8 Jun 2005

the apple

The Chinese appetite for soyabean (in step with the country’s seemingly unsatiable hunger of almost everything - coal, gasoline, steel, cement…) is triggering an imminent ecological disaster in far away South America.

In strife-torn Africa, warlords become Cabinet Ministers, in India we (are coerced to ?) elect our bhais and goons to become Ministers - the empowerment, in either case, legitimizes plunder. Democracy only greys the shade of darkness. Darkness prevails, darkness rules…

On Sundays, i often visit a small weekly village market to buy vegetables. This trip provides me a window to peek at the changes suburban India is undergoing. And last Sunday the fruitseller’s handcart had shiny, crimson apples with little stickers proclaiming “Chiquita” / “Chile”! Selling at Rs. 100/= a kilo.

i’m not an economist by training. But, if those apples were really from Chile (that thin strip along the left margin of the South American continent!!), i marvel at the magic of globalization.
i wonder how i (as the consumer) and our fruit farmers benefit from these imports. i am certain the importers and the middlemen traders make a killing - maybe also killing-off our apple farmers in Himachal (and elsewhere) in the process.
i’ve heard stories of apples rotting on the ground in Himachal, for want of cold-storage and fruit-preservation facilities. i have also eaten the delicious, juicy Golden Apples from Himachal. How is it economically sustainable to bleed foreign exchange while not supporting our own farmers with a fair price for their produce? If the “Chiquita” can have buyers here at Rs. 100/=, i’m certain so can the Golden and other varieties of apples grown in the country. i presume we might even get better quality at a lesser price. Only another set of middlemen would be lining their pockets !
Are we exporting, say, our superior Golden Apples and importing the “Chiquita” and their ilk ? If so, why ? Would that be a position of economic strength in today’s global economy ? If i remember our national tax regime correctly, we incentivise exports by allowing duty-free (or reduced duty) imports to the exporter. Do we really benefit long-term by killing indigenous production capabilities - whether in farm products or in industrial manufacturing ? My powers of comprehension and protest are puny… compared to the lawmakers’ might and the dream-merchants’ magic !

But let me share this, the Golden Apples i had eaten, were far superior to the “Chiquita” i had today evening ! (Yeah, i had picked up some, curiosity got the better of me !)


Anonymous said...

It depends on the "distance": perhaps Chile is closer to Pune than is Himachal. The cost of transportation from Himachal may be greater (for instance.) In that case, it answers your question. However, if there is an oversupply of Himachal apples in Himachal, and an undersupply in Pune, then to correct the imbalance, you have to "integrate" the markets by reducing transportation costs and thus bring Himachal closer to Pune than is Chile.

This does not mean that there are no other market failures which causes this sort of craziness. There may well be.


pH said...

dizzying dictum, Prof!