A Promise, An Update, and A Request

Exactly one year ago, this blog came out of hibernation.

I had started EFE in June 2016, with an aim of popularizing economics. The blog, back then, was about writing simple, easy to understand articles about economics. The idea was to write stuff so that folks would have an easier experience navigating this often complex subject.

As with most things I have tried to start in life, it started well enough, but petered out fairly quickly. I wrote on the blog off and on, but without either a plan or a commitment. The biggest problem was that I was trying to substitute for some really good stuff already out there. Going up against the best – substituting for them –  is difficult. And so the blog lay (mostly) dormant.

The Promise

But on the 13th of June, 2018, I put up five links that I thought were worth reading. And, I am proud to say, from that day on until today, I have been putting up a post a day (at least). Rather than trying to go up against the best in the business, I have simply tried to link to them – complement them.

It’s ironic. One of the most popular posts on this blog is an article about substitutes and complements.

But for the past year, all I’ve done is read, and share some of what I read. There hasn’t been too much method or thought applied to the sharing – if I liked reading it, I shared it. The one thing that I did change was that February of 2019 onwards, I started adding some context to each link, and tagging each post with the topics discussed therein.

The Update

Beginning this week, though, in celebration of it being one year of getting off my posterior and showing up everyday, there is a change to this blog. Long overdue, but some housekeeping, and a semblance of order.

From here on in, Monday will be links about India. Tuesday will be links about technology. Wednesday will be articles from other parts of the world, while Thursday will be about economic theory. Friday will be assorted stuff (keep an eye out for an article about poop tomorrow, for example). Saturday will be tweets I found interesting, while Sunday will be a link to a video I found interesting.

If you want to read a collection of articles related to each topic listed above, simply click on Links, in Categories on the right, and take your pick (Monday through Friday). Alternatively, search for a word and see if I have linked to an article about that topic. Heard of chaebols, for example?

Each article will help you learn a little bit more about the world, and therefore about economics (or is it the other way around?). Keep at it for a while – a week, a month, a year – and you’ll find that you know more than you did before. Learning compounds, and it truly is a miracle.

There will also be a weekly (at least) article on a book I have enjoyed reading, or a podcast episode I would like to recommend to you. These are separate categories in their own right in the Category drop-down menu.

The Request

Please subscribe, if you haven’t already. Subscribing is very easy: simply click on “follow blog via email” at the top right of this page. Alternatively, read this article about what Feedly is, and consider reading more than just this blog. I’d recommend the latter, if you’re asking.

Also, please help spread the word? The blog is free, and will be updated daily, and if you think anybody might benefit by reading five handpicked articles daily, please point them in the direction of this blog by sharing this post.

And lastly, please do not hesitate to send interesting links, videos and tweets my way. My email address is ashish at econforeverybody dot com, and this is my twitter handle.

Thank you

Finally, thank you for reading this far, and (hopefully) for reading the blog in general. It means a lot.

 

 

Agri-Exports in India in 2021

Ashok Gulati and Ritika Juneja had an excellent write-up in the Indian Express last week, and if you are a student of Indian agriculture, it is an absolute must read.

  1. “Agri-exports touched $41.8 billion in FY 2020-21, registering a growth of 18 per cent over the previous year.”
    ..
    ..
    Here’s a fun1 exercise. Figure out where the authors got the data from?
    There’s a very good reason I ask this question. We don’t (yet) have something like FRED available in India. When you read an article such as the one we’re going through today, it is one thing to take a look at the statistics and think about them – and quite another to try and dig out the data yourself. It is a skill that most of us pick up out of necessity when we start work – you’d do well to start practicing right now.
    You’ve won if you can see this on your screen:
Source: An Excel file NOT from DGCIS

2. We need to grow exports, and we need to increase agricultural production. These are, even at an introductory level, obvious statements2. But as the article points out, we therefore need to dig deeper into the data to be able to answer this question in its entirety. Which products can we export more of? Why? At what cost?
Think of it this way: in what ways can the Indian cricket team get better? That’s like asking which specific Indian players can get better, in a way. So if we say that the team will get better if Kohli bats better and Bumrah bats better, is that a correct answer or just lazy thinking? Because they’re already pretty good, no?3.

