While New Delhi&rsquo;s Krishi Bhawan has good reason for urging states that do not have an agricultural produce market committee (APMC) Act to put in place a proper regulatory mechanism for agricultural markets, the fact also is that the APMC laws where they exist have not always been helpful instruments of market regulation. The concept of legally mandated regulation of agricultural markets, aimed at encouraging the orderly growth of farm marketing infrastructure and ensuring fair trade practices, has not worked as intended. It has not enabled the growth of an efficient marketing infrastructure, nor has it prevented unfair trade practices. In fact, the fence has been eating the field and market committees have been abetting unfair trade practices, hurting both producers and consumers. The beneficiary is the intermediary.

Markets for farmers

Business Standard

Amidst the avalanche of words that marked the 10th anniversary of the attack on the World Trade Centre in New York, only a few commentators have looked at the power shift that has occurred in the world since that epochal event. At the time of the Al Qaeda attack, the United States reigned unchallenged and supreme. Once the wars began in Afghanistan and Iraq, there were articles in Foreign Affairs asking why there should not be a new American imperium. Now, the uni-polar moment that provoked such hubris has not only passed, but Samuel Huntington&rsquo;s thesis on the clash of civilisations also seems to have been somewhat closer to the mark than the even more simplistic thesis on the &ldquo;end of history&rdquo; argued by Francis Fukuyama. Looking back, 2001-2011 looks like a lost decade for the United States.

A lost decade

The retail investor may have been wise when he moved away from the stock market over the past several months, seeking security in debt instruments, gold and even real estate. Given the increased volatility and the lack of any general direction, the market has been a risky place. The experts seem confused too; some predict confidently that the Sensex will climb from the region of 16,500 today to 22,000 by December; others talk of the index falling a good way from the present level, though not to the 2009 low point of about 8,000. There is such a wide range of possibilities in between these scenarios that any forecast can be considered plausible or implausible.

A nervous market

Better late than never, it is said. This adage applies aptly to the government&rsquo;s belated decision to lift the four-year-old bar on the export of wheat and non-basmati rice, as also to remove the cap on the export of cotton. However, the government has put brakes on the export of onions, following a price surge in recent weeks. The export ban last week has paid immediate dividends as onion prices have dropped. But as might be expected, the move has provoked criticism from farmers, traders and politicians in Maharashtra, the key onion-producing state &mdash; underlining once again that farmers&rsquo; interests are usually sacrificed in order to protect consumers.

Opening the agri-exports door...

The recent estimates by the Central Statistical Organisation (CSO), on both the Index of Industrial Production (IIP) and gross domestic product (GDP), show a slowdown; by how much, remains a matter of conjecture. For CSO has not only come up with the latest quarterly estimates, but it has also changed the estimates for the corresponding quarter of the previous year. While doing so, it has strangely not released the revised data of the intervening quarters. And the fact that IIP continues to vary widely, and is subject to sharp corrections, is well known. For analysts, the latest data are without a comparable historical perspective, and therefore of limited use.

Missing data

With the European Union (EU) on the brink, the world is hoping that the political leadership in Germany has an epiphany at the weekend ministers&rsquo; meeting in Poland and agrees to plans for a common euro zone sovereign bond that could avert Europe&rsquo;s &ldquo;Lehman moment&rdquo;, and the prospect of fresh financial contagion.

Crisis interruptus

Nobody can fault the intent behind the Insurance Regulatory and Development Authority&rsquo;s (Irda&rsquo;s) proposed change in investment norms for insurance players. The draft norms seek to restrict corporate-sponsored insurance companies from investing more than five per cent of their funds in group companies. At the heart of the matter is the regulator&rsquo;s intent to protect the interests of policy-holders. Given that there have been instances where corporate houses collected money from the public and invested in group entities, Irda&rsquo;s proposal seems fair since it seeks to eliminate the risks emanating from such temptations.

Excessively cautious

It is unlikely that the office-bearers of Hockey India watched the Rugby World Cup that is currently under way in New Zealand. They should have, if only to see efficient sports management in action. Rugby is not a sport that transfixes world sports audiences. Few countries with large populations actually play it at the international level &mdash; although India and China are members of the global rugby federation, Argentina is probably the most populous participating in the current World Cup.

