Will Forest Fires be our nemesis ?

In southern California, December is meant to bring the start of rainy season. Not in 2017. The Thomas fire, the worst of those that roiled the region that year, grew 50,000 acres in one day, eventually burning 440 sq miles and forcing the evacuations of more than 100,000 Californians. A week after it was sparked, it remained, in the ominous semi-clinical language of wildfires, merely “15% contained”.

Five of the 20 worst fires in California history hit the state in the autumn of 2017, a year in which more than 9,000 separate fires broke out, burning through almost 1.25 m acres – nearly 2,000 sq miles made soot. 

In the summer of 2018, the fires were fewer in number, totalling only 6,000. But just one, made up of a whole network of fires, together called the Mendocino Complex, burned almost half a million acres alone. 

In total, nearly 3,000 sq miles in California turned to flame, and smoke blanketed almost half the country. 

Things were worse to the north, in British Columbia, where more than 3 m acres burned, producing smoke that would travel across the Atlantic to Europe. 

Then, in November, came the Woolsey Fire, which forced the evacuation of 170,000, and the Camp Fire, which was somehow worse, burning through more than 200 square miles and incinerating an entire town so quickly that the evacuees, 50,000 of them, found themselves sprinting past exploding cars, their sneakers melting to the asphalt as they ran. It was the deadliest fire in Californian history.

When trees die – by natural processes, by fire, at the hands of humans – they release into the atmosphere the carbon stored within them, sometimes for as long as centuries. In this way, they are like coal. This is why the effect of wildfires on emissions is among the most feared climate feedback loops – that the world’s forests, which have typically been carbon sinks, would become carbon sources, unleashing all that stored gas. 

The impact can be especially dramatic when the fires ravage forests arising out of peat. Peatland fires in Indonesia in 1997, for instance, released up to 2.6gigatons (Gt) of carbon – 40% of the average annual global emissions level. 

The Story of Rice..

Rice is the world’s most important food. More than half of the world’s population depends on rice for food calories and protein, especially in developing countries.

According to the Economic Survey 2015-2016, in wheat, India's average yield in 2013 of 3075 kg/ha is lower than the world average of 3257 kg/ha. The picture is starker in paddy production where all Indian states have yields below that of China and most states have yields below that of Bangladesh. India's best state, Punjab, has paddy yield close to 6000 kg/ha whereas China's yield is 6709 k .. 

The inefficient use of water for agriculture is affecting the productivity. Although water is one of India's most scarce natural resources, India uses 2 to 4 times more water to produce a unit of major food crop than does China and Brazil. 

The world’s largest rice producers by far are China and India. The next largest rice producers are Indonesia, Bangladesh, Vietnam, Myanmar, and Thailand. These seven countries together account for more than 80% of world production.

The ‘Green Revolution’ is the name given to the dramatic increase in cereal crop yields through modern agricultural inputs – irrigation, fertilizers, improved seeds, and pesticides – in the 1960s. For rice, the revolution began with the release by IRRI of the high- yielding semidwarf variety IR8 in 1966. The world average rice yield in 1960, the product of thousands of years of experience, was about 2 tonnes/hectare (T/ha). Astonishingly, in only 40 more years, as the Green Revolution spread, it doubled, reaching 4 t/ha in 2000. The rice varieties and technologies developed during the Green Revolution have increased yields in some areas to 6–10 t/ha. 

Although the Green Revolution was mainly a technology revolution, it required strong public support and policies to develop the technologies, build the required infrastructure, ensure that markets, finance, and input systems worked and that farmers had enough knowledge and economic incentive to adopt the new practices. Public interventions were especially crucial in Asia for ensuring that small farmers were not left behind, and without which the Green Revolution would have been much less pro- poor. On average, Asian countries were spending 15.4% of their total government spending on agriculture by 1972 and they doubled the real value of their agricultural expenditure by 1985. 

