statement. With the declining power and use of the dollar, the US is fighting a losing battle against agricultural subsidies. The US depends on less than 50,000 corporate ‘farmers’ for 50% of ts production. These corporate ‘farmers’ will abandon agriculture at the first sign of reduced subsidies. Over the next 20-30 years, this leaves India (and Russia) to cater to global food shortfalls. The Western industrial model is in its sunset phase. The Indian agricultural model can be the big winner in the next few decades – under the right stewardship.

And in the meantime, he himself follows up with an observation, “studies by economists like Dipankar Gupta suggest, non-agricultural activity already accounts for around half of rural India’s economy and provides employment to 35-45 per cent of the rural workforce.”

Third, encouraging agricultural growth for exports in not a viable option for India. Export of agricultural products is tantamount to export of water. International trade may make sense for some niche products like tea or for managing natural cycles in food-stocks. However, it cannot be a central strategy for a water-starved country like India. It is especially careless to be thinking about exporting water when climate change may be putting even current supplies at risk.

As pointed out earlier, both water management and agricultural exports is something that is both feasible and sensible thing to do. This is something that India must prepare itself for.

The truly ugly

Meanwhile, policies should be aimed at encouraging the process of moving the rural economy away from agriculture.

Broke ... and Broke

The Ikshavaku clan, (of Ramchandra in the Ramayana fame), became a ruling family for developing the agricultural strain of sugarcane. Bhagwan Krishna came to be known as Natho, for domesticating wild bulls. Balarama is the 7th avataar of Vishnu - whose ‘weapon’ was the plough – the founder of Indian agricultural practice.

The Indian agriculturist has made a remarkable recovery after the colonial collapse – and he may still surprise you.

The aspirations of rural India have already shifted — the literate children of subsistence farmers want real jobs, not pesticides. Why should we stop them? However, this requires a big shift in policy mindset. For instance, we need to shift from a regime of cheap but irregular power supply (which may work for irrigation) to one that is fully-priced but regular (necessary for the non-farm sector). This is our best bet for making India drought-resistant.

After ceaseless bombardment of advertising, with Indian languages weakening due to massive Government subsidies to English language education, is the movement to urban lifestyle a surprise? Not to me Mr.Sanyal. Though, why you are surprised, Mr.Sanyal is a puzzle to me. We need to invest in rural India. Currently rural credit is way below its contribution to GDP – and the low price realizations for agricultural output makes the case for investments stronger.

Next, we need to revisit general governance in rural India. The traditional structures may have worked for subsistence farming (even this is debatable) but they will not support large investments in industry, construction and services. The government needs to focus on how to deliver policing, enforcement of contracts, property rights and so on.

This is about shifting from a world of farm-loan waivers to one that can support large-scale mobilisation and investment of capital in these areas. The Naxalite movement that affects a fourth of India is not due to the failure of agriculture but the failure of governance. At the same time, note that the cause of property rights and governance is not served by the indiscriminate use of “eminent domain” to acquire large chunks of land for so-called SEZs.

Do we need this American model?

When you refer to ‘traditional structures’, are you talking about ‘general governance’ of the colonial Raj – that post-colonial India continued with? Or are you talking about the pre-Raj structures? The Indian peasant was the first and the only peasant in the world to own his property – till ‘Desert Bloc’ rulers started a 800 year trend of ‘landgrab’. Yes. India does need to re-visit ‘general governance’! We need traditional governance – and not the ‘modern’ colonial baggage, that India has not discarded.

We need to give back the lands that were grabbed from the poor Indian peasant and the poor Indian tribal.

The need is for a framework of governance that allows industry and services to grow organically in response to local conditions.

Finally, there should be a greater effort to provide urban amenities for education, health, shopping and leisure at places that are accessible to the rural hinterland. Together with the shift to non-farm jobs, this provision of amenities will inevitably lead to urbanisation. This is a good thing and should be encouraged. However, urbanisation is not just about migration to the mega-cities of Delhi and Mumbai … mofussil towns need to be revived as social and economic hubs

Indian agriculture has a great future – and don’t you ignore it, Mr.Sanyal. On the other hand, industrial over-production, debt-financed over-consumption, American economic model, funded by petro-dollars /Sino-dollars, is about to end.

