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Monkey Business

A bizarre news report from the Hindu caught our attention recently.

It was about a Sri Lankan academic testing intrauterine devices (IUDs) on female macaques in an attempt to seemingly control their population.

We know that’s a lot to process at once. So let’s break that down properly.

Macaques are a species of monkeys. They are found across Asia, North Africa, and even parts of Europe. And usually, humans don’t meddle with the mating habits of animals, let alone implant IUDs–contraptions that prevent pregnancies in humans.

However, Sri Lanka is giving this a shot because they are desperately trying to contain the damage from the burgeoning population of Macaques.

To give you more context, in 2010, a local from Sri Lanka wrote to the editor of the Lankan Times saying this-

“Residents in and around Ambalangoda are plagued by the monkey menace. The monkeys invade the gardens during the fruit-bearing season. They do not spare any edible fruit or even flowers when fruits are out of season. These creatures jump from roof to roof in the town, breaking tiles. They also perform acrobatics along the electric mains and telecom cables.”

Sure, you could argue that this report from over a decade ago may be a bit dated. But, believe us, the problem hasn’t gone away; it has, in fact, been exacerbated. From destroying crops to barging into homes and even attacking people, these monkeys continue to cause serious harm to humans. And at the centre of this chaos are the notorious Toque Macaques, native to Sri Lanka.

But how did it come to this point, you ask?

Well, the roots of this escalating conflict lie in Sri Lanka's 26-year-long ethnic war between the government and the Liberation Tigers of Tamil Eelam (LTTE). The war led to widespread deforestation for military use. Fast forward to 2009, rapid post-war development further fragmented forests, pushing monkeys into human settlements. They were simply searching for more food.

By 2015, these encounters had turned into widespread conflicts throughout the nation.

Experts also believe that locals' and tourists' feeding of monkeys, coupled with poor garbage management, has transformed their habits entirely.

And guess what?

The conflict is costing the country millions of dollars in lost coconuts and agricultural damage. According to the Agriculture Minister of Sri Lanka, these pesky wild macaques and giant squirrels destroy almost 100 million coconuts every year, resulting in a staggering loss of $19.3 million.

This significant damage is a primary concern as the country’s agricultural backbone is firmly rooted in the coconut industry, contributing around 12% to the nation’s total agricultural output. Moreover, Sri Lanka is the world's fourth-largest exporter of coconut products, and this contributes substantially to the government’s tax revenues.

So yes, this is a wild situation (pun intended) that needs some serious attention.

And it’s not as if the locals and the government haven’t tried every trick in the book to solve this nuisance.

The government has implemented measures like relocating monkeys to protected areas, reinforcing wildlife protection laws, and launching community awareness programs. It has also promoted non-lethal deterrents like monkey-proof fencing and scare devices. When these didn’t work, the government even issued shotguns to farmers amid mounting complaints of widespread crop damage.

Despite these efforts, the problem persists.

However, last year, a tempting proposal from China got the Sri Lankan government thinking. It wanted Sri Lanka to sell upwards of 100,000 Toque Macaques for display in Chinese zoos. The proposal faced immediate resistance from conservationists. They were sceptical, fearing these macaques might end up in testing laboratories instead.

And their concerns were valid.

Macaques are not just mischievous monkeys swinging from tree to tree. These highly intelligent animals experience emotions much like we do. And they share a significant amount of genetic material with humans, with some species like the rhesus macaque being about 93% genetically similar. This makes them good models for studying human biology, diseases, and responses to treatments.

And as a consequence, they’ve taken a primary role in medical research.

Consider for instance the race against time to develop a COVID-19 vaccine. These monkeys played a pivotal role during this period with countries like China paying top dollar for these animals.

But it’s not just a China thing. India, too, employs monkeys in research. In his book, the then ICMR (Indian Council of Medical Research) chief, Dr Balram Bhargava, quoted how 20 Rhesus macaques were used for Covaxin trials in 2020.

And like Sri Lanka, India, too, was once a significant exporter of this primate. They’d primarily export these monkeys to the USA and they even had a minimum price of $50. But by 1978, the Indian government banned the export of Rhesus Macaques for research, taking a stand against exploiting a species that holds a revered place in Indian culture.

Yet, the global trade in monkeys remains robust.

The U.S. National Association for Biological Research highlights how crucial non-human primates are to scientific progress. For instance, around 70,000 monkeys from various parts of the world are brought to the USA every year to study everything from infectious diseases to brain function and drug development. The value of a single long-tailed macaque has shot up to an astonishing $20,000.

But the story doesn’t end there.

The massive monkey import industry stretches far beyond what we can fathom. While legal exports have dwindled due to protests from animal welfare organisations, large-scale trafficking persists in the shadows. A new market for exotic pets has emerged, with monkeys, especially smaller species like marmosets, priced at about Rs 4-5 lakh, becoming status symbols for the wealthy.

This brings us back to that headline from the Hindu.

We started this story by saying that the use of IUDs in monkeys is a bizarre proposition. But the reality is that it’s a very humane solution to a very real problem. The global monkey trade is booming and countries have some very strong incentives to shoot, kill and export these animals for research. But there are good people still trying to find alternatives. They are trying to strike a balance between human needs and animal welfare.

Will they succeed? We don't know.

We can only hope that the researchers’ efforts bear fruit.

How to tackle stubborn inflation

Price rises are just a part of life.