3. As the article points out, rice accounts for about 21% of the $41 billion. Note that the statistics split this out by basmati and non-basmati rice, we’re adding these up. After that it is marine products (14.46%), spices (9.66%), buffalo meat (7.69%) and sugar (6.77%). That is, the top five categories together account for about 60% of all our agricultural exports. (Get familiar with the power law, if you aren’t already)

4. The rest of the article focusses on rice and sugar, and points out that exporting these two crops is akin to exporting water – and it is not as if we have a lot of it to go around.

India is a water-stressed country with per capita water availability of 1,544 cubic metres in 2011, down from 5,178 cubic metres in 1951. This is likely to go down further to 1,140 cubic metres by 2050. It is well known that a kg of sugar has a virtual water intake of about 2,000 litres. In 2020-21, India exported 7.5 million tonnes of sugar, implying that at least 15 billion cubic metres of water was exported through sugar alone. Another water guzzler, rice, needs around 3,000 to 5,000 litres of water for irrigating a kg, depending upon topography. Taking an average of about 4,000 litres of water per kg of rice, and assuming that half of this gets recycled back to groundwater, exporting 17.7 million tonnes of rice means that India has virtually exported 35.4 billion cubic metres of water just through rice.

https://indianexpress.com/article/opinion/columns/how-green-are-indias-agri-exports-7368002/

5. Related to that last point, here is an old EFE link fest about water and India.

6. “Moreover, the export subsidy given by the government to clear excessive domestic stocks of sugar has led many other sugar-exporting countries like Australia, Brazil and Thailand to register a case against India at the WTO, which India may find difficult to defend.”
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As a student, here are the questions you should be asking (in my opinion). Where can I find details about this case? How do these things work? They have a whole course about it, and you really should sign up for it. If you even think about asking if you get a certificate for this course, you end up killing a little kitten. Yes, really.

7. “Farming practices such as alternate wetting drying (AWD), direct-seeded rice (DSR) and micro-irrigation will have to be taken up on a war footing.”
..
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What is AWD? What is DSR? What is micro-irrigation? Better questions: which countries do this extensively? To what effect? What stops India from doing this? What can be done about it? I haven’t hyperlinked to the last five questions, and that is deliberate. Try searching for the answers yourself, and tell us what you learnt! 🙂

8. “Closer evaluation of non-basmati exports exposes another interesting fact: These exports are actually sourced not only below-MSP but also below the average domestic mandi prices prevailing in the country after one adjusts for freight from mandi to port and loading charges at the port. How does that happen? One possibility is that a substantial part of supplies through the PDS and the PM Garib Kalyan Yojana are leaking out and swelling rice exports.”
..
..
This really takes us into the weeds of agricultural economics, but here’s an article to get you started.

9. And finally, the authors’ proposed solutions:

“It is high time that policymakers revisit the entire gamut of rice and sugar systems from their MSP/FRP to their production in an environmentally sustainable manner. We must ensure that we produce more from every drop of water. Also, at least in the case of rice, procurement will have to be limited to the needs of PDS, and within PDS, it is high time to introduce the option of direct cash transfers. All these will go a long way to promote better diversification of our agri-systems and better use of our scarce water supplies and lesser GHG emissions. We could save on the unproductive use of financial resources locked up in burgeoning grains stocks with the FCI. These savings can be used for doubling investments in agri R&D to improve productivity on a sustainable basis and improve farming practices for minimising carbon emissions. An export-led strategy also needs to minimise logistics costs by investing in better infrastructure and logistics. Only then one can ensure sharing the returns of these investments with farmers to give them a better deal in terms of higher and more stable incomes.”


I’ve been writing posts like these for a while now. Here’s one about fiscal policy in India, here’s one about footwear in India, here’s one about a Marques Brownlee interview, and if you dig through the archives, you’ll find plenty more. The reason I bring this up is that I think there is genuine value to taking notes as you read anything, and publishing these notes online. Plus, as a student, there is genuine merit in asking a simple question repeatedly: where did the authors get the data from? Especially in India, the answers often aren’t simple, and the exercise is therefore worth your time.

