The average Indian farmer is poor because the average Indian farm is small
We’d agree that there’s an element of this in it:
“The agricultural profile of any nation is a very boring subject & studying it requires some effort. As a result, most people who have a view on “what’s happening in India" do not realize that the average Indian farmer is poor because the market for his goods is inefficient.”
We’re not about to try insisting that the Indian post-farm market for agricultural goods is efficient. We would also insist that that’s not why Indian farmers are poor. The actual reason is because Indian farms are small:
Since the first agriculture census over 45 years ago, the number of farms in India has more than doubled from 71 million in 1970-71 to 145 million in 2015-16, while the average farm size more than halved from 2.28 hectares (ha) to 1.08ha.
Imagine, as many of those farms will be, that it’s a monocrop of rice. The retail - note, retail - price of which is about 50 pence per kg. The yield is some 3 to 6 tonnes per hectare. The gross income to be gained from rice farming on one hectare is thus £1,500 to £3,000 a year.
It doesn’t matter how efficient that market for the output is. Even if all the value, something that absolutely never does nor can happen, accrues to the farmer the top end of possible income is that £1,500 to £3,000 a year. That’s before all the expenses of seed, fertiliser, electricity and so on. And that will be the amount to support the entire farming family of course.
Even if we mutter something about two growing seasons - a possibility in parts of India - we’re still not going to be reaching non-poverty levels of net income.
The past was grotesquely poor because most lived as peasants on scraps of land. The peasant lifestyle on a scrap of land is a poor one because the value of output from peasant farming on scraps of land is low.
There is no way out of or around this. Peasant farming means a peasant lifestyle, peasant poverty, on a peasant income.
Given that no one is making more land the only way to increase Indian farming incomes is to do exactly what every rich nation has done. Have fewer farmers each farming larger areas of land. Or, to put it another way, to abolish the peasant lifestyle, that peasant poverty, it is necessary to have no more peasants.
No, not the Soviet way with the Holodomor and the like. Instead have an industrial revolution and near all make their livings with indoor work, no heavy lifting.
As we keep saying solutions can only be found when causes are understood. It’s simply not possible to make a non-poverty income out of farming scraps of land - that’s why the average Indian farmer is poor.
Damn Difficult, Booking Hotels
Victoria Street,
London SW1
“Humphrey...”
“Yes, Minister?”
“The BBC have been pestering me to explain why it has taken us so long to organise hotel accommodation for UK arrivals.”
“Did you accept?”
“Certainly not. I told them we were working 24/7 on the plan.”
“Quite right, Minister. It has been an exceptionally difficult problem.”
“You have my full support, of course Humphrey, but I don’t quite understand why it takes so long to book a few hotel rooms. I must have asked you to do that four weeks ago.”
“Just occasionally, Minister, there is the momentary lacuna in your comprehension of the workings of the civil service. For a start, we have to determine in whose domain this matter lies. We are the steward of the national’s health but dealing with arrivals is a matter for the Home Office and possibly the Foreign, Commonwealth and Development Office also. We must do nothing that might offend our friends overseas.”
“Of course not.”
“The trouble has been that my opposite number has been under pressure to publish a policy paper on preventing illegal immigration and deporting undesirables before the end of the month. This is really urgent. Of course, it won’t actually be a plan, just a set of possibilities for consultation to see if anyone has any other ideas. Then they will be able to rush the Sovereign Borders Bill through Parliament sometime next year.”
“Jolly good show but, now we’ve left the EU, we’ll have to rescue them just the same and we cannot send them back?”
“True, Minister but at least we will be able to quarantine them in three-star hotels for two weeks. At least we will when we can agree whose responsibility that is.”
“How about the FCO?”
“No, they never want to be responsible for anything. But the good news is that the Home Office have just agreed to leave it to us.”
“Thank God for that. Can you now get onto the hotels themselves?”
“Possibly, Minister, but the Attorney General’s Office has thrown a wrench into our delicately tuned workings. They are concerned that forcibly locking people up for 11 days will bring a flood of Habeas Corpus writs.”
“But aren’t these foreigners we are talking about. Well we are not sure yet whether we are quarantining just foreigners or everyone but, be that as it may, the only things all foreigners know about Britain is the Magna Carta and Habeas Corpus.”
“I don’t think King John was bothered about quarantine except for his brother, Richard.”
