Centre’s farm reforms bills set off churning in Punjab and Haryana

The central government has run into political turbulence with its two bills to replace the ordinances that reduce APMCs to also-rans and pave the way for contract farming. Government’s defence is that APMCs don’t benefit small farmers, comprising 86% of all farm units, and that they are forced to sell to middlemen who then take the produce to mandis and rake in the moolah from MSPs. The opposition to the bills warns that it will lead to withdrawal of MSPs besides the grievance of state governments against government undermining its monopoly over APMCs and levying fees on APMC sale-purchases in the guise of facilitating inter-state trade.

Unlike other states, big farmers are a dominant influence in Punjab and to a lesser extent in Haryana. The average landholding size is 3.62 hectares in Punjab and 1.7 hectares in Haryana against national average of 1.1ha. Punjab, Haryana and Andhra Pradesh account for 50% of MSP paddy procurement too. Given these statistics it is fairly evident why the first large protests against the Modi government’s reforms have begun in these two states.

The impact this will have on politics will be keenly watched. Akali Dal has been forced to exit the NDA to convey solidarity with protesting farmers. To counter Harsimrat Kaur Badal’s resignation, Congress MLA and Rahul acolyte Kuljit Singh Nagra who recently earned an AICC promotion, has resigned his MLA seat. In Haryana, deputy chief minister Dushyant Chautala is under pressure from the Jat farmer constitutency. With BS Hooda waiting in the wings, Dushyant will have to tread cautiously. Two of his MLAs are unhappy about not securing cabinet berths, so quitting is no option. There are no elections in the near term and he may choose to ride over the farm lobby’s angst.

This is a calculated gamble BJP has taken. If the reforms succeed and agro business firms, wholesalers, food processing companies, exporters and big retailers queue up at farms and villages and decentralise food markets, the party can bask in the success. But if the reforms fizzle out and the status quo prevails there is heartburn for no one and BJP can still hope to woo the discontents by convenient pre-election hikes in MSP.