Hearty monopoly

Experts without new solutions end up as part of the problem

On the agrarian crisis again. In a column titled What the heart does not feel, the eye cannot see P Sainath lashes out against the criticism directed against him here (and here):

Then there are the ideologically insane. The members of the sect have no interest in either farmers or agriculture. Only in upholding their Gospel. For them, farmers are dying because they have not been reached by free market reforms. If more of them keep dying after they are reached, it’s because the “reforms have not gone far enough.” It hangs a halo of righteousness around wanton ignorance.

The same `commitment’ also leads to a spirited defence of large corporations wreaking havoc in agriculture. The stout defence of technologies about which the defender knows nothing. Some of this is, of course, ideological. Some of it is also self-serving. Corporations involved in agriculture have organised foreign freebies for their ideological advocates. [The Hindu]

Look closely and you will notice that he offers no explanation why the advocates for a greater role for markets are “ideologically insane”. They are insane because Sainath says they are. And as anticipated, their qualifications and motives are dismissed because, unlike journalists like Sainath, they’ve not been there. He also chooses to bracket advocates of reform with the ignorant and the condescending sorts—arguments that would do Schopenhauer proud.

Experts like Sainath are not insane. Nor do they lack interest and empathy for those hard done by. They do not lack integrity. But it is hard to shake off the impression that it is because of their dogmatic inability to see a solution that they are, ironically and unfortunately, responsible for the persistence of the problem. “What the mind does not know, the eye cannot observe.”

24 thoughts on “Hearty monopoly”

  1. Nitin,

    The key word that all free market fans forget is ‘controlled’ free markets. But then if they are controlled, they won’t remain free. Maybe, the vocabulary should be ‘controlled-enough’ free markets.

    If the “real” free markets reach the places without controls, wouldn’t the poor farmers lands become parking lots one day? These farmers who, atleast have a chance of creating their own destinies now, will become completely rudderless then. And then people are surprised, and embarrassed, that something like communists and naxalites still exist in India. They may not commit suicide then as they might be employed by those MNCs in once-owned lands, but then who will grow the crops if a farmer can’t?

    If you leave growing crops to the MNCs then who will control the prices of food products?

    If everything becomes so easy with free markets, why are farmers even in rich and free market countries committing suicides? If the MNCs start dictating what crops a farmer should grow, we would only see corn fields on the whole earth, and other crops may be in biological museums.

    I think Sainath is trying to address these paradigms, which have remained unsaid in his column, because (I’m assuming) they are so obvious for any open-minded, knowledgeable person to see. Again, without sounding like his apologist, its hard to see that you won’t already know about this.

    If anyone thinks that free market wont bring in MNC monopoly in the farm sector, they’d only be fooling themselves if not just others. And frankly, its not just Sainath who is saying that ‘they’ are insane, we can ask a whole bunch of people spread across the Indian heartland whom the Indian government has called an urgent danger to Indian integrity (and its not ‘Islamic fascism’).

  2. Your post is saying that Sainath “lashes out” against criticism on this blog and Indian Economy blog. I looked for it but couldn’t find any references to Indian Economy blog and this blog it in Sainath’s article. Where exactly did he respond to the criticisms on Indian Economy blog and Acorn, as you said in your post?

    Janesh

  3. Janesh,

    I think if you look closely, you would see that the criticizm is against the line which Nitin has taken. I don’t think Sainath will ever directly link to a blog with which he disagress.

    best

  4. Mr. Pai,

    Surrounded as you are by a number of admirers, it has probably gone past your notice as to what you lack. And that is a sense of justice. I think Sainath is extremely justified in questioning your advocacy of laissez-faire capitalism. Has it ever led to the creation of a just society? Then why do you stick on to it?

    I think it is extremely hard on the farmers if they have to compete with agriculturists worldwide who are massively subsidised by their respective governments.

    Under a different constitution, the government might be allowed to wash its hands off the Vidarbha problem, saying that it is none of the government’s business. But as things stand, the government is constitutionally bound to assist agriculture in every possible way.

    Farmers therefore have every reason to expect compensation from the government in lieu of its past neglect.

    Such relief has, I believe, been ordered by the courts in the past for suicide-hit families.

    Atanu Dey might suggest that farmers move to cities en masse, much like Pol Pot’s idea of making people return to the villages, but remember, one of the Directive Principles of State Policy is to create self-sustaining village economies.

    I don’t claim to understand the economics, but I think a compensation for farmers is an absolute essential, if justice is to be done.

  5. Good post. Do gooders like Sainath clearly harm the people they claim to care for. The increasing rate of suicides in Vidarbha is due to peer pressure generated by reports from people like Sainath.

