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Editorial Notes

Editorial Notes 21st September 2016

Anti-Farm Bias; Arvind Subramanian panel on pulses; Uri Attack; Security Challenges and Their Management in Border Areas.
By By IT's Editorial Notes Team
September 21, 2016

Contents

Economy

  • Removing anti-farm bias
  • Reading the pulse

Defence & Security Issues

  • The Uri challenge
  • Securing India’s borders

 

Economy

GS (M) Paper-3: Agriculture related issues

 

Removing anti-farm bias

Introduction:

The farm sector is still in distress needs re-emphasis. We have recently had two consecutive years of a serious drought. The blight of farmer suicides is still with us. Now, it is important to recognize that our policies need to remove their inherent anti-farm bias.

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Concerns:

Agriculture and employment:

  • After 69 years of independence, we still have more than half the population depending on farming and related activities for their livelihood.
  • Large-scale absorption of workers into the industrial sector has been thwarted by stagnation in job growth.
  • The Arthur Lewis model of infinite supply of low-cost labour from the rural sector has not worked as anticipated. It worked in China’s industrial push over three decades.
  • Job creation in the rest of the economy is woefully inadequate. A national survey showed that 40% of those in farming would gladly leave, if only they can find a stable job outside.
  • Farm incomes did not rise proportionate to gross domestic product or industry.

Lobbying in agriculture:

  • The farm sector does not have a focused lobbying voice. Perhaps this is because the sector is too large and fragmented, and now exposed to globalization. Perhaps there are conflicting interests within the sector, and perhaps politics gets in the way.

Subsidies:

  • The various farm subsidies were cornered mostly by large farmers. The distribution of fertilizer subsidies across states and land holdings clearly shows this pattern.
  • Even free or subsidized electricity, or cheap credit, benefits larger farmers.
  • Subsidies also created distortions like overuse of urea, leading to soil salinity, and free power creating a hole in distribution company balance sheets.
  • This entire system of mostly indirect subsidies for the farm sector, in fact, turned out to be a net negative for the sector. This was amply documented by various researchers during the pre-World Trade Organization (WTO) negotiations.
  • By comparison, the Western nations had a net positive subsidy to their farm sector. India continues this battle in WTO of defending its farm subsidies, and rightfully so. From the early 1990s, the domestic terms of trade started shifting in favour of agriculture from industry. This movement to date is far from adequate.

Public procurement and distribution:

  • The single instrument of public procurement and distribution was supposed to achieve three goals: ensure adequate prices to farmers, keep food prices low and stable and ensure food security to the nation. This too has had very limited success in case of India.

Inflation:

  • India has had periodic episodes of high food inflation, especially in crops for which there was no procurement.

Income:

  • Farm income growth since 2011-12 has dipped to 1% or below, which is the main factor behind rural distress.

Minimum Import Price:

  • India has recently introduced the concept of minimum import price (MIP) to help certain industrial sectors deal with the onslaught of low-cost imports being dumped in the country. By contrast, the farm sector routinely suffers from minimum export price (MEP) to discourage exports. In fact, exports of agricultural products are often banned periodically.

Inflation Targeting:

  • The government and the Reserve Bank of India signed a contract making inflation control an exclusive mandate of monetary policy.
  • The inflation measure to be used is the Consumer Price Index (CPI), which has 52% food-related components.
  • So monetary policy will implicitly be deflationary on the farm sector. This could be an unintended consequence but worth noting.
  • In developed countries, since the CPI has only 10-15% food weightage, the focus on a CPI-based monetary policy is not as harmful.

Cotton sector:

  • Prices have risen dramatically in the last few months. This has caused alarm in the textile sector, calling for restrictions like export ban or end-use restriction on cotton. This is against the interest of cotton farmers.

Government’s efforts:

  • The Union budget’s promise that farm incomes be doubled in the next six years is a worthy high-level goal. This goal should recognize that farm incomes now come from a variety of sources like cultivation, livestock, wage employment and other non-farm activities.
  • The recent recommendations of the pulses panel led by the chief economic adviser are welcome. The panel advocates that pulse exports be allowed, public procurement go up by six to 10 times, and minimum support prices be hiked immediately by 15%.
  • The government think tank Niti Aayog too has identified a five-pronged strategy to improve farm livelihoods.
  • Another useful guide for farm policies is the October 2006 report of the National Commission on Farmers.

Conclusion:

India, with its vast continental size, will have to forge a new path in achieving the rural-urban, industry-agriculture balance, unlike the trajectories followed by Western nations. Removing the anti-farm bias in our policies is a crucial prerequisite for this strategy.

[Ref: LiveMint]

 

GS (M) Paper-3: Agriculture related issues

 

Reading the pulse

Current crisis in pulses

  • May be related to back to back drought and policy failures
  • Gap between demand and supply
  • Farmers are dis-incentivised, as procurement for pulses at MSP by government is not as sound as in cereals like wheat and rice.
  • Further, curbs on exports and trade extend the disillusionment.

