A look to a series of liberalization measures in the 1990s, which did not specifically address agriculture, reveals a dramatic restructuring of the agricultural sector. In a 2017 paper, Abhijit Sen and Jayati Ghosh investigate the impacts of these measures, highlighting shifts in investment, subsidies, and credit that inform the current debate.
From the paper:
“In the initial years, the reforms package did not include any specific policies specifically designed for agriculture. In the early 1990s, it was felt that the devaluation of the rupee had already provided sufficient incentive to agriculture, because it was expected to make it more attractive to export crops and thereby improve farm incomes. However, even if no explicit attention was paid to agriculture, various economic policies and other changes in patterns of government spending and financial measures had significant implications for the conditions of cultivation.
Over the initial period of economic reforms, which coincided with government attempts at fiscal stabilisation, there were actual declines in government expenditure on agriculture and rural development. Thereafter, there were cuts in particular subsidies such as on fertilizer in real terms, and the 1990s experienced overall decline in per capita government expenditure on rural areas in both absolute per capita terms and shares of GDP and aggregate public spending. There were also very substantial declines in public infrastructure and energy investments that affect the rural areas. These were especially marked in irrigation and transport, both of which matter for agricultural growth and productivity. In addition, financial liberalisation measures, including the emerging scope of what was designated as ‘priority sector lending’ by banks, effectively reduced the availability of institutional credit. Although the problem of credit access to cultivators was far from solved in India, the nationalization of banks had caused some positive differences, as public sector banks made more efforts to open rural branches and rural accounts, and to provide more crop loans to farmers. But after 1993 in particular, various financial liberalization measures, and the explicit and implicit incentives provided to public sector banks, made this much less attractive for bankers who anyway faced very high transaction costs when dealing with agricultural lending. The growth of branches, accounts and lending to agriculture all decelerated and in some states showed absolute declines. This forced many cultivators, particularly smaller farmers, tenant farmers and those without clear titles to land, to seek recourse to informal channels of credit like input dealers and traditional moneylenders. All this made farm investment and working capital for cultivation more expensive and more difficult, especially for smaller farmers.”
Link to the text.
- “Farmers played a crucial role in Modi’s initial election triumph after he promised to double their incomes in five years… But Modi failed to keep that promise, and farmers instead received prices that were even lower relative to their costs than they had been under the previous government.” In a recent op-ed, Ghosh comments on the farmers’ protests. Link. And Anumeha Yadav examines the role of landless and Dalit farmers, who own only 3.5 percent of farmland in Punjab, in the protests. Link.
- “In Bihar, the abolition of the Agricultural Produce Market Committee Act in 2006 was unable to bring in new investment, consequently market efficiency deteriorated.” In the Hindustan Times, Sukpal Singh on the effects of reforms similar to those passed at the national level in a single state. Link.
- “The crisis has reached unprecedented gravity, to the extent that cultivators were forced to take their own lives rather than live a life of extreme poverty, mounting debt burden and the agony of not being able to pay back the debts.” Anita Gill and Lakhwinder Singh on the rise of farmer suicides between 1997 and 2004. Link. And Tamma Carleton finds that warming temperatures have contributed to the ongoing crisis. Link.
Desegregation and Magnet Schools in Chicago
Postdoctoral Teaching Fellow at the University of Chicago NICHOLAS KRYCZKA studies urban history and desegregation in the United States. In a 2019 paper, Kryczka investigates efforts towards choice-driven desegregation in Chicago public schools in the 1970s.
From the paper:
“In Chicago, the prolonged absence of any program of mandatory transfer had made school integration a matter of ‘choice.’ By the time authorities intervened—via a state desegregation plan in 1977 and a federal civil rights suit in 1979—magnets were the only policy with a supportive constituency and a ready pot of federal funds. With black Chicagoans hardly unanimous in their inclinations toward integration, white Southwest Siders continuing their tradition of resistance, and new Latino organizations echoing their opposition to acarreo forzada (“forced busing”), magnet schools sidestepped ethnic politics. The plans that followed—Access to Excellence in 1977 and Options for Knowledge in 1982—avoided mandated transfer and expanded the menu of non-neighborhood school choices. While no one disputed that magnets were integrated, the fact was that there were too few. With parental choice channeled into a contest characterized by extreme scarcity, magnets carried the expectation of an elite experience and shifted the criteria for success in urban education. Offering one of the stronger critiques of the emerging educational marketplace, the Chicago Urban League declared that choice-driven programs—whether bilingual centers in Pilsen, classical schools in Chatham, or entrance exams at Whitney Young—had a shared mission: to keep the black and poor far away from those who were not black and poor.”
Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: firstname.lastname@example.org.
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- “It is now time to take a broader look at the connections between the rise of merchant capitalism, in which slavery played a central role, and British economic growth.” Nuala Zahedieh on William Forbes and the copper industry’s role in colonial markets. Link.
- “Our estimates show that private equity ownership increases the short-term mortality of Medicare patients by 10%, implying 20,150 lives lost due to PE ownership over our twelve-year sample period.” By Atul Gupta, Sabrina T. Howell, Constantine Yannelis, and Abhinav Gupta. Link.
- In Bloomberg, Catherine Traywick, Mark Chediak, Naureen S. Malik, and Josh Saul on what went wrong with the Texas electric grid. Link.
- “This article argues the Fed rescues banks not because it is captured by financial interests, but because it is captured by the paradigm of systemic risk.” By Onur Özgöde. Link. h/t Paul
- “Within local industries over time, a 10% increase in the average wage is associated with a 0.15% decrease in the number of violations per employee and a 4% decrease in fines per dollar of pay.” Ioana Marinescu, Yue Qiu, and Aaron Sojourner on wage inequality and labor rights violations. Link.
- Carolyn Sissoko on the collateral supply effect in central bank policy. Link.
- “The continuity of foreign direct investment-oriented growth is traced to the corporate politics of business-state elite deals.” Dorothee Bohle and Aidan Regan compare growth models in Hungary and Ireland. Link.
- Javier D. Donna and Jose-Antonio Espin-Sanchez examine water theft as social insurance in Spain, 1851-1948. Link.
- “Manchuria (Northeast China), which attracted millions of migrants from North China during the first half of the twentieth century, experienced a devastating pneumonic plague outbreak in 1910–11. Using data from a rural household survey in the mid-1930s, we explore how the post plague conditions in various villages affected migrant cohorts’ long-term wealth accumulation. We find that the migrant households that moved to plague-hit villages soon after the plague ended prospered the most: they owned at least 112% more land than migrant households that either moved elsewhere or migrated to the same village before or long after the plague outbreak.” By Dan Li and Nan Li. Link.
Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: email@example.com