  6. “The same `commitment’ also leads to a spirited defence of large corporations wreaking havoc in agriculture.”

    I thought it was the government that was wreaking havoc with the farmers.

    Sachin, a poor dying farmer or a viscous blood-sucking MNC are not only alternatives to a farm policy. Would the small farmer not plant corn if there was demand for it?

    Thank you for those communists and naxalites – may be they need a few more years to solve the farm crisis (if they can take a break from that revolution). Heartless free marketers (and now insane) – pay up for the same problem year after year, decade after decade, and shut up.

    A very unfortunate debate.

  7. The Problem in my view is multifold

    Small isnt now anymore Beautifull. Look at any industry and you will see that Small is being swamped by the larger folk. Its more of a Dog eat Dog world.

    Farmers who have large tracts of land are capable of holding off since they have multiple produce which can sustain them in case of a meltdown in price of 1 or 2 commodities, but most farmers who are commiting suicide are those who own very small tracts which isnt either economical or worthwhile to make a living with. But, hope being everlasting, farmers hope that with their produce they can make ends meet. In this hope, they take loans and grow crops which have fetched the highest price (Ie, when the farmer isnt growing any Cash crops) in the last season. But, due to the fact that every other farmer is thinking on the same lines, this results in a Bumper crop and the result is Failure. Sometimes, the govt intervenes with a MSP but most of the times, its too late and too little to be of any comfort to the grower.

    I dont think cheap finance can solve the problem since the problem as I think is the case (I am no farmer and hence maybe wrong) is quite different. Rather the solution would lie in making Education Free and Compulsory especially in Rural areas since atleast with that education, the next generation can make a living out of something other than farming.

    Problem in rural India is that too many mouths depend upon a very small area for their Subsistence and which inturn gets reduced at every generation.

    But, then thats a long term plan which may never see light due to the dillydallying by the politicians eager to exploit any small thing which could be of favour to them. I wouldnt be too wrong in saying that even in case of suicides, all that the politicians can think of is Money, as if that can solve all problems.

    On a shorter term, I believe that if the government can build good infrastructure (read Cold Storage, Roads for transport, etc) and crackdown on Fake Seeds / Fake Pesticide (Crop fails more due to these than due to Monsoon failure though Water too is a very costly input especially when one considers what we pay on a PPP basis) manufacturing / Selling persons, life for farmers can continue for sometime without resorting to suicides.

  8. Prasanth,

    “Sachin, a poor dying farmer or a viscous blood-sucking MNC are not only alternatives to a farm policy. Would the small farmer not plant corn if there was demand for it?”

    If you took the time to read whatever I wrote in my jumbled way, thats what I am also saying. I’ll add something else to your statement. Small farmers will plant corn if there is a demand for it AND if they are paid decent price for it. Milk co-operatives were a success because the producers got a good price (and India was still not a free market). This is not to say India should close up, it means common sense and learning from others who did this before, can pay well.

    Please, you are being kind to give all the credit to me for the naxalites. I don’t deserve even some of it. Its thanks to people (like you?) who look at things with a tunnel vision.

  9. Sachin,

    I think Sainath is trying to address these paradigms, which have remained unsaid in his column, because (I’m assuming) they are so obvious for any open-minded, knowledgeable person to see.

    Nice way to propose solutions to problems. Leave them unsaid so that open-minded, knowledgeable people can see them. “Free markets” leading to MNC “monopoly” is a phrase in the same vein. I’d like to see defenders of Sainath defending Sainath’s solutions. What are they?

    Karthik,

    Justice? For whom? In my response to your comment on the previous post, I asked that given the finite amount of resources the government has, why should preventing farmers from taking their lives be any more “just” than immunising children, delivering meaningful relief to victims of natural disasters or even investment in law-enforcement that can prevent acts of terrorism or communal riots? Farmers are no more entitled to government compensation for failed crops than factory owners are to unsold goods. The reason for government intervention is social welfare.

    You also contend that

    But as things stand, the government is constitutionally bound to assist agriculture in every possible way

    Which part of the constitution?

  10. There are many pointers to the fact that the Constitution fully expects the government to act in the welfare of farmers. One, the preamble that calls India Socialist. Seond, the Directive Principles of State Policy, which asks the Government to ensure a living wage for all working men. Thirdly, numerous Supreme Court judgements have accepted the concept of a Welfare State as a basic feature of the constitution and ordered the Government to come to the assistance of those in need of it.

    why should preventing farmers from taking their lives be any more “just” than immunising children, delivering meaningful relief to victims of natural disasters or even investment in law-enforcement that can prevent acts of terrorism or communal riots?

