HEARING VOICES: Falling Rice Prices Spur Farmer Protests

“The moral hazard inherent in price intervention distorts market signals, discourages efficiency gains, and fosters long-term dependency on fiscal outlays that exacerbate structural misallocations of capital. Yet, in a political economy framework, the ruling coalition must balance allocative efficiency with clientelist imperatives, ensuring that key electoral constituencies perceive material benefit from state intervention. The optimal equilibrium, therefore, is a nominally pro-market stance punctuated by targeted transfers sufficiently opaque to avoid overt accusations of subsidy while maintaining the necessary perception of patronage. In other words, let the rice farmers have their check—just don’t call it a price guarantee.”