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Mainstream, VOL LIX No 33, New Delhi, July 31, 2021

Farmer Politics in Punjab | Pavittarbir Singh Saggu

Friday 30 July 2021

by Pavittarbir Singh Saggu *

Abstract

This article focuses on the role of the central and state governments in influencing the trajectory of agricultural growth in Punjab, as well as farmers’ political responses to three major policy areas. The first is the issue of government procurement and food pricing. The second concern is the provision of water and electricity. The third topic is land reform and agricultural taxes legislation. The central dimension of these issues is examined in the context of the need for enhanced state autonomy in the last part.

Keywords: Farmer politics, Punjab Agriculture, State Autonomy, Agriculture Development, Land Reform

Introduction

Farmers have acquired political clout in recent years in India’s states that benefited most from the Green Revolution. The Bharatiya Kisan Union (BKU - Indian Farmers Union) has established solid strongholds in north Indian states like Punjab, Haryana, and Uttar Pradesh, relying on the support of middle and small-income farmers. Maharashtra, Karnataka, and Tamil Nadu all have active farmers’ movements. Procurement prices, electricity charges, irrigation, and input expenses such as fertilizer, insecticides, and diesel fuel are the main reasons for dissatisfaction.

Using their political clout with state governments, farmers have successfully lobbied for debt forgiveness, higher support prices, and bigger subsidies on vital supplies. These changes are a direct result of the Indian government’s agricultural expansion strategy, which began in the mid-1960s with the help of large foreign aid donors and focused on the dissemination of high-yielding seed types and the use of biochemical inputs. Improved mechanization and increased irrigation capacity were also key elements of the new plan. Resources were concentrated in areas of the country that could generate sustained output growth. The idea was that the rise of a class of ambitious farmers actively investing in agriculture would not only enhance affluence in crucial states like Punjab, Haryana, and Uttar Pradesh but also lead to political stability.

Farmers, paradoxically, were more active in expressing themselves politically as their fortunes grew. This was because farmers who adopted the new technique received subsidized inputs from state governments, giving them a vested interest in how state resources were distributed. Farmers in the more advanced states reacted to potential infringements on their privileged economic position by mobilizing around important agricultural problems, which brought them into conflict with state and central governments, as returns on agricultural investment dropped in the 1970s and early 1980s. The central government, efforts to achieve a more equitable pattern of growth by focusing on the improvement of economically backward parts of the country are partly intended to reduce reliance on the northwest as a source of procurement stocks, but such a policy is only likely to enrage Punjab farmers even more.

Agriculture is largely categorized as a state affair under the basic provisions of the Indian constitution, providing state governments significant freedom over a wide range of policy issues. State administrations are in charge of canal irrigation, land improvement, credit, and agricultural taxation. The central government is in charge of developing agricultural policy for the entire country. It also assists in the coordination of food grain procurement and the establishment of agricultural prices. Interstate water resource regulation and development are likewise constitutionally identified as a key government concern. Certain policies are shared between the state and the central government, the most important of which is electricity generation; atomic power is solely the responsibility of the central government. The character of agricultural politics in India has been shaped by the distribution of administrative tasks between the national and state governments.

Punjab’s Agricultural Development

In the post-independence period in Punjab, the public sector was crucial in establishing the necessary infrastructure for sustained agricultural expansion. In the 1950s and early 1960s, successive state governments prioritized the expansion of communications, power, and irrigation networks. To address issues of fragmentation, land consolidation was advocated, while reclamation schemes improved the amount of land available for cultivation. From the late 1960s through the early 1970s, an agricultural strategy centered on the use of high-yielding seed varieties (HYVs) in combination with intense fertilizer and pesticide application gave rise to the so-called "Green Revolution." The success of this technique was particularly evident in the case of wheat and rice, whose outputs have expanded fast since the green revolution, owing to a constant increase in cultivated area and productivity gains.

The Green Revolution’s success in Punjab and other regions where the new strategy was implemented widened economic gaps with more backward areas of the country where old farming techniques were still used. In light of these disparities, the central government has attempted to implement measures to boost agricultural output in the less developed eastern region, which accounts for 67 percent of rice-growing land but produces less than half of national output and contributes only a small portion of procurement stocks. The establishment of financing and marketing facilities, as well as enhanced water harvesting techniques, were all part of the Seventh and Eighth Five Year Plans, which aimed to boost rice output. Punjab’s agricultural superiority, on the other hand, stays intact in the short term.

