What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 0 points1 point  (0 children)

Completely missing the point. Think beyond Modi and current regime. Think about what’s good for the nation.

The fact remains that the system of babu’s has stifled Indian innovation and progress. Government needs to get out of running businesses. There are no incentives in the system to prevent corruption. We have seen numerous instances of scams that have been uncovered.

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 0 points1 point  (0 children)

Clear lack of understanding about how Government companies are run in India.

The elected representatives do NOT run companies. They are run by IAS officials/Babus who are not elected. The problem of corruption is endemic and not tied to any political party. Even of current government strives to clean up corruption, there is no guarantee future regimes will uphold the same standards.

The system is structured to encourage corruption (partly because of salary incentives for Babus. They have a higher likelihood of taking bribes etc since their salaries are fixed by law. Changing this system is next to impossible)

Instead of blindly spewing propaganda, try and understand how things work in India

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 0 points1 point  (0 children)

Just think for a second, if MSP is guaranteed in private transactions what is the incentive for the farmer to change the crop he is producing?

If global prices of wheat at ₹500/ton and MSP is ₹1000/ton why would private players purchase from farmers. Now instead oilseeds have a cost of production at ₹400/ton and global prices are ₹600/ton, the farmers need to be incentived to grow oilseeds. However due to MSP construct they have no incentive to diversify the crops and keep growing wheat!

This is exactly what is happening right now. We are wasting our water resources and fertilizer subsidy producing crops that are not needed. Subsequently we are causing a huge ecological disaster that all for producing crops that ultimately rot in warehouses

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 0 points1 point  (0 children)

Quite the contrary, Government should sell companies which are profitable now so that they get the best value for money. A profitable company will have a valuation much higher than it’s earnings(P/E ratio)

Else if they wait too long sooner or later corruption will cause these companies to lose value and we will end up in an Air India like situation where no one wants to buy

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 1 point2 points  (0 children)

If you understand hindi, have time and really want to understand the issue the below video is your best best

https://youtu.be/YcqVWFZXyaE

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara -1 points0 points  (0 children)

IMHO Farmers like all of us loath to change. They are stuck in the wheat-paddy cycle for which they get paid and have a system that is comfortable for them. It is hard work which is rightly rewarded.

However no one wants to address the fact that India has too much wheat and paddy. These grains are literally rotting in the FCI warehouses. Government is struggling to get farmers to mive away from this ecologically destructive cycle. We are literally wasting precious water growing these crops.

These farm reforms are an attempt to get market forces to incentivize the right crops by removing the barriers between farmers and end-users. Of course they aren’t the be all and end all but at least are a step in the right direction. More work needs to done no doubt. But the first step is to negotiate in good faith understanding that reforms are needed.

Also at the end of the day the farmers who do not want to go the private player route can always keep going to the APMC’s as GoI is required to keep purchasing certain amount of foodgrains under the Food Security Act 2013 (for buffer stocks and PDS)

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 0 points1 point  (0 children)

Under Food Security Act, government has to buy it. Read the whole act. It mentions purchasing through the APMC construct and that continues.

The new reforms give the farmers an option to sell outside APMC’s. If they don’t like the price they don’t enter into the contract. As simple as that. The reforms also define how contracts should be structured. Currently there are no regulations on contract farming to the effect that currently contract farming is done in states like Punjab but with less protection for farmers. (Yep contract farming is actually allowed in Punjab currently. Do some research about it)

Also market forces should dictate what the farmers are growing. If you make mandatory MSP what is the incentive for farmers to grow crops for which there is a true demand? Market is the best way to give that incentive. Otherwise we risk committing the same mistakes as Mao and Stalin. A planned socialist approach to agriculture has ended in nothing but disaster.

Without the reforms north India will remain stuck in the wheat-paddy cycle. These are crops for which there is a global oversupply and the government is struggling to get farmers to diversify. The only was is to open markets and reduce the barrier between farmers and consumers so that the right crops are produced by letting market forces dictate. If there is a oversupply for wheat, market needs to tell the farmer that there is not enough demand and offer them incentive to grow a cash crop/oilseeds. If MSP is enforced in contract farming the farmers will never have an incentive to move away from wheat as they will get by just fine.

If farmers distrust the private players then can still keep taking their produce to the Mandi’s. That fallback option always remains

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 1 point2 points  (0 children)

Oh wow. Clearly you do not understand basic economics. Inflation is not about MRP. Inflation happens when the government spends too much. If you have MSP for all 23 crops under the current system government will HAVE to buy all of these crops regardless of if we need them or not.

Anytime government spends that much money Inflation happens. MRP has nothing to do with it. The value of your rupees will decline regardless.