“Well actually, Habeas Corpus only became a statute in 1679 and they had a real problem getting it through Parliament. At the final vote, the "ayes" had only two more votes than the "nays" but there were five more votes in total than the number of lords eligible to vote. This came about because one teller counted a particularly fat lord as ten, by way of a joke, and the other teller was too dozy to notice.[1] The Attorney General’s Office, I gather, is anxious that its validity is not challenged.”
“Come on Humphrey. You are pulling my leg.”
“No joking matter, Minister. If you disregard that, consider the position of HM Treasury, namely that those being quarantined should pay for their own hotel accommodation. You may think that is fair enough but it will be at least £1,000 a head for single people and what about couples and families? We have already had representation from citizens’ rights groups saying that we do not charge the guests of Her Majesty's Prisons, so why should we charge those we lock up in hotels?”
“Humphrey, this is ridiculous. What about those who’ve had their two jabs? No point in quarantining them.”
“Excluding them would be discriminatory, Minister. We are consulting widely. To quote from our draft press release: ‘Detailed work is already underway with the Home Office, Department for Transport, Foreign, Commonwealth and Development Office and Department for Digital, Culture, Media and Sport, and other government departments.’”
“Oh good. It’s getting above my pay grade. I’ll ring the Prime Minister.”
“No need for that. The Cabinet Secretary phoned just before I entered your sanctum. I understand that the PM is creating a new Cabinet sub-committee, including a number of senior Cabinet ministers, to undertake these bookings.”
“That’s just like the old joke: how many British Cabinet ministers does it take to book some hotel rooms?”
“That is a pleasantry, Minister, with which I am not acquainted.”
“The answer, Humphrey, is nobody knows because it has never been done.”
“Very droll indeed. The good news is that the PM wants you to lead the sub-committee. After the initial flurry he does not expect it to meet more than once a week and you’ve already spoken with the Australians and New Zealanders,”
“Yes, I expect I can manage that. It’s an honour really. Primus inter pares, what?”
“The Cabinet Secretary also asked me to relay that the PM has the utmost admiration for your abilities but has asked General Sir Gordon Messenger actually to make the bookings. He’s an old Commando, with a geography degree, so he’ll know what to do.”
“So what am I supposed to do?”
“You will be too busy chairing the sub-committee, Minister.”
“Let me get this straight. All arrivals from the red list countries will get the black dot when they go through immigration and, when they’ve got through customs, go straight to the buses for their hotels.”
“What happens if they dive down into the underground instead of catching the bus?”
“That wouldn’t be cricket, Minister.”
“Do I need to remind you, Humphrey, that Johnny Foreigner does not play cricket and, since we sold off all the school playing fields, nor do many Brits? Which are the red list countries anyway?”
“Our press release of 18th November, which may have momentarily eluded you, stated ‘If you have been in or through any of the [33] countries listed below in the last 10 days, you will be refused entry to the UK.’ I admit it is a slightly odd list in that it does not include some countries with the highest Covid levels such as the USA, India, and Mexico. It should be updated monthly but our friends in the Foreign, Commonwealth and Development Office do not want to rock the boat.”
“Humphrey, surely we cannot be excluding our own returning nationals, tempting as that must be?”
“Indeed not, Minister, just foreigners but, as the Home Office, will testify, we are not too good at rejecting the uninvited.”
“You know, we really should have done all this a year ago.”
“You may recall that we were so overwhelmed with our own viruses that we really did not think a few imports would matter much, even though the whole thing started of course, with imports. And actually some of your skiing friends in particular.”
“Humphrey, that is not very kind. I was simply standing up for diversity, as one must these days. I said we must not discriminate against foreign viruses, simply on the grounds that they are foreign.”
“Do I take it that we may now discriminate against variants on the grounds that they are variants?”
“Be that as it may, Humphrey, it seems we’ll all be done and dusted and ready to roll by 15th February. I have to say that I’m very impressed.”
“Thank you, Minister.”
[1] J. E. Powell, Great Parliamentary Occasions, 1966: The Queen Anne Press. p. 65.
Reasons for optimism - communications
Advances in communications technology will be no less transformative in the next few years than they have been in recent years. The future looks to be one of increased access, lower costs and more innovative hardware.
The UK government’s commitment to the rollout nationally of fibre optic cable might well be overtaken by events. Fibre optic cable is expensive to lay to remote rural areas. Rival ways of providing wifi include projects such as Elon Musk’s Starlink, with thousands of low-orbit satellites making wifi ultimately available anywhere in the world, and promise to bring telecommunications and internet access to remote areas far more rapidly and cheaply than any land-based systems look likely to offer.
