Jointly, a Duke University professor and colleagues from the Massachusetts Institute of Technology undertook research that has now been reported in the March 5 edition of the American Medical Association. They found the higher the price, the more effective the placebo treatment. That is, even if the drug is placebo or useless, patients feel better if a dose costs $2.50 rather than 10 cents.

There can be no disagreement that India faces an agro-cum-rural crisis. Nor should there be any disagreement about the reform agenda — land markets (tenancy legislation, if not ownership changes), contract (not necessarily corporate) farming, freeing up credit and insurance, introduction of risk-mitigation instruments, public expenditure (with shift from input subsidies to rural infrastructure, particularly water and power), removal of adverse price signals through administratively determined output prices, research and extension (especially the latter), removal of state controls (production, storage, distribution) and dis-intermediation, creation of skills, regulation and enforcement of seeds and fertilisers and creation of off-farm employment. This requires recognition that an agro/rural sector policy is more than a foodgrain (actually rice and wheat) policy. And also the recognition that the objective is not to keep people in a rural arcadia, but pull them out of it.

But this government wants everyone to go rural. To the best of my understanding, there are 607 districts (2001 Census). Read the budget speech on national rural employment guarantee. How have we managed to conjure up 596 rural districts? This is reminiscent of the 2005-06 budget speech, as originally delivered, not as printed. In the delivery, PURA was described as provision of rural amenities in urban areas. The reform agenda would have benefited not just farmers (those who own land), but also rural labourers. In passing, figures on the number of farmers are grossly over-stated. People ascribe 72 per cent (or 65 per cent) to the total population (not even the work-force) and derive a rural population figure, then equate this with agriculture. Not more than 50 per cent of employment in rural India is agricultural (Economic Survey says 52 per cent) and, barring the principal earner, other members of the household often earn a living outside agriculture. There is a seasonal element to this too. Hence, actual figures are probably like 100 million landless labourers and 125 million farmers. And we have a little over 100 million holdings, 60 per cent marginal (less than 1 hectare) and another 20 per cent small (1 to 2 hectares). If we don’t reduce the number of people employed in agriculture, there is not enough land to redistribute.

... contd.