Another reason I bring this up is that if you do this long enough, you end up making a very helpful mental map of whatever it is that you’re studying. And trust me, over time, learning compounds.

So I hope that this helped you learn a little bit more about agriculture in India, but I also hope that you learnt how simple, and powerful, it is to take notes regularly. Please do! 🙂

  1. I use the term in a very, very loose sense[]
  2. ought to be, at any rate[]
  3. Yes, yes, I know. My point is to ask if we should be focusing on the star performers, generally speaking, or the relative laggards. And yes, I agree that both were not at peak performance in the WTC final[]

Links for 9th April, 2019

  1. “What is not useful is the sense that measuring GDP is the problem, and measuring gross national happiness is the solution. Few societies have ever really focused on either. We should all be happy about that.”
    Tim Harford reminds us that the truth lies somewhere in the middle. In this case, the article is worth reading for understanding how GDP can’t really be measured, and how that may not be a bad thing. In addition, please read the article to understand that Bhutan probably isn’t all that “happy” a country in the first place!
    ..
    ..
  2. “Given the pressure on all unions to negotiate higher-than-average wage increases, using monetary policy to reduce inflation would inevitably aggregate spending to fall short of the level needed to secure full employment, but without substantially moderating the rate of increase in wages and prices. As long as the unions were driven to negotiate increasing rates of wage increase for their members, increasing rates of wage inflation could be accommodated only by ever-increasing growth rates in the economy or by progressive declines in the profit share of business. But without accelerating real economic growth or a declining profit share, union demands for accelerating wage increases could be accommodated only by accelerating inflation and corresponding increases in total spending.”
    Monetary nerds only, it should go without saying! David Glasner runs a blog called Uneasy Money, which is well worth reading, but only if you want to find yourself steeped in all things monetary. This post takes a slightly critical view of Arthur Burns tenure as Fed Chairman.
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  3. “Amazon’s economists game out real estate decisions, set the lowest prices that will deliver a profit, precisely determine what customers care about and whether advertisements are working — all using machine-learning algorithms that automate decision making on a massive scale. It’s the kind of asset that smaller companies can’t always pay for, allowing Amazon to pull further and further away from the competition.”
    Amazon has, in case you didn’t know, probably the world’s largest collection of PhD’s in economics. This article helps you understand what it is that they do once they’re in Amazon. A helpful read if you are considering building a career in economics.
    ..
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  4. “The White House explains why it’s predicting such big growth: the TCJA will cause a surge in business investment by “substantially raising the target capital stock and attracting increased net capital inflows.” And this rise in the capital stock will cause a surge in productivity. Except that there’s no sign of a surge in business investment: the report cherry-picks a few numbers, but overall orders for capital goods, probably the best real-time indicator, are showing nothing much (that 2015-6 slump, by the way, was about fracking, which fell off for a while when world oil prices plunged)”
    Paul Krugman is less than impressed with the 2019 Economic Report of the President, and provides data to show why he is less than impressed. The chart that follows the excerpt is worth looking at too.
    ..
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  5. “There’s one biosignature that Seager, Guyon, and just about everyone else agree would be as near a slam dunk for life as scientific caution allows. We already have a planet to prove it. On Earth, plants and certain bacteria produce oxygen as a by-product of photosynthesis. Oxygen is a flagrantly promiscuous molecule—it’ll react and bond with just about everything on a planet’s surface. So if we can find evidence of it accumulating in an atmosphere, it will raise some eyebrows. Even more telling would be a biosignature composed of oxygen and other compounds related to life on Earth. Most convincing of all would be to find oxygen along with methane, because those two gases from living organisms destroy each other. Finding them both would mean there must be constant replenishment.”
    That’s just one of many, many excerpt-able pieces from a very long, but also very rewarding article about the search for ET. Take your time with this one – about an hour or so, and pay particular attention to the infographics.