Sunday, May 15, 2016

Moving Farmers Up the Value Chain

As Modi tries to build a support base among farmers with an eye to re-election, he continues to be targeted by opportunist politicians challenging him with the usual populist brinksmanship:

While politicians scramble to cater to farmers due to their large electoral worth, what's lost in the melee is the fact that farming is a very fragile, antiquated and low-profit livelihood, at the mercy of things like seasonality and weather conditions. Manufacturing, by contrast, is not hostage to those things, and offers higher profit-margins by being more value-added.

Modi's govt has come up with the "Make in India" campaign to promote and incentivize manufacturing. What might be even more useful is to have a program which specifically targets farmers to incentivize them in particular to shift out of farming and into manufacturing. The more farmers who successfully transitioned into manufacturing, the more they would taste the benefits of it and inform each other by word-of-mouth, to encourage a trend. Continuing to dole out subsidies to farmers so that they can continue to tread water and maintain their subsistence-level livelihoods is a waste which only encourages them to lean on the govt and pursue dependency, which only squanders valuable resources that could be more productively channeled elsewhere. In the zero-sum game of politics, shrinking the farmer lobby could help to boost the manufacturing sector all the more quickly. Shrink the flab, grow the muscle.

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