Why the farmers commit suicide

Well, Dilip D'Souza thinks that the privileged folks are directly responsible for this. There is a grain of truth in that, we will come to that.

Consider this. Agriculture accounts for less than 1% of the GDP of the United States (by the way, it is not because US imports most of its food. It has surplus Corn and Wheat production). Most advanced economies have figures in low single digits. In India, the share of agriculture has fallen from 55% in 1950 to barely 20% as of 2005. The reason is simple: you could only eat so much. Also, agriculture has become remarkably efficient over the years.

The Government insists on giving unsustainable subsidies to farmers while brutalizing the service sector and the industries. It takes 89 days to get a permit to open an industry in India compared to a few days in Australia, China and 49 days in our neighboring Pakistan. Even Sri Lanka and Bangladesh have better figures. The agricultural subsidies are a net drain on our economy.

The problem is, agriculture employs most of the vote bank. It would be political suicide for any parties to reduce incentives. But what they could do is incentivize the small scale industries and open up retail and service sectors. We could have done this long ago, instead of megalomaniac dreams of creating humongous steel plants. We could have easily got on to the small scale and semiconductor manufacturing bandwagon. We coulda been a contender.

But the politicians (the real privileged class of India), would have none of that. Instead of welcoming Wal-Mart with open arms, they are busy sharing the loot.

People like Dilip D'Souza are barking up the wrong tree.