Tuesday, July 28, 2020

COVID-19 and its impact on the Agri Economy of Punjab

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Syed Ahmed Uzair

Article Title

COVID-19 and its impact on the Agri Economy of Punjab

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Global Views 360

Publication Date

July 28, 2020

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Women planting paddy seedlings in agricultural field

Women planting paddy seedlings in agricultural field | Source: Diganta Talukdar via Wikimedia

The COVID-19 pandemic has hit the agricultural economy of the Indian state of Punjab really hard. Punjab’s paddy farmers have traditionally relied on migrant agricultural labourers who are mostly natives of the state of Bihar and Uttar Pradesh. Due to the pandemic, a large number of migrant labourers have returned to their native place causing a massive shortage of farm workers in Punjab.

Its impact became more severe as the paddy transplantation period was already around. Gurbachan Singh, a local paddy farmer told news agency ANI, "There is a shortage of labourers as the government sent back the migrant workers without proper planning."

The shortage of migrant workers forced the farmers to rely more on the local labourers. The local labourers used this opportunity to demand more wages which has resulted in almost doubling the labour cost. The migrant labourers used to charge around ₹2500 per acre for sowing paddy while the local ones were demanding ₹4000 per acre for the same work.

The  village panchayat (Local village council) tried to fix the labour charges of ₹3,000 per acre which did not go down well with local labourers. This caused a dispute which even resulted in a clash between labourers and farmers where the shots were fired as well.

The labour shortage does not appear to be ending soon as most migrant labourers are not willing to come back. Viresh Kumar, a labour contractor from Sonbarsa in Bihar’s Sitamarhi district who supplies workers to paddy farmers in Phagwara, told ThePrint, “Workers from Bihar and UP either don’t want to come back to fields in Punjab or they want farmers or us to bear the cost of bringing them back, which is a very expensive and complex procedure now. Due to the lack of sufficient number of regular trains, the cost of bringing a single migrant to Punjab is around Rs 3,000 to Rs 4,000 per person.”

The shortage of cheap labour has forced the local farmers to start looking for some alternative which could maintain the economic feasibility of farming.also provided some benefit

Agricultural Secretary of Punjab government, KS Pannu noted that some of the farmers have started employing new technology to cope up with the labour shortage. "Farmers have sown paddy at around 5 lakh hectare land with Direct Seeding of Rice technology this year. Some farmers, however, shifted back to the puddling method for cultivation as they could not adapt to the technology," Pannu told ANI.

Manpreet Ayali, a member of Punjab State Legislative Assembly, and a wealthy farmer, says that this labour shortage is a blessing in disguise for the farmers as it would make them more self-reliant, rather than depending on labour for the transplantation season.

The shortage of cheap migrant labour has forced many farmers to cut down the area of paddy cultivation. Experts believe that due to the reduced area of transplantation the groundwater levels might improve in the state which tops the country in over-exploitation of groundwater reserves.

It is still too early to give a definite verdict on the long term impact of the COVID-19 on the agricultural economy of Punjab, but in the short term it is nothing short of a disaster for the local farmers.

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February 4, 2021 4:52 PM

Randomised Control Trials and the Alleviation of Poverty in India

Abhijit Banerjee and Esther Duflo won the 2019 Nobel Prize in Economics for their “experimental approach in alleviating global poverty”. Their experimental approach encompassed a variety of novel methods to understand and analyse interventions and Randomised Control Trials (RCTs). Their research has been used by policy makers to make informed policy decisions to best help the marginalised.

What are RCTs?

To understand the effect of a policy, intervention, or medicine, decision makers try to measure the efficacy of the treatment. Do deworming pills given to children improve test scores? Does providing chlorinated water improve the health and economic outcomes of villages? These are some causal (read causal, i.e. caused by, not casual) questions researchers are interested in. The best way to analyse causal effects is to randomise the selection of people in the treatment and the control group (for example: children who are given deworming pills versus children who are not given the pills). This random selection of the two groups removes many statistical biases that might affect the results.

RCTs in India:

Many of the RCTs performed by Banerjee and Duflo were in India. They involved short- and long-term impact assessments of various interventions, policies, models, and treatments. We look at a few RCTs implemented in India:

Teacher absenteeism rates:

Troubled by the low attendance rates (or high absence rates) of public-school teachers in India, Duflo assessed the impact of financial incentives on the absence rates of teachers in Rajasthan. The study monitored teacher attendance by cameras, which was tied to a financial incentive if the attendance was high. From a baseline absence rate of 44%, teacher absenteeism in the treatment group fell by 21%, relative to the control group. High teacher attendance caused child test scores to improve too.

COVID-19 and health-seeking behaviour:

In the context of COVID-19, Banerjee tested the effect of sending messages via SMS that promoted health preserving behaviour. The results were very positive. By sending a short, 2.5-minute clip to 25 million randomly selected individuals in West Bengal, the intervention i) found a two-fold increase in symptom reporting to village health workers, ii) increased hand washing rates by 7%, and iii) increased mask-wearing by 2%. While mask-wearing rates increased only marginally, the spillover effects (wearing a mask stops the virus from infecting more people) were moderately high and positive.

Asset Transfers and the Notion of Poverty:

An RCT by Banerjee in West Bengal involving a productive asset transfer accompanied with training found large and persistent effects on monthly consumption and other variables. The treatment group reported 25% higher consumption levels relative to the control group, who did not receive the asset transfer and training. Implications of such RCTs are huge. The notion that the poor are lazy and unwilling to perform strenuous labour is falsified by this RCT. Often, what the poor lack are opportunities that are hard to come by, given their financial status. A small nudge, like the asset transfer, can cause large and positive effects on their well-being.  

Salt fortification to reduce anaemia:

RCTs also help rule out less cost-effective interventions. Duflo and Banerjee evaluated an RCT which distributed fortified salt in 400 villages of Bihar, to reduce the prevalence of anaemia. However, this intervention found no statistically significant impact on health outcomes like anaemia, hemoglobin, etc.  Thus, while RCTs help introduce novel methods of impacting the lives of the poor, they also help in ruling out in-effective measures. A policy maker might try other alternatives to reduce the prevalence of anaemia.

Are RCTs the gold standard?

Maybe. Extrapolating results from a regional RCT to national policies could present problems. Contextuality matters. A study that indicates positive gains for one region might present different, and rather adverse effects for another region. Nation wide effects might not be as prominent as regional results of a single RCT. The good part is that Banerjee and Duflo have a solution. Just perform more RCTs!

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