TISS report on farmer suicide in Maharastra

A TISS study on farmer suicide on request of High Court. It has some important conclusions about minimum support prices in India (which are lower than cost of production in India, in many cases 50% less), investment in agriculture by govt (which has been steadily decreased to 1.6% of GDP), rural credit system in India (even today more than 50% of agri. loans are from private sources).

It touches some of the broader macroeconomic issues but not in detail.
http://www.tiss.edu/Causes%20of%20Farmer%20Suicides%20in%20Maharashtra.pdf

Meeting the challenge of Mandal II

This is a two part series looking into
a) Social distribution of current graduates 20 or above
b) Defining "merit"
c) Proposing a new model for affirmative action.

http://www.hindu.com/2006/05/22/stories/2006052202261100.htm
http://www.hindu.com/2006/05/23/stories/2006052305841100.htm

World Trade Talks & Agricultural Subsidy

Recently in Sangati we started discussions on World Trade Policy, especially how it impacts developing and third world countries. Its a very interesting topic and one of great importance to almost everyone as these talks have the potential of changing livelihood options for millions (maybe billions).

Brief History:
After the second world war numerous world-wide institutions came into existence. The important ones relating to trade/finance were the World Bank, IMF and GATT. All these institutions were set up by the developed nations with different objectives. The objectives varied from funding post-war recovery to opening up trade among nations. GATT (General Agreement on Trade and Tariffs) was designed to provide an international forum that encouraged free trade between member states by regulating and reducing tariffs on traded goods and by providing a common mechanism for resolving trade disputes. Intially only developed countries were part of GATT. By 1980's most of the developing countries were members of GATT but the discussion agenda was dominated by developed countries. Developed countries wanted developing countries to lower tariffs and other barriers so that their corporations could trade in develping countries more easily. GATT's intial agenda dealt only with trade in goods The last round for GATT talks - the Uruguray round - increased the scope of GATT by signing an agreement on Intellectual Property Rights at the behest of the developed nations. By mid-1990's GATT gave away to WTO (World Trade Organization). WTO covers trade in goods, services, IPR and almost everything. Almost all countries in the world - barring few are part of WTO. As per WTO site its a platform for multi-lateral trade talks and its goal is to improve welfare of people pf member countries.

More detailes about GATT can be found at http://www.ciesin.org/TG/PI/TRADE/gatt.html

Developed vs Developing Countries

Developed countries are interested in opening up services like financial services, goods trade and in imposing intellectual property rights through WTO. The developing world has a nascent or almost non-existent services industry + they are technological disadvantage to developed world. So they are opposed to opening up services, because developed world corporations will crush the local industry. Developing world wants that developed countries open up agriculture and low end manufacturing trade for them. These are sectors where developing countries have an advantage and most of their population is involved in. But developed nations have maintained very high argiculture tariffs making it almost impossible to export to them. But they are more bigger issues in agriculture trade as explained below.

WTO Round of Talks:

The Doha round of talks seem to be stuck on agriculture. In its last few meetings WTO members havent being able to come up with an agreement on this issue because of strong disagreements between developed and developing world. So whats the crux of the problem?

In short, a farmer in developed world gets huge subsides through their respective gevernements and can afford to sell their products in international market at substantially low rates. A farmer in developing country or under-developed countries doesnt get these level of subsidies and is unable to sell their produce in international market at rates offered by developed countries farmers. So their produce is not competetive to be sold in international market. So they are forced to sell at very low profits or below their production costs.

Plus, developed countries have very high barriers in form of tariffs for imported agricultural produce. So these markets are virtually closed for many agricultural goods for the entire world.

In addition, import tarrifs for agricultural goods in many developing countries are not high. So local farmers have to compete with imported subsidized produce from developed countries.
This means farmers lose out on their local markets also.

Why is this a BIG problem?

In developing countries and especially the under-developed countries agriculture is one of the main occupations and more than 50% of the population is dependent on that. These farmers have very few alternate livelihood options and lack of social security incentives. Subsides offered in developed world kill the only area of trade where they have more expertise as compared to developed world.

In upcoming blogs I will go in detail on specific case studies like, EU & Sugar Subsidy, US & Cotton Subsidy, Japan & Rice Subsidy. The issue is far more intricate than the above explanation implies and hopefully details will try to clear those. Once its clear how the subsidies impact poor in the developing world, we will try to look at reasons why developed world govt are so opposed to removing them.

Corporate Subsidy - SEZ land allotment

Humongous amount of land are being allocated at concessional rates for setting up SEZ's by corporations. Another example of "unmentioned" corporate subsidy.

SEZs give rise to new-age landlords- The Economic Times

Corporate Subsidy

All across India, in name of development/jobs, private corporations are given land at concessional rates or free. This is true from software parks in South or industries in Orissa or the topic of discussion below Reliance in Punjab. One example of corporate subsidy being offered by the poor state/central governments.

Earlier I had pointed on blog about SEZ (Special Economic Zones) bill, which is full of corporate subsidies.

Who pays for this? Ultimately the state, the tax payers.

At what Cost? State govts which cant fund "agraian crisis" due to lack of funds (Maharastra), who have huge budget deficits pay these subsidies.

Who cares? Almost no one, because very few seem to be directly affected. This though smaller in proportion earlier has been rapidly rising with the new wave of "development".

I am not against development or new industrial parks or things coming up. But these are for-profit corporations and if they really feel worth it they can invest the money and buy up land at market rates. After all corporations are all for market to work and no government interference so why doesnt the principle apply here.

These are some arguments for doing this: like new jobs are created in the area, new taxes will be collected and so on. Agreed. But there should be transparency in how much subsidy the govt gives for these purposes and needs to be evaluated is it worth it?.

http://www.tribuneindia.com/2006/20060508/main4.htm

The Tribune, Chandigarh, India - Main News: "Punjab out to ‘gift’ land to Reliance
Crucial meeting today
Sarbjit Dhaliwal
Tribune News Service

Chandigarh, May 7
The Punjab Government is all set to offer the premium land worth several hundred crores to Reliance Industries Limited (RIL) for a song. A high- level meeting in this regard has been convened by the Chief Secretary, Mr K.R. Lakhanpal, tomorrow in his office.

Among others, who have been asked to attend the meeting include the Principal Secretary, Industries, the Managing Director of the Punjab Agro Industries and the Secretary of the Punjab Mandi Board.

What is being offered on a platter to the RIL is a piece of a 20-acre land at Mohali. The land belongs to the Punjab Mandi Board and was purchased by it about 18 years ago. The land is just close to the railway station, a prime location.

Of course, the Punjab Mandi Board is opposing the sale of the land to the RIL at a price it was acquired 18 years ago. “At present the worth of the land, if it is sold by earmarking plots, is worth Rs 200 crore. However, if the land is developed as a commercial site and sold for showrooms, it can fetch a price up to Rs 1,000 crore', say real estate analysts.

However, when this land was acquired by the Mandi Board, its price was only Rs 2 crore. The government has"

Electricity Privatization in Delhi

Jan Sunwai on power, water crisis sought

Power privatization in the Capital a `miserable failure'

Option for consumers to choose new meter demanded Selling price of power `exorbitantly' high

The Hindu : Opinion / Leader Page Articles : Of hi-tech, low efficiency, and malls

A good articulation of development debate in India.

The Hindu : Opinion / Leader Page Articles : Of hi-tech, low efficiency, and malls