    I did not say that it is. But since the government seems to be so comfortable on the financial side that it is gifting away the revenue that it gets by setting up SEZs all over the country, I am inclined to think that it must have the few thousand crores to do this small bit of relief. And money to promote primary education, and to immunise children aganist polio, and to reform the police force.

    But you forget one thing, Mr. Pai. That the Government has been involved with agriculture for all this years. It has made decisions for the farmers, decided what they will grow, what seeds they will use, which fertiliser they will use and so on. It can’t run away now that the full results of all those policies are coming out into the open! The risk is borne by the person who makes the decisions, isn’t it?

  11. Karthik,

    There are many pointers to the fact that the Constitution fully expects the government to act in the welfare of farmers. One, the preamble that calls India Socialist. Seond, the Directive Principles of State Policy, which asks the Government to ensure a living wage for all working men. Thirdly, numerous Supreme Court judgements have accepted the concept of a Welfare State as a basic feature of the constitution and ordered the Government to come to the assistance of those in need of it.

    None of the things you point out require the Indian government to pay compensation to farmers who might commit suicide.

    I am inclined to think that it must have the few thousand crores to do this small bit of relief. And money to promote primary education, and to immunise children aganist polio, and to reform the police force.

    You are, of course, entitled to think what you like. The facts, SEZs notwithstanding, are quite different. But it is not merely a question of affordability. Rather, it is the wisdom of it. The solution lies in fixing the bucket, not for the government to pour water in.

    But Mr Cavale, I agree with you entirely that the government is responsible for the mess, and that the onus lies on the government to fix it. However there are right ways and the wrong ways for the government to fix it. The bucket is broken. The right way is to fix the bucket. The wrong way is to simply pour more water into it every year.

  12. as far as I know, there is no decent empirical work on the effect of agricultural policies (pre or post reform) on the livelihoods of agricultural households. there is clearly a huge gap in our knowledge here, so I don’t think either “side” is really arguing from a purely statistical (i.e. survey or other data based) position. petia topalova (Yale, IMF) has the best work so far on the effect of liberalization on poverty (again she does not look exclusively at agricultural households). the major problem with that work is that no causal mechanisms are identified, but I suggest that people at least start with that work (and for work that documents the extent of poverty reduction post reforms see various papers by Deaton (Princeton) and Tarozzi (Duke) and a whole debate on the issue collected in a world bank book). All these authors have decent websites, so access to the papers should not be a problem.

  13. Nitin,

    I completely agree with you that simply announcing loan waivers periodically is of no use. Yet, it is a starting point, and is necessary to bring back Vidarbha to a position where normal agriculture can resume once more.

    But the necessity of immediate compensation is undisputable. I don’t believe that there should be any pre-conditions set for the sanction of that compensation. Because that means that someone else will be suffering, or dying because of the government’s mistakes.

    Regarding the constitutional requirement of compensation to farmers in Vidarbha, I suppose you are pointing out that neither the Preamble, nor the Directive Principles of State Policy are legally enforcable. But then, it does make the intentions of the Constitution-makers, as well as the present Parliament very clear (as they haven’t amended these sections).

    There are many ways for the Government to make more money. For a starter, it can start selling the lands that it holds at market rates to the highest bidder instead of selling them dirt cheap rates to industries in the name of development. Ditto with all those PSUs. And the same goes for setting up of SEZs too. And then it can stop pumping huge amounts of money on wasteful projects like the Sardar Sarovar Dam. Or the latest fanciful idea of connecting rivers with each other.

    Coming to your analogy of the leaking bucket, let me take the liberty of slightly modifying it. Let’s say it is a broken pot with a plant in it. The plant is about to die, unless you water it immediately. Repairing the pot will take a few days, till when you can’t really wait. So you water the plant, and then proceed to repair the pot. Instead, if you wait till the pot is repaired, the plant might be dead by then.

  14. Nitin,

    Sure, I didnt see any solutions in Sainath’s article. But its no excuse to tell the people

    “Hey, there is no solution. So, here’s my solution, go shoot yourself now. You’re dying anyway, and give all your money and land to me.”

  15. Sachin,

    Your comment is extremely distasteful. I would think a genuine interest in seeing a way forward out of the problem is better than sheer apathy. You can reasonably question whether the solutions proposed will work or not, but I fail to see why you should vilify an argument you don’t like to such an extent. If this is all you have to say, why say it at all? This space is for rational debate, for an exchange of ideas that leaves everyone better off. Putting distasteful words in the mouths of people you don’t agree with is not par for this course.

  16. Karthik,

    Sorry friend, but you are way off the mark on the constitutional argument. You claimed that “the government is constitutionally bound to assist agriculture in every possible way”. None of what you cited binds the government to agriculture.