Important recommendations of the Arvind Subramanian panel on pulses:

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  • Delisting of pulses from the state Agricultural Marketing Committee Acts (APMCs)
  • Removal of curbs on exports and stock-holding of pulses
  • Incentivising cultivation of these crops on irrigated lands
  • Ensuring remunerative returns to growers to motivate them to produce more
  • Creating a buffer stock to stave off price volatility through opportunistic local purchases when prices are low
  • Set up a new body to procure and store pulses

Analysis:

  • With policies that favour cultivation, pulses can easily be pushed into multiple cropping systems on irrigated lands thanks to the availability of quick-growing and high-yielding varieties.
  • Better procurement of pulses and higher MSPs are required to incentivise farmers to grow pulses, a major source of proteins for Indians.
  • The panel’s suggestion to set up a new body to procure and store pulses may end up in creating another inefficient white elephant of the kind the Food Corporation of India has proved to be.
[Ref: BS]

 

Defence & Security Issues

GS (M) Paper-3: “Security challenges and their management in border areas; linkages of organized crime with terrorism”

 

The Uri challenge

Introduction:

The gruesome death of 18 jawans in Uri is, arguably, a defining moment for PM Modi’s foreign policy. But India’s larger enduring strategic conundrum remains the same.

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Questions here are:

How do you deal with a nuclear state that uses terror as an instrument and which is still bankrolled by major powers?

How do you deal with a state where the army has incentives to maintain its centrality, whose identity is marked by resentment?

Options before India:

Economic sanctions over Pakistan:

  • An economic blockade by India might attract sanctions by other countries too. But china is unlikely to follow due to vested interest in CPEC corridor. ASEAN nation too would be unwilling to block Pakistan.

Direct Military Action:

  • An overt attack at this time would be playing into Pakistan’s military hands.
  • Any covert operation requires Special Forces, but unlike the U.K.’s Special Air Service (SAS) and Special Boat Service (SBS), the Green Berets and SEALs of the U.S., Germany’s GSG 9 and Russia’s Spetsnaz, these are primarily intended for military operations ‘behind the lines’ during a period of war. They are not capable of any independent operation.

Using Indus as a bargaining chip:

  • Might lead to more radicalisation inside Pakistan
  • Might give China the precedent of the power -an upper riparian state can exercise

Cyber warfare:

  • Our capacity in this area is considerable, and it should be possible to engage in extensive cyber sabotage and cyberwarfare to bring Pakistan to its knees.

Conclusion:

  • Pakistan is a state where defeat led to even more militarisation and radicalisation; this is a state that is willing to bear the cost of great internal violence, so a little more experience of internal violence will hardly dent it.
  • The Indian government’s failing is not inconsistency. Dealing with an obdurate adversary will require changes of vision.
  • We have navigated a dangerous strategic conundrum by inflicting less damage on ourselves than many powers would have under similar circumstances.
  • Repairing our structures so that they make us less vulnerable, and in that sense provide deterrence, is probably a better tribute to the jawans who laid down their lives, than reckless adventurism that might satiate political egos, but does little to solve the problem.
[Ref: Indian Express]

 

GS (M) Paper-3: “Security challenges and their management in border areas; linkages of organized crime with terrorism”

 

Securing India’s borders

The recent terrorist attack against an army camp at Uri and the previous and similar attack on the air force base at Pathankot have shown up vulnerabilities in our management of our borders, which remain to be addressed.

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Where are we lacking?

Limited use of new technologies

  • Devices like thermal imagers, night vision equipment, surveillance cameras and drones to monitor movement along and across the border are not much in use.
  • The equipment requires frequent repair and maintenance along with quality tests for reliability.

Lack in adoption and strict enforcement of standard drills:

  • The other aspect relates to the adoption and strict enforcement of standard drills and procedures to ensure the safety and security of critical border infrastructure, including defence installations and personnel.

Layers:

  • There are usually several layers of defence for such military establishments so that even if one layer is breached there is a subsequent one to prevent access. Were these in place at the Uri base?

Intelligence agency: 

  • Lack of seamless communication between various state and central intelligence agency. Information sharing between them is not very good.

Counter- terrorism forces: 

  • The National Security Guard (NSG) was set up in 1984 as a Federal Contingency Deployment Force to tackle all facets of terrorism in the country. Its competency is also questioned viz. swift operation

Inherent defects:

  • A general disdain for the law of the land on the one hand and endemic corruption among those responsible for upholding the law, means that it is relatively easy for terrorist and hostile elements to gain ingress across the border and carry out all kinds of hostile activities, including serious terrorist attacks
  • One cannot ensure safe borders in a country where there is such widespread flouting of laws, from jumping traffic lights, muscling ahead of a queue, insisting on exemption from security checks claiming VIP privileges, which may seem relatively minor, to indulging in contraband trade, drug smuggling and unaccounted money transactions
  • Such activities create a congenial environment in which national security is seriously undermined. Drug trafficking across the India-Pakistan border, as also across the Northeast border with Myanmar, is now becoming a huge challenge, not only for the social problems it is causing in border states, but also by creating serious breaches in border security, which are then exploited by terrorist groups

Suggestions:

  • We need to have an overall national security strategy, which addresses our obvious vulnerabilities.
  • A good starting point could be the setting up of an independent commission of respected and credible experts, similar to the earlier Kargil Commission, to fully investigate both the strengths and weaknesses of our current security set up, particularly as exposed in our handling of the Mumbai terrorist attack of 26/11, the serial attacks at Gurdaspur, Pathankot and now Uri.
  • Implementing recommendations of Madhukar committee pertaining to strengthening of border protection on Indo-Pakistan Border.
  • Open but regulated borders, the promotion of regular trade as against tolerating smuggling, the breaking of the unholy nexus between politics and illegal trade and addressing the pervasive lack of respect for law – these are all part of the response to security challenges we confront.
[Ref: BS]

 

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  • maushami

    very helpfull for mains
    nice editorial thanks
    but hope we get such to the point articals daily

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