India cannot go down that path.

Pakistan on Frontier of Fight Against Terrorism – Asif Ali Zardari – washingtonpost.com

The West, most notably the United States, has been all too willing to dance with dictators in pursuit of perceived short-term goals. The litany of these policies and their consequences clutter the earth, from the Marcos regime in the Philippines, to the Shah in Iran, to Mohammed Zia ul-Haq and Pervez Musharraf in Pakistan. Invariably, each case has proved that myopic strategies that sacrifice principle lead to unanticipated long-term consequences. (via Asif Ali Zardari – Pakistan on Frontier of Fight Against Terrorism – washingtonpost.com).

December 17, 2007

More than 18 months ago, the 2ndlook blog, traced the source of all terror in the modern world to the very door-step of the US of A.

In today’s world, behind all terror you will similarly see another baleful influence. No, it is not Osama bin Laden. The source of modern terrorism is the USA. (Decemeber 17th 2007 – from Behind The Web Of Terror).

October 6, 2008

The 2ndlook blog did a Quicktake on the commendable, new Pakistani attitude – best represented by Asif Ali Zardari.

Zardari’s vision (first time, during an interview on Times Now), was for a Pakistan which would serve as a facilitator for good Indo-China relations on one hand – and a Pakistan that is ‘lucky’ to share common borders with the world’s two emerging economies – India and China.

This is the kind of vision that India-China and Pakistan must share and work with. Of course, India needs to be motivated by these statements on one side! On the other India must keep consolidating gains at each step. We cannot let paranoia come between us – and blind faith in human goodwill, blind us to realities of Pakistani politics.

After all, Musharraf did a Kargil after the Lahore Accord – and Zardari questioned the validity of a signed agreement. (from A New Beginning! by 2ndlook).

We must take up Zardari’s offer

Zardari’s most valuable statement is an echo of Indic values was made to Pakistani bureaucrats, “For power to be effectively used for long lasting public good, it must be dispersed as widely as possible”. It is America and Britain which created the border problems, funded and armed these countries and stoked the rivalries. 

EU scraps ban on ‘ugly’ fruits and vegetables – The Times of India

These potatoes didn't know EU rules ...

Europe ends a two-decade ban on wonky fruit and vegetables on Wednesday by scrapping standards that keep misshapen mushrooms and curvy cucumbers out of supermarkets.

The European Union said dropping rules that only allow beautiful-looking produce to hit shop shelves would reduce waste and allow farmers sell more of their crop. (via EU scraps ban on ‘ugly’ fruits and vegetables – International Business – Business – The Times of India).

Shameless vegetables?

Earlier in November, newspapers reported that,

Based on a proposal by the European Commission, EU member-states voted to repeal specific marketing standards for 26 types of fruit and vegetables, including asparagus, cucumbers, carrots, cherries, melons and onions. The standards, introduced more than 20 years ago, have been derided by critics as proof of EU’s madness to regulate everything, under which a Class 1 green asparagus must be green for 80 per cent of its length, Class 1 cucumbers should not be bent by a curve of more than 10 millimetres per 10 centimetres, and a string of onions must have 16 onions to qualify.

Forked carrots, onions that are less than two thirds covered with skin and the over bent cucumbers have been excluded from supermarket shelves. Now, the rules governing the size and shape of fruit and vegetables will be consigned to history.

EU wants bananas and cucumbers to follow 'rules'

To those who think that this over-regulation is a ‘modern’ phenomenon, must look at the Desert Bloc history of nearly 2500 years. During this period, the cornerstones of ‘modern’ societies (based on older religions) from the Desert Bloc are One God, One Book, One Holy Day, One Prophet (Messiah), One Race, One People, One Country, One Authority, One Law, One Currency, One Set of Festivals, et al.

From this Oneness, we get the One Currency, One Language logic  – a fallacious syllogism. Once you accept One, you will accept all others, including ideas like one shape of vegetables. This quest of ‘oneness’ is the root of most problems in the world.

And when you see ‘modern’ law-makers spending time, on making bananas obey their rules, about shape and curvature, you know where this comes from!

Nilekani to head Unique Database Authority, gets Cabinet rank – The Economic Times

Infosys Technologies’ Co-Chairman Nandan Nilekani was today appointed as Chairman of an Authority with Cabinet minister’s rank to steer the ambitious scheme for creating a multi-purpose unique identification database of citizens.