The future is set to give the whole world the ability to communicate with any part of it, and to enable a global conversation. Artificial Intelligence will bring automated translation, so that people with different languages will be able to speak to each other across the world. The newest translation programmes replace the tinny and flat mechanical voices of the past with the sound of the speaker’s own voice talking in another language.
As the ability to miniaturize develops, smaller instruments are appearing, and enable conversations to take place without visible instruments. Already there is the somewhat unnerving sight of people apparently talking aloud to themselves in the street while conversing with distant parties. The future might look even stranger, since the mobile phone in the pocket could well be replaced by something less substantial, even perhaps for some people a small chip inserted under the skin. And dialing will be replaced by verbal commands and questions. People will converse with computers in ways more fluent and natural than today’s virtual assistants.
Power usage by devices will be less and will cost less, and charging will probably be mostly by induction, perhaps even by just walking past fixed power points. Virtual screens and holograms will soon enable those who wish to dispense with fixed screens mounted on desks or on mobile phones to see images projected into the air in front of them.
The ability of people across the world to be able to talk to each other will present economic opportunities that far outweigh and compensate for any job losses within the telecommunications industry itself. Advances in communications will be a game-changer, changing the way people live their lives and interact with others.
To observers outside the industry and the research centres working on new developments, the progress forecast might look like the stuff of science fiction, but when Steve Jobs unveiled the first iPhone in 2007, science fiction suddenly became a part of everyday life. It will happen again repeatedly, and will bring humankind undreamed of opportunities to achieve things previously beyond their reach.
If only people understood about broadband as a utility
Yes, OK, we’re picking an easy target here in India Knight, she’s not employed for her detailed knowledge of the real world. But still, this is a useful example of something that near the entire conversation about broadband to every home is missing:
The internet isn’t some quirky little place for weirdos. It’s infrastructure, in the same way as electricity and sewerage, an essential service that must be made available to everyone.
Well, we’re not sure we agree but let us assume that we do.
The government’s assessment is that standard speeds are available to 98.5 per cent of UK homes, which is dandy unless you’re part of the remaining 1.5 per cent.
OK. So, what would happen if we were to treat broadband - of that acceptable speed - in the same way we do utilities like electricity and sewage.
Over a million properties across rural areas of the UK cannot connect to the main sewerage infrastructure.
We’d be saying that your lovely little rural bolthole is too far from the infrastructure for it to be economic to connect you. You’ll have to use some other solution, like a septic tank.
Apply for a quotation for a new connection from the distribution network operator (DNO) responsible for electricity in your geographical area as soon as you have plans of your proposals, including a site and location plan. The application process usually involves filling out an online form.
Connection is not cheap, and it’s best to budget for it as early as possible.
We’ll also charge you the full cost of connecting your rural bolthole to the network. Costs do indeed go up, substantially, the further you are from the extant infrastructure.
That is, we currently do treat broadband as we do utilities like electricity and sewage. So, what was that complaint again?
Protectionism: Product standards
Most countries want to keep out products that are potentially unsafe (such as. electrical goods, medicines, recycling waste or GM crops) or unethically sourced (such as products made by slave labour).
That seems a perfectly legitimate policy — though if we find that a country imposes stricter product standards on importers than it imposes on its own producers, that is a sure sign of safety masquerading as protectionism.
So how do we know what safety and ethics objections are legitimate and not merely an excuse for protectionism? Are the concerns about America’s use of hormones in cattle, chlorination of chicken, or exports of genetically modified cereals legitimate health fears or just an excuse to block US agricultural products? And is America justified in refusing meat products from countries with much lower animal welfare standards, or manufactures from those with poor human rights records?
There are no easy answers. Safety concerns can be exaggerated, and standards twisted in order to keep out specific competitors. That is why product standards are one of the biggest sources of WTO trade disputes.
Given the opportunities for abuse, our general aim should be to stop individual countries imposing their own standards on other people’s products. International agreements might be a better way to achieve the stated aim.
It's possible to wonder about some people
The auctioning off of seabed rights to build wind farms is raising some money:
Two windfarm sites within the Irish Sea have reportedly attracted the most frenzied bidding, with energy firms offering to pay as much as £200m for each – a total revenue of £400m a year. Awards for another three areas have yet to be decided. The licences are for 10 years, meaning the auction will raise at least £4bn over a decade.