Governments also shored up farm credit systems, subsidized key inputs – especially fertilizer, power, and water – and intervened in markets to ensure that farmers received adequate prices each year to make the technologies profitable. Many governments used their interventions to ensure that small farms did not get left behind. Substantial empirical evidence at the time showed that small farms were the more efficient producers in Asia and land reform and small farm development programs were implemented to create and support large numbers of small farms. Small farm–led agricultural growth proved to be not only more efficient but also more pro-poor, a win-win proposition for growth and poverty reduction.

Since the mid-1990s, population growth has exceeded rice yield growth and the gap has been growing steadily larger, creating a significant imbalance between supply and demand. This trend is evident for Asia as a whole, but also separately for East Asia, Southeast Asia, and South Asia. Stagnation in area harvested further contributed to the problem, and prices eventually began to rise. Indeed, world market rice prices rose steadily by a cumulative 67% between April 2001 and September 2007.

There are several possible reasons for the slowdown in rice yield growth and production: displacement of cereals on better lands by more profitable crops such as groundnuts, diminishing returns to modern varieties when irrigation and fertilizer use are already high, and the fact that cereal prices have fallen relative to input costs, making additional intensification less profitable. There is also concern that pest and disease resistance to modern pesticides now slows yield growth, and that breeders have largely exploited the yield potential of major Green Revolution crops. 

Environmental problems that have arisen in different areas include excessive and inappropriate use of fertilizers and pesticides that pollute waterways and kill beneficial insects and other wildlife, irrigation practices that lead to salt buildup and eventual abandonment of some of the best farming lands, increasing water scarcities in major river basins, and retreating groundwater levels in areas where more water is being pumped for irrigation than can be replenished. Some of these outcomes were inevitable as millions of largely illiterate farmers began to use modern inputs for the first time, but the problem was exacerbated by inadequate extension and training, an absence of effective regulation of water use and quality, and input pricing and subsidy policies that made modern inputs too cheap and encouraged their excessive use.

Globally, farmers need to produce at least 8–10 million tons more paddy rice each year—an annual increase of 1.2–1.5% over the coming decade, equivalent to an average yield increase of 0.6 t/ha during the next decade. Over the longer run, global rice consumption growth is expected to slow down but yields will have to continue to grow faster than at present because of pressure on rice lands in the developing world from urbanization, climate change, and competition from other, high-value agriculture. Rice yield growth of 1.0–1.2% annually beyond 2020 will be needed to feed the still-growing world and keep prices affordable.

Acknowledgement : This section sourced largely from this article. 

Should India follow the East Asian Development Model ?

A study compares between East Asia and South Asia on the level of economic development and draws some lessons for South Asia.

 In 1960, GDP per capita in South Asian countries was higher than in some East Asian countries, such as China and Indonesia. The table below illutstrates what happened next :  

 Even though East Asia and South Asia are in the same region, began the second half of the twentieth century in a similar economic situation and are well connected with each other, it is to be explored why has there been such a wide discrepancy in the economic development between the two sub-regions.

The development performance of many East Asian countries has showed that economic development is possible even without utilizing the colonization process, which helped propel the economic progress of many European countries until the twentieth century. Several European countries colonized different parts of Asia, Africa and Latin America in the past during the time of their economic development. They heavily exploited the natural and human resources available in their colonies. In this context, one can ask whether the East Asian Development Model serves as an alternative to the Anglo-Saxon development model.

During the initial stage of economic development, some East Asian economies, such as Japan, the Republic of Korea, Singapore and Taiwan Province of China had a number of common policy approaches, including, among them, protection of domestic firms from foreign competition through import substitution, the provision of direct and indirect subsidies and the use of preferential foreign exchange facilities and undervalued exchange rates, as well as large-scale fixed investment supported by ample domestic savings. Those economies had strict capital control regimes until recently. In addition, they pursued active industrial policies. 

The second-tier of newly industrialized countries, such as Indonesia, Malaysia and Thailand, also followed similar approaches to propel their economies. An important impetus in kick starting the development process in those countries was the crucial role of the government as a developmental state. It is argued that there was a “nationalist” State with a developmental vision that had the capacity to identify “strategy switching points” once diminishing returns set in. Another researcher similarly argued that the transformation of the East Asian sub-region could not be attributed to the results of free trade and unregulated markets. 

