TAKING STOCK : Should we protect our farmers 70 per cent of Nepalis depend on agriculture for their sustenance. A majority of these barely eke out a living and would prefer to be employed in industry or services if only they could get a job. Since so many derive their livelihood from tilling the land, it is natural for politicians, NGOs and government officials to proclaim themselves as champions of the rural poor. Policies are made to protect the producers of fruits, vegetables and grains from competition. Imports are restricted. Land reform and redistribution has been the mantra of those out to get the votes of the villagers in Nepal, India, and elsewhere. Farmers are deemed a privileged lot. Don’t they provide us with food without which life would be impossible? States in India which have powerful farm lobbies continuously ask for subsidies from the centre. The chief minister (CM) of Punjab always wants to raise the price at which wheat is bought by the government’s Food Corporation of India. The CM of Haryana pleads for higher subsidy for fertilizers. Andhra Pradesh wants more money allocated for irrigation projects, while UP wants free electricity for its farmers. The demand for protection and subsidies is endless. The money for these schemes to help farmers —be they in Nepal or India — has to come from somewhere. Inevitably the burden falls on the taxpayer. Then again poor countries are not alone. The lobbies of farmers in America and Europe are equally strong and demanding. Tobacco growers in the US get billions in subsidies. There are subsidy programmes for grape planters, wheat producers, and sugar manufacturers. Europe has mountains of milk and butter thanks to its subsidy for its dairy industry. Japan is notorious for protecting its rice farmers. It restricts imports and prices are kept, artificially, at the highest level in the world. So what if the Japanese consumer buys rice at the world’s highest prices, the farmers have to be enriched at all costs. In fact, the main stumbling block, at the recent WTO meets, preventing nations from increasing trade, has been subsidies by rich nations for their agricultural producers. Is the world and Nepal in particular, justified in protecting its agricultural workers? No. Human progress, our wealth, and how quickly we eliminate poverty depends on how fast we can move people out of farming into manufacturing and then into services. The job of governments is to formulate policies which help businesses grow. This in turn will absorb the ‘extra’ people who are employed in providing us with food. In 1800, America was as dependent on agriculture for employment of its people as Nepal is today. If it were not for the constant shedding of jobs on the farms, manpower would never have been available for making America the economic powerhouse it is today. Go back sufficiently into history and everyone was fully employed in growing food or hunting for their survival. It is progress when the number of people required to feed us declines and the numbers which provide us with other goods and services increases. Today America employs barely three per cent of its population on its farms. They feed 30 times their number in the US and many more in the rest of the world as well. The decline in the number of people doing hard labour on the farms has meant corresponding increases in the number employed in cushier jobs be it manufacturing cars, running airlines, assembling computers, or providing us with internet services. In 2004 alone, America’s Wal-Mart stores, the worlds biggest retailer, added 1,00,000 jobs. Bank of America employed 42,000 more people. Citigroup added 34,500 to its payroll. Starbucks, originally the coffee shop of America and now of the world invited 22,700 more people to join its organisation. This churn of jobs — the decline of agriculture and the rise of services — is the key to our becoming wealthy. In Nepal we delay prosperity by focusing on agriculture to the detriment of industry and services. The concentration, instead, should be on creating an environment friendly to business so that people move voluntarily out of farming. Do this by removing trade barriers, lowering taxes, eliminating needless regulations, and by providing a safe environment for investment. Then one day Nepal too will need less than three per cent of its population to feed us. (The writer can be contacted at: everest@mos.com.np)