I have, as I believe I mentioned more than once over the years, never sat in an economics classroom. I’ve never read an economic textbook. So, basically, I’m a complete amateur when it comes to discussing economics.
Yet, I can but wonder sometimes about all these “eminent economists” and the things they say.
One of India’s alleged “economic experts”, and a long time servitor of the (monarchical) Congress Party, is one Montek Singh Ahluwalia. This man, who pro-Congress media sources are pushing as the next Commerce Minister, recently went on record to say that rising food prices are a reflection of growing economic prosperity. 
Before I go on further, let’s see what he’s talking about.
In the last two years, food prices across India have shown an incredible upward spiral. The reason is this: with the 2008-9 economic crash in the West, Indian exports nosedived. India still imports almost everything it needs for the so-called good life, so to bridge part of the trade deficit (since we Indians, unlike Americans, cannot simply print worthless dollars to pay off our overseas debt) the government began exporting food. Said food exports still continue apace, even as domestic prices skyrocket, and the government has no plans to stop these exports.
Now, I suppose the reasoning behind Ahluwalia’s statement is that prices rise when there is more money to spend on a limited supply of a product. Even I know that when five people want to buy one car, the one who’s willing to shell out the most wins out. That’s how auctions work.
But, even a non-economist knows perfectly well that auction analogies don’t work where food is concerned. People need food. They cannot survive without it. They can live on the streets if absolutely essential. They can, especially if they live in warm climates, cover themselves with just enough scraps of cloth to maintain “decency”. But food is the one thing they cannot do without. However high food prices run, people will have to buy, if they don’t want to starve to death. Even if they have to forgo literally everything else, they will have to purchase food. And don’t tell me Montek Singh Ahluwalia doesn’t know this.
But of course this is a red herring, because the price rise isn’t a function of more money chasing a product. As I said, the price rise is a direct result of the export of grains, spices and other agricultural items in order to continue earning dollars, which in turn would be used to finance imports meant to keep the Muddle Class happy.
However, there is another aspect to it, as well. That is the growing influence of the agribusiness lobby.
India is a wonderful example of a nation that is consciously and deliberately trying to hang itself with the agribusiness noose.
Look at the facts. Every year, thousands of farmers commit suicide since they are simply unable to pay their debts off to banks, local moneylenders and the like. Why does this happen? It happens because the government doesn’t ensure that they get a fair price for their produce.
Now, the government buys up a proportion of their crops and keeps it as reserve stocks. This way there are always stocks in reserve against famine, and through the post-Independence Indian history there never has been a famine. These stocks are meant to be paid for at a fair rate, and apart from this, another portion of the agricultural produce is compulsorily purchased in order to provide it to the poor at subsidized rates: the so-called “fair price shops.” More on these in a moment.
But, in the so-called “post-liberalization” era, the small farmer is no longer the backbone of Indian agriculture in the eyes of the government and the Great Indian Muddle Class. The small farmer is, in fact, thought of as a liability, and ignored if not actively discouraged in favour of agribusinesses owned by mega-rich tycoons who happen to be in the good books of the ruling coalition. These agribusinesses are openly promoted by newspapers, like The Telegraph of Calcutta, which are thinly-veiled government mouthpieces.
Now, in a situation where you have thousands of farmers committing suicide every year, what could you do? One solution, I guess, is to give them fair recompense for their produce, and access to fertilizers and pest control measures at subsidized rates, not to mention encourage co-operatives; in fact, do exactly what turned India from a net food-importing country in the 1950s to a country able, though precariously, to feed itself.
Or, you can simply try and drive the small farmer into extinction and turn the whole thing over to the agribusinesses.
Guess which way the government of India went?
There’s this wonderful film called Peepli, Live, which I’ve reviewed , a satire which points out a telling fact: by the Indian government’s rules, a farmer is literally worth more dead to his family than alive, so long as he makes sure to commit suicide in the prescribed manner, owing enough money to the proper people and leaving proof that this is why he’s committing suicide. Not funny, but true satire never is.
Now, remember the stocks of food I mentioned? Apparently, their existence is a source of profound unhappiness to certain people. As the so-called Indian economic miracle runs out of steam and more and more people get poorer and poorer, it’s become obvious that these stocks (which aren’t stored in any scientific manner – the photo on top is actually of one such stockyard – and whose locations are closely guarded) are merely serving to feed rats and insects.
It’s been suggested that the stocks simply be distributed gratis to poor people, but the government reacted in horror to the idea. Free food, apparently, means decline in “economic growth”, and the nation’s so-called “prime minister”, a rubber-backboned ex-bureaucrat and so-called “eminent economist” who has never won even a municipal election in his wretched life, keeps repeating “ten per cent economic growth” as the solution to every problem. (Very much as George W Bush, this “prime minister’s” declared hero repeated “9/11” to any and all criticism. Birds of an ill-omened feather flock together.)
So, since keeping the stocks of grain will merely mean their rotting away and distributing them will hurt “economic growth”, what is the solution? Apparently, one suggested solution is to dump all those millions of tons of grain in the sea. You’re at liberty to make up your minds as to whether those who made this suggestion had any ulterior motives, as they say in Indian bureaucratese.
Meanwhile, too, the paid articles in magazines and newspapers which shill for the government and its favoured businesses keep repeating how like paradise things will get if only the big businesses take over all the farms. They keep urging the government to convert farmland into industrial estates at gunpoint if necessary, and this is something happening more and more across India. Apparently, to these people, “economic growth” means people do not have to eat any longer. Cars and clothes will be an excellent substitute for food.
Unless, of course, you hand it all over to the agribusinesses.
Over and over in these last years, I’ve come across fairly strident demands in the right-wing media (which means all but a small portion of the Indian media) suggesting that the fair price shops close down because people don’t buy from them any longer. The argument is, of course, that the so-called “economic miracle” has made these shops redundant. That’s another argument that’s so slanted that a moment of research shows it to be hollow. The fair price shops only serve those people who have special cards provided by the government, and a very large proportion of the food is stolen en route. What’s actually sold, especially in the villages, is often at above the official rates, and is also sold at odd times when the average village is trying to scrape a living, and isn’t free to queue up for what’s available…which is often unfit for human consumption.
And so the solution? Don’t clean up the distribution network; don’t force the corrupt bastards to do their jobs honestly. Just junk the whole damned thing.
To the Great Indian Muddle Class, as I believe I’ve mentioned before, the poor are either an embarrassment or simply do not exist. Their welfare doesn’t register on the Muddle Class radar.
But the prices of food are rising so high now that even the Muddle Class is hurting, and hurting badly. Let’s take a moment for Schadenfreude.
Even if I weren’t a card-carrying and proud anti-Indian traitor, I would be glad to see a revolution in this country. But being an invertebrate, feudal nation, I doubt it will happen anytime soon.
And meanwhile farmers will still kill themselves in the thousands, and the government will still bend over backwards to pander to the agribusiness lobby along with the other bandit-capitalist vermin.
Remember what I said about no famines since independence? That period might be about to run out soon.