54-year-old Nilekani, the co-founder of the leading IT firm along with N R Narayana Murthy 28 years ago, will head the Unique Identification Database Authority of India (UIDAI) under the aegis of the Planning Commission. (via Nilekani to head Unique Database Authority, gets Cabinet rank- Corporate Announcement-News By Company-News-The Economic Times).

Infosys … PR … gushing media

In typical Infosys style, with a huge PR turnout and saturation media coverage, Nandan Nilekani’s appointment was announced. While there is much to be admired about the success of Infosys, their PR and lobbying (perhaps a necessary evil) grates.

The coming fraud

Coming to the UID project, this project is being sold to Indians as a ‘cure-all’.  As the gushing press reports, it will: -

1. Address security concerns
2. Over-haul and direct the delivery mechanism for public goods and services to intended beneficiaries
3. Also means orders worth crores being rolled out to top IT firms including Infosys, Wipro and TCS
4. A big leap in e-governance and a big leg-up for national security
5. Eliminate wastage and leakage of official subsidies
6. Overhaul the entire subsidy system from subsidising products and services
7. Direct transfer of the subsidy or welfare payment to the target beneficiary

What it will also do is divert attention away from deeper and essential changes, more pressing issues (especially for the poor) like: -

1. Agricultural land reform
2. The reversal of encroachment on forest dwellers lands
3. Education in Indian languages
4. The dominance of Big Industry, Big Infrastructure
5. The erosion of village level economic subsystems

Asuras and Mayas

What this project will do is create ‘maya’ – an ‘asuric’ illusion of a ‘caring State‘, of an ‘efficient’ government, a ‘vision’ of an ‘effective welfare system’.

Above all it will create a logic and raison d’etre for a bloated Government. And that will be Nandan Nilekani’s job. So, while Nandan Nilekani for years, has been proposing ‘lesser government’, he will now be in the vanguard of creating a BIGGER Government.

What more! I am sure Nandan can see this. He is smart.

A flight over Chowpatty that made history – The Times of India

In 1895 an Indian pioneer flew what is said to be the first Indian plane in the air. The centenary year of the first successful flight, by the Wright brothers, was celebrated from December 17, 2003. But our own pioneer from Mumbai, Shivkar Bapuji Talpade, made an aircraft and had flown it eight years earlier. One of Talpade’s students, P Satwelkar, has chronicled that his craft called ‘Marutsakha’(Friend of the Winds) flew unmanned for a few minutes and came down. (via A flight over Chowpatty that made history – The Times of India).

Claims … and reality

Speculative drawings based on Vymanika Shastra

Western claims to superiority over the Rest usually include their record in ‘innovation and invention’. This record is brandished as proof of Western superiority – of Western attitudes, institutions, society, polity, media and academia, values, et al.

Technology – a function of funding

What is usually never mentioned or understood is the funding of technology. Technology is a quantitative function of funding. Western funding of its technology quest was underwritten first by conquest (of the Native American by the Spaniards), followed by slavery (of the Native Americans and Africans) followed by colonialism. It were these forms of exploitation which created a continuous flow of resources (funds, patrons, technology, raw materials) which enabled this technology output.

If …

As this news item points out: -

1. The Indian pioneer could not obtain funds. Another newspaper report (reproduced elsewhere) points out how the British Raj influenced the Maharaja Sayaji Rao Gaekwad of Baroda from support to Talpade’s research.
2. On the other hand, the Wright Brothers were supported by the US Army to the extent of US$25,000.

These reports are linked to an intriguing Sanskrit technical manual, the ‘Vymanika Shastra‘. Some level of critical examination has happened in the last few years. What makes this claim worth investigating is the fact that this manual in Sanskrit came out in India – from a man who had little exposure to technology being developed on the opposite side of the world. While original dating of this document is not yet done, its authenticity as a technical document in Sanskrit, within a few years of Kitty Hawk makes the ‘ripoff-theory’ baseless.

