Thread by @svickram

Thread -

60% of Indian farmers are poor and why they are poor.

There are three key stakeholders whose are solely responsible for poor farmer income

and no it is not the middle-men

The real villains are - RBI + Media + Middle Class

1/9

1. RBI has been maintaining inflation targeting as a key policy maker for a long time ( probably only central bank with such high focus on inflation rate)

But Houston there is a problem. 2/9

2. Our Inflation index is botched up - like many other indexes - weightage of food is 46% while of real estate/housing is mere 9%. (zero for rural india) 3/9

Rise of food prices creates maximum havoc politically. Price of onions have led to loss of many govt, but what is share of onion in house hold budget ? 4/9

Onions are interesting - a good % of population does not eat onion

It is not main staple food. max consumption per house hold is not more than 10kg a month

If it is super cheap still consumption wont increase and if it is expensive, one can drop it 5/9

but it gets 10,000% media attention, compared to its weightage.

Every headline screams onion. Every channel screams onion

Middle class screams onion.
6/9

So Govt works overtime to keep food prices low

India being an agrarian country, almost 60% of population is dependant on agriculture. It is obvious but still for city folks / columnists, Agriculture is food production. Farmer is producer of food or that onion
7/9

now Remember Govt is committed to keep food prices low because they want to keep inflation low and 45% inflation comes from food.

That means, Govt is committed to keep income of these 60% of population low (while cost of education/housing / travel /health etc rising)
8/9

So why it is a surprise that farmers remain poor!

Remember, Govt & policy makers are working to keep prices low due to pressure from Media/middle class.

So if farmers are poor, its success of policy not failure. Celebrate success of policy as thats a rare thing in india. jai ho

fringenotes.in/2018/03/13/far…