I read an article yesterday on farmer suicide. Consider the plight of a farmer who changed from planting beet on his land to planting onion because the market price for onion had been going through the roof. Come the time to reap his crop and take it to market, the price for onion had dropped so far that it was not even worth the risk to try and take it to market. The transportation cost exceeded the amount he could have realized from the sale. Unlike some other crops, I hear one cannot leave onion unharvested, and you cannot dump it for mulch or fertilizer.
The first temptation is to set mechanisms such as floor price to protect the interest of the farmers. Step one away from Capitalism. Unfortunately, this does not really work to the benefit of the farmers. Middlemen and corrupt officials arm twist the farmer into signing for the support price while paying him short. Sugarcane factories in Maharashtra have recently been in the news for not paying farmers their dues for years. The sugarcane factories are under pressure too, for some are running at less than half capacity and unable to break even. The solution was to then institute a law that forced farmers to sell their sugarcane only to the sugar factories in their own sub-district. They were not allowed to cart their own produce to a market that offered a better price. Now we are two steps away from Capitalism. Follow this to its logical conclusion and pretty soon we have a full blown licence-raj where some wise babus in Delhi get to plan how many scooters should be produced in the country. We have seen how that worked out.
But back to the farmer, for this is where Capitalism falls short. The tenets of Capitalism dictate that if you do not produce what the
customer wants at the price the customer is willing to pay, then the
free hand of the market will reach out and slap you. But what did this
farmer do wrong? He did try to produce what the customer wanted at a price that
offered value to both himself and the customer, only to find the rug
pulled out from under his feet after he had toiled for months.
Ditto for the newly retired people who put their life savings into a new home or invested in the stock market a little before 2008 only to see their support system destroyed and twenty years of remaining life staring them in the face. All while the BSDs at the investment banks took home their multimillion dollar bonuses.
Is more regulation is the answer? What am I saying? Contemplating more regulation is the top of that slippery slope that leads to a planned economy. Even with all its vices, Capitalism might be the best we have got.
And this is vexing, for the concept of survival-of-the-fittest evokes one emotion when you consider the winners, quite another when you contemplate the dying.
3 comments:
Imperfect solutions, mutating problems. Somehow, you see awareness and quality education as the only answer. But quality education in itself is another vexing question. It's almost like responsible journalism - there is a great big need for it, but somehow there are no solid measurement and hence monetary returns for being a good journalist/teacher
Countries that propagate capitalism do not really have subsistence farming. Farming, by its very nature, probably requires scale economies. Trying to provide for the subsistence farmer is a socialist problem..(assuming that the farmer is a subsistence farmer, else loss of one crop shouldn't need suicide) Wondering how a socialist problem can be resolved by capitalism...hmm.
1. Aren't all models presently seen, in some way - consumption based and hence innately capitalistic?
2. I haven't come across any hue and cry from any of the political parties or activists about farmer suicides in Konkan or even whether suicides are happening. Is Konkan oblivious, impregnable or not worth it?
---not rhetorical questions, but innocent & genuine doubts
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