Sanjeev Sabhlok's blog

Thoughts on economics and liberty

Discovery of a brilliant liberal scientist of Indian origin – C.S. Prakash

Due to the accident of his commenting on my TOI agriculture article, I found time to study the work of CS Prakash, and I’m deeply impressed.

I wonder how I missed getting to know about him and his work till now. I suppose I’ve paid more attention to economists of Indian origin than to scientists – since from my experience most scientists are completely ignorant about basic economics. But here’s a biologist who – unlike MS Swaminathan – is really good in economics. I presume that’s why Liberty Institute invited him to deliver the 2003 Julian Simon lecture (I’ve requested a copy of the lecture from him and will post it on my blog etc. if I can get hold of it).

As expected, he is also a strong votary of GMO and recently retweeted this.

I’m delighted to discover CS Prakash and look forward to finding out more about his views. If only we had scientists like him in India.

At the minimum one must thank Thomas Jefferson and colleagues who helped create a free nation to which people like CS Prakash could go to, even when they were oppressed within their own nation.

As Prakash has noted about India in a tweet: “800 years of outsiders-ruling have conditioned us many Indians to be slavish to the statist state & made us look up to the government for everything allowing politicians & bureaucrats to be paternalistic. I grew up in the 60s where we were taught ‘Government is God’ in schools!”

Strongly encourage all SBP members to follow Prakash’s work. We would like to involve him in SBP’s agricultural policy development in the coming years.

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Looking for serious money to support a full-fledged training institute for SBP

The RSS took decades of “prachar” to spread its message to the people. Our party’s ideology is entirely different but we should probably follow the same long-term strategy to create an umbrella of paid pracharaks across the length and breadth of India.

I am now looking for financial support and land to establish a training institute for the party which will hire full time pracharaks. I will personally oversight the creation of the institute. I am hoping to launch the training institute within the next few months.

Let me know if you can contribute. Only those with willingness to chip in at least Rs.2 lakhs may please write to me at sabhlok@gmail.com. The institute will need at least Rs.20 lakhs to start.

 

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My next planned TOI articles on behalf of SBP

After five articles in TOI I’m now planning a few more. My plan, in chronological order:

a) To send by mid-August: On mining reform

b) To send by mid-November: On education reform

c) To send by mid-February 2019: On water reform

d) To send by mid-May 2019: On urban planning reform

e) To send by mid-August 2019: On environmental protection

I’ve already finished one on governance reforms, but I’ll try to get it published elsewhere since TOI doesn’t seem to take more than one article every quarter.

I’m not taking any comments on this blog but don’t mind any specific inputs from HIGHLY KNOWLEDGEABLE PERSONS in the above areas. Please send me at sabhlok@gmail.com.

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Response to comments on my TOI agriculture article

I have compiled below some comments on my agriculture article. And a brief response, as appropriate, in blue. Very few sensible people in India, as these comments show.

===SOURCE TIMES OF INDIA ==

Raghavan Srinivasan: I agree with the author that the Government must be kept off from agriculture. Farming if done well will not need any of the loans, subsidies and the like. Providing these has failed agriculture and created corruption and spoiled the integrity of people who are honest otherwise. Instead, Government must build infrastructure, link rivers, build dams and village ponds, all of which are capital expenditures in nature giving long-term benefits like farm productivity, inclusiveness in agricultural operations. [Sanjeev: the government doesn’t have a role even in some of these items of local infrastructure. The government must not subsidise agriculture in any way since that will distort incentives. Irrigation must be fully cost recovered. Only general infrastructure can be supported by the taxpayer].

The moot question that remains unanswered in this article is whether marginal farmers can independently conduct profitable agriculture? The answer is a big NO because their lands are fragmented, they are in perpetual debt, they are handicapped in marketing their produce profitably and fall prey to market intermediaries. [Sanjeev: It is NOT the job of government to pick particular sectors of the economy for support. Marginal farmers are not special. We need just the optimum number of farmers – not too many, not too few. Currently we have too many. Most of them should shift employment and move to the services or manufacturing sectors to improve their income.]

