Nous Indica

Hubris as policy

Crony capitalists can’t make the mandi’s inefficiencies vanish

Hubris as policy

Headline management: A government agency intends to question Deepika Padukone on the day of the Bharat Bandh against the farm Bills.

Rajesh Ramachandran

Roza is a tiny railway station in a nondescript town by the same name in western Uttar Pradesh. Nearly two decades ago, an alert railway freight manager found that there was a huge flow of wheat from Roza to Khanna in Punjab. It just did not make any sense. Why would anyone carry wheat to Punjab? Well, the story, as I found out travelling to Roza, was very simple. There was hardly any procurement of wheat in UP those days; so, it was a business opportunity for middlemen to buy wheat dirt cheap from distressed farmers, book railway rakes and send them over to Punjab to sell it to the government at the Minimum Support Price (MSP) and still make a hefty cut for all the officials and traders involved to remain happy. Not just traders and corrupt officials, but the miserable farmers of western UP too benefited from this violation of the APMC Act, and so did the railways. Such appalling, inefficient profligacy was not created by the market; instead, the market was only trying to make the most of this inefficiency, bypassing the rules.

All that the government had to do was to have set up a Food Corporation of India (FCI) procurement centre or a small mandi at Roza to help the farmers get the MSP, but in its absence the market devised its own means to create an alternative — but corrupt — mechanism. In the light of the new farm Bills, which are being tom-tommed as a panacea for all farm ills, I checked with Northern Railway to find out whether rakes of wheat still ply between Roza and Khanna. Apparently, this trade stopped long ago, when procurement began in right earnest in UP. The FCI procured 35.77 lakh metric tonnes of wheat despite the Covid restrictions during the last Rabi season, which was considerably lower than the previous year. The market by itself cannot check corruption or the humungous wastage of public money — only governmental intervention can do that.

Thus the seamless transportation of farm goods, which one of the three new Bills envisages, was not required to ensure a fair price for harassed wheat farmers of western UP. In this case, the market was not offering a sustainable business model, but merely using public money, government procurement agencies and the government transporter for profiteering. And once the government began doing what it was always supposed to do, the business model of carrying coal to Newcastle collapsed. This could be one reason why farmers are still not convinced about the farm Bills.

Instead of ensuring greater transparency, modernisation and incremental digitisation of the agricultural economy, the government has made farmers anxious and apprehensive about corporatisation of one of the most productive sectors of the Indian economy. Despite the Covid contraction of 23.9 per cent of the GDP during the April to June quarter — the worst in the world — caused by the Central Government’s lockdown, agriculture was the only sector that grew, by 3.4 per cent over the last year’s figures. Why would the government want to overhaul a sector that is bucking the general negative trend and growing well? Why isn’t the government doing something similar for the manufacturing, construction, mining, hospitality, communication and transport sectors, which have no hope of immediate revival after having bottomed out?

Farmers, particularly landowners who may or may not till land, are middle class, politically aware, astute voters and opinion-makers. They have smelled a rat in the farm ordinances, which have been hurriedly and undemocratically enacted, bulldozing parliamentary customs and courtesies. They believe that this is an attempt to corporatise farming and thereby gradually dismantle the MSP regime and the available safety nets for the rural economy. Sure, Madhya Pradesh has supplied more wheat to the central pool than Punjab this season and West Bengal is the top producer of rice in the country; but the agitation of farmers of Punjab and Haryana cannot be dismissed merely as a result of misinformation by the middlemen. It questions the intelligence and free will of the hardy people of a region that has suffered the worst and yet produced some of the greatest sons and daughters of India. The apprehensions of these people are genuine as they have already gone through the failed experiment of contract farming. About 15 years ago, I had travelled the Majha countryside to report on the farmers burning contracts that they claim were reneged by the corporates, including the multinationals.

The Central Government has, so far, not taken the farmers’ agitation seriously, nor does it have any qualms about appropriating a state subject without an agreement with the stakeholders — state governments, Bharatiya Kisan Union leaders and agricultural economists. Instead, one of its agencies intends to question Deepika Padukone on the day of the Bharat Bandh against the farm Bills as if headline management on news TV channels is all that matters in this New India. People are in great distress after having lost 2.1 crore salaried jobs and this is no time to tinker with a smooth-running machine. If the arhtiyas are racketeering, the officials are corrupt and the mandis are inefficient, the solution is not to open the entire sector to the vagaries of the market with no legal protection for MSP; the solution lies in cleansing the system that has been delivering for decades.

Even Parliament was treated like the government’s extension counter in its tearing hurry to get the Bills passed, making farmers wonder whether it is all about favouring certain crony-capitalists, who would want to take over a profitable system that would be bankrolled with public money. When a government stops conversing with the people or feels it unnecessary to engage with them, it begins to unravel.

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