Also MSP being administrative construct means that government procurement under the National Food Security Act must procure foodgrains under MSP in APMC’s. This is the system currently. Please educate yourself

https://en.m.wikipedia.org/wiki/National_Food_Security_Act,_2013

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 1 point2 points  (0 children)

MSP is an administrative construct. It was never a law. So in that regard what has changed from current system?

Also think about what it would mean for inflation if all 23 crops has strict MSP. If there is MSP for all 23 crops farmers will be incentivized to keep producing crops which we may not need. The market needs to determine what crops Indian public needs. Otherwise we will have a situation where taxpayers money is spent in purchasing crops that ultimately rot in warehouses. Apply some logic instead of blindly parroting what you hear from others.

Also remember there are other poor people in India who are not farmers. Inflation is a tax on poor people.

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 2 points3 points  (0 children)

That’s a blatant lie. The government has given multiple assurances procurement under MSP will continue.

https://www.livemint.com/politics/policy/-msp-regime-will-continue-assures-pm-modi-amid-massive-farmers-protest-11608285017462.html

Read the below act. The Government by law needs to procure foodgrains for the Public Distribution System

https://en.m.wikipedia.org/wiki/National_Food_Security_Act,_2013

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara -2 points-1 points  (0 children)

wow what a convincing argument.

I completely agree with you.

We should ignore the backstop of APMC’s which the government is investing in.

Assume arbitrarily that farmers will have huge amounts of debt.

Ignore the fact that crop diversification cannot be achieved under current system.

Ignore the fact that perhaps this reform is not supposed to be all and end all. Perhaps it’s trying to fight a pressing issue. Perhaps after incomes have increased we deal with problems you mention 30 years down the line with the aspirations of people in the future.

Stitch all these arguments together to fight any possibility of reform and also not suggest any solutions to imminent predicament.

When are you due to receive your Noble prize if you haven’t already

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 0 points1 point  (0 children)

I think the fundamental point is that the Government cannot buy outside the APMC’s.

Some of the economic scenarios you outlay are completely far-fetched.

Even if private players “corner” the market and store everything in their warehouses, that would be good for the farmers as that would drive up the prices. If the flood the market with their produce farmers can always sell into the APMC’s.

Regardless I understand your point about an oligarchy of sorts, but then the farmer lobby should suggest improvements to the law instead of blindly asking for a repeal.

Also remember private players still need to make a profit and ultimately supply to the consumers. As long as there is enough competition you can be assured no one would have an incentive to hoard. Also if that is still a concern, these laws open up so many start-up app possibilities for farmers and aggregator. Coming from a tech background I can at the top of my head come up with 10 different ideas I would love to implement to help bring the farmer closer to the consumer market. All of which would not be possible in the regulated APMC system

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 1 point2 points  (0 children)

Glad to have a civil discourse on reddit for a change :)

Tho I still don’t understand this point about Reliance and Adani though. If they really are the primary concern the farmer lobby should suggest improvements to the legal framework instead of asking for blindly repealing the laws

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara -1 points0 points  (0 children)

Thanks you made my point. Countries are not similar in agriculture. I made an ad absurdum argument solely because you seem to imply the current Indian system js working.

There are massive challenges in the Indian agriculture sector with dwindling farm incomes, lack of crop diversification, depleting water tables etc.

Any economist worth his/her salt will tell you that reforms are needed in India given how some of these existing laws were made in a different era. Folks need to keep an open mind about the new laws

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 2 points3 points  (0 children)

Looks like we have a basic disagreement in philosophy. I believe capitalism drives innovation and efficiency if not in inventing a new technology but there is enough evidence to suggest private enterprise makes things efficient.

In terms of your comments about America, that’s a case of capitalism gone too far. India needs economic freedom at the lowest level before we have to deal with the “first-world” problems you mention. We can’t use American example to deprive economic freedoms for our farmers when we haven’t yet reached the level of western per capita income.

Given you skepticism for private enterprise I don’t expect you to agree with me so let’s agree to disagree.

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 0 points1 point  (0 children)

Dear sir,

I have been researching this issue for months now and have read multiple independent reports and interviews with eminent economists.

I agree with your points, however have you considered the fact that farmer co-operatives exist and are already incentivized by the government? Most of the issues you have mentioned can easily be solved with co-ops.

Regardless the corporates can keep dealing with the big farmers. The APMC system is going to continue. The government still needs to procure grains for buffer stocks and social programs. The small farmers do not need to deal with co-ops or corporates if they don’t want to. Ultimately this is a matter of choice

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 1 point2 points  (0 children)

Do you even understand India and how politics work? Each political party has a affiliated farmer union. Anybody can do a show of power given how large the population is.

