RGE Monitor recently posted a synopsis on the
Listed below are some of the litany of sins (focusing mostly on internal problems; highlight mine) + my comments.
RGE: “Despite being an agricultural economy,
RGE: “Rice shortages had common cause: Public policies encouraging production of crops for export rather than local demand
My comment: Previously depressed prices of rice prodded government to encourage this policy; still the unintended impact of regulations.
RGE: “Other internal causes of current rice shortage:
RGE:- “trade barriers that tighten rice supply - high import tariffs (50%) paid to NFA (National Food Administration) by private sector rice distributors/retailers, ban on private importation
My comment: subsidies always cause distortions
RGE:- “landlords convert agricultural land for non-farm use to avoid govt's land distribution program
My comment: When investments to the agricultural sector become a losing proposition then it is natural for landowners to diversify. This represents more of an effect and an aggravating circumstance.
RGE:- “low productivity due to poor irrigation, poor seed and fertilizer technology, higher cost of imported fertilizer due to higher feed and energy costs
My comment: Same premise, low returns equals low incentive for increasing productivity.
RGE - “use of rice as a political salve - subsidized rice diverted to the poor
My comment: Bullseye!
RGE - “uncompetitive local rice industry plagued with monopolies by special interest groups (in and out of gov't), inadequate marketing
My comment: Subsidies bestows undue privileges to favored groups. Here they monopolize the rice trade. And since farmers totally depend on “special interest groups” and the government for sales, market price signals have not diffused to them. Consequently, “special interest groups” control a bigger share of the income at the expense of the producers or farmers.
RGE: “NFA interventions unsuccessful at stabilizing rice prices”
My comment: Touché!
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