With a growing population, migration of farm workers to find new pastures away from villages, unremunerative prices, failing quality seed availability and depletion of manual labour and lack of enterprise to conduct agriculture are good reasons to understand why agriculture cannot be performed independently. The only way out is pooling of lands by marginal farmers, who constitute the bulk of the farming community today.  [Sanjeev: it is not the job of government to “pool” any land] Their lands must join a group of non-exploitative entrepreneurs to conduct agriculture. These men will bring the latest technology, conduct soil assessment and apply the soil water balancing techniques, explore markets innovatively, examine possibilities for value-addition and many such initiatives that have a making of an Industry of Agriculture. The takeaway from these initiatives will be the employment of everyone including livestock in the village, peaceful living, generate monetary needs for education, medical welfare and all that is necessary for becoming an agricultural behemoth. We need to help ourselves and not expect the Government to do all that is necessary for our wellbeing. This must clearly be understood. We need an out-of-the-box solution to fight the agrarian crises. [Sanjeev: this is A VERY BAD IDEA – JUST STICK TO GOOD ECONOMICS. DON’T TRY TO SECOND-GUESS THE PRINCIPLES OF ECONOMICS!]

Raman Govindan: the first and major mistake was to dole out the surplus land to land less farmers. China waited for a long time until the economy picked up to sell the lands to them! without necessary capital they struggled and and the farming output decreased or did nob go up as anticipated. plus when the govt. needed the lands for industries and infrastructure it was Herculean job to acquire it back. and they were delayed to the detriment of development. the fixing of minimum support price and govt.procurement made the agriculture non enterprising one. it just became another govt. dept. the Fabian socialism of Nehru and the left parties made it sure that the agriculture cannot be a remunerative profession/career. we made mistakes to get votes and and made sure that the nation struggled and the farming community too!

Shri Naresh: Yes it is true we must free agricultural activities from the shackles of unnecessary governament controls only free market can improve the incomes and conditions of present day farmers let market forces play freely and see what happens be optimistic things will improve for better definitely .

Harsh Bhola: Excessive production of a produce and thereby a glut and very low prices is a bane to the farmers . How can this be addressed ? Can this be addressed through govt. Intervention or market forces ? The middle men , it seems make exorbitant profits in thick and thin both. Can this be addressed through govt. intervention or market forces ? Fortunately we have a committed govt. at the centre. I think a committed and sincere govt. can bring about change in the fortunes of farmers. [Sanjeev: Wishful thinking. Modi runs one of the most incompetent governments in the world and has not clue about public policy]  If the lot of farmers and connected personnel does not improve the lot of India cannot improve as desired by all of us.

Mahadevan Kv: Agriculture has been made a holy cow which needs to be looked after by the government -all in the name of “garibi hatao ” . It has become a vested interest to maintain the farmers in perpetual poverty and debt trap so that subsidies and support prices can be used as vote catching tools by the politicos and money stealing tool by the beurocracy. . No political party will do anything to change the system and no govt babu will allow the system to be changed. . Who will bell the cat ?

Vivek Musmade: Being a farmer it’s very difficult to talk about abolishing subsidies further removing MSP concept is also debatable issue considering sugarcane further Govt Machinery is totally corrupt including non performing agri universities which are not addressing farm mechanisation issues and also GM variety issues such as of cotton which has hampered farm income basically in vidharbha and marathwada their are many issues including farmers sentiments including commercial thinking process , being optimistic life ,further rural women upliftment issues including women’s life and their financial independence

Gautam Jain: Sir, I disagree with your remark that power subsidy will draw more water from ground but u didn’t considder about farmers will do agroforestry which will bring the water table up so ur idea is totally wrong  [Sanjeev: ALL SUBSIDIES ARE  POISONOUS, THEY DISTORT INCENTIVES AND DESTORY A COUNTRY’S WEALTH. PERIOD.]

Ramesh Zade: Very apt analysis of rural poverty and agrarian crisis. This issue should become pivot in 2019 election. It’s even responsible for urban poverty and economic slowdown. I was hoping some changes from present government in this regard but remain clueless around Swaminathan committee recommendations. Hon.Sharad Joshi had done marvellous work not only in this field but also took national interest in to consideration. But very few of us know and will to carry out his tremendous work. But his solution is workable dynamic and need of the time. Lets work……..Ramesh Zade  [Sanjeev: Well said]

Prithvi Gulati: Has this gentleman ever seen how agriculture is done? He quotes Newziland and Australia, which are surplus land area with very low population ; what about comparing with European countries with high density population, further he wants small farmers to become beggars, since there are no jobs available for them, he doesn’t know that small farmers are taking to all new technogies since last 40 years and there is very slow development in agricultural research and also in Extension programmes. He should go through Prof. Ashok Gulati’s writings to find out what ails Indian agriculture. These days every body wants to be a specialist [Sanjeev: It is futile to attack my knowledge of the grassroots realities of India. I’ve worked many years in the IAS at the grassroots level. I know all about India’s bogus government programs. Try attacking my arguments, instead.]

