An Independence Day Thought for Farmers

Today, on 15 August 2009, we commemorate 62 years independence, the 63rd independence day. The first one after the new government has taken office in May 2009 (see Congress Comeback and Expectations), the first one after the global financial crisis that started in the latter half of 2008 (see Financial Crisis, Mental Health and ..., Economics Needs a Scientific Revolution: A comment, and Surviving the Recession), the first one after the terror attack in Mumbai (see Mumbai...Lives On), the first one after Indian is exposed to the global pandemic of A (H1N1) influenza (see Swine Flu in India), and also happens to be a year when the country is facing a severe drought. The latter is particularly worrisome because the state of Indian agriculture is already under stress (see Indian Agriculture in Doldrums, Agrarian Crisis and Farmers' Suicides in India, Agrarian Crisis in India, and Hunger and Undernutrition). Some of these concerns have been raised in the Prime Minister's speech (see its Highlights) and I would leave it at that. However, with the looming drought-like scenario, I would like to raise some issues with regard to the farmers.

Debt waiver or for that matter postponing the date of payment is not the answer. Debt waiver is a book-keeping exercise that helps the banks reduce their Non-Performing Assets (NPAs); for the farmers, at the most, it reduces a mental burden and makes them eligible for fresh loans. The moot question is that there are no mechanisms to address risks in non-repayment that arise because of reasons that are beyond the control of the farmers, that is, for non-willful default. Rather, a blanket waiver clubs the wilfull default with the non-wilfull ones.

More over, debt waiver is a temporary measure. The global financial crisis saw a lot of money being pumped in by different governments in the name of stimulus, and hence, there is nothing wrong in providing stimulus for the Indian farm sectory. However, it has to go beyond the debt waiver and address more fundamental issues so that it enhances returns to cultivation and improves livelihood (including education and health requirements) of those dependent on agriculture.

Another limitation of the debt waiver exercise is that it did not address the loan burden of farmers from the informal sources. These loans are likely to have a greater interest burden. What is more, the small and marginal farmers have a greater dependence on them.

Delaying repayment of current loans does not provide much solace. It will rather add to the interest burden, as it has to be paid for a longer time period. There is no appraisal done on whether loans for two sucessive crops can be paid from returns from a single crop. A reasoanable guestimate sugests that it is not possible, that is, if there will be a good monsoon/crop the next year/season it will not be possible for the farmer to repay the loans. The repayment will still be non-wilfull, but even then he/she will still be a defaulter who would be denied access to future loans from formal sources. Thus, increasing his reliance on the informal sources. With the kind of information and communication technology that we have today, the government and banks should come up with a system to identify wilfull from non-wilfull and devise mechanisms to mitigate risks for the latter group.

A note of caution. In providing risk mitigation they should avoid the plethora of products that claim financial innovation, which in practice add rather than reduce risks from a farmers point of view.

There has been a goal of four per cent annual growth in agriculture. This, one presumes, is with regard to gross value addition. However, if one has to plan for an increase in value addition, it becomes dificult becasuse we are not aware of the future prices. Thus, in practise the planning boils down to increase in production and perhaps giving emphasis on crops with a greater value addition. The latter increases the vulnerability to price fluctuations and also compromises the farmer's ability to meet food security requirements during years of crisis. More importantly such targets forces upon the planning mechanism a top-down approach, which is totally contrary to the bottom-up approach being envisaged through the district agricultural plans.

Getting back to drought, one feels that the National Rural Employment Guarantee Scheme (NREGS) can play a great role, both in building assets as also providing employment. This is the least that we can do for the risk-taking enterprising farmer. Jai Kissan! Jai Ho!

Quantitative Approaches to Public Policy

Quantitative Approaches to Public Policy - Conference in Honour of Professor T. Krishna Kumar (QAPP-TKK), which Sushanta and I have been working on for more than a year is now finally over. This took place at Indian Institute of Management Bangalore (IIMB), under the aegis of the Centre for Public Policy and as an independent tract of the Fourth Annual International Conference on Public Policy and Management.

