[Chetan_Rao]

Originally Posted by poloman

....The same way if you don't extend subsidies or tax breaks to farmers they are going to look for alternatives.....

Who said anything about not giving subsidies and tax breaks? All of that can be provided to farmers who need these, after farming as a profession is made accountable. The problem is keeping the profession outside the ambit of taxation (ergo accountability), which makes life difficult for the really poor ones while the rich reap all the benefits.

Taxation (and the consequent indexing of income) will help redistribute funding to where it actually needs to go, to the poor farmer in Vidarbha (just an example) killing himself to escape debt rather that his rich counterpart elsewhere driving around in vehicles costing lakhs/crores, but picking up the same sops and benefits.

Our farmers need help, no debate about it, but it's about time we focused on helping those that are worse off and need help to survive before we help those that can fend for themselves, and that can only come with accountability, not by unaccounted distribution of largesse while it still remains questionable whether the sops actually reach their intended recipients.

Throwing stuff at the wall hoping something sticks has been tried for decades, hasn't worked, so it's time we tried something else.

Agricultural reform, anyone?

[binand]

Originally Posted by Chetan_Rao

his rich counterpart elsewhere driving around in vehicles costing lakhs/crores, but picking up the same sops and benefits.

Is that rich counterpart driving around with his farming income or by selling his farmland to real estate sharks?

In my view, to help our farmers, we need to give them an exit option. Unfortunately pretty much all government action (union and state level) ties down farmers to farming.

India's GDP is broken down between sectors as 18-25-57 (approx., between agriculture/manufacturing/services). On the other hand, employment breakup is 53-11-36. That is, 53% of our workforce (in agriculture) need to be paid from 18% of our wealth creation. On the other hand, 57% of the wealth created in the country pays 36% of our workforce (in services). It is this imbalance that we need to address.

Another piece of data: in 2016 we have cultivated 105 million MT of rice and 90 million MT of wheat (disclaimer: these are estimates, I'm not sure if the actual output was lower due to drought etc.). If we take 300 g of grains/adult male/day as the benchmark (though kids etc. need far less than that), to feed 120 crore people for a full year we need only 130 million MT. That means we are overproducing grain.

[poloman]

Originally Posted by binand

Is that rich counterpart driving around with his farming income or by selling his farmland to real estate sharks?

In my view, to help our farmers, we need to give them an exit option. Unfortunately pretty much all government action (union and state level) ties down farmers to farming.

India's GDP is broken down between sectors as 18-25-57 (approx., between agriculture/manufacturing/services). On the other hand, employment breakup is 53-11-36. That is, 53% of our workforce (in agriculture) need to be paid from 18% of our wealth creation. On the other hand, 57% of the wealth created in the country pays 36% of our workforce (in services). It is this imbalance that we need to address.

Another piece of data: in 2016 we have cultivated 105 million MT of rice and 90 million MT of wheat (disclaimer: these are estimates, I'm not sure if the actual output was lower due to drought etc.). If we take 300 g of grains/adult male/day as the benchmark (though kids etc. need far less than that), to feed 120 crore people for a full year we need only 130 million MT. That means we are overproducing grain.

Your first statement is true to a large extent. May be some big farmers can also afford to do that.

But for a nation with large population like ours we cannot afford to give an exit option to farmers like that. The agricultural land once lost to real estate or industry is gone for ever. We should be proud that we produce more food than we require, so that some of that can be exported. Do we need a situation in the future in food like the one we face today on energy? Petroleum import bills is one of the major hindering factor in the development of our country.
Agricultural reforms is the need of the hour.

[Chetan_Rao]

Originally Posted by binand

Is that rich counterpart driving around with his farming income or by selling his farmland to real estate sharks?...

The crux of my point there wasn't questioning the source of the rich farmer's income (which should happen from an accountability perspective), but whether all farmers should be eligible for the same benefits irrespective of their actual income, and the governance of the said sops in making sure they reach their intended recipients.

Farmers falling prey to land-sharks is a huge concern but an entirely different socio-economic (and political) debate, some points of which you touched upon in your post.

Our farming community and nation as a whole would be better served by helping those who actually need help and when they need it (the timing is critical too), not by having one-size-fits-all handouts in an unregulated profession, the results of which are plainly obvious, never-ending loan write-offs (at tax-payer expense) in the sector being just one symptom.

But then that's just the opinion of a keyboard warrior, so feel free to disregard if I've got it all upside down

[binand]

Originally Posted by poloman

But for a nation with large population like ours we cannot afford to give an exit option to farmers like that. The agricultural land once lost to real estate or industry is gone for ever. We should be proud that we produce more food than we require, so that some of that can be exported. Do we need a situation in the future in food like the one we face today on energy? Petroleum import bills is one of the major hindering factor in the development of our country.

First, "we cannot afford to give an exit option" sounds quite like bonded labour to me. If a farmer wants to quit farming and pursue whatever their interest is, who are the rest of us to stop them?

Second, and I'm also a bit hazy about my knowledge here (having studied this stuff years ago), there is an economic concept called comparative advantage. What the theory (attributed to David Ricardo) says is that if you do not have comparative advantage in producing something, you are better off not producing it. In agriculture, we do not have comparative advantage - it lies with the developed world due to their advanced farming techniques, higher yield per unit area, better access to irrigation etc.