The other day, I went to the market to buy fish. And after buying a kilo, my wallet was practically empty. No money left for veggies. It’s a sting we all feel.

But it’s not just a problem for you and me. It’s a headache for the RBI and the government too. Economists call it inflation. And while they’ve been trying to make it more bearable for us, they’re kind of stuck. They just can’t seem to control it as well as they would like to.

So, what’s the solution, you ask?

Well, one idea floating around is to simply remove food from the inflation equation.

Wait… what? That might sound crazy, we know. But it’s not some wild theory. Serious analysts are considering the idea and even the latest Economic Survey makes a mention of this. And while it might seem nonsensical at first, hear us out.

Inflation has two main components.

First, there’s core inflation, which covers stuff like education, clothing, rent, healthcare, transportation and other household expenses. Notice anything missing?

Yup, food and fuel aren’t included here.

The second part is non-core inflation, which is where food and fuel come in.

Put these two together, and you get the headline inflation, also known as the Consumer Price Index (CPI).

For years, the RBI has been trying to get a grip on headline inflation. Back in 2016, the RBI and the government agreed to aim for a 4% inflation target. The idea was to have a roadmap to keep price rises under control, with a tolerance range of 2% above or below this target.

And to hit this target, the RBI has been raising interest rates, especially since the pandemic. Raising rates makes borrowing more expensive, so people and businesses spend less. In theory, this cools down prices. And it sort of worked. Inflation dropped from 6.2% in FY21 to 5.4% in FY24.

But here’s the catch. Despite the efforts, the RBI just can’t seem to hit that magical 4% target. The main culprit?

Food!

See, inflation can happen in two ways.

First, there’s demand-pull inflation. This is when there’s a lot of demand for something, so prices rise because people are willing to pay extra. Think of flight tickets. The more people want to fly, the more prices go up.

But then there’s cost-push inflation. This happens when prices rise due to external factors like increased costs of labour or transportation.

And this is exactly what’s happening with food prices. Even basic staples like onions, tomatoes and potatoes are getting more expensive, not because people are suddenly eating more of these foods, but because of things like erratic weather, heatwaves and supply chain disruptions. No matter how high the prices climb, people still need these essentials. It’s a supply problem, not a demand one.

Now, if you take food out of the inflation equation, the RBI has actually been doing pretty well. To put things into perspective, core inflation dropped to 4.3% in FY24, a four-year low. And that played a big role in bringing down overall headline inflation, which was the lowest among emerging market and developing economies (EMDEs).

But even though food prices have calmed down a bit, the RBI still can’t cut interest rates to boost the economy. Lowering rates would help businesses expand by giving them better access to capital. But the RBI has kept rates steady for nearly a year and a half now (since February 2023 to be precise).

That’s because it can’t just say, “Hey, core inflation is under control, let’s start cutting rates.” If it does that, people will have more money to spend, which could push up prices again, especially with food prices already high. And the RBI would be back to square one.

It doesn’t stop there. Rising food prices are also affecting other things. For instance, when food gets more expensive, households feel the squeeze, so they start asking for wage hikes. And when employers raise wages, they need to make more money to cover the cost, which pushes prices up again. It’s a vicious cycle.

That’s why some analysts suggest removing food from the inflation targeting framework altogether.

But hold on Finshots… Isn’t food a huge part of household spending? Haven’t you seen the latest Household Consumption Expenditure Survey? You better have, because it’s you who said that rural households now spend about 46% of their money on food, and urban households spend close to 40%. So how can anyone seriously suggest kicking food out of the inflation targeting framework, when it’s such a big chunk of our expenses?

Actually, you’re right. And we had the same thought too.

But here’s the thing. The CPI is calculated by looking at how much households spend on close to 300 different items and services, each with its own weight depending on how important it is in the average household’s budget. And here’s the kicker. The CPI basket includes outdated stuff like horse cart fares, prices of video cassette recorders and costs of audio and video cassettes. I mean, who uses that anymore? So, yeah, the CPI basket is a bit outdated.

The same goes for food. The weight assigned to food in the CPI has been stuck for over a decade, all thanks to the previous Household Consumption Expenditure Survey which was conducted over a decade ago. Back then, rural households allocated nearly 53% of their expenses on food, and urban households spent 43%. But those numbers have dropped since. So based on that, the CPI’s current 46% weight for food is a bit exaggerated.

That’s why, instead of removing food entirely, maybe it makes more sense to just update the weight assigned to it in the CPI calculation. And guess what? The government is already considering this.

Will tweaking the food weight in the CPI really help the RBI control inflation better? Or is removing food from the headline inflation framework the smarter move?

We’re not economists, but here’s one thing we know. Whatever they do won’t magically make our groceries cheaper. Even the RBI governor himself isn’t convinced that it’s wise to take food out of the equation entirely.

But at least fixing the weights and the basket could give us a more realistic picture about inflation.

Today's Discussion 💡: What's In A Name?

Here are the full forms of iconic brand names you didn't know about-

PVR: Priya Village Roadshow

TVS: Thirukkurungudi Vengaram Sundram

WIPRO: Western India Vegetable Products

DABUR: Daktar (bengali/hindi for Doctor) Burman

MRF:  Madras Rubber Factory

LG: Lucky Goldstar

MDH: Mahashian Di Hatti

How many did you know?

And that's all for today folks! If you learned something new, make sure to subscribe to Finshots for more such insights :)

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