An opportunity has been lost in the politicisation of a critical issue as the farm bills get enmeshed in a cesspool of vested interests while the farmer interests stay ignored

When the establishment ignores the historical context and the emotional component underlying any debate, mass protests can develop the potential to shape the future. The people of Punjab did not want a confrontation with the union government. No one would but agitated farmers, women and men, more young than old, with a strong common purpose, energised in a way not seen in many decades, prompts one to join in.

To nullify the possible impact of the three farm acts passed in haste by the Parliament, the Punjab government was compelled to pass its own bills on Tuesday. These broadly attempt to ensure continued procurement of wheat and paddy at the minimum support price (MSP), uphold the powers of the courts in dispute settlement and empower the state to regulate trade in foodgrain.

The crux of the agitation is that the three farm acts were preceded by a high-level committee in 2015, headed by Shanta Kumar, a former BJP chief minister, which had suggested measures to reorient the operations of the Food Corporation of India (FCI) by shifting away from the public distribution system to cash transfers. This negates the very requirement of MSP procurement. The Commission for Agricultural Costs and Prices has been recommending a review of the open-ended procurement of foodgrain, which is reflected in the recent RBI annual report.

The RBI says that the MSP is no solution to farmer’s woes. Similar views were expressed by a union cabinet minister lately. Therefore, the farmers infer that a path that makes MSP procurement redundant is inevitable and fear it will become applicable after the assembly elections in 2022. To quantify the expected damage and grasp the farmer’s resentment, it would be worthwhile to examine the items under which the probable loss will accrue to Punjab.

The MSP for wheat is ₹1,925; for paddy it is ₹1,868. In the absence of government procurement in Bihar and other places though, the crops normally sell at 20 per cent below the MSP. Similarly, without assured procurement in Punjab, the losses to the state could exceed  ₹15,000 crore. This generated such an intense outcry that even BJP allies had to go to the extent of breaking long-forged alliances for fear of becoming politically irrelevant. Though it is more likely that the open-ended procurement of wheat and paddy will end.

In other states, procurement per farmer is capped at produce from five acres of land. For example, in Rajasthan, it is 25 quintals for moong and groundnut. Eventually, farmers fear that the same limits will be applied in Punjab. Should that happen, about 20 per cent of paddy and 25 per cent of wheat will not be procured and will sell below the MSP. This will amount to a loss of ₹3,200 crore.

Possibly, that is why central government functionaries have often repeated that “MSP will continue” rather than clarifying that “procurement at MSP will continue as earlier”. To give them credit, their “truth” corresponds to Yudhishthira’s “untruth” when he stated, “Ashwatthama is dead”. This adds fuel to the fire because the statement hides more than it reveals.

In adjoining states, central government agencies do not pay a mandi fee on procurement. The new farm bills disallow imposition of any mandi fee on farm produce procured outside the mandi’s physical boundaries. Should FCI or private traders trade outside the mandi space, the state will lose ₹3,500 crore in revenue.

Central government agencies do not pay commission to arthias in their price support operations for oilseeds, pulses and cotton. If this practice is extended to Punjab, three-quarters of 24,000 arthias and their employees will lose agency and employment. The annual loss will be about  ₹1,500 crore. Further, in the event of not being paid by the purchaser, they will start charging farmers extra fee under various pretexts.

After reneging on the promise of fixing the MSP by the C2+50 per cent formula, the government settled on the (A2+FL)+50 per cent formula, the derived MSP under which is far less. There are rumours that in the future MSP will be calculated separately for each state depending on their cost of cultivation to stave off a financial crisis. If true, in Punjab, the MSP for wheat and paddy will get reduced to ₹1,035 and  ₹1,094 per quintal respectively — the loss could be more than ₹26,000 crore.

There has been no sense of purpose demonstrated over trying to resolve these discrepancies and dilemma, driving a state of civil unrest. Politics now threatens to complicate the process. Will a future historian  recall the time when Punjab changed course and how an issue of farmer livelihoods morphed into the question of Punjab’s survival? It is time to stop moralising.

“If you want a happy ending, that depends, of course, on where you stop your story,” Orson Welles, actor and movie director, most famed for his film Citizen Kane, had once remarked. For Indian farmers, the point is now.