Farmers block the National Highway in Pipli, Haryana, demanding MSP for sunflower seeds, June 12, 2023 (Photo: ANI)
CALL IT ROAD RAGE of another kind. A week ago, farmers in Kurukshetra, Haryana, hit on a novel tactic to enforce a demand they made from the government: they blocked a stretch of the National Highway passing through the town. Their demand was simplicity itself: their sunflower crop should be purchased at the declared Minimum Support Price (MSP) of `6,400 per quintal. In these polarised times, it seems difficult to describe what took place. Chances are that if you are a civil liberties fan, you will describe what transpired in Kurukshetra as farmers asserting their rights. There is, however, another description: threatening a government to pay up or else…
When the local police tried to disperse the crowd, the ‘farmers’ resorted to violence and damaged government property. Their leader, Gurnam Singh Chaduni of the Bharatiya Kisan Union (BKU) was detained along with nine others on June 7. He was later presented before a judge who remanded him to judicial custody for 14 days. Within no time, farm leaders across Haryana decided to intensify their agitation unless Chaduni was released and their demand for government purchase of their crop was met.
A week later, on June 13, the government acceded to the farmers’ demand and agreed to purchase sunflower in the state at the declared MSP of `6,400 per quintal. The formula that was worked out was that farmers would be paid `5,000 per quintal along with a price differential between market rates and MSP of `1,400 per quintal. Farmers had alleged that they were “forced” to sell their crop at `4,000 per quintal to private traders. It is worth noting that the Haryana government purchases 14 crops in the state at MSPs declared by the Centre. These include wheat, mustard, some pulses, and other crops. Recently, the Centre increased the MSP for sunflower from `6,400 per quintal this year to `6,760 per quintal for 2023-24.
Governments face a three-sided price-cum-fiscal problem in handling agricultural commodities. On the one hand, farmers want assured purchase of virtually all crops at prices that are increased every year. On the other hand, these prices have to be kept in check as many of these commodities are distributed under the Public Distribution System (PDS) or even when sales take place through private trade. Any sustained increase in the selling price of these commodities at the retail level is politically very expensive for any government. On the third side is the equilibrating lever in the hands of the government: how much money it is willing to spend on purchasing crops in any particular year. Since the time of the Green Revolution in the late-1960s, the vast bulk of this money has been used to purchase wheat and rice in a geographically very restricted area, that of Punjab, Haryana (from the 1970s) and parts of western Uttar Pradesh. It is only in recent years that farmers in states like Madhya Pradesh have been given these benefits, albeit on a much smaller scale. But over the years, the number of crops under the ambit of government purchases has increased dramatically.
At one time, these assured purchases had economic logic to them. India was a food-deficient country and unless the government, in particular the Centre, did the heavy lifting, food shortages could easily turn into famines. The Centre rose to the occasion. In states like Punjab, massive expenditures were incurred, not just in providing farmers with a package of inputs to ensure higher output of wheat and rice, but virtually an entire economic apparatus had to be created de novo. From land consolidation—a precondition for the Green Revolution to take-off—to huge expenditures on building rural roads connecting villages with market towns. It is interesting to note that while this infrastructure was ready in Punjab (and Haryana) by the mid-1970s, virtually all of India had to wait for another three decades for the Pradhan Mantri Gram Sadak Yojna for the rural road infrastructure to be built in a modest manner. While the ‘farmer’ of Punjab loses no opportunity to claim that he has “fed” the country, he is pretty much clueless about the costs incurred on him to ensure his prosperity.
Activists and intellectuals bristle at the use of the expression
‘too much democracy’ for India. One can ask: How should one describe a bunch of farmers who are not amenable to any reason and who are always on the lookout for excuses to launch agitations? The much-maligned expression comes close to describing the events in Kurukshetra
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These costs have had major consequences for the Indian economy. The Marxist scholar Ashok Mitra analysed in detail how the spending on rich farmers derailed India’s industrialisation. In Terms of Trade and Class Relations: An Essay on Political Economy (1977), Mitra showed through elaborate calculations how rich farmers benefited at great cost to the country.
Now, almost 50 years later, farmers from the very same region are up in arms demanding more. In the past nine years, there have been very large increases in MSPs for wheat and rice, directly benefiting these farmers and, indirectly via levying of taxes on the Centre, the fiscally straitened government of their state, Punjab. To give a very rough estimate, consider the money to be spent directly on farmers in 2023-24 at the expense of the Centre. The combination of fertiliser and food subsidies along with the PM-Kisan scheme will cost the Centre a tidy `4.32 lakh crore. This is close to 10 per cent of the entire expenditure of the Centre. It comes very close to the entire effective revenue expenditure of the Centre and accounts for nearly 61 per cent of the country’s primary deficit (fiscal deficit minus interest payments). Any other country would be in serious fiscal trouble at this scale of expenditure on only one special interest group.
India is in the midst of a major and historically unprecedented infrastructure push. At this time, the country’s spending priorities ought to be different. Hopefully, this time India’s infrastructure won’t be a casualty as its industrialisation was some 60 years ago.
The timing of the ‘protest’ in Haryana is cunning. The state is scheduled to hold Assembly elections later next year, soon after the Lok Sabha elections. No government in India can afford to antagonise this very vocal and crafty section of the electorate. Within days of the protest in Kurukshetra, the agitators were joined by Rakesh Tikait, another alleged farm leader from Uttar Pradesh. The Haryana government bowed down within no time.
Activists and intellectuals bristle at the use of the expression “too much democracy” for India. One can ask: How should one describe a bunch of farmers who are not amenable to any reason and who are always on the lookout for excuses to launch agitations? The much-maligned expression comes close to describing the events in Kurukshetra.
At the same time, the government is open to criticism that it reacts to events instead of tackling them head-on before they arise. In 2021, it was forced to retreat and repeal the three farm reform laws passed a year earlier. That emboldened farmers greatly. Now, there are agitations at the flimsiest of excuses. This is now a seemingly endless spiral of protest and agitation. In Haryana, this is also linked to local caste politics. Chaduni is expected to be released from custody soon. But now that farmers have tasted blood, they want the agitation to continue. Now, their protest is aimed at demanding the arrest of MP Brij Bhushan Sharan Singh who is facing allegations of sexual harassment. The trouble with road rage is that it is never-ending. Perhaps there is something elemental about it. Once you clobber someone and get away with it, you start hunting for new people.