By the mid-1980s, Punjab’s per capita income still greatly outstripped that of other states. However, while the total economic gains of increased output and productivity were significant, they were not distributed equally across all cultivator classes. Disparities were particularly pronounced in the late 1960s when it became clear that larger and wealthier farmers were investing more in new technology than other growers. By the early 1970s, HYV technology and biochemical inputs had expanded to smallholders, but greater landholdings gave wealthier farmers a risk-bearing advantage, allowing them to access institutional loans and acquire more expensive mechanical inputs like tube wells and tractors. Even though all classes of landowners saw an increase in revenue, research revealed that the wealthier farmers continued to benefit disproportionately from the new technology. Punjab farmers, who are mostly Sikhs from the Jat agricultural caste, coalesced into a unified political force that dominated state politics.

The Political context

Since independence, two major political parties have dominated Punjabi politics, each with its own set of ideals. The Congress is a Pan-India secular nationalist party, whereas the Akali Dal is a Punjab-based Sikh theocratic party. The Congress’s historical strength stemmed from its advocacy of agricultural development and rural reform in the 1950s and 1960s, which ensured the farming community’s support. After independence, Jat Sikh landowners gained seats in several Congress-led ministries and dominated the state party leadership. The Akali Dal primarily received support from urban Sikhs, particularly those involved in trade and business, who were drawn to its religious particularism. When in power, both the Akali Dal and the Congress relied on backing from other parties, but they remain the most powerful political forces in the state.’ Wealthier Jat Sikh farmers progressively moved their allegiance to the Akali Dal in response to the emergence of a more secular rural leadership in the party in the 1960s, and these alignments began to shift.

Agricultural problems were significant on the Akali Dal’s agenda during the 1970s and early 1980s, reflecting the growing political assertiveness of a powerful landowner bloc. This was particularly visible in the Anandpur Sahib Resolution, a detailed policy declaration produced by the Akali Dal in 1973 that merged the party’s primary economic issues with a variety of religious grievances. It asked for remunerative rates for surplus food grains bought by government procurement agencies, as well as the nationalization of the wholesale foodgrain trade. The manifesto addressed demands for lower-cost electricity, expanded irrigation facilities, and more loan availability. A 1978 revision of the statement expressed more specific objections about the division of river flows going through Punjab with the neighboring states of Haryana and Rajasthan, as well as the repeal of land reform legislation’s limitations on property ownership. However, not many farmers were represented in the Akali Dal, which was dominated by rich landowners at the time. The Punjab Khetibari Zamindari Union (Punjab Landowners Union) was founded in 1972 to mobilize smallholders and middle-income farmers on problems such as land reform and procurement prices, which were similar to those advocated by the Akali Dal but from a secular political standpoint. It was eventually renamed the Punjab branch of the BKU, and it was active in several of the farmers’ agitations in the 1980s.