    You now argue that the government can raise additional revenue to pay farmers. Let’s say that is possible. I would again question why the newly raised revenue should be used to pay farmers to prevent them from committing suicide this year, when it can be used for so many other equally life-saving causes.

    My point is that the systemic solution to this problem does not require government to use taxpayer’s money in a significant way. The savings can be used for any number of pressing problems that are possible only with government funds.

  17. Nitin,

    You have not yet told me why none the provisions of the Constitutions that I have cited expect that the government assists agriculture. The reason why they aren’t legally enforcable is that the Government might not be able to immediately fulfill all of these due to paucity of funds. But this isn’t the case, and even if it were, it would still mean that Government can not adopt a policy of not coming to the rescue of agriculture ever in the future.

    My point is that the systemic solution to this problem does not require government to use taxpayer’s money in a significant way.

    Think of it, how will any effort towards improving the availability of credit help if the farmers are already debt-ridden and hence incapable of taking any more loans? You know what, I don’t think Sachin is all that off the mark. Your solution will help agriculture, in the sense that richer farmers may use their savings to buy land from the starving people and the land-consolidation that results from it might result in better productivity.

    But it is not an acceptable solution because we don’t the number of landless farmers to increase. It is the stated goal of the Government, and was the rationale behind the land reforms of the 50’s and 60’s. It is hence necessary that the Government chips in.

  18. Karthik,

    You have not yet told me why none the provisions of the Constitutions that I have cited expect that the government assists agriculture.

    The onus is on you to prove how governments are “constitution bound” to assist agriculture. Here’s what you wrote:

    One, the preamble that calls India Socialist. Seond, the Directive Principles of State Policy, which asks the Government to ensure a living wage for all working men. Thirdly, numerous Supreme Court judgements have accepted the concept of a Welfare State as a basic feature of the constitution and ordered the Government to come to the assistance of those in need of it.

    None of this commits the government to support agriculture. It applies to carpenters, plumbers, lathe-operators and nuclear scientists too. Does the constitution bind the government to support furniture-making, plumbing, machining and nuclear science? In any case, all this business about the constitution is beside the point. It is beside the point because a democratic goverment should have the welfare of its citizens in mind. Including that of farmers (and carpenters, plumbers and everyone else).

    Again, if you read my original post (Vidarbha whodunit), and my two responses to your comments on the previous post, you will notice that my argument is that writing off the loans by itself is no real solution. The fundamental problem is one of fixing the bucket. Once the bucket is fixed, you can provide emergency relief by pouring some water into it to tide over the immediate problem. But simply writing off loans year after year is not going to get you out of the rut.

  19. Obviously, if it were possible that so many people can be meaningfully employed elsewhere, then the government need not bother about assisting agriculture. But, as you would know better than me, that isn’t likely to happen in the near future. And the alternative, when it is implemented, would not be to make them migrate to the already overcrowded towns, but to indulge in other activities while residing in the villages.

    We all (Sainath included) agree that a loan waiver in itself will not solve the problem. The real difference of opinion, if I understand it rightly, is in the way to fix the pot, and whether the fixing of the pot must be precondition to pouring water in it in the present situation.

    The government must loosen its hold over agriculture, but it will still have to give some form of subsidy for agriculture to be viable.

  20. Nitin,

    You’re shooting at the messanger. But I guess simplifying the spin (to Extreme, admittedly!) was always dangerous pass time.

    (I’ve seen worse characterizations of things before, both on the post and the comments, btw)

    Wishes and bye

  21. Karthik,

    We all (Sainath included) agree that a loan waiver in itself will not solve the problem. The real difference of opinion, if I understand it rightly, is in the way to fix the pot, and whether the fixing of the pot must be precondition to pouring water in it in the present situation.

    The government must loosen its hold over agriculture, but it will still have to give some form of subsidy for agriculture to be viable.

    Yes. That’s a good summary of the debate. I’d slightly rephrase it to read “…whether the fixing of the pot must be a precondition to pouring water in it for a permanent solution to the problem”.

  22. Fact is that more mouths depend upon a small piece of land that gets smaller at each generation. There is no way, a farmer can make decent living if his land area is too small to be able to make optimum use of the same. Also, added fact is that most farmers are un-educated which means that they dont even know of any other thing which they can do.

    As I said in my earlier post, there is simply no easy solution. Long term solution is to ensure that the number of mouths depending upon farming comes down.

  23. Well interpreted. I have been reading Sainath’s writings for some years. I do appreciate his concerns about poor farmers. But at the end all that one findsis his blame on rich, class segregation, govt ineffectiveness and wealthy nations. In one writing he ridiculously linked “American’s spending on pets” to the poorr farmers in India.
    No where I found him suggest any feasible solution to the problem. I wonder if he ever thought about economics?

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