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Two Indian success stories
Yes, the first is about agricultural productivity, that still-neglected issue:
Ajit Singh, a farmer in the poor northern state of Uttar Pradesh, had never seen a computer until four years ago when ITC, the Indian agribusiness-to-hotels conglomerate, installed a PC in his village, Kurthia.
Now the thin 47-year-old farmer visits the ITC station, known as an "e-choupal" after the Hindi term for "gathering place", every day for online access to news-papers, crop prices, weather forecasts and farming techniques. As ITC's village manager, he passes on what he gleans to fellow farmers.
Knowing the fair market value of crops allows farmers to fetch better prices and circumvent local traders who used to dictate terms. Farmers can also sell wheat and other crops to ITC.
The result has been a big jump in crop productivity. Annual incomes in Kurthia have risen from Rs40,000- Rs50,000 ($1,000-$1,230) before e-choupal to Rs100,000- Rs120,000 now, says Mr Singh.
Here is the link. Here is the second story, with photos at the link:
Mukesh Ambani, the fifth richest man in the world, is building the most expensive single family residence ever, a $2 billion -- yes, BILLION -- 27-story skyscraper in downtown Mumbai.
Posted by Tyler Cowen on May 5, 2008 at 12:37 PM in Current Affairs | Permalink
Comments
keep in mind ,mr. singh has an obvious incentive to
overplay the benefits. itc still does plenty of good
in book though. it's less obvious that they'll make
any profits out of all this. just sayin' as a shareholder.
Posted by: sa at May 5, 2008 1:31:21 PM
From one of my favorite essays, in answer to the question "How will blogs change development thinking?" although I'm really answering "How will Internet communication and knowledge storing technology change development thinking?":
The answer is by connecting a network of discrete decision-making individuals with the knowledge needed for development. Combined with the networking potential of the Internet, communication through blogs can focus development on what works, providing real-life, real-time results with little cost and allowing the results to be disseminated over the entire spread of the network at speeds unheard of in Watt's day, and unbelievable in Heron's day.Need an example? Consider the humble zeer pot, a neat bit of technology that's proving to aid economic development in the dry climates of Africa by providing cooling without electricity. Could any centralized development planning agency produce and disseminate an equivalent low-cost solution to the need to keep fresh produce cool in underdeveloped regions of the world? Or would they be more likely to focus their efforts on grandiose plans of development that involve substantial investments in major infrastructure at great cost and with little benefit to the people their efforts are intended to help? Historically, those engaged in "development" have almost invariably pursued the latter course.
Sustainable success in development relies on the ability of individuals to adapt solutions to their own unique needs, whether in parallel with others or by building upon what's been proven to work elsewhere. They only need to know their options, and the key to enabling the exponential growth of their opportunities are the networks of development, of innovation and of knowledge available to them. In the end, the best paths to a better future run alongside the networks of individuals that create them. It is, after all, all about their own ability to improve their own lives.
Nice to see it works in India!
Posted by: Ironman at May 5, 2008 2:03:03 PM
These "cut out the middleman" stories are not about ag productivity per se, but the role of information and market power. (I am enthusiastic about them.)
Now all we need to do is cut out the middleman in international aid, e.g., the Bank and other Sachsian enterprises. I do not mean money transfers, but information and technology transfers. It's the difference between push (the past: "this is what you need") and pull (the future: "this is what I want").
Posted by: David Zetland at May 5, 2008 2:17:11 PM
with respect to Indian farming, it's wonderful to see how things are improving when you give people some modest technological advances.
Regarding the house, I'd rather have an old Victorian house any time. From the pictures, the most expensive house in the world looks rather bland...
Posted by: jpf at May 5, 2008 3:54:35 PM
1. TC, 1 Indian success story and another story about a successful Indian.
2. Second JPF re: modest tech. advances leading to large improvements. Given the modest cost of these improvements, I wonder if such stories are more common and underreported or as uncommon as anecdotal evidence suggests.
3. I move a lot and strangely, care little about the square footage of my abode. Maybe that'd change if I was as wealthy as Mr. Ambani.
Posted by: disaggregated at May 5, 2008 6:34:13 PM
David Zetland: I suppose the idea is that the better prices the farmers get (thanks to this information) will act as incentives to them to increase production. As well as providing the cash to buy fertiliser, etc.
This is wonderful, and exactly opposite in spirit to big aid projects.
Posted by: improbable at May 5, 2008 7:18:03 PM
How much have crop prices increased in these four years? I expect that currently high commodity prices explain a substantial chunk of the increase in *revenue* experienced by this noble Indian farmer.
Posted by: A student at May 5, 2008 7:21:19 PM
In the more dysfunctional African states, a major problem is that there's no way for small entrepreneurs to advertise their services or do banking. There's no institutional capital.
Internet cell phones fix this. You can promote yourself, take work orders, and keep your assets safe from local warlords. There's more on this episode of econtalk: http://www.econtalk.org/archives/2008/04/coyle_on_the_so.html
Posted by: Nathan Bowers at May 5, 2008 8:31:31 PM
This sounds like an unrelated point, but knowledge cannot be stored outside of an individual. Knowledge, of the type created in Ajit Singh when he reads online price and market information, is transferred to him through online media, now cheaper and easier to access. Mr. Singh can read, remember previous info, reason, and problem solve through that information. He then communicates his version of the information to his village passing along his edited, perhaps more valuable, information to them. It seems like a fine point, but knowledge production in Mr. Singh's head is very valuable because it lets him be more productive in passing along information to his audience.
Information, in economics literature, often fudges this simple distinction as if information is knowledge. Knowledge production, the cognitive process of taking in and refining information, is actually crucial in development economics because there is a key requirement for the Mr. Singhs of the world-- they must have literacy, numeracy, information management skills, and access to info resources. Adding information resources (like seemingly simple cell phones and internet access) is important because they make knowledge production easier and faster-- if that is then translated to others and they in turn learn new things about their resources, opportunities, and the like, then they can use the new information to build wealth.
Without key learned skills, access, and incentives to use it, information is just noise. Building schools in regions without information resources or access is like planting rice in the desert. In the US we have torrents of information resources pouring over a society ill trained to manage and build knowledge with it.
Posted by: The other Eric at May 5, 2008 9:57:06 PM
And to think the son of the man who caused creation of the Taj Mahal had his daddy locked away as crazy for spending so much money that way.
Posted by: R.Richard Schweitzer at May 6, 2008 4:04:03 PM
Futures trading in wheat and rice have been banned for some time. Also recently the government banned futures trading in four other agricultural products.
So much of the benifit of the e-chaupal will evaporate.
Posted by: rishi at May 8, 2008 1:51:51 PM
