Thursday, June 4, 2009

Populism and Economy


Some one, say a farmer has one acre of land - they toil for 4 months to grow rice, they spend close to 14000-18000 to seed, grow, harvest.

How do they sell?

Government, if you live in Tanjore, cauvery delta buys it back. if the farmer lives anywhere else, middle men buys and sell it. Means, price is variable, it can be lower than the cost of production !

Government sells at Rs.1

Government provides subsidy and sells it at Rs.1 for the poor and needy. But rice is being smuggled across the state and there are innumerable instances of corruption, smuggling, tradingn reported.

Who benefits ?

It is the traders who make money - not the producers, not the consumers ! Price of Rice is hovering around Rs.34/- in open markets now for retail customers.

1 comment:

  1. rightly said sir. Issue of one kilo rice for 1rupee has worsened the situation. it has even created shortage of labour supply.