Siromani Akali Dal (SAD) has been a so called founder member of the NDA and for its minister to resign from the union cabinet is significant. This also shows the fissures in the coalition so much so that the prime minister had taken the first opportunity to inveigh against the critics of the government move. Prime minster had underlined those who were now feeling hurt by the new developments.

For herself, Ms Harsimrat Badal had given a fumbling explanation of her last minute resignation drama. That she did not know about the bills so things to that effect. This does not hold much water.

Nirmala Sitharaman, finance minister, had announced in her stimulus package of the government’s commitment to free up Indian agriculture by scrapping the old Agriculture Products Marketing Committee (APMC) law, essential commodities list and free pricing.

It is not possible that Ms Kaur was unaware of the changes the government was attempting to bring about. She was only waiting to see how far the pressures from the farmers’ lobbies in her home state in Punjab and Haryana were rising to reach a cracking point.

What are the issues. Just a few. But those are good enough to fracture the long established framework of a comfortable equilibrium in the farm sector of the agriculturally most prosperous states. Under the system that is now sought to be replaced, the farmers in two states more specifically, Punjab and Haryana, were getting lion’s share of the food grains procurement outlay year after year.

Year after year, the procurement prices would rise. As such, the minimum support price (or MSP) would be one-and-a-half times the average cost of production. The average cost is calculated on the basis of costs at the al-India level.

Since, most of the farms in these two states were mechanised, and worked on a larger scale, their costs were comparatively lower. Every year, the farmers in these states would gain more than their counterparts elsewhere. On top of that, minimum support price would be revised upwards and thus one can guess what a comfortable arrangement it was.

No one would grudge the farmers having a good time. After all, they helped the country overcome the demeaning situation of recurrent food shortages and abject dependence on food imports. Those days are bad dreams of a past age and times. But this is no argument for not changing the dispensation for all times to come.

The APMC, the minimum support pricing mechanism, the essential commodities act were all regulations of a time when India was perpetually in short supply of farm products. From there, we have graduated to a situation of plenty, which demands a different dispensation for the farm sector in the overall scheme of things.

The present changes are moves in that direction and no wonder these would be opposed by those who have thrived on the earlier systems.

The government proposals are bringing about some of these long continuing practices. First of all, the reforms seek to abolish the stranglehold of the Agricultural Products and Marketing Committee Act (APMC) which makes the farmers to sell their produce through the village Mandis functioning under the purview of the Mandi committees.

In the proposed new system, the farmer should be free to sell his product to whoever he chooses, whether it is a local trader, a corporate buyer or distant buyers elsewhere. In these days of mobile phones and electronic marketing facilities being available on mobiles, there is no reason why a farmer should restrict his offering through only a directed set of buyers. He might just as well sell over the phone or even do advance sales before harvest.

This can even raise his overall income. Particularly, if the large corporates are allowed to trade in farm products.

These changes are good for farmers but bad for middlemen. To defeat the entire reform process, these vested interests have acted with alacrity.

They have successfully and instantaneously been able to spread rumours that with the new system, the arrangement for MSP operations would be discontinued. The regular and stipulated increases in support prices and almost compulsory purchases by Food Corporation of India would be suspended.

This is behind the entire drama of farmers agitation and SAD resignation, coupled with sudden outburst of activity against the farm bills. Economic logic suggests that MSP operations in rice and wheat should now be tapered off. At least, the extent of procurement should be fine tuned. Even at th end of December 2019, 78 million tonnes of food grains were procured when the stocks were running impractically high.

Think of it. The Food Corporation of India would require roughly around Rs3 lakh crore a year in procurement. And traditionally, a major part used to flow into these two states. There are those intricate maze of middlemen and others who are thriving on this largesse.

We see here a deadly mixture. Some genuine modernisation moves have been mixed into a cocktail with minimum support price mechanism and government procurement of food grains to make the entire move toxic. This is the real story. (IPA Service)