Just before the conference we were little worried because Professor T. Krishna Kumar in whose honour this was being done was not be able to come because his wife was unwell. However, through some web link a contact was made he could participate in some of the proceeding.

One issue that came up is that there was not much time for discussion. True, but as the purpose was to honour Professor T. Krishna Kumar and we decided in favour of bringing together more scholars as against fewer papers with more time for discussions. In any case, we have already requested participants to send in their comments to the authors. The authors can also forward the link of their papers to others requesting comments. I hope that this helps the authors in revising the papers. We also have plans of peer reviewing selected papers for possible publications.

At the end of the day, the conference went off well. The taste of the pudding was yummy!

Swine Flu in India

The first swine flu death in India of Rida Shaikh a 14 year old school going girl in Pune has initiated a public health debate. As of 31 July 2009, World Health Organization in its 60th update indicates that there have been 1,62,380 cases and 1,154 deaths. The news reports of 5th August 2009 indicate that in India there have been 574 cases of which 470 have been discharged and there was one death. There have been 154 cases in Maharashtra of which 104 are from Pune and 22 from Mumbai/Thane.

In this pandemic, there is a demand that private hospitals be allowed to treat. This is a public health problem and whether you like it or not, its treatment is available at designated public facilities. The moot question is the quality of care (state of hygeine) is not good in these facilities. This leads to another pertinent question. Why has this happened? If you create a system where people who can act as a pressure group to ensure quality have nothing to do with this system then it would degenerate. Let us not wait for such epidemics to set our house in order. We should have a stronger public health system.

Another point that emerges is are the care providers of Rida Shaikh, who was first taken to a private clinic and then to the public facility where again there was delay because the first blood test report was done at a private hospital. One may not hold the providers neglecting the child's care, but it does call for some systemic evaluation and improvement.

This incident, as in all health related ailments, reiterates two things. We do not know when we will fall sick. If sick, we do not know when we can get better. It is for this that unregulated private care givers is definitely not the answer.

A state of epidemic has been declared in Pune and Satara districts of Maharashtra. As per this, the state can enforce treatment on people unwilling. It can also seas premises like schools and other public places to prevent the spread of diseases.

The World Health Oragnization has a Swinflu portal Pandemic (HINI) 2009 that is updated regularly. There are guidelines for individuals, communities, and national authorities. The most important being the frequently asked questions on What can I do?

To protech yourself:


• avoid touching your mouth and nose;
• clean hands thoroughly with soap and water, or cleanse them with an alcohol-based hand rub on a regular basis (especially if touching the mouth and nose, or surfaces that are potentially contaminated);
• avoid close contact with people who might be ill;
• reduce the time spent in crowded settings if possible;
• improve airflow in your living space by opening windows;
• practise good health habits including adequate sleep, eating nutritious food, and keeping physically active.

It is difficult to distinguish between a common seasonal flu and swine flu. The typical symptoms are fever, cough, headache, body aches, sore throat and runny nose. In India, there are specified public hospitals where this can be treated. The only place in Mumbai (which is 160 kilometers from the epidemic declared area) is Kasturba Hospital on Arthur Road - Phone: 230 83901/92458/00889). This can be treated, but it should be done under medical advise. DO NOT PANIC.

If you think that you have the illness then:

• stay at home and keep away from work, school or crowds;
• rest and take plenty of fluids;
• cover your nose and mouth when coughing and sneezing and, if using tissues, make sure you dispose of them carefully. Clean your hands immediately after with soap and water or cleanse them with an alcohol-based hand rub;
• if you do not have a tissue close by when you cough or sneeze, cover your mouth as much as possible with the crook of your elbow;
• use a mask to help you contain the spread of droplets when you are around others, but be sure to do so correctly;
• inform family and friends about your illness and try to avoid contact with other people;
• if possible, contact a health professional before traveling to a health facility to discuss whether a medical examination is necessary.