The East Asian Development Model basically includes (a) a pro-investment macroeconomic policy, (b) control on luxury consumption, (c) strict controls on foreign direct investment, (d) infant industry protection with export promotion, and (e) a productivity-oriented instead of an allocation oriented view of competition. 

Political stability and credibility are also important for economic development since unstable politics generates greater uncertainty, which, in turn, makes economic activities subject to constant revisions. The Keynesian notion of “animal spirits” and “investor confidence” can only emerge in stable political environment. During the rapid growth phase, authoritarian or at least semi-authoritarian regimes had ruled these countries. Governments in the East Asian countries have, in fact, remained strong enough to exercise widespread control and to even take potentially unpopular decisions if they were considered to promote economic development. The governments of those countries have been effective due to strong bureaucracies, which are organized under a strict meritocracy and have attracted highly capable graduates from top universities by offering competitive pay. Many South Asian countries, on the other hand, have been constantly marred by political instability and internal conflict, resulting in a weak government and bureaucracy.

 Under the guiding role of the State, East Asian countries encouraged high investment, export-led growth and a focus on the manufacturing sector to absorb excess labour from rural and traditional sectors as a way to boost labour productivity. The East Asian Development Model is in fact a state-guided development model which does not let the market identify the areas of comparative advantage. Instead, government plays an active role through industrial policy, development planning, technology transfer and selective incentives. A researcher argued that state coordination led to an investment boom — utilizing credit policies, subsidies and tax policies. Both the Republic of Korean and Taiwan Province of China provided these incentives for selective increases in investment spending.

The study concludes by saying : 'The development experiences of East Asia show that the governments played a constructive role as a developmental state. In South Asian countries, until recently, governments had been involved significantly in economic affairs. Before the adoption of economic liberalization in the 1980s and in the beginning of 1990s, South Asian countries had pursued economic policies similar to the ones applied in East Asia. These included promoting import substitution, setting up a licensing system, regulating the financial system, disbursing concessional loans to domestic industries, maintaining favourable exchange rates to promote exports, developing state-owned enterprises and setting a high tariff wall to discourage imports. Despite this, the South Asian economies failed to grow at the same level as those experienced by East Asian countries. It has been argued that the failure in South Asia was due to the absence of rapid growth in agriculture, an equitable income distribution and substantial accumulation of human capital. 

More importantly, East Asian governments did pursue an active industrial policy to develop the manufacturing sector and technology transfer with human capital development. In contrast, South Asian governments were weaker than those in East Asia and the development process was fragile in the sub-region due the weak interlinkages in the economy. It appeared that the governments of countries in South Asia failed to identify “strategy switch points” to lead to greater growth. Instead, they mainly relied on the exports of simple and labour-intensive manufactured commodities. During the controlled regime, rent-seeking activities directed at unproductive sectors were rampant in South Asia and thus the countries did not succeed in expanding exports after applying import substitution programmes.

Based on the experience of East Asian countries, economic development requires high investment, the construction of infrastructure, the expansion of health facilities and quality education, adoption of technology and innovative practices, and job creation inside the economy. The government should play an active role in promoting those areas although in many instances, it may not be in a position to do so. For the private sector to thrive, a congenial environment for economic activities with adequate physical infrastructure must be in place. Even by adopting a changing scenario, the countries of South Asia, taking into account the experiences of the countries in East Asia, should increase investment in their economies, follow an export-led policy, and develop human capital and physical infrastructure. In addition, the countries in South Asia need to think about the productive use of remittances. Moreover, managing conflict is also a key public policy issue to ensure the future stability and growth in South Asia.' 

Acknowledgement : The piece above is summarized from a 2013 paper : ECONOMIC DEVELOPMENT IN SOUTH AND EAST ASIA: EMPIRICAL EXAMINATION OF EAST ASIAN DEVELOPMENT MODEL by Prakash Kumar Shrestha