An Information Architect's Approach to Address Indian Farmers' Indebtedness

The Indian farmer, including their counterparts in some developed countries, fell in debt-trap even as GDP and food prices soared and many sectors of the economy shared benefits of GDP growth. Apparently, none of the systems— colonial, socialist, or market-based—have tools to share economic prosperity with the farmer. The paper simulates steps in order to experimentally demonstrate that there could be very high risk in agricultural production. Finally, it proceeds to outline architecture of a centralized digital market, different from existing forms of markets available to the farmer, which addresses such risk as is associated with payoff from agriculture. General Terms Pearson r: Pearson r coefficient determines correlation between two data series, which can be positive or negative depending on whether both series increase or decrease together or one increases while the other decreases. A lower or higher absolute value of r indicates weaker or stronger correlation respectively. Also, vide footnote 5. Bid: Bid is defined as an amount offered as price to buy a product in the production plan of the farmer. Generally, bids are associated with conditions, period of validity being an important one. Bidders would overbid one another in a competitive market until a plateau is reached. The farmer would typically wait until prices become stable. Bids may follow the pattern of English Auction [8]. Ask: Ask is an amount quoted as price to sell a factor in the production plan of the farmer. In a competitive market, askers would tend to offer lower and lower prices for a factor until a stability is attained. Asks may follow the pattern of Dutch Auction [9], [10]. Hedging: Hedging would be construed to mean a mechanism that ensures that costs of factors and prices of products do not change after production. This is partially satisfied by the amount of loan provided by the middleman since such amount serves as the minimum guaranteed price of products. For other definitions of hedging vide [11], [12]. Monopoly and monopsony: If a market has only one seller or 1 Even though India‘s share of world GDP was 22.6 percent in 1700, marginally less than Europe‘s share of 23.3 percent [1], the farmer used to be oppressed by the then prevailing colonial policies such as high rent even during the great depression [2], which occasionally turned them rebellious [3]. Preobrazhensky, the socialist theoretician promulgated, ―it would be necessary to exact ̳tribute‘ from the peasantry to pay for industrialization, largely by turning the terms of trade against the rural sector,‖ [4] famously known as the Price Scissors [5]. Lacuna of market-economy in infusing competition into agricultural factor and product markets is discussed later in the paper. 2 The definition has been customized [6], [7]; similarly for some other terms. buyer of a good then such market would be termed as monopoly or monopsony respectively. Oligopoly or oligopsony have been covered under these definitions. Thus, if there are two sugar mills in a village, they would rarely offer any competition. Monopsonistic competition may be observed in having a sugar mill and a rice mill in a village. However, once the farmer is committed, the market falls back to monopsony [13]–[15]. Auction: Auction [6]–[8], [16] mentioned here or reverse auction below would be conducted via a web portal. Anyone with internet connectivity or even a phone—through a teleportal service—should be able to connect to auction or reverse auction service, provided one is a member of the FE (Farmers‘ Exchange). Other means of participation to the portal may be devised to extend its reach further. Banks and post offices may play important role in handholding and popularizing the service. Auction is meant for bidding for products, vide above. Reverse auction: Reverse auction [17] is meant for asking for factors, vide above. It is carried out at the same portal, at the same time, and with the same set of production plans.