Table of Contents
A Political Ploy
• Centre has cleared a hike in the minimum support prices (MSPs) for the kharif summer crop.
• Ranging: 3.7% increase for Urad 52.5% for the cereal Ragi
• Promise fulfilled: 150% of the cost of production
• Farm sector strategy announced in this year’s Budget
• Commission for Agricultural Costs and Prices is said to have gone by this cost-plus-50% principle
• CACP recommends a fair price for all major crops, including cane, based on demand, supply, stocks, international price and other relevant factors
• While making calculations, it relied on estimates of input costs actually paid by farmers and the imputed value of unpaid family labour engaged in the field.
• MSP for bajra pegged 97% over estimated costs.
• On an average, the MSP hike notified for 17 kharif crops is about 25% higher and constitutes the biggest hike since 2013-14.
• Budget had promised that Niti Aayog would work with the Centre and States to put a fool-proof mechanism in place so that farmers get adequate remuneration if market prices slip below the MSP.
• government purchases
• gap-funding mechanism: difference between MSPs and market prices is transferred to farmers
• Little is known on the status of this endeavour, or the Centre’s procurement strategy for this year
• Farm distress: mainly from excess production of one crop after another.
• Driven entirely by opportunistic politicking, and not by economic sense state governments arbitrarily decree much higher state-advised prices (SAPs).
• This overpricing induces overproduction
• Free or ultra-cheap electricity for farming
The new trade order
• Trump has lashed out at allies and adversaries alike on trade.
• While the U.S. has significant concerns about Chinese economic practices: intellectual property
• The discord with trading partners such as the European Union and Canada has undercut the
possibility of presenting a united front on China complaints.
• At G7: Mr. Trump seemed to explain the aggressive U.S. stance by citing Canada’s protective dairy regime.
• There is ample evidence that Mr. Trump places a high priority on bilateral trade deficits, which he seems to equate with profit and loss statements.
• May 2018: Chinese Vice-Premier Liu went to Washington to offer increased Chinese purchases of U.S. goods as a means of resolving the looming tariff threat.
• The Trump administration initially struck a deal, then reversed it roughly a week later.
• Mr. Trump: American industry will do better behind a wall of protection.
• The General Agreement on Tariffs and Trade and World Trade Organization were never designed to block a major world power from running amok.
• The WTO Dispute Settlement Mechanism cannot act quickly enough to address the mounting spats about trade protectionism emanating from the U.S., a major reason why countries around the world have not waited for verdicts from their WTO complaints and have instead
proceeded with retaliation.
• There are roughly 140,000 Americans who work in steel production, there are about 2 million who work in industries that use steel as a major input.
• Those latter industries are beginning to cry for help, along with farmers who are seeing sales lost to retaliatory barriers.
Everyone a loser in Trump’s trade war
• The trade war that President Donald Trump has been threatening has finally started, with US tariffs of 25% on $34 billion worth of imports from China and retaliatory tariffs in
China on imports worth the same amount from the US having
kicked in on Friday.
• President Trump has threatened to retaliate against the Chinese retaliation. China has promised to return the favour.
• The rest of the world would suffer collateral damage, even if the US were to refrain from penalising imports from other countries.
1. If Chinese steel cannot find its way into the US, it could be dumped on other markets, triggering protective tariffs.
2. Global growth could be hurt. Modern manufacturing runs on supply chains, in which the same product could cross multiple borders multiple times, to add value every time,
before being incorporated into a final good for export.
3. Share prices to tank, initiating a flight of capital from emerging markets to the safety of the home market, making currencies and interest rates move in wholly
undesirable ways.
Merkel’s deal
• Angela Merkel, now in her fourth term as German Chancellor, has weathered many crises without jeopardising the stability of the government in Berlin, or the integrity of the Eurozone.
• Inconclusive election in September 2017
• In March, the initially reluctant centre-left Social Democratic Party (SPD) saw wisdom in reviving the grand coalition with Ms. Merkel’s conservative Christian Democratic Union as the only realistic option to avert another poll.
• This week she resolved a row on the refugee question
• Horst Seehofer, the Interior Minister from the CSU, wanted migrants to be immediately turned back to the country of their original registration in the European Union.
• The Chancellor held that the proposal was at odds with the bloc’s principle of free movement as embodied in the Schengen passportfree zone and would undermine EU unity.
• Under the latest compromise, asylum seekers registered outside Germany would be accommodated in transit centres on the border with Austria and sent directly to the respective states
• Something that is evident in several EU states, the hollowing out of the political middle-ground and strengthening of extreme forces.
Important News
• Nawaz Sharif sentenced to 10 years in jail for corruption
• CJI alone is master of the roster, rules SC
• The term ‘Chief Justice of India’ denotes an individual judge and not a collective
of the first three or five senior-most judges of the Supreme Court called the
‘Collegium,’ the Supreme Court declared on Friday.
• Won’t deport Zakir Naik: Mahathir
• Govt. deploys 800 IAS officers for village outreach
• Academia irked by HECI move
• Nuclear deal partners offer support to Iran
• Pompeo arrives in North Korea
• ‘Petro products could enter GST in stages
Answers-
1. Which countries have won a united bid to host FIFA 2026?
A) US, Canada and Mexico
B) Brazil, Colombia and Chile
C) Spain, Portugal and Germany
D) UK, Germany and France
2. What was India’s rank in the Global Peace Index 2018?
A) 136th
B) 138th
C) 149th
D) 158th
Questions
1. India has developed a new model to forecast the reach of which natural disaster?
A) Tsunami
B) Earthquake
C) Cyclone
D) Drought
2. Which state has emerged as best in the country in prevention of parent-to-child transmission of HIV?
A) Kerala
B) Tamil Nadu
C) Odisha
D) West Bengal
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