Third, you forget the fact that the farming yield has been steadily increasing over the years. So, the same number of farmers cultivating the same area of land are producing a lot more output than what they used to in the past. That excess all contribute to farmers getting hardly any money for their harvest. I am looking at some data here:

http://www.airea.net/page/62/statist...-yield-of-rice

Originally Posted by Chetan_Rao

Our farming community and nation as a whole would be better served by helping those who actually need help and when they need it (the timing is critical too), not by having one-size-fits-all handouts in an unregulated profession [...]

I wasn't disagreeing with you. I was just saying that instead of handouts/sops/subsidies/doles/whatever, what the farming community in India needs is a rethinking of their profession based on 21st century reality. Right now, we are producing a lot more than what we need leading to price drops and unsustainable farming. We need to rationalise what we cultivate and how much, improve our distribution network (goodbye, FCI?) and reduce the number of rent-seeking middlemen. Like everything else, that requires a lot of political willpower and administrative acumen that it seems to me is unlikely during my lifetime.

[Chetan_Rao]

Originally Posted by binand

We need to rationalise what we cultivate and how much, improve our distribution network (goodbye, FCI?) and reduce the number of rent-seeking middlemen. Like everything else, that requires a lot of political willpower and administrative acumen that it seems to me is unlikely during my lifetime.

Absolutely no disagreement there. Indian agriculture is still stuck in the last millennium, and the need for widespread agricultural reform is as obvious as it is unlikely, for the reasons you mentioned. For all the talk of helping our poor farmers, our existing policies just supply them band-aids on a regular basis, doing nothing to improve their lot so they don't need these band-aids.

Demonetisation is a painful but temporary phenomenon, the real change needed is evolutionary and will take at least a couple of generations to implement. That is if the decison-makers (today's and future's) actually have the cojones to start the process and see it through across the board without 'considerations' getting in the way.

Time will tell.

[sgiitk]

@poloman; I agree 100%. I find the noise, a lot of just that. In the area of vegetables etc. the farmer is getting what he was getting earlier. It is the middleman who is cut out. A cousin drove around extensively around Mumbai and did not see any tomatoes dumped, etc.

[civic-sense]

Originally Posted by sgiitk

@poloman; Remember the first round was over only on the 30th. Even collating data from Banks, Post Offices etc will take time. Analysis (esp forensic to weed out the 'operators') will take much longer. I fear that we may get preliminary data in a couple of months, but I will be surprised if the real 'artists' are caught in a couple of years.

They were quicker in doling out numbers when this exercise was still on. But ever since it became clear that most of the money out there as 500 and 1000 is likely to come in, information coming out slowed down.

I wouldn't be surprised if this data never sees the light. We will eventually forget everything and carry on with our lives.

[deathwalkr]

Still not getting used to the 2k note. Went to ATM punched in 4500 got two 2k notes and one 500 note and complained to the manager that i got only 2500!

Took me a while for the faint light bulb in my head to blink

Sorry for the distraction, carry on with your discussions

[pramodkumar]

The ATM withdrawal fee is back, you can perform 5 free transaction, 6th onwards its 20 RS per transaction, anyone would like to confirm this?

Pramod

[nowwhat?]

Originally Posted by deathwalkr

Still not getting used to the 2k note. Went to ATM punched in 4500 got two 2k notes and one 500 note and complained to the manager that i got only 2500!

Looks like monopoly money to me... From day one, it felt like transient currency, not something built to last and definitely not meant for hoarding. Two of these 2K notes are still thinner than the old 1K.

I know they spoke of having better security features in the new currency notes, but I really don't see any with the exception of the ascending numerals (Perhaps this aids in tracking?). For all I know, counterfeiters are stumped by the new dimensions because somehow that seems important.

Something tells me the 2K notes would be quietly taken out of circulation over a period of time.

[greenhorn]

Originally Posted by pramodkumar

The ATM withdrawal fee is back, you can perform 5 free transaction, 6th onwards its 20 RS per transaction, anyone would like to confirm this?

It depends on your bank account I guess. Debit card charges are also back it seems
http://timesofindia.indiatimes.com/i...w/56303167.cms

[srishiva]

Originally Posted by nowwhat?

Looks like monopoly money to me... From day one, it felt like transient currency, not something built to last and definitely not meant for hoarding. Two of these 2K notes are still thinner than the old 1K.

I know they spoke of having better security features in the new currency notes, but I really don't see any with the exception of the ascending numerals (Perhaps this aids in tracking?). For all I know, counterfeiters are stumped by the new dimensions because somehow that seems important.

Something tells me the 2K notes would be quietly taken out of circulation over a period of time.

How would people react if they invalidate notes after 2 or some years. People have to keep depositing them in bank with same rules as current exercise but over 3 or 4 months.

Maybe change the colour since that would be easier

[nowwhat?]

Originally Posted by srishiva

How would people react if they invalidate notes after 2 or some years. People have to keep depositing them in bank with same rules as current exercise but over 3 or 4 months.

RBI has done it before with the pre-2005 notes, it hardly caused a murmur.

Anyway with these lame insipid 2K notes, I for one have lost my fascination for cash and have slowly moved to cashless. I gotta admit I was resistant to PayTM at first, but now I am quite comfortable and I have even downloaded BHIM. Yesterday I argued with my barber and grocer why they were still not cashless -- Turns out the former went with his mobile to his hometown and the latter crossed the 20K limit on PayTM.

[pramodkumar]

Originally Posted by nowwhat?

the latter crossed the 20K limit on PayTM.

Read in todays newspaper, the limits have been increased to 50k, Paytm is definitely having a field day.

Pramod