/**SNAP Code begin **/ /**SNAP Code end **/

Friday, February 02, 2007

Solution Is Next Door

Farmers suicides in Vidarbha is global news. An economics Nobel prize winner, anti-globalizer, and Columbia professor, Joseph Stiglitz, blames suicides on globalization - displaced farmers due to rich countries subsidies. Our own Manmohan blames it on not enough sops and announced an almost a $1billion dollar relief package - that apparently was not enough according to local, so called, activists. And then there are others who relate any free market ideas and market failures to the suicides, comparing interest rates on loans to luxury cars to interest rates on loans to poor farmers to subsidies provided by US to its cotton farmers to blaming the private black market (forced privatization!).

While this blame game and calls for more aid, more spending, more subsidies, and more anti-trade tariff continues, just based on trouble in one part of the country, cotton farming in the rest of country is booming. India will be second largest cotton producer in the world, after China, replacing US. India share of global cotton production went from 12% in 2002-03 to 17.5% in 2006-07. And this when the land for cotton cultivation increased a bit from 7.5 to 8.4 lakh hectares where as the yields increased 50% in five years. [Link]

Our media, as usual being lazy, does no home work to identify the dichotomy. Our government has not analytical skills - that will force it to make rational decision, a big no no. Sanjeev Nayyar, a consultant, provides reason for the dichotomy in Business Standard (via Ajay Shah blog). Apparently Maharashtra state government has to look in the mirror for the cause and solution to the suicides.

Cotton farmers commit suicide in Maharashtra but prosper in Gujarat. The prime minister visits Vidarbha and announces sops, yet the suicides continue. Both states accounted for roughly the same proportion of the country’s production in 1991-92 (Gujarat was 12.7 per cent and Maharashtra was 10.5 per cent). While Maharashtra’s share has increased only marginally in the period since, to 14.8 per cent in 2005-06, Gujarat’s share is up three times, to 36.5 per cent; Maharashtra’s area under cotton has grown just marginally, Gujarat’s has nearly doubled; and Gujarat’s yield is more than three times that of Maharashtra. [Link]

Nayyar compares Maharashtra cotton state monopoly experience with Gujarat's cotton free market experience. With two thirds of land under cultivation, Gujarat produces three times the cotton as Maharashtra. Gujarat focused on improving irrigation system and removing hurdles for farmers to make their own decisions. Maharashtra followed the classic socialist solution to every issue - creation of monopoly. Brides, arbitrary exercise of power, non-payments, and coercion quickly followed - result of any classic socialist solution.

No wonder the media doesn't want to talk about. No wonder Manmohan's government (his agriculture minister is from that state) and Congress I state government doesn't want to do anything about it. Calls for more sops, more subsidies, and blaming globalization won't stop the horror of suicides. Now that should be a scandal and news, not who hosts a game show.

Cross-posted on INI-Signal