Which is nice. As with other resource rents the correct home for this revenue is the state. We do need to have government, we do need to have revenue to pay for it. Given that no one created the seabed by taxing the value of it we dissuade no one from producing seabed. That is, as with all other land value taxation, we have no associated deadweight costs and thus this is the most efficient source of that necessary revenue. Henry George was right.
The vast sums involved have prompted calls for the revenues from Britain’s renewable resources to be kept by the public in a “green sovereign wealth fund” that could be used to invest in tackling the climate crisis.
“Rather than being squirrelled away in Treasury coffers, how much better would it be to use this renewable windfall as initial capital for a sovereign wealth fund that could then be invested for future generations, similar to what we’ve seen the likes of Alaska and Norway do in the past with their oil wealth,” said the Green party co-leader, Jonathan Bartley.
Which is where we do have to start to wonder about some people. £400 million a year is not a vast sum, not in governance. It will keep government running for perhaps 5 hours, maybe the NHS for 26 hours. This isn’t the sort of sum that’s going to make a useful start to a wealth fund.
But worse than that is the inability to see that this is the product of investing for future generations already. The entire argument in favour of wind farms is that we are spending now in order to reduce climate change in the future - an investment in, or at least for, those future generations. The very fact that we have this revenue is proof that we’re already doing the investment.
Clarity of logic is a useful aid in determining public policy.
This could indeed be true, why don't we test it?
A supposition from Jeremy Warner in The Telegraph:
Covid, it would seem, may end up performing much the same role as the Second World War in ushering in a new era of interventionism and deliberately pursued self sufficiency. When the pendulum swings, as it plainly is at the moment, it is hard to resist.
A less efficient economy where duplication and protectionism become the norm may be a price Western electorates are prepared to pay for a greater sense of national resilience.
We think it’s unlikely that this is true. We think what is likely is that politicians will enjoy chuntering along as the Big I Am and deciding what should be duplicated and protected in the name of that resilience - what’s the point of going into politics if it isn’t to exercise power?
What is needed therefore is a test to see whether the initial contention is true. Will people accept a reduction in their immediate standard of living in return for that greater resilience over time? Or, perhaps, given that at some extremes that’s obviously true, how much will they be willing to trade the one for the other? And, clearly, how much is it just the enjoyment of our political servants enjoying their pulling of the levers of power?
Fortunately we have a method of testing this. As we know expressed preferences are not a good guide to human desires, it is revealed ones that are. So, only if everyone is left with that free and open choice can we determine the answer. Only if all are free to purchase the cheapest from wherever, also free to buy domestic in the name of resilience, can we test the contention.
That is, unilateral free trade is not just a good idea in itself - so we say of course - it’s also the way we find out whether everyone else agrees that unilateral free trade is a good idea. If people choose to buy foreign on price grounds then they don’t think that the resilience is worth it.
What doesn’t work, logically, is an insistence that all will sacrifice for that resilience and yet also insist they must be prevented - or dissuaded, or taxed out of it - from expressing their desire on the matter. For to do that is to be insisting that they do not prefer the resilience which is why they must be forced into it.
If people prefer domestic production then leave them free to express that preference. If people don’t then leave them free to express that. The very contention that the local supply chain is preferred is all that is necessary for it to exist.
Government not only need to nothing about it it shouldn’t - the very call that government must is the insistence that the original contention is wrong.
Protectionism: The anti-dumping argument
Dumping is the idea that foreign businesses may export products cheaply — or even below cost — into your country, in the hope of squeezing out local producers. Having captured the market, they can then put prices up again.
This predatory dumping may be rarer than imagined. In order to capture a country’s market and then raise prices a company would have to see off all other sellers. That is unlikely to happen — so why bother trying>
But there are many reasons why exporters might sell their products cheaply or below cost. They might have produced goods that have failed to sell or might have a temporary overstock to clear. So it makes sense to sell them for whatever they can raise. That is a boon for consumers, but it is not likely to cause much harm to producers.
The real problem, though, is when governments get involved in business. Predatory governments subsidise their industries or maintain a cheap currency in order to undercut other nations. They might even use exploited or slave labour to produce export goods at very low cost. China, for example, has been accused of all those things.
If the World Trade Organisation cannot stop such practices, it is neither surprising nor altogether wrong that the victims might respond with trade barriers against it.
The CAA can go boil its head
To leap free from an overweening bureaucracy is a benefit but we do then have to be careful about the home grown equivalents:
Ryanair's spat with the Civil Aviation Authority escalated on Wednesday night as plans emerged to axe all domestic routes and all services from Britain to non-EU countries.
