Excerpt: Are farmers from all over India protesting?

It is silly to say that Indian farmers are protesting. While much of the protests are political, most of the protests seem to be from one state, Punjab.

To understand why, it would help to understand that Punjab rice farmers sell 100% of their produce through MSP compared to say 1% in a state like West Bengal. Farmers from just 3 states – Punjab, Haryana and Uttar Pradesh account for 56% of all wheat and rice procurement by the Government. Hence Punjab enjoys something close to a monopoly when it comes to wheat and rice procurement from farmers. As is the problem with monopolies, they are not sustainable forever.

The Indian Government at some point will need to understand that India is bigger than just Punjab and Haryana. MSP procurement is meant for poor farmers in remote regions across India and is not an exclusive scheme for rich farmers in the richest states. Farmers in Punjab are the richest in India with an average monthly net income of Rs 16,020 (compared to an Andhra farmer who makes Rs 5842 or a Gujarati farmer who makes Rs 3523). Other states like Madhya Pradesh, Chhattisgarh and Telangana are already complaining of being discriminated against and the Government is turning its attention there by building storage and transportation networks.

Secondly, only 6% of produce are being sold under MSP. This means that more than 90% of farmers don’t use MSP to sell their produce. If the huge majority of farmers are not using MSP to sell, why should they care about MSP guarantees. Clearly, nobody outside the Punjabi and Haryana farmers have much stake in the current farmer reform discussion. Why should they protest if they don’t even avail the service?

Hence contrary to mischievous media reports that “All Indian Farmers are up in arms”, it would be more accurate to say that “Rich Punjabi farmers, middlemen and loansharks are up in arms” against agricultural reform. Even their demands are uncompromising – stop all reform and go back to status quo, however terrible it may have been. Which sensible poor farmer would say that the previous system had the best possible outcome and reform should be stopped at all costs.

Published by Vinod Aravindakshan

Engineer, Economist and Manager

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