What was responsible for the agitation turning into, first, a tractor parade of hardliners not interested in any compromise and, second, into this violent mess? We do know.The long and dangerous — because the state shares a border with Pakistan —economic decline of Punjab. In misleading media shorthand, what’s been happening since three laws on farm trade liberalisation passed is focused farmers’ agitation. In reality, it’s Punjab’s long-simmering frustration finding an outlet. This is not just a matter of Punjab farmers being the dominant constituent in the protest. It’s also about how the two-month-long agitation has become a stage on which inchoate anger of a once-rich state can be on display.
These days, as former PM’s economic advisory council member Shamika Ravi wrote last month, the average Haryanvi is 1.5 times richer than the average Punjabi. As surprising as that may seem to most, that’s just the headline figure.
Punjab’s multidimensional decline is shocking for a state that used to boast of prosperity. Ravi makes the point effectively. In unemployment, substance abuse and mental illness prevalence, the state ranks far higher than the national average. In access to public health, it ranks substantially lower. Not just Haryana, other smaller states like Himachal Pradesh and Kerala have had faster per-capita income growth.
Add to this: Punjab’s agriculture production system has lost both its productive shine, and its importance to national food security. Its oncevaunted industrial belts of Jalandhar and Ludhiana are rusting. And free power for farmers means industrial firms already in trouble have to pay dearly for power.
Migrant labour does the dirty work on farms. Industrial employment is not a viable option for educated young Punjabis. And since not everyone can be sent to Canada, the pool of the frustrated has been expanding alarmingly.
And the tadka on this volatile social and economic mix is the spectacular indebtedness of Punjab, the worst among all Indian states. One out of every five rupees in state revenue goes to service interest on loans. Both Akali-BJP and Congress have treated the state budget as SUV-driving, partyhopping sons treat their rich daddies’ credit cards in some parts of the National Capital Region. Result? The state’s capacity to fiscally address its economic crisis is severely limited. It’s entirely fitting, of course, that this parlous state of state finances is thanks mainly due to successive governments’ utterly irresponsible munificence to farmers, via zerotariff electricity and periodic farm loan waivers.
BJP’s three farm laws came in this backdrop. The essential logic of these reforms is inarguable — ever-rising State-guaranteed prices for cereals are highly distortionary and can’t be sustained. Critics who agree with this pointed out laws’ provisions like denying farmers the right to legal recourse — a near-unconstitutional step. That can, however, be amended. What can’t be, and where the Centre misjudged the situation tactically, is that a longer attempt at consultation should have preceded the laws, knowing that Punjab’s farmers and its unemployed young, many of whom depend on farm incomes to finance their emigration plans, would likely respond to change as all those caught in long-term economic decline do.
That’s why it’s correct but irrelevant, in the context of Punjabi farmers’ agitation, to say only 6% of agriculturalists in India depend on minimum support prices (MSP) and the rest sell to markets anyway. Punjab is the hotbed of that 6%.
It’s also correct but irrelevant to say Punjab’s farmers should switch from cereals to crops that fetch higher market value. The Green Revolutionled wheat and paddy production system, coddled by years of fixed-price selling and encouraged by governments carrying memories of food shortage, has created a class of wealthy agriculturalists who think the State must always genuflect before the tractor. The patience and cleverness needed to nudge such a social and economic system to start thinking of change was missing from the Centre’s otherwise smart farm reform. There’s hope, though. The two-year window offered by GoI can be used to do what was needed to be done earlier.
The million bales of gehu question, though, is whether those leading Punjab’s farmers will be embarrassed enough by the Republic Day violence and take a softer and smarter line, or whether they reckon the State has to be beaten back and forced to keep supporting an irrational production system. Chances that it will be the latter are reinforced by the larger context of the protest: a once-rich state inexorably sliding into an economic crisis.