The Beautiful and the Damned: Fantasy and Facade

I just finished reading Siddhartha Deb's book, "The Beautiful and the Damned," and I was left imagining modern India like the fake Alamo, in which a visitor can have all the experience of the real thing, right down to the climactic battle.  In the end, however, it's just a facade.

Reviewers of the book have focused on a poignant story of a intelligent young woman named Esther who has made a success of herself, leaving her rural village behind to become a waitress in a "luxury restaurant." However, both socially and economically, she's hit a ceiling especially as a woman, and this story is melancholy and well drawn.

Deb points out that all of the call center and business outsourcing employees Western journalists harp on endlessly, amount to a little over 1 million workers.  By contrast, Indian farmers represent about 400 million people.Western journalists' fantasies sometimes portray budding entrepreneurs using modern technology and free markets to take their place in the sun, as American industrial farmers have done. Siddhartha Deb paints quite a different picture, in what I consider the best vignette in the book.

The author visits Andhra Pradesh developing a story about red sorghum, a versatile crop which is the subject of product development efforts to create new foods and food ingredients.  The U.S. is the world's number two producer behind Nigeria, and the number one exporter of the crop, mainly to Mexico.  Red sorghum is used also in animal feed for cattle and chickens. In the recent past, the Indian government has provided price supports to farmers to buffer them from droughts, floods and volatility of commodity prices.

A McKinsey report, which Deb notes has disappeared from circulation even on the Web, touted the need for India to abolish agricultural subsidies and move to "free markets" if the country wanted to modernize the agricultural sector.  Of course, in this extreme form, the idea is quite ludicrous given that every Western nation subsidizes its agriculture in chosen domestic or export sectors. 

Andhra farmers gave up their traditional production of millet in order to convert their cultivation to sorghum, in light of what they were told was rising demand.  Millet had the advantage of being relatively hardy and not requiring extensive irrigation or expensive seeds.  Switching to sorghum immediately forced the farmers to drill wells, for which they went into debt with unscrupulous operators who often failed to find water.  Next came the seed dealers, the new mafia, who were peddling GMO seeds, for which the farmers again had to go into debt.  Can you tell where this is leading?

Deb's story includes one Mahipal Reddy who offered to buy the farmers sorghum for what he considered a fair market price, taking into account some measure of adequate margin for the farmers.  Reddy went all in on offering to buy the area's sorghum crop, and he showed a bank guarantee for Rs. 40 crores, which should have given anyone comfort that he could perform against his bid, take delivery and pay. Reddy, like many personalities in rural India, is not a totally transparent character, to be fair.

Now, the timeless, traditional methods of Indian business kicked in.  A rival bidding group to Reddy went around to the bank, suggested that Reddy's bid was foolhardy and that he would be unable to repay any bank loans. As if by magic, the bank rescinded its credit guarantee and Reddy's bid collapsed, putting the farmers at risk.  In this case, the local government Collector in Nizamabad did step in to offer some degree of relief, against the prescriptions of McKinsey's rugged capitalism.  Farmer suicides, often by swallowing insecticide, have become a recurring feature of the new agricultural landscape, but it's an issue that has received far less attention that the call centers and their "new middle class" workers. 

Indian government agricultural policy has become very cozy with multinational giants by touting GMO seeds and other high cost inputs for farmers who are still a class without the benefit of good, reliable information on prices, market outlooks, alternative forms of credit, and without any enforceable property rights, as Deb outlines in his book. 

Prince Charles has called attention to the issue of Indian farmer suicides dating back to 2008, but his campaign was an easy target for corporate propaganda to discredit due to the Prince's own quirky private behavior. It's much more fun to read Tom Friedman's odes to globalization and bright Indians and Chinese subjects of  his books.

In the end, the failure is the failure of the Indian government.  Like a fake Western town, it has the facades of democracy: beautiful houses of Parliament built by those bad boy British colonizers, noisy but predicatable elections, and CEO's of public companies who run their businesses like family companies while pontificating about governance and foreign investment.   It doesn't have the vision or will to build a public health infrastructure with prosaic things like water treatment, rural power, housing and the rapid judicial enforcement of property rights and prosecution of abusive lending.

We are still living through our own scourge of  unfettered mortgage lending, especially with toxic instruments to unqualified populations: we have experienced the harm this kind of lending can inflict on an economy.  In the Indian agricultural sector, the government should start with a mission to create a viable future for Indian farmers, which would keep them on the land, being productive, and not migrating to the urban favelas to join the vast, informal work force.  In undertaking such a mission, a lot of oxes would have to be gored, but continuing on the current path will not yield a sustainable future. 

I give Siddhartha Deb credit for telling a small story about Indian agriculture in his book.  I'm only sorry that he didn't give us a punch line and get angry about what he has described in plain, but moving detail.