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Archive for September 30th, 2011

We need price de-regulation

Posted by Sandeep Shelke on 30th September 2011

Farmer’s suicide stories are endless like Hanuman’s tail. It will continue to grow despite all debt-waivers, schemes, awards. If government is willing to solve this problem then they must accept that there is one. And problem is that we have worst policies in place. Governments archaic pricing policies must go away, we need price de-regulation. 

For example, the Agricultural Debt Waiver and Debt Relief Scheme in 2008 by UPA, Free electricity announcement, state controlled agricultural produce market yards, National Rural Employment Guarantee Scheme, etc.

Though I’m against any waivers because, I think anything free paralyzes economy. If we look at result of any of the schemes above, its evident that all of them were just poll gimmicks. Debt waiver helped mostly farmers from western Maharashtra where the debt wasn’t any issue. compared to Vidarbha (e.g.). So the suicide belt could not get the help required. Then the free electricity scheme in Maharashtra, a complete misnomer. What government did that supplied 3-phase electricity only for 8 hours in summer when crops need much more watering. Even today also we have 3-phase electricity only for 12 ours.

All these idiotic decisions weren’t enough that UPA introduced NAREGA. This created an artificial employment scarcity especially when they needed most. The labors demanded double the wage for 7 hour work with 1 hour lunch break that means 6 hours of effective work. But at the same time they forgot to take care of market pricing. So I call NAREGA as anti-development.

I remember for past 5 years onion prices are in the same range of Rs. 5-7 at the yield time but input costs have more than doubled over the same period. Just for example 5 years ago daily wage for a farm women labor was Rs.40-45 today they demand anything above Rs.100.

We need MSP and crop insurance.

Friends, current political parties have no competency and inclination to solve the problems they are rather interested in quick fix. I decided to replace them and I’m on my way. Whats your take?

जय भारत!

Related Posts: Farmer’s right to decide price

EDIT: After few years on this I realize price intervention from govt is problematic. As it is false assumption that govt has ability to derive rational price. Market is the true force to decide price as per demand and supply. If price is higher for basic commodities govt can subsidies the weakest section (which must be revised every year).

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