Farm Bill | Err on the side of caution

My father is a farmer. He works and lives in western U.P., a relatively prosperous area in terms of ground-water and road connectivity. He is not sufficiently poor. He managed to pay for my college (circa 2007). I spent the first 21 years of my life in the village, often working on the farms. It is a hard life once you have experienced the alternatives.

We are sugar-cane farmers and are well organized. Usually, politicians don’t like to mess up with organized farmers. But a hyper-centralized state can. After all, everyone is living in their own bubbles these days. Some powerful people will always believe that they know best what is good for everyone else. This is not true even when they have the noblest of intentions and act in good faith. And this bill was not passed in a good faith.

We wouldn’t know the effect of this bill for a year or two. Strong fluctuations in prices is a routine for farmers, especially near harvesting season (can’t tell why!). But there is something odd about this bill. Like demonetization, GST, and CAA, the long term benefits of this Farm Bill are doubtful at best (call me anti-national), but the short term dangers are real.

Let’s consider the simplest possible scenario. I spend 3 to 4 months on my rice or wheat crop. During these months, I paid school fees, medical bills (not all days are achche din) often by borrowing money from a local money-lender at an interest rate of 15% to 50% (What? That can never happen in our glorious country. I must be lying! After all, the best government is at the helm. Off with an FIR!). As soon as I harvest my crop, the first thing on my mind is to pay back the loan and plan for the next crop. I can’t store for a very long time or delay the payment on the loan even if the loan is from a Sarkari bank. I am not Ambani, Adani, or that Kingfisher guy (I am sure this list is long!).

The local vendor (khalifa) comes to my village and offers me a price which is usually less than the minimum support price given by the govt. He picks up the crop from my house. Saves me the time and hassle of transporting the crop to the Sarkari mandi which is at least 30km away. Selling in Mandi usually means wait there for a whole day to sell, and for a couple of months for the money in the bank. If the vendor offers me 10 to 15% less than the Sarkari price, I happily sell it to him. If he offers less, I take the trouble to go to Mandi, usually in a group of 4-5 farmers. Unlike what others have been telling you, farmers always had the choice to sell their corp to anyone. This bill brings nothing new in this regard! Isn’t it obvious? I’ll sell anyone who offers me MSP-1. The question has always been at what price? No vendor has ever, ever, offered more money than the MSP!

If all local vendors lower the price for a month or two then only a few farmers would be able to wait and watch till prices go up again, if ever. Almost all farmers will go for stress selling. It is worse for farmers who grow perishable crops like tomatoes and papaya. They can hardly wait for a week. It is not a hypothetical situation to malign the reputation of your favorite politician. It happens all the time: just talk to a real farmer in good faith.

Let’s take a leaf from your life and talk about education and health. You must have had some experience with these two sectors. I see them somewhat functional in the cities and towns, much better in the southern part of the country. These sectors have roughly the same social and economic dynamics and roughly the same arguments about public and private ownership.

If your local government school is bad, I bet, most private schools are only slightly better. Aren’t they? There is no incentive for a private school to do much better than the best government school in the locality. They do slightly better and you get enough candidates. Not sure what is the situation is with your hospitals. My guess is that private hospitals need to do just slightly better in diagnostics but has to look much better (they have color TV at reception). I read all the fantastic stories about how nicely and humanely they treat their patients! Why would you think farmers will get any different treatment from similar corporates entities?

The government should strive for a decent baseline: MSP for crops, minimum wages, minimum education, and minimum health coverage, even when the private sector is helping and not exploiting the lack of government presence. This is not too much to ask from a government for its people, democratic or otherwise, left or right, sikular or fascist. And every decent society should strive for it.

The MSP is set at 1.5 times the cost of the crop. The real market can’t afford to give this much to the farmers hence the MSP was proposed in the first place. If you think that market must be able to pay that much or more ( balle balle!), then it does not matter if you leave the MSP alone. If you think the market is fair, then it wouldn’t matter if you leave the legal provision for appeal in the court there (it won’t ever be used). Even if you think, these are needless in your somewhat utopian view of markets, my request is to err on the side of caution.