Most of the non-farmer population is poorer than farmers with the surplus
India is now both wheat and rice surplus. India’s Minimum Support Prices (MSP) is about 40% higher than world wheat prices, and depending upon the rice category, up to 20% higher.
So any higher yield is not going to increase the income of farmers because there is no domestic demand. Costlier than the world market, we can’t export them either. The same is the case with sugar. If the government increases MSP further, that will simply be a transfer of wealth from one section of the population (non-farmer) to farmers with the surplus. Most of the non-farmer population is poorer than farmers with the surplus. So it will be immoral and economically destructive as all government forced transfer of wealth are.
So, how can farmers have increased incomes? How can India survive this confiscatory practice called Minimum Support Prices?
So why do we not have cold storage chains, food processing industry, dairy produce processing industry?
Almost all other crops are more labour intensive than wheat, rice, and sugarcane. Labour has gone to MNREGA and Rs 2 kg of wheat/rice. So farmers are not switching to other crops. If they switch to fruits, again, labour will be a problem, and prices will crash in seasons of the respective fruits as artificial surplus will be created. Because India has no system of cold storage chains that can preserve fruits beyond the season.
Another way of avoiding the seasonal crop, not just fruits, is to convert it into another form, that is, process it into something else. Like oranges into juice cans that can survive the whole year. For that, again, we need food processing industries.
In fact, if we could have a similarly dairy produce processing industry, we can shift huge manpower and areas from wheat/rice/sugarcane to dairying.
So why do we not have cold storage chains, food processing industry, dairy produce processing industry?
Two reasons, interlinked.
First, we do not have cold storage chains, food processing industry, dairy produce processing industry because of…, can you guess it?
Well, the answer is the same old: The 150 clearances, permissions, licenses, NOCs, and over 55 government inspectors, and once you have got them all and bribe the 55 inspectors, you discover the 151st permission and the 56th inspector who comes to lock your working plant. If you somehow buy him also, there are NGTs, EPAs, SPCB, CPCB, all the high courts, the Supreme Court. And of course, do not forget the local rangdar.
But if you get supreme lucky, and fly under the radar, still there is the second cause.
The second cause is that there is nobody to buy your products. Yes, the folks surviving on MNREGA and Rs 2 kg rice can not afford your juice can.
And they have MNREGA and Rs 2 kg of rice because there is no industry to give them higher-paying jobs!!!
And there are no industries to give them those higher-paying jobs because, well, the answer is the same as above: the 150 clearances, permissions, licenses, NOCs, and over 55 government inspectors, and once you have got them all and bribe the 55 inspectors, you discover the 151st permission and the 56th inspector who comes to lock your working plant. If you somehow buy him also, there are NGTs, EPAs, SPCB, CPCB, all the high courts, the Supreme Court. And of course, do not forget the local rangdar………
So, to increase farmers’ income, you need industrialization of India, and for that to happen you need to set the entrepreneur free and give him the rule of law.
Everything else is hogwash, stupidity, timepass, some new stratagem of the permanent looting elite of India.
And if this obvious truth is not obvious to those who control the destiny of 135 crore human beings, then there can be only one of the two reasons: either they are braindead stupid, or they are more cruel and heartless than the animal you will get if you mate a Tyrannosaurus rex and a hyena.
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Yes, a few will get higher income. The rest will be out of work. There’s no way industrialization will raise income without displacing more farmers. And we just can’t tell them to go to school. That will mean English school and more free labor and markets for the western companies. They need to develop local language capabilities and Indic versions of all the products to sustain themselves while keeping competitors away.
Agree with you on every point.