Sports' informal licence raj

Consistency may generally be regarded as the virtue of fools, but consistency is the least one expects from a central bank. Having joined the battle against inflation, and finding the enemy still unvanquished, the Reserve Bank of India (RBI) had no option but to take the rate hike action that it did last week: it increased the repo rate by 25 basis points, taking it to 8.25 per cent. If the spectre of inflationary expectations continues to haunt, one must expect RBI to take further action, at least till it reaches the pre-Lehman threshold of nine per cent. In that sense, the central bank still has some headroom for further action. That this has negative consequences for growth and capital formation is well understood by policy makers and it is clearly the price the central bank thinks the economy ought to be willing to pay for price stability as well as for altering the state of expectations.

The last lap

While Japan is one of the countries that Gujarat Chief Minister Narendra Modi visited recently, he now has an invitation from the People&rsquo;s Republic of China. One lesson he would learn from the China-Japan relationship is the political importance of an apology. For all the good work that Mr Modi has done, and continues to do, in Gujarat, he has to convincingly atone for the communal carnage in the state in 2002. His three-day fast has turned out to be more a farce than a genuine expression of remorse and an attempt at reconciliation. Gujarat needs a &ldquo;truth and reconciliation&rdquo; process for the future well-being of its people as well as for Mr Modi to seek his destiny in national politics.

Just say sorry

India&rsquo;s smaller pharmaceutical manufacturers appear to be stealing a march on their bigger competitors in terms of growth. Though competition is desirable, caution is necessary when medicines are involved. First, the regulator should ensure that all pharma players follow good manufacturing practices. Cutting costs in this regard to engage in price competition should be frowned upon.

Pharmacy to the world

Protest comes in entertaining forms these days. In cooking the biggest-ever baigan ka bharta with only organically-grown baigan (brinjal or egg plant), a group of environmental activists scored two points. First, they qualified for entry into the Limca Book of Records. Second, they registered their protest against the proposed Biotechnology Regulatory Authority of India (BRAI) Bill, 2011, fearing it would ease the commercial production of genetically modified (GM) Bt brinjal. Indeed, the significance of the proposed statute goes far beyond crop biotechnology, the prime focus of the debate on genetically engineered products. The science of biotechnology is being gainfully utilised in fields as diverse as agriculture, fisheries, environment and forests, human and animal health, pharmaceuticals, industries and so on.

Half-baked policy

The idea that governments have a right to tax the rich to pay the poor is as ancient as the idea of equity and of civilisation itself. But that is not the only principle underlying United States President Barack Obama&rsquo;s plea that the rich in his country must be willing to bear a larger share of the burden of resolving the nation&rsquo;s debt burden. There are two additional principles underlying his proposal. First, all kinds of income must attract the same rate of taxation at any given level of income. Thus, subsidy offered to the rich through lower taxation of dividend income or zero tax on inherited wealth is an inequity that deserves particular redressal at a time when the government is scraping the bottom of the proverbial barrel in search of funds to reduce public debt.

Obamanomics

All aspects of the episode leading up to the resignation of Justice Shivaraj Patil, the new Karnataka Lok Ayukta, within six weeks of taking office highlight the change in recent times in the way public affairs are conducted in the country. As former high court chief justice and Supreme Court judge, he enjoyed public esteem till it was reported that he and his family own more than one property acquired through co-operative house building societies (apparently against rules). In terms of personal culpability, his position appears to be only a little better than that of P J Thomas, the former chief vigilance commissioner who had to quit since he had a criminal case pending against him for many years. The personal integrity of both in the discharge of their public duties is not questioned and in neither case is a matter of conspiracy or political stratagem to unseat the incumbent suspected.

