Thursday, May 4, 2017

Improving farm income

"Preparation for war is a constant stimulus to suspicion and ill will."
—James Monroe (American President, 1758-1831)
Word for the day
Dox (v)
To publish the private personal information of (another person) or reveal the identity of (an online poster) without the consent of that individual
Malice towards none
Why Shri Narendra Modi visiting a temple should be a national news?
 First random thought this morning
I almost killed myself and two school children yesterday in order to avoid hitting a dog who suddenly decided to take a stroll on a busy road and came in front of my car from nowhere. Police refused to file an FIR and take any action against the errant canine.
Why can't animals be treated just like human being and punished for endangering others life, littering and encroaching public land.
Cases of killing and mutilation of bodies of infants and young children by stray dogs are reported frequently in India. There are many cases of attacks on adults, old and infirm also.
Why is it so that media, liberals, nationalists, politicians and civil society has never made hue and cry over these deaths.

Improving farm income

As I suggested yesterday (see here), to improve the health of farm sector, and liberate 40% of Indian population from perennial distress, we need a combination of administrative, legal, social, economic and financial sector reforms. In particular the following three things need to happen, viz., (a) Substantial rise in productivity; (b) Substantial rise in price of agriculture produce; and/or (c) fall in price of agriculture land.
Rise in productivity
My discussion with many farmers, agriculture scientists and rural activists suggests that a substantial rise in productivity is possible without cumbersome land, marketing and labor reforms or building expensive infrastructure.
Aggressive promotion of collective farming, institutionalization of farm equipment rental business, creating more awareness about intensive farming and moving the farmers away from traditional cereal crops towards cash crops could enhance yields by 50-100% in most cases.
In this context, implementation of the food security law is critical. If implemented in right earnest this could transform Indian agriculture from a mere self sustenance activity into a truly commercial activity.
This measure combined with the financial inclusion efforts, could have meaningful impact on the livelihood and productivity of small and marginal farmers.
Substantial rise in prices of agriculture produce
A substantial rise (2 to 3x) in most agriculture produce price could potentially bring back interest in agriculture sector and incentivize substantial investment leading to higher productivity and eventually lower food inflation.
This one time measure could help making taxation of this sector politically and finically feasible thus improving the fiscal balance of the country.
The negative could be substantial rise in food inflation in the short term leading to higher rates.
Substantial fall in land prices
Substantial fall in prices of agriculture land could also help in improving yields and therefore attract fresh investments in the sector.
Such a fall, however could have serious impact on the consumer discretionary spend, as a large part of the growth in discretionary spending has been contributed by the wealth effect created through higher land prices.
The best solution therefore would come only from a mix of the above three. Any solution on these lines might take ~5years to implement and another ~5years to have a meaningful impact on structure of agriculture sector in the country.
Read with the following

No comments:

Post a Comment