Tuesday, January 11, 2011

Fritter them away through ban

Ban on exports and other short-term price-cap measures prevent price signals from causing an adjustment in demand. Worse, they prevent farmers from benefiting from the improvement in their terms of trade (the enduring hypocrisy of India’s commitment to farmers). Higher prices would also induce them to increase production and improve productivity of their land. Repeatedly, governments have done the opposite. Yet, farmers’ suicides are blamed on factors and forces other than these short-sighted decisions.

1 comment:

  1. Indian ethos were revolved around working fairly firstly for ownself and then for others. As proclaimed by Dr. John nash 'Best results comes when anyone in a group working for himself and for others', just contrary to the profit maximisation theory of adam smith....
    But, is there any relevance here for such extraordinary excellent oberit dictums of gurus, here in indian economy. Don't you think that that we need a broad debate on implementation of this theory in respect to working of indian economy and political disturbances at large in this system....