Agriculture and Development — Part 2

This weblog entry is in response to the comments on Rajesh Jain’s weblog entry called Agriculture and Development. The first is from Arun Anantharaman who writes:

I think people tend to assume today that the American capitalistic route is the right way to go. I am not so sure. I think we can continue to remain a significantly agricultural country (40% of the population), and I think we should. (Not that we may have a choice on that). That still leaves a mammoth 600 million in manufacturing and services.

What we need to do though is make sure we are 100% literate. Even the BIMARU states. Understand how to continue to attract and retain non-speculative long term FII and other inflows and invest hugely in primary and secondary education. And continue to improve agricultural productivity.

Arun appears to imply that there is a dichotomy between capitalism and agriculture. An economy can be agricultural and the economy could capitalistic, socialistic, or communist. For now, India is an agricultural economy if the criterion is the fraction of its labor force is in agriculture and related activities. The structure of the Indian economy is a hybrid capitalistic-socialistic type. It is not a very good system that we have today if one were to examine what this structure has achieved. Perhaps we have picked up the worst from both systems to arrive at this unhealthy hybrid. Whether American-style capitalism is the right way to go or not will take us too far afield from the question of whether India can continue to have a significant percentage of its labor force in agriculture and still become a developed country.

As I have argued before (see Agriculture and Development), we cannot have large number of people in agriculture and still hope to become a developed country. To reiterate: agriculture alone cannot provide the massive income required to raise the per capita incomes of a billion people. The market for the required amount of agricultural production simply does not exist. The demand for food is fairly inelastic at the relevant level of consumption and it is easy to arrive at a saturation point.

One additional point that we should be careful about is the distinction between the labor force and the population. They are not the same. So saying that 600 million people will be available for services and manufacturing sectors is not correct.

Moving on, Bob Wyman has made a very important observation about the appropriateness of using TV for educating the umpteen millions of Indians who need affordable education. I got my basic education from traditional schools. The education was expensive and it was good. However, for the majority of Indians, this route is not an option because of resource limitations. Here is an excerpt from what Bob wrote:

…something that amazes me about India is how little there is in the way of “educational television” at the same time that I see massive penetration of television itself throughout even the poorest quarters of the cities and country side. It seems to me that an exceptionally cost effective program could be created to present 24/7 constantly streaming educational television on one or more channels. There is undoubtedly much content already available in India and much more can be obtained from foreign sources. (although much of it would be in English).

Such a service could be run for little more than the cost of a tape machine at the head-end and someone to swap tapes every half hour or so… Most of the content should be available free already. There *are* spare channels available on at least the Indian cable TV services so you don’t even have to go to the expense of transmitters to reach the city based populations. (Note: Before you complain that cable is expensive and won’t reach the people who need it, remember that even in the worst slums of India, cable TV is common either because people are pirating the hookups or because they’ve gotten them as “gifts” during election campaigns… Sometimes corruption can be useful…)

You can’t get a larger non-agricultural workforce without getting a more educated workforce. Exploit TV and Cable TV for something other than access to old Bollywood movies and MTV broadcasts… There is no more effective and efficient way to deliver learning and skills to the millions who crave a better chance.

Great points. Much of what I know, I learnt from TV myself. I had the great fortune of having lived in the US for a couple of decades and made great use of public TV and radio. The Public Broadcasting System (PBS) is one of the greatest sources of quality TV. Then there is public radio such as NPR (National Public Radio), MPR (Minnesota Public Radio), AR (Alternative Radio), and so on. These radio sources carry programs such as “Press Club” and “Commonwealth Club” speeches, “Fresh Air” (one of the greatest living interviewers Terry Gross is the host), and on and on.

Thus, not just TV, radio can be one of the most accessible tools for delivering education to the masses. In this regard, for India, the constraint is not resources but a lack of enlightened leadership, of imagination, of political will, of empathy and compassion.

Author: Atanu Dey

Economist.

3 thoughts on “Agriculture and Development — Part 2”

  1. Just saw your response to my comment on Rajesh’s blog.

    First of all, I am not sure why you inferred a dichotomy between capitalism and agriculture in my comment. I only meant that we don’t have to necessarily go the agricultural to manufacturing to services route. In fact, my argument is to the contrary – that despite being a capitalistic economy, we should try to continue having a siginificant segment of the labour force involved in agriculture and related activities (assuming we have a choice on that).

    But coming to your main point – you suggest that agriculture cannot provide the per capita income boost. I must confess I don’t know about that. Maybe you are right, and I suppose I did implicitly assume that a market would exist. But still I am not very sure why you think only 5-10% can and should be involved in agriculture and related activities. I would think 30% is a reasonable number. But yes, I will have to think more on that and maybe look at a few statistics to see if that supports my stand.

    As for the labor force – population distinction, point noted. You are right of course ,wrong usage on my part. But what I had meant to say was that 600 million dependent on manufacturing and services.

    Thanks for responding to my comment. And good luck with Deesha. I hope you can make a difference.

    Btw, a suggestion – please remove the “cancel” button on this comments page which closes the window. Or at least reposition it. I just assumed it was the “post” button, and had to retype everything 😦

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