Facing Credit Crisis - Farmer vs. Financial Advisor

The news of an Indian origin financial advisor committing suicide after killing his entire family hit the headlines within hours of the event. I wonder if it had been an Indian farmer instead of a financial advisor, whether the news would have taken the same position on the newspapers.

However, the stark similarity in context of the suicide with that of the Indian farmers prodded me to think which one of them was worse - the Financial Advisor's or the Farmer's.

The farmer in India lives on the bottom edge of the economic ladder, is uneducated and enjoys little socio-economic security. However, the financial advisor was an affluent citizen (having made a fortune of $1.2mn once), had a social security number and was well educated. His committing suicide indicates a complete failure of the much touted "social security" which the west claims to be its achievement.

However, look at it from another perspective. The financial advisor works on estimates and projections of several years (sometimes 100s of years), bets huge sums of money on speculative projects and their derivatives. But the farmer works on a financial cycle of months and quarters - borrows money in the short term and plans to redeem his investment as soon as the crop is ready within 3-6 months.

So, if the financial advisor gets it wrong big time and comes to a dead-end, its quite understandable. But the farmer getting his short term calcultions wrong and reaching a life threatening dead-end because of it is completely inconceivable. The fact that its true simply indicates that in India our systems are so crude that they can fail us even if one monsoon fails or a single crop is destroyed.

Everyone has hailed the RBI and SEBI in their proactive and intelligent handling of the current financial crisis. Clearly India is not as badly hit as the US and probably had the US regulators been as conservative and cautious as their Indian counterparts - even the US would have fared a lot better.

Back here in India its high time we strengthen the more basic systems like those on short-term lending, irrigation, farm-produce acquisition, food storage and transportation so that we remain unaffected by an economic meltdown and bad monsoons alike!

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