The budget carrier will only operate out of London Stansted airport and will cull 13 routes to Morocco, Ukraine, Montenegro, and Norway.
We do sort of assume that consumers like being able to fly on Ryanair - we’re not quite sure why, we’ve done it and enjoyment perhaps is not le mot juste - from non-Stanstead airports. After all, the airline gained customers by doing so and so those customers must have thought the bus in the sky approach worth it.
So too about flights to non-EU countries from the UK. People took the deal on offer, it was an increase in consumer utility therefore.
So, why the spat, why the action?
A row erupted in December between Ryanair and the CAA over pre-Brexit rule changes. At the centre of the dispute is Ryanair’s use of so-called “wet-leasing”, where airlines hire aircraft and crew to operate services on their behalf.
Ryanair only has one UK-registered aircraft. The CAA wanted less than half of Ryanair’s UK services to be run by “wet leased” aircraft.
No one is claiming that wet leased aircraft are less safe. If that were so then the CAA shouldn’t allow them at all of course. But there is still this insistence:
The CAA’s Paul Smith said at the time: “A UK airline with a significant presence in the UK, should not rely heavily on using wet-leased, foreign-registered aircraft.”
Umm, why? We find it difficult to believe that the CAA is so hungry for the £146 registration fee that they’re willing to cause the severing of such international links.
It is true that other countries - the EU itself - have weird rules about who may fly and where on what sort of registered aircraft. But that’s exactly the sort of thing we’ve been trying to leap free of. As Joan Robinson said about trade itself, just because someone throws rocks in their own harbours no reason to chuck ‘em in our own.
At a deeper level this is akin to the shareholder primacy argument. That has the merit of there being the one single objective of a company. The same should be true of regulatory bodies - the one, single, simple, objective of the organisation. This being the consumer interest. That’s what they’re there for, to enable the maximisation of consumer utility and nothing else.
The CAA is, perhaps simply as a result of amour propre, reducing the choices of consumers and thus acting against their, our, interests.
The government should tell the CAA to go boil its head. After all, the entire point of the system is that they all work for us, in our interests. Something the CAA quite obviously isn’t at present.
Reasons for optimism - artificial intelligence
There are very few areas of human activity that will not be affected in major ways by artificial intelligence. AI was originally defined as anything done by a machine that would previously have needed human intelligence, but modern definitions include the notion of machines that can learn, adapt, improvise, and apply their knowledge to new situations.
The key factor is the speed with which they can work, coupled with the range of knowledge they can draw upon to interpret new scenarios. Machines are good at automating routine, repetitive work. Even though many such tasks are performed by relatively unskilled labour, AI could even take over more skilled tasks such as the work done by solicitors in accessing the legal history of previous cases.
Among the benefits AI will bring is the use of speech and language recognition to aid in translation and transcription. Their developing capabilities at facial recognition and surveillance are already used in crime fighting and prevention. Some supermarkets use facial recognition to identify repeat offender shoplifters, while law enforcement now uses AI that can predict from a person’s movements on camera whether they are likely to be planning to carry out a terrorist attack. There are obvious privacy and ethical issues to be addressed here, to ensure that a balance is struck between protecting people and invading their privacy.
AI will have a major role to play in healthcare, spotting and correlating symptoms to identify potential problems that a more fallible human observer might miss. Eye examination, for example, can pick up the small changes that have in past cases been precursors of serious conditions. AI will similarly play an increasing role in the early detection of cancers by picking up a combination of symptoms and anomalies whose significance might be missed by human observers.
In transport AI will enable the autonomous cars, trucks, ships and planes that will carry people and freight more rapidly and more safely than human drivers could. It will enable people to converse and interact advantageously with machines. They will, in effect, become personal assistants.
The 2020 success of AlphaFold 2 in solving the decades-old problem of determining the 3D structure of proteins indicates the role that AI can play at the frontiers of scientific research, and its finding has huge significance for tracking human diseases.
Two questions are raised concerning AI. Does it threaten humanity by making us outdated and inferior? And does it threaten huge numbers of jobs? The answer to the first is no. It will be introduced as a partner, rather than as a competitor. The second answer is a partial yes, it will take over large numbers of jobs. In doing so it will make operations and operators more productive, and will generate the wealth that will lead to other jobs being created. It may be, however, that AI will lead to the necessities of life such as food and transport being handled by machines, leaving humans free to engage in activities they regard as more rewarding.
Humanity could be headed for something like the slave economies of the ancient world, but in this case the slaves will not suffer.