Revisiting Singur in context of the current food scenario

Prez Bush has apparently come up with a new "Bushism". However, this piece of Bushism is not original, and this statement of his is "borrowed" from Ms Rice, who has "backed up" her statements with a "few facts". According to Condolenza Rice:

we obviously have to look at places where production seems to be declining and declining to the point that people are actually putting export caps on the amount of food... that in countries like India and China, it was not as much a problem of declining production as growing prosperity, which has pushed up demand resulting in “pressures to keep food inside the country...

Well, as far as I am concerned, in case of India it may not exactly be "declining production" in the strictest sense of the word, but it is something equivalent to it, since it is a clear statement that the supply is struggling to keep up with the demand.

Now, the part I am interested in is when Rice mentions that there is actually an export cap on the amount of food. From the point of view of India, as a country, as of now, this might just about work, if, after the export cap there is enough food for the people. But, surely, this is a pointer that in future, probably India will have a case where not only will it have an export cap on food, but it will also have to import food. Despite all the grand statements of "India shining", I dont think that the poor Indians (or even the "middle class") have enough resources to buy food at higher prices that will inevitably result from importing food. An average Indian in US spends around $150 per person for food - that is Rs 6,000 per person per month, which roughly translates to Rs 24,000 per family of four per month. No, the rates are too high.

Which is exactly why I choose to differ with the left front when they decided to let Tatas use Singur for their car factory. I had a post on this topic earlier where I outlined a few arguments why Singur should stay a farmland, and an alternative location should have been picked up by the CPM government. There was a comment from a commentator that there are "lifestyle needs" and there are "livelihood needs". Apparently the commentator thought that cars were going to be "livelihood needs" soon enough. In reply to this an anonymous commentator replied:

"Yes, but if you dont take care of today's need, the question is, "will you survive to see tomorrow?"

Prophetic words.

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Update: Another report that highlights the crisis. India has blindly stumbled into an inflationary situation.

Farmland vs Industry

Here is a report in the Telegraph, titled "Seal on CM farm theory". It goes on to state that while the national economy is growing at 9%, industrial growth rate has just reached double digit at 10%. The share of agriculture to GDP has declined to around 18.4% while that of industry and services have increased to 26.5% and 55.1% respectively.

To quote the article "Bhattacharjee has already read the situation and believes that Bengal — which he reckons is in a transition phase — needs to slowly shift from agriculture to industry (see interview in Bengal Unbound)."

I just wonder whether this form of economics considers that food is a primary necessity for human existence. Respected CM, supporting industries in Bengal is a welcome move; stamping out agriculture is not.

To be perfectly honest, the numbers quoted in the article really dont mean anything unless somebody also comes up with stats for the %age of population engaged in agriculture, services and industry, as well as the absolute requirements from agriculture (this is the minimum level one has to ensure; a fall from this level of agricultural production is a potential minefield for a relatively poor country like India).

Battleground Singur

Recent controversy over Singur and Nandigram lead us to an interesting debate, that of farmland vis-a-vis industrialization. I see the following reasons which suggests that setting up an industry in Singur may not be such a good idea.

Daily wage laborers: Associated with the farmlands are daily wage laborers. The government compensated the land-owners, but the poorer people, namely the daily wage laborers didn’t get anything since they didn’t own any land there, but just worked on the land. Many of them might not find employment in Tata factory. Tatas have gone on record saying that they may not be able to provide jobs to all those who lose their jobs. They will employ only some of the “employable” people. Most agricultural workers don’t have training for jobs like fitters, welders etc, and there is a limit to how many Tatas can employ as coolies etc. Consider Tata Steel. It is one of the biggest Tata factories, yet has about 2900 employees. I believe the present factory will employ a lower number, and many of the employees will be skilled personnel like engineers and technicians. Therefore, while creating new jobs, the factory will take away some of the older jobs, possibly from the people who need those jobs more urgently.

Older investments: Singur is a reasonably well-irrigated area (or so I heard). A great deal of money has been invested for irrigation. What happens to those facilities? Is it justified to fritter away the taxpayers’ hard earned money on building facilities and then wasting them?

Industrialization with a human face: Industrialization of Bengal is overdue. There can be no two opinions on this. Singur is not the right place though. However, since the government has already taken the plunge, what it should do right now is damage control. It can’t back out now, since this presents a negative image. What it can do is not to acquire more agricultural land for industrialization. At the same time, specifically in context of Singur, it has to set up a co-operative society within which a self-sustainable model can be built. This could involve setting up a small scale industry (the type suited for unskilled workers).

Food vs Cars: Take your pick. which one is a more pressing need.

Bottom-up approach (this is a much more general comment): Unfortunately, Indians always believed in a top down approach. In the context of development, its high time people and the government realize that development need not always be all about large industries. If you looked at the Nobel prize for 2006, you will see that one of the awardees was Mohammad Yunus, an economist from Bangladesh. He introduced the concept of micro-finance and micro-credits. It has been applied by NGOs in very poor villages close to Hyderabad with astounding results. The good thing is that not only do the villagers benefit, but the NGOs running the show get decent dividends. So much so that some of the people running the show are actually economics and business grads who left decent jobs in US to work close to these villages in Hyderabad. Now, even ICICI bank is interested and is actively participating in the micro-finance model, esp in the Hyderabad-Secunderabad region. If you are interested to know some more about microfinance model, take a look at these three links:
http://en.wikipedia.org/wiki/Micro_credit
http://en.wikipedia.org/wiki/Muhammad_Yunus
http://nobelprize.org/nobel_prizes/peace/laureates/2006/yunus-lecture-en.html