Humble Rice and the Mighty Oil

Lets start with the humble Rice. Being the staple food of a large part of India, it was indeed a matter of great concern for the government when Rice prices went up in the world markets. So, to stop domestic prices to go up, Indian government curbed exports of all Rice varieties, except of the high priced Basmati, which has a negligible market in India. Seems to be a perfect step, a logical one. There is only a small problem - India also is home to the largest farming community in the world, with the maximum number of farmers engaged in subsistence level farming. Majority of these farmers are rice producers, thus a rising rice prices in the world markets is nothing but a great boon for them. They have a god-given (or man-created) opportunity to sell their produce at higher prices, realise higher profits and get due returns on their investment (physical and financial). Unfortunately, before they could raise their glasses and say toast to higher prices, the all mighty pro-poor (and allegedly pro-farmer) government steps in ban exports. After all, how can the stupid illiterate farmers become the beneficiaries of the market forces? No, no, market forces are only for the high and mighty, the educated middle class, the companies (public and private), the planning commission economists but not for the wretched farmers. They must be kept dependent on the alms of the central government via policies like loan waivers, once in 20 years. This is the surest way our government can think of to get farmers' votes! To top it all, our PM will sent postcards to lakhs of farmers, reminding them of his kindness (to waive off their loan). He should also write in the postcard, how he and his government denied the rightful market governed prices to the farmers for their produce. Its a pity how even the lobbies, which consider themselves pro-farmer, dont raise any hue & cry over this blatantly unfair act of the so called pro-farmer government. If the government was afraid that rising rice prices would affect the poor (landless labourers), it always had the option to buy the rice and supply them to the poor through its public distribution system at the subsidised rates (which it anyway does now). Who were the real gainers of this act? It is the middle class, you and me, who have been spared the burden of rising rice prices at the cost of the farmers. The media speaks for the middle class today and the middle class trounces on the rights of the poors (including farmers) with contempt. We have a new caste system, with only 2 castes - the educated with a voice (access to media & information) and the voiceless. And people in the first category happily screw the people in the second, without knowing and without remorse.

The case of oil is also similar to the case of rice. The highly subsidised oil is, for the most part, benefitting the middle class India - people with 2 and 4 wheelers, office goers and the companies. The average consumption of fuel in rural India sucks when compared to the urban India. Rural India needs kerosene for the most part (for lighting and cooking) and a little bit of diesel (for water pumps running during agricultural seasons). The urban India needs Petrol & cooking gas every single day. Diesel is used mostly for goods transportation. So, it is clear whose interest the government is serving by stopping the petrol and cooking gas prices from rising. The irony is that it is being done in the name of the poor. Which poor? Is there any good pro-poor reason why the subsidies from Petrol & cooking gas should not be taken away? In fact, a large part of subsidies on diesel should also be done away with (the part which goes for private transportation).

I may seem anti-middle class - I am not. Like the 30% Indians, my family also belong to this group. All I want to point out is that the money going to subsidise the fuel and the rice, can very well be used to build new roads and better infrastructure. A small fraction of our oil subsidy can support many new educational institutions. Access to world commodity markets can make farming profitable and less risky, thus avoiding the need for half baked measures like loan waivers (which are dangerous for the rural banking system and thus for the farmers themselves in the end). What I fail to understand is that these measures are coming from someone as learned as our PM. Surely, he can not say "our farmers deserve our support" and then, bar them from getting better prices for their produce. That would be hypocracy - Mr. PM, you are too good and respectful to go to such lows.