Policy on foodgrain procurement and pricing

The question of marketing and the prices paid for food grains by government procurement agencies has been perhaps the most important political issue confronting farmers during the last two decades. The Food Corporation of India (FCI) was established in 1965 to coordinate the national government’s procurement, storage, and distribution of food grains. The goal is to build up a central buffer stock of food grains for redistribution under the public rationing system, and procurement takes place on the free market directly through the FCI or state government bodies such as the Punjab Marketing Federation (MARKFED). The Commission for Agricultural Costs and Prices (previously the Agricultural Prices Commission) determines pricing policy at the national level based on annual crop yield forecasts on the eve of harvest. The minimum support prices granted to farmers by the FCI for different varieties of food grains are set by the Commission. Over the last two decades, the central government procurement system has absorbed much of Punjab’s marketable excess of food grains. Since 1970-71, wheat procurement as a percentage of total production has fluctuated around the 50% mark. Since 1980-81, procurement of paddy has at times exceeded 90% of total production, and the combined contribution of wheat and rice from Punjab to national procurement stocks was 55%, highlighting the state’s critical role in the public food distribution system. Because government procurement agencies absorbed such a large part of the production, the prices established by the Agricultural Prices Commission became a major predictor of farmers’ profitability. This was especially important in light of rising production costs over time, which have had the impact of diminishing the large profit margins enjoyed by farmers at the Green Revolution’s heyday. Fertilizer prices have doubled, pesticide prices have quadrupled, and diesel prices have nearly quadrupled since the Green Revolution. These three inputs used to account for 15% of overall input costs in the 1970s, but their share has since increased to a great extent. After 1973-4, the price of agricultural output declined dramatically in comparison to the price of inputs, particularly petroleum, fertilizers, and pesticides. Despite a minor improvement in the 1980s, production prices remain significantly below those of the early 1970s. Farmers’ attention has been drawn to the central government’s procurement pricing as profit margins have shrunk. Because they are influenced by a variety of factors, agricultural lobbies can exert political pressure on them. Parties like the Akali Dal and non-party organizations like the BKU repeatedly demanded increased procurement costs throughout the 1970s and early 1980s. For example, in May 1984, the BKU displayed its power to disrupt state procurement in Punjab by boycotting grain markets in protest of the official wheat price established, compelling the state government to compensate farmers with a bonus on top of the minimum support price. The significance of the agitation lay in the fact that, even though the BKU leadership was dominated by wealthier farmers with landholdings of more than five hectares, it was able to mobilize a broad cross-section of farmers around an issue like wheat prices, demonstrating the importance that the majority of farmers in the state place on procurement. It is still a sensitive subject in Punjab and other food surplus states, and it is becoming increasingly significant in determining state administrations’ electoral fortunes.

Canals, Tubewells, and Electrical power

In Punjab, irrigation has played a crucial role in agricultural development. The British built a vast canal network across the province’s dry central tracts in the latter half of the nineteenth century, which had the effect of transforming low-quality wasteland into profitable wheat fields. Most of the canals remained on the Pakistani side of the border after the province was partitioned at independence. As a result, the government of East Punjab made irrigation a top priority, allocating a significant portion of the state development budget to the improvement and extension of the canal system. The formation of Haryana in 1966 from the eastern half of the state resulted in a series of disputes between the two states over control of canal headwork and dam projects, with the Bhakra-Nangal dam on the Sutlej river serving as a particular point of contention. The dam was built with funds provided by the Punjab government to supplement existing irrigation sources in the 1950s. When Punjab was separated, the central government took control of the key dam projects, including the Bhakra-Nangal dam, but this action only served to enrage Punjabi farmers, who perceived it as an unwarranted intervention in state affairs. Despite the Akali Dal’s efforts in the 1970s and 1980s to persuade the central government to hand over ownership of the canal headwork’s to the state, the party has so far been unsuccessful. The distribution of river waters between Haryana, Punjab, and Rajasthan, which all used them for irrigation, was closely related to this. The waters of the Ravi, Beas, and Sutlej rivers were divided evenly between Punjab and Rajasthan under a 1955 agreement. However, with the introduction of high-yielding seed varieties and multiple-cropping techniques in the 1960s, irrigation demand exploded. The establishment of Haryana caused a bitter feud between the three states’ governments, who each desired to maximize their share of river flows to avoid shortages. Politicians anticipated that delays in water supply would harm agricultural production, causing discontent among farmers, who’ve been powerful political constituents in these states. Because of the impasse, the central government was forced to step in as an arbiter. Rajasthan was given the greatest portion of the river flows under the terms of a 1976 settlement, with Punjab and Haryana sharing the rest evenly. Farmers’ groups in Punjab disputed the settlement’s terms, stating that 750,000 acres will go unirrigated as a result. The Punjab government then challenged the award due to farmer pressure. In 1981, a new deal raised Punjab’s allocation on the condition that it could use surplus water to meet Rajasthan’s needs until the latter needed its entire allotment. Punjabi farmers were outraged by the arrangement and protested by refusing to pay taxes and honor their loan obligations to rural credit organizations.

