Monday, May 05, 2008

Bias and Romanticism

Aco wrote in the Diskusi Ekonomi (in Bahasa Indonesia) why rice import policy, which have larger number of gainers than losers, could not get thru. He proposed three possible answers: the gainers fail to coordinate its political power (the Olsonian logic of collective action), pure ignorance, and stubborn ideological stance.

The logic of collective action may be able to explain import ban, but not export restriction, because we find that regardless the number of net gainers or losers, people seem not to like the idea of international free trade. Import no, export also no. This is a symptom of an anti foreign bias (Caplan, 2007). For many of us, anything foreign is bad, dangerous, and threatening, including trade with foreigners.

Moreover, there seems to be a reverse-orientalism sentiment, that is, everything but western value is better. This observation is supported by the fact that conspiracy theory sells very well -not only to the illiterates but also the educated.

On ideological bias, there also seems a romanticism on peasantry. Paul Collier, the writer of excellent The Bottom Billion, wrote here (and read the whole discussion on food crisis, too):
Unfortunately, large-scale commercial agriculture is unromantic. We laud the production style of the peasant: environmentally sustainable and human in scale. In respect of manufacturing and services we grew out of this fantasy years ago, but in agriculture it continues to contaminate our policies.
and, indeed that:
In Europe and Japan huge public resources have been devoted to propping up small farms. The best that can be said for these policies is that we can afford them.
But developing country like us can not afford it. We don't have such luxury. So when we come up using public resources to develop the agriculture revitalization program, are we speaking the same language for large scale commercial agriculture?

Are we ready to give up the idyllic view of a small plot land owner peasantry for a large scale industry and see a transformation from myriad small peasant landowners class to become waged farmers working in a handful large scale agroindustrial companies?

7 comments:

Anymatters said...

i'm sorry but i think it's up to the landowners of paddy field or their distributors (value chain managers) where and how to sell the rice :-)

rizal said...

Anymatters, as long as they pay their farm worker's wage, what's the problem?

Anymatters said...

of course they pay the workers.

Anonymous said...

The fact is most Indonesians are (small) farmers. Now, I have two questions for you:
1. Do you think the gov't should help them?
2. If the answer to the first is yes, how?

rizal said...

Anonymous,
1. Yes, look #2
2. In brief, in the long run: improve irrigation and research for productivity (as public goods); more access to market --including international market-- for goods and inputs (distribution) and credit (at the market rate).

The government should help by letting the market mechanism transform this sector into more efficient production arrangement, instead of resorting distortionary policies.

In the short run, you can reallocate the fuel subsidy for food subsidy, cash transfer, or cash-for-work program to survive. (Yes, I share Aco's view here), but only to the small farmers who fall below poverty line --as part of poverty alleviation program, not agriculture revitalization.

Anonymous said...

In my opinion, typical Indonesian farmers are producing at the decreasing part of the rice farming's long-run average total cost curve (LRAC). So, to help farmers in the long run, the gov't needs to promote consolidation of rice farming. That is the only way farmers could take advantage of the economies of scale.

This is not easy, if not impossible.

Pasha said...

Remember in the mid to late 60's there were concerns on food shortage in South East Asia. Thus, the International Rice Reseach Insitute (IRRI) was established as a means to pool researchers to develop a more productive rice seeds. The result is the HVY (high yielding varieties) developed by Peter Jennings and some other Japanese guy (I forgot his name). Essentially, HVY yield more crop the ordinary rice seed and it was soon developed so that it can adapt to different environment. The result is so profound that it started what is now called the Green Revolution.

Now, fast forward to 40 years later....whatever happen to agricultural research? Is therea a significant progress being made in the field? Especially when taking into account the recent hike in food prices worldwide...I mean people are protesting over the increased price of pasta in Italy for god's sake.