1.Problem of plenty (The Hindu)

2.After the spring (The Hindu)

 

1.Problem of plenty (The Hindu) 

Synoptic line: It throws light on the issue of farmers’ distress and need for agriculture policy. (GS paper III and IV)

Overview

  • Agriculture is the backbone of the Indian economy but the sad part is that it is still in a rudimentary stage, which ultimately affects the overall economy. The most egregious and heartbreaking instance of the agricultural crisis was seen recently in various strikes by the farmers.
  • Over the last few weeks, across India the price of potatoes has fallen sharply after a year of bumper production, the production is not the problem here, but the farmers are finding it difficult to sell their produce at profitable rates.

Assessment

  • With the price of a kilogram of potato dropping as low as under a rupee in certain wholesale markets, many distressed farmers have left their produce to rot on the roads, and in cold storage facilities. Potato prices were many times higher just months ago amid scarce supply. The sharp swing in prices has been explained by the Cobweb phenomenon.  
  • Farmers tend to increase the production of certain crops in response to their high prices during the previous season, which in turn leads to a supply glut that causes prices to crash. The cycle repeats each passing year, with the lag between price and production causing a huge mismatch between supply and demand. The present fall in potato prices comes against the backdrop of a slowdown in the rural economy.

Need on an hour

  • Given the humanitarian and political costs of agricultural distress, particularly in a year when many big States go to the polls, local governments could turn towards populism to satisfy their rural voter base.
  • There is need for fiscal measures such as farm loan waivers, a higher minimum support price for farm produce, or some combination of the two. The next Union budget is expected to focus up on the rural economy through fiscal measures.
  • However, these relief measures temporarily ease the pain on farmers, but it fail to make a significant difference to their lives in the long run. Any permanent solution to the problem of agricultural distress will have to deal with the challenge of price fluctuations.
  • The boom-and-bust cycle is the result of a broken supply chain that is over-regulated. In the absence of a robust market for buying and selling forward-looking contracts, farmers are left to fend for themselves against severe fluctuations.
  • The government must resolve to address these structural issues, and not limit itself to ad hocpolicy measures in fire fighting mode. There is a need to give farmers not just a better, but also more stable, return on their crops.

Way ahead

  • The committee on doubling farmers’ incomes also suggested adoption of a liberalized land leasing policy to recognize tenant farmers, contract farming, freeing up of agricultural markets and strengthening decentralized procurement of crops by states.
  • The panel’s recommendations come in the backdrop of continued farm distress and the government’s signal that the forthcoming Union budget will put forth solutions to address the problem.

Ques-With the forthcoming Union budget, there‘s hope that it will address the farmer’s distress, explain

Why need of an agricultural policy that should look to address the problem of severe price fluctuations?

 

2.After the spring (The Hindu) 

Synoptic line: It throws light on the issue of Jasmine Revolution’s seventh anniversary. (GS paper II)

Overview

  • Tunisians have seized on commemorations of the Jasmine Revolution’s seventh anniversary to oppose the government’s austerity measures. In a way, the continuing clamour in the North African state is for a consolidation of the fragile gains from the 2011 revolution that set off the Arab Spring.
  • The weeks-long demonstrations was going which was triggered for the unrest is the stringent terms attached to the government’s recent budget  a precondition for the $2.9 billion loan from the IMF.

About Jasmine revolution

  • Jasmine Revolution, popular uprising in Tunisia, had protested against corruption, poverty, and political repression and forced Pres. Zine al-Abidine Ben Ali to step down in January 2011. The success of the uprising, which came to be known in the media as the “Jasmine Revolution,” inspired a wave of similar protests throughout the Middle East and North Africa.

About recent unrest

  • The run up to the anniversary of Tunisia’s Jasmine Revolution has been marked by violent demonstrations in which government buildings, police stations and cars have been burned, roads blocked, a protestor killed, hundreds, including 97 members of the security forces, injured and around 800 people arrested.
  • Lower petrol subsidies and higher taxes on cars and utilities are among the measures proposed to reduce the fiscal deficit, currently at 6% of GDP, to 4.9% by the year-end. Further fuelling the anger are the 25% youth unemployment rate, twice the national average, and persisting disparities among regions.
  • Tourism has been one of the sectors worst-hit by the political unrest of recent years and the 2015 terrorist attacks. The government has promised $70 million in aid to support the poorer communities in a bid to quell the protests. But as the opposition Popular Front has set its sights on the withdrawal of the budget, there are few signs of the turmoil subsiding anytime soon.
  • The country-wide opposition and police action have, understandably, led to comparisons with Tunisia’s 2011 popular uprising that spread across the Arab world. The relatively stable transition witnessed in Tunis, in contrast with the authoritarian backlash in other countries, saw Tunisia being hailed as a global model.
  • Prime Minister Youssef Chahed has been cautious, confining his criticism to the violence behind the opposition rather than the expression of dissent per seagainst the fiscal reforms. But he would have to show demonstrable progress in implementing democratic reforms to restore confidence in the government’s ability to deal with the discontentment.
  • In recent years, the IMF has seemed more alive to the macroeconomic issues confronting developing countries, even as it has administered the usual recipe of structural reforms. Tunis could do with international support to prevent the country from slipping into the kind of chaos and uncertainty that has gripped the rest of the region.
  • European Union nations in particular have an interest in promoting political and economic stability, in the light of migrant outflows from North Africa to the continent.

Ques– What was ‘Jasmine Revolution’? Explain why Tunis must do more to reclaim people’s confidence in view of anti-austerity protests?