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Showing posts with the label agriculture

Decision Making as Output and Bounded Rationality

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  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra
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Notes on Punjab Politics

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  The events at the Red Fort and other parts of Delhi in the guise of farmer protests have brought the spotlight back on to the politics as it exists in Punjab. There is no doubt, a rising clamour for the arrest and crackdown of the farmer’s movements or at least the movement that is going on in the name of farm laws. The protest leaders might be busy disowning the actions at the Red Fort but cannot absolve themselves of the responsibility of their actions which led to this fracas. The protestors might have the backing of the media and the opposition parties, each wanting to hit back at the Modi government for their own reasons, but their agenda seems to be suffering a setback. However, the setback might not be visible in Punjab as it would be perhaps in Haryana or Rajasthan or Uttar Pradesh. There is very distinct Sikh identity to the current protests and thus the events would reinforce the perception that Sikh and Khalistani agenda in specific was the real agenda of the protest group
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Solving the Food Inflation Puzzle

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The double digit food inflation shows no signs of abatement. Meanwhile, the headline CPI (7.35%) hits the highest point in recent years.   However, the core CPI has stagnated around 3.6%, WPI continues to be low and core WPI is in near zero zone. There is negative inflation in manufacturing sector as also in fuel and power. GDP deflator is less than 2%. In normal course, low real growth will translate into low nominal growth depressing the economic buoyancy. Therefore, barring food inflation, other components are well under control, yet unless food inflation is tamed, political costs are like to be substantial.   There are grounds to suggest the causes to usual inter seasonal volatility, but that would be short-sighted.   There exists an opportunity in the crisis long term solutions to agricultural production. In endeavouring a solution, there however lies a catch. Agriculture is state subject thus resulting in each state adopting a different approach. Further, farmers constitut
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Weather changes and food production

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Agriculture is often characterized by high variability of production outcomes or, production risk . Unlike most other entrepreneurs, farmers are not able to predict with certainty the amount of output that the production process will yield due to external factors such as weather, pests, and diseases. While one cannot deny the rapid advances in technology in food production through better seeds, yield management, irrigation systems etc, weather and climate yet remain wild cards. The drought in South Asia in 1987 and consequent wheat imports and havoc in livelihoods still remains fresh after 25 years.   The origin of Arab spring in late 2010in Tunisia started with the failure to quell food prices and the rise of water wildcatting in Yemen flared up protests there.  Some scientists believe that weather changes due to global warming can depress the food production beyond the current estimates.   UN estimates in 2011 revealed that food prices rose consecutively for eight months
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Green Revolution and Indian Agriculture

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As Larry Lessig puts forth in ‘CODE’, the policy makers use four means to influence allocation of resources. Green Revolution represented the architecture or the product being changed to influence the increase in food supply in the country. It was in 1967-1978 that India began the transformation from endemic famine hit nation to one of the pioneers in agricultural production.   In the 1970’s while the per capita food production was around 180 kgs, it increased to more than 200 kg by the early 1990s inspite of doubling the population. It was a far cry from the days of the disastrous famine in Bengal in 1943 (caused by state indifference than by shortage of food), which wiped out nearly 4 million people   and 1964-65 when PM Lal Bahadur Shastri appealed to people to fast one day per week to ensure availability of food to all.   Borlaug revolution of hybrid seeds sowed the roots for wheat and paddy production in India. The rise in prosperity among farmers in Punjab, Haryana and
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