Former Planning Commission member Mihir Shah on the farm crisis in India

2017_6largeimg06_tuesday_2017_232427087Mihir Shah writes:

The ongoing farmers’ agitation has taken on a shockingly violent form. Discussion has revolved around an apparent paradox: why are farmers rioting after a bumper crop? But any student of economics knows that prices fall after bumper harvests, which is good for consumers but terrible for farmers. This is why the government needs to step in to buy from farmers at a minimum support price, while subsidising consumers so that they get affordable food. This is what we have done over the last fifty years after setting up the Food Corporation of India (FCI) in 1965.

If this system has been in place for so long, why are we still lurching from crisis to crisis? For long, we have said that the solution is to get people off farming. While there is no doubt we need to create more jobs in manufacturing, we must not forget that even in the year 2050, according to the latest projections, there will still be 800 million people living in rural India. And just one look at the state of Indian cities makes it clear that endlessly moving people from villages to cities could actually deepen the urban imbroglio. So solutions have to be found for agriculture — and fast.

Read the full article in The Hindu

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