Global economy’s dialogue of the deaf- Opinion-The Economic Times

First, the frequency of meetings should be increased, especially in times of crisis, and the level of a few of these meetings enhanced. So, for example, two meetings a year at the head-of-government level and quarterly meetings at the finance-minister level would provide ample time for dialogue…

Second, the IMF’s permanent Executive Board should be abolished. Important decisions should be vetted by the IMFC and others delegated to IMF management …

Third, the obvious secretariat is the IMF. Unfortunately, the Fund is not regarded as being impartial, especially by countries that have been seared by its past conditionality. (via Global economy’s dialogue of the deaf- Opinion-The Economic Times).

The Raghuram Rajan Report was another tinkering list

On 5th November 2008, Raghuram Raman was appointed as by the GOI as advisor to the Indian PM – to advise the Indian PM about the forth coming G-20 meetings. As ex-IMF man, if he is the ‘expert’ that he is touted as, by this time Raghuram Rajan should know that the IMF and World Bank are international only in name. They are Western Clubs – meant for the benefit of the West.

Trying to clean these Augean sales is a waste. India should engage with the BRICS countries – and focus on creating another institution without the West to start with.

At it again …

In a media outing, (extracted above), Raghuram Rajan suggests that the Developing World (and India) continue to beat our collective heads at Western altars. Why would the West dilute or allow the Rest to take advantage of structures that the West has created for its own benefit?

Just why?

My feeling …

The BRIC leaders know well enough that the West will not let go of the IMF and the UN. The charade of UN /IMF /World Bank Reform is possibly required – and they are going through it. As for Rahuram Rajan, I dont know if Raghuram Rajan is going for a verbal charade – and at the last minute, spring the BRIC currency. What RRR is suggesting is not going to happen – is clear.

What worries me …

Or does he still believe that his ex-employers can be cured – and endured!

Foreign education takes a hit

Out of the around 93,000 students in Australia, over 40 chose to fly back in the wake of the racially motivated attacks. International education is the third largest source of overseas earnings for Australia, generating around US$12 billion in 2008 and supporting more than 125,000 jobs in the country. (via Foreign education takes a hit).

This one hurts …

After all, which self-respecting, WASP (‘White, Anglo Saxon, Protestant’) Nation would like to be dependent on us dirty and crass Indians!

Bad feeling, huh!

Some people do think that that Indians are of no ‘use to Australia in industry or as a market’. Education happens to be the third largest revenue stream for Australia – after raw materials and tourism. And Indians, by the way, are significant consumers for Australian raw minerals and tourism also.

Anyway, such concerned people should let their Government know about these ‘new found facts’. Because the Australian Government is trying its best to attract Indian tourists to Australia – just like they tried to attract Indian students.

Will Indian industry engage Bharat?

Stop giving gyaan

Indian entrepreneurs are capable and talented — the best in the world — and have emerged from the pains of competition and globalisation with confidence and competence. They are the envy of most countries and are the pride of India. They can also be respected, trusted, and cared for — but, they are not, as of now by government, NGOs and the public.

And, this is sad because Indian corporates have, and are, contributing to social development through affirmative action; skills development; micro-finance programmes; women empowerment; primary education initiatives in rural areas; supporting healthcare; building infrastructure in villages; setting up low-cost housing; reconstructing villages ravaged by natural calamities; planting trees and helping the environment agenda, etc. India is the only country where industry has set up care and treatment centres for HIV/AIDS affected persons (ART Centres) — this is an outstanding example of social action. (via Will Indian industry engage Bharat?- Opinion-The Economic Times).

Stop this swill

Mr.Das you surely know this …

A favorite scam in the Indian mobile phone industry is to activate services that the customer has NOT asked for – and start charging him for it. It then becomes the customer responsibility to discontinue these services. If the customer does not pay the bill, his name gets reported to CIBIL, a credit bureau – which will make it difficult for the customer to access other credit services in future.

If he pays the bill , the telecom has succeeded in the scam. The effort required to discontinue these services, in many cases, is seemingly higher than the charge for these services – about Rs.20-30. (40-50 cents per month). The scam becomes outrageous when you multiply this amount with the number of subscribers – at last count nearly 40 crores (400 million).

The Mobile Recharge Scam

We dont need need no gyaan ...

The same scam makes an appearance in mobile recharges. Customers have no way of knowing how and where their money has gone. Hiding behind walls of call centres and IVR machines, telecom companies in India are looting customers.