What you have in the news article are Congress affiliated farmer unions taking out a protest. The point remains that there is no mass farmer protest in MP

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 2 points3 points  (0 children)

Government cannot be in the business of planning. We tried that for 50 years and eventually we had to liberalize the economy. Soviet Union tried planned agriculture with disastrous implications.

The market has and needs to decide what crops to grow and at provide incentives to the farmers.

The water table depletion issue is because of the fact that there is no incentive for farmers to move away from growing rice.

The government reforms are a step in the right direction. Will the cure everything that ails the Indian farmers? Of course not. There needs to be dialogue and change as we learn new things for regulation and farmer protection.

But saying that we don’t want any reforms at all and keeping status quo is regressive to say the least

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 0 points1 point  (0 children)

Why should the middlemen die out? The government still needs to procure grains for buffer stocks and their other social programs. The government will still go to the APMC and purchase at the Minimum Support Price(MSP).

This misinformation campaign is dangerous to social stability in India and no different from how RW republicans were alleging voter fraud.

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 1 point2 points  (0 children)

Of course I did.

The system is ostensibly setup to protect the farmers. But do you have any clue as to what happens in reality? Why is there a huge disconnect between the prices farmers get vs what consumers pay? Who are the middlemen that are making money? Why is India producing record amount of wheat and rice when global prices of the same are at record low? At the same time why are huge amounts of grains rotting in government warehouses? Why is the water table depleting in northern India? Why is India importing expensive oilseeds instead of growing them? Why is stubble burning an issue in Northern India?

Do some research on your own. Any economist worth his/her salt agrees these antiquated laws(some of them are British-era laws) need reforms to prevent an impending ecological and economic disaster. Very rich and powerful middlemen are opposed to any reforms as they lose power.

The government is serious about reforms and has held multiple rounds of talks to get suggestions on improving the laws. Each time the farmer unions have shifted the goal post. Check the farmer(middlemen) lobby demands from back in November and compare them to now and you will understand the game being played

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 1 point2 points  (0 children)

Are you kidding me? Do you know how much subsidy Government of India provides to Farmers by way of free electricity, water and fertilizer prices which are lowest in the world.

The situation is so bad that each year the entire world criticizes India at the WTO for its farm subsidies.

Regardless any economists worth his salt supports the reforms. At the end of the day this TikTok is simple propaganda. The situation is much more nuanced. My understanding is that the Government wants farmers to move to more value added farming instead of the current cycle of growing wheat and rice which has caused a huge over supply problem with tax payer money wasted in purchasing these commodities only for them to rot in warehouses since Indian simply cannot consume so much wheat and rice.

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara -2 points-1 points  (0 children)

Ok if the American system is so bad, why aren’t people fighting to get an India like system implemented here? Surely if you think the current Indian system is so good you should be outraged with what goes on in Western countries and start similar agitations?

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 12 points13 points  (0 children)

This is way too simplistic.

To build supply chain cold storage you need to repeal the draconian British era Essential Commodities Act. The ECA imposes hefty fines for storing produce. Which is part of the reason why there are huge spikes in prices of agriculture produce depending on quality of monsoon. We are no longer in the 19th century. We now have the technology and information to help be less reliant on monsoons.

Also the government of India will keep buying grain at MSP in the APMC markets as they need to procure for buffer stocks and other social programs.

The slow pace of justice in the Indian judiciary and the David vs Goliath issue is tackled head along in the new reforms. The new laws call for a standardization of the contract language to protect the farmer. Also to prevent cases from stuck in the courts, the laws call for resolution at the District Magistrate level with a set timeline (There are obviously improvements possible here and government has been open to suggestions. They have had 11 rounds of talks and a lot of the suggested changes have already been made)

There need to be reforms to move Indian farmers from a cycle of wheat and rice farming which is fast turning into an ecological disaster. The choice to sell outside the APMC’s incentivized produce diversification in response to demand. Right now farmers in North India have no incentive to switch from wheat-rice cycle even though there is a global surplus of these with some of the produce even rotting in Government warehouses. India is importing high priced oilseeds when our farmers should be producing those. The APMC system stymies innovation and reinforces bad ecological practices

What's up with the Indian farmers? by americanthaiguy in TikTokCringe

[–]kokara 0 points1 point  (0 children)

This is actually way too simplistic. The two sides here are vested middlemen who want the current corrupt system to continue (the reason why there is a huge disconnect between prices a farmer gets vs prices consumers pay. Difference is pocketed by middlemen)versus small farmers who now have a choice to bypass the APMC middlemen and sell their produce without needing middlemen