The matter was brought to a climax in 1982 when Punjabi farmers headed by the BKU attempted to obstruct the construction of a canal connecting the Sutlej and Yamuna rivers, to provide Haryana with a greater portion the region’s river flows. Farmers cultivating land through which the proposed link would travel, it was argued, would not be adequately compensated for the land loss resulting from the project.

The Akali Dal and the Communist parties also backed the movement, presenting it as an instance of discrimination by the central government against the interests of Punjabis. When building on the canal link resumed two years later as part of a regional deal aimed at defusing a separatist movement led by Sikh extremists, the farmers mounted another protest, effectively halting the project. Following administrations have been hesitant to recommence work on the canal link for fear of reigniting the unrest and alienating a key political constituency, resulting in the matter remaining tense. Farmers began to invest in diesel-powered tube wells in the late 1960s, however, government canal irrigation remained vital, particularly in the state’s southwestern parts, where groundwater levels were unsuitable for tubewell use. Tubewells had the advantage of irrigating a much wider command area than wells powered by bullocks, and they were also a more reliable source of irrigation than canals. Farmers were able to double-crop wheat and rice because of continued investment in tubewell irrigation systems. A constant increase in the gross irrigated area was one impact of the rapid growth in the number of privately owned tubewells (including multi-cropped land). Since 1985, the percentage of area irrigated by tubewells has increased dramatically, especially for electricity-powered tubewells, which were both more efficient and less expensive to operate, especially given the high jumps in diesel prices after 1973. The Punjab State Electricity Board, which provides electricity to farmers at a subsidized fixed-rate, aided the trend toward electric tubewells even more. Electricity was made available throughout rural Punjab when the state was electrified to 100 percent in 1976. The availability of long-term credit through the cooperative banking system enabled a significant amount of new investment in electric tubewells. Increased agricultural demand for energy has resulted from the large investment in electrically operated tubewells and other machinery. Agriculture accounted for only 6.9% of electricity use in 1951, but today, it has risen to more than 40%, putting it on pace with industrial. Long delays in processing applications for power connections have irritated and angered buyers of electrically driven tubewells. Electricity supply has become more variable, with frequent outages and shortages, causing tubewells to underperform and yields to fall short of their potential. Farmers have frequently defied the Punjab State Electricity Board’s attempts to hike electricity tariffs for agricultural use to compensate the board’s massive operational losses by refusing to pay their bills despite the fear of being disconnected.

Land reform and agricultural taxation

Farmers have been somewhat united in their requests for higher procurement prices and subsidized electricity rates, although concerns of land ownership and taxation have mostly been a source of worry for the wealthier farmers. Partition in 1947 prompted land reallocation, which eventually resulted in significant reductions in the holdings of the larger incoming West Punjab refugee agriculturalists. Nonetheless, rather than being redistributed to poor and marginal farmers, much of the land abandoned by Muslims was acquired by wealthier landowners. Individual holdings were limited to 30 acres by legislation enacted in 1953, but this did not stop major farmers from sharing land with other family members to get around the restriction. Ownership remained lopsided, with farmers owning more than 20 acres controlling 45 percent of the land in the 1960s, although accounting for only 14 percent of all landowners in the state.

The state government of the Congress passed a new Land Reform Bill in 1972, in keeping with its stated commitment to protecting the rights of poor farmers and Scheduled Caste laborers, on whom it relied heavily for political support. The goal was to allocate surplus land to landless families and small farmers. Based on graded ceiling limits, agricultural land was divided into three categories: land irrigated by government-owned canals and capable of producing at least two crops per year was limited to 7 hectares; land irrigated by privately owned wells and canals was limited to 11 hectares, and rainfed land was limited to 18 hectares. The law was drafted with a five-person household in mind. Each male offspring, up to a maximum of three, was given an additional hectare, while adult family members who did not own land were given additional exemptions.

Big farmers, understandably concerned about possible losses in their landholdings, were outspoken in their opposition to the measure. Despite the Punjabi Landowners Union’s best efforts to rally landed opposition to the measures, the Punjab Assembly passed the Land Reform Act in December 1972. Litigation, disguised ownership, and bribery of village authorities were all utilized by opponents of the law to get around its requirements, with the consequence that only a small part of the available land was allocated. The challenges faced by the state government demonstrated the power of Punjab’s large farmer lobby, and no concerted effort has been made to enforce the legislation’s provisions or to enact any additional measures.