In the mobile recharge system, an additional victim is the retailer. 2%-4% of pre-paid recharges never reach the consumer. The retailer refunds the money to the customer – and the telecom company in most cases never reimburses the retailer. What is the retailer commission for these recharge services. 2.5%-4%. What are the number of recharges which dont reach the customer – 2%-4%.

Basically the retailer subsidizes the mobile phone companies by providing these services to the telecom customer. A similar story is playing out in credit card businesses, banking and unsecured loans.

Big Business and Big Government

They are both on the same side. Fighting the two Goliath is equally impossible for Desi Ram or Indy Joe. The outrage against these scams is building up – and will damage the faith that the Indian has in Indian business.

A word of advice

Mr.Das, a bit of advice.

Stop giving gyaan to the Government. Look at members in your own association. They are working hard to lose the trust that the average Indian has for Indian corporates. Stop all these wasteful CSR swill and propaganda – and just get your members to work their businesses cleanly. That itself will be a big enough CSR for Indian industry.

I doubt if India and Indians need or expect more from businesses – BIG or small.

Dealing with bow and arrow – The Lalgarh imagery

Clearly, it would be extremely difficult for the largely urban and Western-educated ruling class—the current UPA government has the largest number of MPs who studied in American and British universities — who are also among the richest in the country (300 crorepatis in the Lok Sabha, mostly businessmen) to relate to axe-wielding women who seek justice and honour in the rough backwoods of the country. And it matters little what the political persuasion of the rulers is. States ruled by parties as different from each other (or perhaps not) as the Congress, the BJP, the CPI(M) or the BJD are all struggling with the problem of alienation and extremism. (via Latha Jishnu: Dealing with bow and arrow).

For nearly 40 years, India’s Naxalite problem is known, recognized – and unresolved. This extract above by Latha Jishnu in Business Standard, summarizes the problems and hsitory well – and connects to this interesting document from India’s Planning Commission.

These are the Santhal tribesmen, who made the British Raj look weak in the knees. These are frugal people who have little to lose – and they will not let anyone take away what little they have.

The Big Government in India and the Big Business in India are cosying up to loot these poor tribals. Indian media is so besotted with English speaking politicians and ‘phoren educated ministers, that they fail to notice the disconnect between India’s poor and non-Westernized masses, who will not submit.

There are more ... where they come from ...

When so many women come out in the open, with bows and arrows, one thing is clear.

There are more where they come from.

BRIC demands more clout, steers clear of dollar talk – Yahoo! Philippines News

Change is indeed on its way

“The summit of the so-called BRIC nations of Brazil, Russia, India and China ended with a short statement by Russian President Dmitry Medvedev and a communique that demanded more power for developing nations in international financial institutions and the United Nations.

‘We are committed to advance the reform of international financial institutions, so as to reflect changes in the world economy,’ the BRIC countries said in a joint communique.

‘The emerging and developing economies must have a greater voice and representation in international financial institutions,’ it said. ‘We also believe that there is a strong need for a stable, predictable and more diversified international monetary system.’

“We will not do without additional reserve currencies,” he said, adding that a new supranational reserve currency was also an option as the IMF’s SDRs gained a bigger role.

The initial response from the developed world to Russia’s initiative came from Japan, where Finance Minister Kaoru Yosano reiterated his view that the dollar will remain the world’s key reserve currency. (via BRIC demands more clout, steers clear of dollar talk – Yahoo! Philippines News).

This was predictable

The 2ndlook posts and the Quicktakes on the events in the unfolding global financial crisis have been pre-casting these developments. This meeting was good news. This meeting could not have happened earlier – with elections in India being the delaying proposition.

The meeting has happened. Some old and tired cliches have been shopped out for waiting media. Greater role for BRIC in UN and IMF … is not even old wine (turned vinegar) in a old cracked bottle.

What’s gonna happen

The Chinese and Russian decision to increase holdings of their each others currencies was good development. The greater role for ‘IMF-SDR’ is eye wash. The BRIC leaders know well enough that the West will not let go of the IMF and the UN. But the charade is possibly required – and they are going through it.

The real developments will happen more quietly. After all, the final outcome is something that they, The BRIC nations would like to reveal with fanfare and celebration.

We live in exciting time … or is this a dangerous time?