Manab Roy: Since 200 yrs of british raj,70 yrs of british chamcha raj farmers are made bonded labour.presently some progress in policy is noticed. [Sanjeev: I can’t see any significant change in any policy settings] Now agricultural sector became lucrative for to many wealthy.and they wanted to extract large some out of it.govt should restrict entry of these breeders.Let the farmers live with their self respect

Dharmapada Bhuyan: A simple analysis of the nerds of a consumer would tell us that everything that people use can be produced in a factory except organic food. Every other process of producing goods are a reduction process where tonnes of raw materials are to be reduced to get a few kilos of finished goods. Let us observe any product be it a furniture, household equipment, electric wires and fittings, construction materials, electronic gadgets etc., all these are created by reducing raw materials of nature. Only agriculture is an additive process which sows fistfuls to reap bagfuls. But in our blind pursuit of urbanisation and consumerism, we neglect our basic needs of FOOD and potable water. Huge areas of cultivable land are being acquired for highways, railways, airports and industries; more water is allotted to industries; flora and fauna are being destroyed indiscriminately at our own peril as a human race. The speed of depletion of natural resources is not a quick reversal process. SHORT TERM GAINS NEVER WILL BE ABLE TO SUSTAIN LONG-TERM NEEDS. WELCOME THE DEATH OF CIVILIZATION BASED ON CONSUMERISM IN VERY NEAR FUTURE.

Have you ever searched the internet to know about the per capita land available in different countries? Please do that before commenting. It is the lowest in the world for India. Hardly 2340 sq.m of land per capita in India as against 6770 sq.m in China. Other countries have much greater area per capita. [Sanjeev – an entirely bogus set of ideas, these. Try understanding economics and economic history.]

Viswanathan Balachennai: Non interference by central and state govts and self regulation are best be it agriculture,education,housing ,health etc.That is what Mr P.M. said during elections”THE GOVT THAT GOVERNS LEAST IS BEST GOVERNANCE”.But who listens including P.M. himself. [Sanjeev: Well said]

AW Nayma: Become a farmer then talk about them, practically this is impossible and very misleading,this is nothing but letting in big corporates into agriculture and no farmer will agree to this and be comfortable with it the aurther himself has said how Western countries had 71 percent of it’s population in agriculture and now only 5 percent is in it this is nothing but a trap being laid down for the farmers,imagine all these farmers with no work this will create havoc. [Sanjeev: IT IS PEOPLE LIKE YOU WHO HAVE LEFT FARMERS TO ROT IN TERRIBLE POVERTY. NO country can claim to be advanced if a vast proportion of its people are engaged in farming. You are the worst type of enemy of farmers.] i do not agree with this author,sir kindly refrain from destroying the agriculture sector with this brilliant ideas of yours.

Raghavan Srinivasan: I hold a similar view on whats going on with farmers and farming. Today a marginal farmer who constitutes maximum numbers and is destitution cannot adopt the suggestions made by this author. So my prescription is as under.Paradoxically, there is an inopportune judgement of our agricultural crisis in India, for many reasons. Without classifying farmers between large, medium and marginal landowners, the application of a uniform policy on agriculture has skewed the efforts in many respects. [Sanjeev: NO. Farmers are just any other citizen. NO special policy is needed for farmers. Just LEAVE THEM ALONE and let the government perform its core functions] Ms Madhumita Shah wrote a piece on the subject of agriculture for Zee News. She quotes the FM, â The current government is committed to seeing agriculture as an “enterprise” and not simply a livelihood. This means that farmers are now seen as an entrepreneur and not someone who just works to fill his belly or that of the nationâ . Before the main article, she puts out a small inscription that reads â Though Jaitley made his government’s goal clear, there was little clarity on how to get thereâ . The following liners may throw some light on how to get there. We need to differentiate the types of farmers in our country. Farmers with large land holding possess the entire wherewithal to conduct agriculture profitably, in food crops mostly. For them, the buyer of their crops is usually the Government for distribution through the Fair Price Shops. If the Government fails to buy their produces, they too have a problem to market and realise a realistic value. With deep pockets, they do not suffer much but are able to tide over issues of marketing. They can also influence policymaking and the recent earmarking 1.5 times the cost of production as Minimum Support Price (MSP) in the current budget could well be one of their demands. This is only a guess and not an accusation. Small or marginal farmers do not sell to the Government, as their volumes are insignificant and do not possess collective strength.The medium-sized farmers are those who can manage agriculture, albeit with some shortfalls. A few are members of Farmer Producer Companies. Since its formation, the operations of many FPC suffer from bureaucratic leaning, similar to the heads of Cooperative Societies! Member farmers have to individually produce crops of their choice and seek any help like input supply, marketing or banking assistance when necessary. When monsoon fails, they are helpless. They have little know-how on water conservation and similar techniques of agricultural operations/innovations. For marketing, they are introduced to bigger intermediaries. Others, who do not form part of FPC group get help from NGOs and other institutions. This help is unsustainable as they all need the assistance of intermediaries to market whatever they produce. They get unremunerative prices, as they claim. Mr Ashok Gulati, a former Chairman of the Agricultural Prices Commission, argues that the farmers may typically get as little as 25% of the price that consumers fin