Price of probity

The draft National Food Security Bill, 2011 of the United Progressive Alliance government bears a closer resemblance to the version proposed by Sonia Gandhi&rsquo;s National Advisory Council (NAC) than the one preferred by the Prime Minister&rsquo;s Economic Advisory Council. Yet, the draft put out for public debate is unlikely to be welcomed without reservation even by the well intentioned. The key NAC proposal incorporated in the draft suggests that the proposed law should go beyond the supply of highly subsidised foodgrain to include the provision of cooked meals for the destitute, including homeless people, poor children, pregnant women and lactating mothers, regardless of the cost and practical difficulties involved. Further, the Bill provides for cash compensation in case the government fails to supply foodgrain or meals.

More jobs than food

The outcome of Palestine&rsquo;s bid later this week, to get United Nations (UN) recognition as a state, is a foregone conclusion, since the United States has declared its opposition and will most likely use its veto when the matter appears before the Security Council. This will be a repeat of February, when the US vetoed a 14:1 resolution on a more straightforward issue, the fresh Israeli settlements that were coming up on land occupied since the 1967 Arab-Israel war. Earlier, the Palestine Authority had broken off peace talks with Israel because of the fresh settlements on land that a future Palestine state hopes to claim as its own. Israel wants renewal of talks without preconditions (which means the settlements should not be made an issue), and argues that UN resolutions will be pieces of paper that change nothing on the ground.

Beyond the Security Council

Favouring auction over revenue sharing seems to have become a test of virginity in policy making. Suggest that there was nothing necessarily wrong with the policy of revenue sharing and opting for continuity of policy on spectrum allocation and telecom licensing and one is bound to be dubbed a sinner and worse. Virtue is on the side of the votaries of auction. This in a country where bidders for various licences and contracts have mastered the art of rigging auctions! The highest bidder in an auction or the lowest bidder in a tender process is no angel. And, in any case, it has been repeatedly pointed out that the methodology for sale or leasing is a function of the market and the objective of such an exercise.

Auctioning nonsense

It would seem from recent policy announcements emanating from the United States that a third round of quantitative easing (QE3) is round the corner. Indeed, given renewed global inflationary pressures, it would seem QE3 has already been unleashed. It reflects both a paucity of options to revive the US domestic economy in the short run and the inability to take the tough decisions that would enable economic revival in the medium to long term. The ramifications of this economic unilateralism are likely to reverberate globally. Commodity prices are likely to head north thanks to an injection of liquidity into a global system already awash with it. Interest rates, already close to zero in the US, will inevitably to lead to capital outflows by investors seeking to arbitrage interest rate differentials. A weak US dollar will reduce imports by making them more expensive, unless the US continues to ignore an increasing trade deficit.

Exporting economic woes

The Bharatiya Janata Party&rsquo;s octogenarian leader Lal Krishna Advani ought to have gracefully retired from public life in May 2009 when he led his party to ignominious defeat. In 2004 his party had not gone to the hustings seeking a mandate for Mr Advani as prime minister. That year it was Mr Vajpayee who was defeated at the polls.

Write a book, Mr Advani

While the new managing director of the International Monetary Fund (IMF), Christine Lagarde, spoke of rediscovering the &ldquo;spirit of Bretton Woods&rdquo; at the annual meetings of the Washington, DC-based international financial institutions (IFIs), India&rsquo;s Prime Minister Manmohan Singh reminded the United Nations General Assembly in New York on the same day that the world had changed a lot from the days of Bretton Woods, and the IFIs and the UN system needed to catch up.

Dangerous new phase

After displaying considerable flexibility in global climate negotiations at Cancun and Copenhagen, even if in vain, India seems to have stiffened its stand on several key issues for the forthcoming 17th Conference of the Parties (COP-17) on climate change in Durban later this year. This is evident from Environment Minister Jayanthi Natarajan&rsquo;s statement at the recent informal ministerial consultations on this issue in Pretoria. She sought greater commitment on emission reduction from developed countries before India could even begin to discuss the legally mandated agreement on climate change. She also ruled out international verification of India&rsquo;s voluntary action on alleviating global warming, which the country had earlier expressed its willingness to consider under the proposed &ldquo;international consultation and analysis&rdquo; mechanism for member countries&rsquo; domestic climate programmes. Clearly, India wants to keep the spirit of the Kyoto protocol alive.

The climate changes

Incisive columns and editorial comment by top opinion leaders

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