Similarly, successive state governments have been unable to impose an effective agricultural revenue system based on land ownership due to the entrenched hostility of the major farmer lobby. The Raj Committee raised the issue of agricultural taxation in the late 1960s, recommending that more effective fiscal tools be introduced to harness the growing wealth generated by the Green Revolution. The Punjab government was not required to boost existing tax levels since agricultural taxation is classified as a state matter under the Indian constitution. Fearing antagonizing the major farmer lobby and the political unpopularity that would certainly precede such measures, state administrations have been hesitant to hike agricultural taxes. Land revenue is negligible as a percentage of state tax revenue. The adoption of an agricultural wealth tax has been thwarted for similar reasons. Farmers are exempt from any significant claims on their incomes or landholdings, even though indirect taxes like excise duty and sales tax are vital sources of revenue for the state government. Attempts to acquire extra funds, such as by raising power rates, have failed due to strong opposition from farmers’ lobbies, as we have seen. As a result, political parties in the state, particularly the Akali Dal, have explored alternate solutions to the problem of resource mobilization by advocating for greater state autonomy.

The autonomy demand

The Akali Dal began advocating for more financial autonomy for Punjab inside the nation after the state was divided in 1966. Farmers enraged by the central government’s unwillingness to provide Punjab full control over canal headwork and river flows flowing through the state made the demand, which was also increasingly seen as a statement of Sikh religious independence.

Increased financial autonomy could provide access to other sources of revenue, such as income tax, and control over a larger development budget, allowing the state to expand its manufacturing base and power generation capacity, which was of more immediate interest to the rich farmers who dominated the party leadership. Even though Punjab is India’s most important food-producing state, industrialization has been slow. In the form of food processing and the delivery of agricultural machinery and other inputs, the majority of the industry that has emerged is related to the agricultural economy. The wealthier farmers want to invest in other types of industry to serve the larger Indian market, but the state lacks the requisite infrastructure. Manufacturing expansion and continued agricultural expansion are both reliant on increasing power generation in the state, which can only be achieved by increased public investment in thermal or hydroelectric power plants. However, the national government has been hesitant to boost public spending in what it perceives as a dangerous and vulnerable border state. Greater autonomy has thus been portrayed by the Akali Dal as a means of boosting economic growth and allowing the state to take control of water resources and canal projects currently held by the national government. These have become intertwined with a range of Sikh theological demands in the process. The central government’s continued refusal to grant greater autonomy has been interpreted as prejudice against Sikhs, fueling secessionist sentiment in the state.

Future implications

The Punjab story states that, while high agricultural growth has benefited the economy over the previous two decades, it has come at the expense of political stability. The agricultural policy boosted the political power of the wealthier and more innovative farmers. Farmers in Punjab have sought to influence the state’s development agenda through political representation in government or concerted pressure from farmers’ lobbies. For fear of losing the political support of farmers, successive governments have worked to maximize the share going to the state in disputes with neighboring states over river water rights. Farmers have proved their ability to mobilize effectively in the face of unpleasant legislation. On a larger scale, the growing influence of major farming lobbies over state government policy, as well as the central position played by the Punjab government in foodgrain procurement, has influenced the overall thrust of agricultural development strategy in the country. The central government intends to diversify its purchase stock sources by developing dryland areas to reduce political pressure from farmers in the Punjab and neighboring northwest states for higher prices. However, this is unlikely to happen shortly, especially if Punjab’s agricultural expansion continues at its current pace.

While some efforts have been made to diversify the Punjab economy, the initiative is still in its early stages. As a result, agriculture is expected to continue to be essential for a long time. As a result, political constraints brought on by diminishing agricultural profitability are unlikely to abate. Much will thus hinge on the Punjab government’s ability to satisfactorily address farmers’ problems, on the one hand, and the central government’s readiness to foster economic diversification in the state through continued public investment, on the other. The paradox is that by devolving more power to Punjab and other states, the Indian government might give farmers greater access to state resources while diminishing the central government’s ability to develop less developed areas of the country.

* (Author: Pavittarbir Singh Saggu is a Research Scholar, Panjab University, Chandigarh)

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