Chandrasekhar Reddy: Yes,all the subsidies and MSP are farce.Regulations only benefit the buerocracy and politicians

Raghavan Srinivasan: I agree with the author that the Government must be kept off from agriculture. Farming if done well will not need any of the loans, subsidies and the …

Tejas Shah: 100 percent agree with everything. But unfortunately, none of these will happen. What will politicians do if they fix farmer\’s issues?

==SOURCE ECONOMIC TIMES ==

Veeraputhiran Balasubramoniam: liberalization must be with some controls and restrictions like any government procurement with in the country must be from the farmers of this soil. [Sanjeev: THIS IS A TERRIBLE IDEA. Let’s not distort incentives and investment] and the price fixation must be done by the government and exports must be through the Government at a export market average price fixed by expert committee and for different country must be different like US highest , Indonesia lowest (i.e) affordability of the people of specific country.if for Somalia it could be for free also.

Kishore Shivani: THE TRUE LIBERALISATION WILL ONLY TAKE PLACE IF THE GRIP OF RICH FARMERS AND FILM CELEBERITIES AND THE INDUSTRIALISTS WHO USE THE FARM SECTOR TO CONVERT BLACK TO WHITE ARE TAXED THE POOR FARMER WILL WHOLE HEARTEDLY SUPPORT THIS  [Sanjeev: Thanks. This is indeed SBP policy]

==SOURCE LINKEDIN==

Anand Shanker Pandey: Wishful thinking, no concrete suggestion, market economy is not a panacea and in real sense no market is completely free. [Sanjeev: IDIOTS LIKE THIS ROAM AROUND IN INDIA IN VAST QUANTITIES – totally useless, totally harmful to any future development of India]

Amit Shukla: Subsidies and doles are popular, not because they end poverty, but because they end political poverty and government employee poverty.

Subsidies to the poor end up more in the pockets of the politicians and government employees who are supposed to administer the subsidy, and the grass-root political workers(employees?) of the political party.

And that is precisely why they are so popular. [Sanjeev: Well said]

seshadri akella: Subsidies and doles will continue to be given to keep the poor in perennial poverty, so that they live on government mercy forever and vote for those who give the subsidies and doles.

Kuldip Mehra: Good intentions but no govt can do much, forget all, of what is suggested in this article.

Intentions count. The assumed intention behind all the controls on agriculture sector was that farmers lack access to money, information and market, the govt as a supposed well wisher of its citizen was given the role of protecting farmers while it  prepared farmers to eventually take up these responsibilities on themselves. [Sanjeev: It is NOT the job of government to protect any sector of the economy. Its job is to perform ITS OWN FUNCTIONS, WHICH IT DOESN’T, IN INDIA]

Unfortunately the truth is that no indian govt ever fullfilled its objectives both due to avoidable as well as unavoidable reasons. We can try free market actors to play the intended role  now but be assured that they may also not fullfill the part of making farmers more aware. Free market wont solve anything if farmers remain ill informed. Dont forget that the fact that such large population still depend on farming for jobs is in itself a failure of govt.

If we started to remove govt from everywhere that it has failed to perfom, we wont have a govt. [Sanjeev: WHY DO IDIOTS LIKE THIS ROAM AROUND IN INDIA SO MUCH? THEY WANT GOVERNMENT IN EVERY FIELD OF HUMAN ACTIVITY. MISERABLE DUFFERS]

There is only one answer to non performing govt i.e. get a performing govt,. There are no alternatives to it. Look at education, housing or health, just making a sector accessible to private players does not make it any more effective.

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